UAW, GM Work At Friendship.
Steve Yokich and Gary Cowger don't exactly need a friendship like Luke Skywalker and Han Solo but it wouldn't hurt. How well the UAW president and the head of labor relations for General Motors get along, and how much they trust one another, will decide the course of this summer's national contract bargaining.
So far, the signs point to a warming relationship. The union and the company are relatively quiet. There's little posturing in the press and both sides seem to agree they'll maintain a low profile during negotiations. When things don't go well, there's a lot of rhetoric in the media.
But, as Sheila Ronis, president of The University Group, points out, that's only the beginning. "Gary is wonderful, but he can't solve the cultural problem," she says. "That can only come from (GM Chairman) Jack Smith and the board." She's not talking about sending people to charm school Instead, she says GM executives must create a new set of beliefs and values that creates trust,
The same goes for the UAW. Yokich and Dick Shoemaker, the head of the UAW's GM Department, must embrace the same ideas. "They must be believed all the way down to the plant manager level and first line supervisor," Ronis says. That may be easier if the UAW chooses GM to negotiate its agreement first.
Common wisdom says it will. The reasons are many. First, neither side can afford a strike. It may be easier to avoid a walkout if the UAW isn't trying to force a "pattern" agreement forged with another automaker on GM. "Last summer's (54-day) strike at GM can't be repeated," says David Cole, director for the Center For the Study of Automotive Transportation in Ann Arbor. "That strike probably dealt an axe blow across the head of strikes for a long, long time. It cost GM $2 billion and blackened the image of both the company and the union.
Second, GM will use modular assembly in the future and that could help the UAW organize suppliers if a contract is negotiated correctly. Yokich has been publicly opposed to modularity because it costs jobs. A modular plant requires only a third the workforce of a traditional plant. But he knows it's coming. GM is the least efficient of the major automakers and must make its plants more productive and cut costs. Modularity addresses those issues because suppliers build the modules and ship them into the assembly plant from nearby sites.
Yokich must negotiate an agreement that puts a UAW spin on the program. Most likely that will be the ability to organize supplier plants that feed the modular plant. While labor law forbids GM to force its suppliers to be unionized, the automaker can strongly encourage it and find reasons to chose suppliers willing to accept the union.
That's great for the union, with a few caveats. "The UAW can only declare victory if it has protected every Person who is working and has a clear field to organize the supplier plants that surround the assembly plants," says Cole.
To do that Yokich must walk a political tightrope. Some very influential UAW members want modular plants. Others are staunchly opposed. He's got to negotiate an agreement that brings both sides together, otherwise ratification could be difficult. If he can't get an agreement that accepts modularization, GM could easily take the work offshore and that will cost thousands of UAW jobs.
Third, Yokich, 62, hasn't chosen GM as the "target" during his presidency. This is likely his last chance. If this is a traditional three-year agreement, he'll retire just before the next round of bargaining. "It's simply good politics to be mad at GM," says one UAW official.
Every UAW president has taken on GM first, so politically it's probably a performance Yokich can't avoid. If he goes to Ford, where many perceive he has a close relationship with Vice Chairman Pete Pestillo, some GM union members may challenge the contract, wondering if what was won at Ford is best for them.
Fourth, the UAW will negotiate a separate agreement with GMs former components operation, Delphi, which became a separate company last month. That adds one more element of complexity that may be easier solved if GM goes first. Look for an agreement with wages and benefits that are similar to the GM agreement The big changes won't come until the next round of bargaining.
The situation at Ford is vastly different. The UAW and Ford have gotten along quite well for almost two decades but the challenge is to maintain cooperative labor relations. "The danger is that because it is so successful Ford could get sloppy in the implementation," says a UAW official. "It can't forget this is not a self-stimulation process." Plus, there's a lot of new blood at the top and in middle management. The challenge is to make certain these people are as Committed to labor cooperation as those who forged the relationship almost 20 years ago.
DaimlerChrysler is also a completely different predicament. The way things are structured there are two masters to serve, the Americans and the Germans, and it seems the German faction will have the final say. Daimler has some experience with the UAW because the union represents Freightliner, which the German maker owns. But bargaining between the UAW and the automakers is very different.
While this could be an opportunity for the UAW to negotiate a more "international" agreement that is unlikely given the difficulties at GM. The biggest issue here will be organizing the Mercedes plant in Alabama. The UAW will demand that.
For all three companies executive pay versus hourly pay and strong record earnings will be bargaining topics. Top officers at GM, Ford and DaimlerChrysler were paid multi-millions in salary last year. That irked the UAW, which often sites a Business Week story that points out CEO-to-worker compensation in the U.S. increased from 104-1 in 1991 to 326-1 in 1997. Add to that the $11.8 billion the three major U.S. automakers earned after-tax in 1998 and it's a sure thing these two subjects will be used as weapons in this year's bargaining.
Even so, the biggest issues are at GM. To make it all come together without a strike, one UAW official advises the automaker to stay out of the limelight and muzzle executives who make controversial comments. He even suggests the automaker find a "sacrificial lamb," someone who represents the old guard's "beat-'em-up" position on the union, and turn him out to pasture.
That's what Luke and Han would have done.
What The UAW Wants
* Guaranteed jobs and income.
* Higher wages, better pensions, increased health care (extending coverage to domestic partners and to children up to 25).
* Improved profit sharing.
* Removal of all financial caps on the Supplemental Unemployment Benefit (SUB) program and job security programs.
* Reduction in the number of allowable layoffs. Currently, companies are allowed to idle workers for up to 36 weeks if sales slow.
* First shot at jobs opened by attrition.
* Commitments from the company to modernize facilities and grow businesses.
* Expanded hiring rights, not only at their employer's facilities but at companies created by a spinoff, sale or reorganization. Those rights would also extend to companies supplying the UAW-represented operation.
* No outsourcing or subcontracting without mutual consent.
* The right to strike over outsourcing.
* Commitments to work with the union on all future product decisions.
* Commitments to evaluate work previously outsourced to foreign or non-union companies so it can be brought back in-house if competitive.
* No work moved from UAW to non-UAW suppliers.
* Work lost to market downturns replaced by bringing outsourced work back in-house.
* Prohibitions against sharing jointly developed cost reduction information with outside vendors. Eliminating the practice of encouraging vendors to rebid their proposals based on that information.
* The automakers to supply the union with quality evaluation reports of their suppliers.
* Reduction in the standard 40-hour workweek with no cut in pay.
* Paid days off to vote in federal elections.
* More four-day holiday weekends. Additional vacation and personal time.
* Suppliers and other UAW employers to institute two-week summer shutdowns like GM, Ford and DaimlerChrysler.
* More alternative work schedules such as worksharing and flex time.
* A reduction in overtime
* Moratorium on plants closings
* More income protection for those who lose their jobs because of plant closings.
* Employers to bargain over the effects of restructuring.