Auto Unions Seek Job Security
Impact of Japanese `transplant' factories will be felt at bargaining table. CONTRACT NEGOTIATIONS
NEGOTIATORS for the Big Three United States automakers and the United Autoworkers Union (UAW) performed their traditional handshakes across the bargaining table this week as they sat down to negotiate a new three-year labor accord. They'll have until midnight on Sept. 14 to come up with contracts covering nearly a half million US autoworkers. The rhetoric leading up to the start of negotiations gives the impression that labor and management will need all of the next eight weeks to come to terms.
Though it's been 20 years since the union completely shut down one of the Big Three, the word ``strike'' has been popping up frequently in Detroit's vocabulary.
The union is ready for ``all contingencies,'' UAW President Owen Bieber warned Wednesday as he sat down Wednesday for the first day of bargaining with General Motors Corporation. The union's talks with Ford Motor Company began yesterday and with Chrysler Corporation today.
But despite the blustering and tough talk, both sides realize there's a wild card limiting their options more than ever before. Japanese automobile factories in the US, called transplants, have helped Japan capture a record 28 percent of the domestic market.
``There's no question the [Japanese] transplants are silent partners at the table. They may not have a voice or a vote, but their role will be looked at by both sides,'' says Harley Shaiken, a labor specialist with the University of California at San Diego.
Though GM, Ford, and Chrysler must each negotiate their own separate three-year agreements with the UAW, one issue will dominate: job security.
The US new car market is again in a slump. Japan's share is up from 24 percent last year. Automation and other changes threaten to reduce the need for assembly line manpower.
``Our goal is to extend and apply contractual provisions to provide job and income security to cover all the contingencies faced by our members,'' Mr. Bieber said this week.
But getting it in writing has proved tricky, as the union found with job security provisions contained in each of the contracts negotiated with the Big Three since 1984.
Mr. Shaiken says the union didn't read ``the fine print,'' and as a result, they've belatedly discovered loopholes big enough to thread an assembly line through.
While the Big Three are barred from actually closing plants, GM has instead ``indefinitely idled'' several facilities. Whatever the language, roughly 36,000 UAW members are currently on indefinite layoff, with little chance of ever regaining their jobs.
``We're going to close'' the loopholes, UAW Vice President Stan Marshall has promised. Mr. Marshall, who heads the union's Chrysler Department, added that ``We can't leave any way for them to squirm out.''
The Big Three insist they aren't trying to violate either the spirit or letter of their agreements, but must simply keep their options open.
The fact is, they emphasize, overall US new car sales were down by 3.4 percent during the first half of the year, but the Big Three reported a decline of 6.5 percent, meaning that Detroit's assembly lines are running at well below their capacity.
And unless some of those plants can be idled, costs go up, says David Cole, head of the Office for the Study of Automotive Transportation at the University of Michigan. ``The only way to ensure jobs is to ensure the competitiveness of the auto companies,'' Mr. Cole says.
The automakers hope to gain even more flexibility to shift workers from one job to another; abandon the current limitation on how many jobs can be eliminated through attrition; and maintain at least the ability to indefinitely idle plants due to declining sales.
The Big Three also want the union to address rising medical costs. ``The cost of health care to us was $3 billion last year,'' noted Al Warren, GM's chief negotiator. ``It's alarming. Every car we make carries a $622 price tag for health care.''
That works out to a yearly figure of $6,000 per worker at GM, with the other automakers laying out about the same amount on health care. And medical costs are rising 19 percent a year.
By comparison, Mr. Warren noted, the Japanese transplants lay out only $60 to $100 per car on health care costs, largely because the transplants have a much younger work force than the well-established plants operated by the Big Three.
The carmakers would also like to limit pension costs. The Big Three pay far more for pensions than the new transplants because Detroit has a much older work force. Chrysler has been particularly hard it. Because of its sharp cutbacks during the early 1980s, it now supports one retiree for every autoworker on the job.
If anything, the union may press for new pension cost-of-living benefits which would drive costs even higher.
And Ford president Philip Benton says that adding COLA for retirees would be ``ruinous.'' But it may prove especially hard to say ``no,'' especially in the wake of GM's recent decision to increase pensions for its top executives. The pension of outgoing chairman Roger B. Smith, for example, will double to nearly $1.1 million a year.
Union leaders have tried to walk a fine line, trying not to anger the more militant among their rank-and-file, but also trying not to build hopes too high.
Bieber and other UAW officials are all too aware that should they drive Big Three costs even higher, the companies will become even less competitive.
As it is, ``the transplants have a [production] cost advantage that might be on the order of $500 a car,'' says auto analyst David Healy, of Barclay's DZW. Some say the gap is as large as $700. That works out to as much as $5 to $7 an hour less in total wages and benefits.
But at the same time, adds labor specialist Shaiken, the threat of the transplants means Detroit can't ignore union demands. For if things do reach an impasse and the union calls a strike this fall, some Big Three buyers will turn to Japanese nameplates. And these days, once a buyer is lost to the Japanese, it is hard to win him or her back.