It's pretty easy now to see why General Motors and Chrysler Group executives were so confident going into this year's contract negotiations with the UAW.
They're holding all the aces.
To summarize, GM and Chrysler workers can't strike and they would probably lose in binding arbitration. Moreover, UAW President Bob King is trying to look reasonable in salary demands to the transplant automakers that the union is trying to organize.
Ultimately, GM and Chrysler will likely force the UAW to settle for a signing bonus and enhanced profit-sharing when what a frustrated rank-and-file really want is a raise and restoration of cost-of-living adjustments. Negotiations are scheduled to conclude around the time of the Sept. 14 expiration of the current four-year contracts.
Here's how the cards are stacked against the UAW rank-and-file at GM and Chrysler:
- Ace of spades -- The UAW can't strike GM or Chrysler during this round of talks. The union gave up that threat in 2009 as part of concessions meant to help the two automakers reorganize in bankruptcy. Without it, workers can't use the one thing that the carmakers fear in contract talks – a legal interruption of vehicle production.
- Ace of clubs -- Unresolved bargaining issues will be resolved through binding arbitration. That's also a product of the 2009 concessions that is a sure loser for UAW negotiators if they have to go there. Why? The language in the contracts say an arbitrator shall resolve the dispute based on keeping GM and Chrysler wages and benefits "comparable to U.S. competitors, including transplant automotive manufacturers."
Comparable in this case means lower. GM workers earn $56 an hour in wages and benefits, higher than any of the other carmakers except Ford at $58. Chrysler's figure is $49 an hour, but that's still higher than Nissan at $47 an hour, Hyundai at $44 and Volkswagen at $38.
- Ace of hearts -- The UAW's King is playing for the hearts and minds of the U.S. transplant operations. He has staked his legacy and the future of the UAW on organizing them during his tenure. If he looks too greedy or adversarial in these talks, he risks turning off workers in those right-to-work states. They already are asking themselves why they would pay two hours of their work time a month in union dues for UAW representation. King has denied pulling any punches in these negotiations to aid his case to the transplants. But not all workers believe him.
- Ace of diamonds -- GM and Chrysler are making healthy operating profits and they'll likely pay a signing bonus to workers of at least $5,000 a person to entice workers to swallow the contracts. Along with that, they'll hold out the promise of several thousands more in profitable years under new and improved profit-sharing formulas and performance bonuses.
- Wild card -- Ford Motor Co. workers can strike and are not subject to binding arbitration by virtue of refusing the concessions that GM and Chrysler workers granted. Clearly, the hand isn't nearly as strong for Ford negotiators. They'll have to sweeten the pot beyond what GM and Chrysler executives will have to pay to get a contract.