The domestic car companies saw a pragmatic UAW leadership during the UAW National Convention in June. The union, for instance, said it had little choice but to accede to General Motors' early retirement and buyout program, which will trim 35,000 hourly jobs. It also recently made historic concessions on retiree health care.
But time will tell whether the UAW will give more when the union enters negotiations for a new master contract with the Detroit 3 next year. The current contract expires in September 2007.
Sean McAlinden is an expert on automotive labor relations and UAW politics. The chief economist of the Center for Automotive Research spoke this month with Staff Reporter David Barkholz at the Management Briefing Seminars in Traverse City, Mich.
What's going to happen in 2007?
The Jobs Bank will be retained but be a lot less expensive for the car companies. The companies will attempt to get another health care concession. They might look around for further restructuring. That I know they'll do. But what I think they should be looking at by the end of the decade is a new, flexible agreement for new hires that matches the costs of the transplant car companies. A new pension program. A new health program. Lower wage rates.
You mean a second-tier program, where new hires earn half as much as older workers doing the same job?
Call it a flexible program. If the UAW doesn't do it, there won't be 10,000 GM workers left here by 2010. With all the retirements, GM is going to have to hire 40,000 to 50,000 people. And it will all be in foreign countries unless there's a new, flexible contract.
Specifically, what has to happen to the Jobs Bank?
It's going to be harder to qualify to get in it (more years of service), and it may not cover 100 percent of a worker's pay. I think both will happen and cut the cost.
What about health care concessions?
The co-pays go up. Right now, active workers don't have a co-pay on insurance. The average union worker in the United States pays about $2,600 a year for their health care.
UAW President Ron Gettelfinger has been pretty clear that he isn't interested in a program that pays new hires at the auto companies less than veterans. There's precedent at Delphi, but where's the precedent for the OEMs?
NUMMI. Essentially, workers there have half 401(k) for a pension and half defined benefits. They tried to negotiate a cheaper health care plan and failed. That clearly irritated Toyota a great deal. There's no 30 and out, like at GM. If they gave that deal to Toyota, why can't the union give it to GM?
You may e-mail Dave Barkholz at [email protected]