One of the most powerful labor unions in the world, IG Metall of Germany, was pressed this summer to accept smaller wage increases and new work rules for Mercedes-Benz assembly workers in Sindelfingen, Germany.
At Visteon Corp.'s steering components plant in Indianapolis, UAW Local 1111 is being asked to give up several of its job classifications.
At General Motors' Saturn assembly plant in Spring Hill, Tenn., workers voted this summer to give up a no-layoff policy in exchange for a crack at producing a new vehicle that will keep the plant busy for years.
Around the industry, union locals are under the gun to accept new rules and give up older ones they once hailed as negotiating triumphs.
The reason is simple. As automakers and suppliers become more global, companies are straining to justify work forces in one region that are not as flexible and productive as those in another.
In addition, automotive companies are facing pressure to bring their costs in line with competitors, which are turning increasingly to lower-cost content from places such as India, China and eastern Europe.
"They don't have much of a choice," says Mike Jackson, forecasting manager with CSM Worldwide in Northville, Mich.
"Operating on a global basis puts you into a more competitive environment. Every aspect of the supply chain is being looked at for efficiency. That includes the benefits that workers have at the auto plant or the supplier plant."
Global competition is still a relatively new phenomenon at DaimlerChrysler AG's big car plant in Sindelfingen. Before 1997, the company's Mercedes-Benz brand did not build vehicles outside of Germany.
The Sindelfingen plant, which employs more than 40,000, shares the job of supplying Mercedes vehicles with plants in Brazil, South Africa, Alabama and Austria.
It also competes against BMW AG, whose assembly plant sites include South Carolina and Russia, and against Toyota Motor Corp., which recently began building Lexus vehicles in Canada.
Sindelfingen erupted in a strike in July when DaimlerChrysler proposed making the big plant more efficient by cutting about $600 million annually out of its operating overhead, increasing workers' hours and making the plant more flexible.
Mercedes made it clear that if workers didn't agree to changes, Sindelfingen could lose as many as 6,000 jobs to the company's other plants. The company and the union reached an agreement that accepted lower wage increases for both labor and management, but they also agreed to some flexibility in work hours.
At Saturn, the UAW local began in the 1980s with a flexible work agreement that was ahead of its time. The company's no-layoff agreement was a form of compensation for getting Saturn workers to agree to a lower wage scale than the rest of GM and to accept a reduced number of job classifications.
Saturn and its workers redrafted pieces of that original agreement in the past decade. But last month's change in rules addressed a different issue.
Saturn wants to put new product into its Spring Hill plant, which is staffed with about 6,000 UAW-represented workers. Its current production volumes probably could be staffed at closer to 3,000. But the company's contract prevents layoffs.
By surrendering that clause, the workers will make it possible for Saturn to risk investing in a new product with an uncertain market demand.
Sean McAlinden, an economist and labor expert at the Center for Automotive Research in Ann Arbor, Mich., believes that auto workers face more givebacks as manufacturers struggle with costs.
"It's market reality," McAlinden says. "The union recognizes that it has to do something to stay alive."
This year, the UAW agreed to a two-tier wage structure for new workers at North America's two largest suppliers, Visteon Corp. and Delphi Corp. Instead of paying employees the same wages that a Big 3 assembly plant pays, $22 to $36 an hour, Visteon and Delphi will pay new workers from $14 to $18.50.
McAlinden, who has rankled UAW leaders in the past by arguing that "no plant can be competitive paying Big 3 wages," credits UAW President Ron Gettelfinger for taking steps to make the union more responsive to the industry's cost pressures.
"What good does it do to pay high wages if people are being laid off?" McAlinden says. "Unfortunately, it's either do this or die."
Before it was confronted with this two-tier wage structure, Visteon's UAW Local 1111 in Indianapolis faced another controversial proposal this year. The company wanted the workers to agree to a "competitive operating agreement" - a flexible work model that would enable management to shift workers around more freely among jobs inside the plant.
Local 1111 President Jim Lewis says job classification changes at Visteon's Indianapolis plant were not intended to eliminate jobs.
"It seems like we've got a specialist for everything in this building," Lewis says.
But he clarifies that the changes were not intended to eliminate the number of workers. That was happening already.
"We're 2,200 jobs and falling," Lewis says. "We could be at 1,400 people by 2007 if we don't do something."
The union's willingness to make changes has put the plant in line for a new series of products that could increase employment by 200 to 300.
Visteon is planning to source more steering pumps, columns and pumps to Indianapolis, a move the union directly links to the competitive operating agreement discussions.
Steve Babson, labor professor at Wayne State University in Detroit, says that such work rule changes are emotional issues for employees.
"When you talk about going from as many as 30 job classifications to just a few, you immediately frighten people with seniority," he says.
"The classifications that disappear are typically the softer jobs, like housekeeping or working in the tool crib. Those are jobs that people on the line might want as they get older."
But McAlinden notes that some of the proposals for change remain theoretical. When GM talks about being able to reduce Saturn's head count, it is less likely to lay workers off than to ease them away from the plant.
In the current climate, companies often nudge older workers toward retirement. Those who don't retire typically are offered a relocation deal.
A few thousand of Saturn's workers transferred there from other GM plants in the 1990s. At Indianapolis, Visteon is allowing some workers to transfer to Ford assembly plants rather than have their wages reduced.
But the downward push continues. Says McAlinden: "At least one economic theory says that, in the end, the same wage rate will be paid everywhere."