Researcher: UAW strike, or Detroit 3 lockout, not likely
Dale Jewett
Automotive News
August 9, 2007 - 12:01 am ET
TRAVERSE CITY, Mich. -- There is virtually no chance of a strike by the UAW or a lockout of workers by the automakers as the current industry contract expires in September, a top industry and labor researcher says. Sean McAlinden, chief economist for the Center for Automotive Research, said there is now a good chance that the new labor contracts will include concessions by the union -- such as putting tighter limits on the Jobs Bank for workers from idled plants. He said the union may also be willing to take responsibility for retired workers' pension benefits. McAlinden spoke Wednesday at the Management Briefing Seminars in Traverse City, Mich. In a wide-ranging discussion on the labor talks, McAlinden warned that if the new contract is similar to the current deal, and doesn't make significant changes to labor costs, it is likely the pact will have to be re-opened in two years to help an ailing automaker. Ford Motor Co. is the UAW's likely target company for the negotiations while it continues its restructuring program, he added. Adding urgency to this year's negotiations is the reality that Toyota Motor Corp. doesn't fear the UAW anymore. The Japanese automaker is moving to pay different wage rates in its plants. Toyota and other foreign-based automakers in the United States have paid wages close to UAW rates as a way to keep workers from joining the union. Currently, the Detroit 3 pay $16.15 an hour more in wages and benefits to their workers than Toyota pays its workers, McAlinden said. The fall in union membership -- less than 23 percent of U.S. auto workers belong to the union -- and declining market share of the Detroit 3 has weakened the leverage of the UAW's pattern bargaining strategy, McAlinden said. It is now more likely that separate Voluntary Employee Benefits Associations will be created by the automakers and the union, instead of one association that would combine the retiree costs from the Detroit 3, McAlinden said. The reason: Each automaker can better negotiate what it could contribute to the fund. Creating the benefits associations would let the automakers hand over the costs of paying retiree benefits to the union. The automakers would fund the groups with billions of dollars in cash, and possibly stock, that the union would manage to earn money to pay benefits. McAlinden said it is also likely that the new contract will include a bonus - because it is needed to win the support of workers. "Fifty percent of the UAW workers trust Ron Gettelfinger, but 40 percent do not," McAlinden said. "So they need to win over, or bribe, that other 10 percent to get the deal." You may e-mail Dale Jewett at djewett@crain.com |
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