Commentary
10:12 am
Tue July 12, 2011

Can the UAW Survive?

Later this month, contact talks are set to begin between the United Auto Workers’ union and Ford, General Motors and Chrysler.

There’s a temptation to feel nostalgic about that. This has been a time-honored tradition in Detroit since the 1940s. Every three years, negotiations began, and the union selected a strike target.

That target could have been any one of what were then referred to as the Big Three. Negotiations followed a system called “pattern bargaining,” which meant the union and the selected company would battle things out to a settlement.

Sometimes a deal could be reached without a strike; sometimes not. Once a deal was reached, the other two automakers would settle with the union on essentially the same terms.

During the glorious fat years of postwar prosperity, the bargaining scenario also followed a predictable pattern.  When negotiations began, the company would offer the union the equivalent of a crust of bread. The union would demand the moon, plus a kitchen sink with gold-plated handles. Eventually, with or without a strike, they’d reach a deal where the union got the moon, but had to settle for a sink with plain old chromium handles.

Walter Reuther would then promise to get the gold-plated ones in the next contract, and he usually would. But everything is different now. Chrysler and GM went through a near-death experience two years ago. As part of the price for the federal government’s saving them, the UAW had to agree not to strike either company.

The only thing they can do in the case of a grievance is ask for binding arbitration. The union could theoretically strike Ford, but now that all automakers aren’t on an equal playing field that’s unlikely.

But the UAW does face two immense new challenges.

First, their workforce had no voice in the concessions their union leaders forced on them two years ago. Those included new work rules that benefit the company. Cost-of-living adjustments were frozen. And new hires make far less money than before.

One big question: Will rank-and-file union members accept those concessions - or will they demand their union try to get their benefits back? The auto companies are profitable again, and hiring some new employees.

Will union members now insist its their turn to do better as well?  Regardless of how that’s solved, the union has an even bigger problem. It needs to find a way to organize the foreign automakers’ plants that are making cars in the United States.

If they don’t do that, the union has no future. I didn’t say that, by the way; UAW President Bob King did. Until production was temporarily disrupted by the earthquake in Japan, Americans were buying more cars with foreign nameplates than Detroit ones.

But the union may be a tough sell in the so-called “transplants.” Ford and GM’s hourly labor costs are still higher than those at Toyota, Honda and Nissan. If the union wins lost benefits back, that wage disparity will increase, making those companies that much more apt to resist the UAW.

However, if the union doesn’t get back the benefits it lost, how much can it really offer workers who are already making a good living without it? Bob King clearly has an interesting job. 

And it just might be the toughest in the state.