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September 22, 2003

What the UAW Won

Some of the press is playing the recent UAW contract deals as labor rolling over for management to preserve jobs:

But this week, amid a burst of major contract agreements, even corporate executives are acknowledging that labor's first concern has changed from demanding more and more to making sure that companies and jobs survive.

Obviously in hard times, unions get more cautious in their demands-- there is a smaller pie to share and unions recognize that.

But the stories are missing the fact that the union exchanged moderation on wage demands for commitments to support organizing to expand union presence, setting up the unions for greater strength in the next round of negotiations.

Organizing Alabama: Take Daimler-Chrysler which agreed to ease organizing in its Alabama Mercedes plant:

Among concessions granted to the U.A.W. by DaimlerChrysler was an agreement that permits the union to hold a card check at a Mercedes plant in Vance, Ala. In a card check, workers sign cards designating that they want to belong to the union, rather than vote in more formal balloting at their factory.

In the past, Mercedes had resisted union efforts to organize the factory. The union has never organized a plant solely owned by a foreign automaker, but it has leverage over Mercedes because DaimlerChrysler owns it as well as Chrysler.

Big Three Agree to Pressure Suppliers: With all of the Big Three, the UAW has demanded that they formally and informally demand that suppliers not fight UAW union organizing drives.

"Essentially, the auto companies are saying to the suppliers, if you want to get future business from us, you have to invite in the union," said J.P. Morgan analyst David Bradley.

The UAW said on Monday it was still in talks with General Motors Corp., Ford Motor Co. and suppliers Delphi Corp. and Visteon Corp.

"The UAW intend to bolster their membership, and offset the declining Big Three rank, by signing up automotive suppliers," said Goldman Sachs analyst Gary Lapidus in a report on Monday.

Wins at the Suppliers: With outsourcing and subcontracting, more and more auto jobs are in the auto suppliers, not the Big Three, so organizing them is crucial. And the UAW has already made inroads through these "bargaining to organize" negotiations with the Big Three:

A Johnson Controls spokesman said nine plants so far had completed card checks and agreed to join the UAW. The process simplifies organizing by letting workers sign cards saying they want to unionize rather than voting in formal elections.

The union is strongly represented at the nation's top three parts companies — Delphi, a GM spinoff; Visteon, spun off from Ford; and Lear Corp. — but represents less than a quarter of all workers employed by U.S. parts companies.

The UAW won a key victory in August, when it reached an agreement with auto parts maker Dana Corp. recognizing the union's right to organize.

Dana spokesman Gary Corrigan said the pact covers plants that supply the Big Three but declined to comment on which of its 200 U.S. factories are affected.

Problems: The worst aspects of the agreements are the return of "two-tier" deals at some of the suppliers where new hires won't get the same benefits as present employees. This was a terrible approach to concessions used heavily in the 1980s, which most unions abandoned in the 1990s because of the discord it creates between workers doing the same work at different pay rates.

Hopefully, these are temporary concessions used to expand membership to be eliminated when the union has higher density and more power in the overall supplier marketplace.

Tradeoffs for Future Power: In any case, these negotiations were far more than simple concessionary bargaining-- they were a strategic move by the union to exchange moderation in demands today for expansion of power through the industry that will hopefully pay off in the future.

Posted by Nathan at September 22, 2003 07:44 PM