State of the Union September 22, 2010

Sept. 22, 2010 online at www.uawlocal2250.com


From Chairman Mike Bullock: During his visit last week, which went very well, our new Manufacturing Manager Jim Glynn made a statement that was reiterated in yesterday’s diagonal slice meeting by John Dansby: As long as GM builds a van he sees no reason for it to be built anywhere else but here.

From the Chaplaincy Committee: “See you at the Pole” will be today after first shift at the flagpoles in the front of the plant. This will be to commemorate Global Day of Student Prayer. The tour holding room doors will be open for your convenience.

The reception for our Make-A-Wish family will be tomorrow at lunch timein the tour holding room. Come up, hopefully clad in a colorful Hawaiian shirt, and help brighten their day. The plant tour will begin at 11 am and you can check out the tour route in the cafeteria.

From Automotive News: The UAW will aim to ensure that its members share in General Motors Co., Ford Motor Co. and Chrysler Group LLC profits in contract talks next year, President Bob King said on Monday. The union wants the workers to share in the turnarounds at the U.S. automakers in a way that does not put the companies "back in a cycle of uncompetitiveness" that left them struggling in recent years, King said. "There are a number of different approaches" to achieve that, including "flexible compensation, whether it is profit-sharing (or) gain-sharing," King said in an interview with Reuters. King also said the union was open to foreign investors buying into a GM IPO and expects GM and Chrysler to be able to repay U.S. taxpayer funding that supported their restructurings. "Our ultimate criteria is how do we make General Motors most successful, not where investors come from," King said.


Former Auto Task Force head Steve Rattner has published a book about his experience in dealing with the GM and Chrysler restructurings. This is from an interview with Jonathan Cohn:

JC: Let’s talk about the unions for a second. There are a lot of people who think that the unions are substantially if not primarily responsible for the problems at the Big Three. Obviously management had to be collaborating in this, but, as the argument goes, unions basically bargained for and secured packages that in today’s economy are just not competitive. And it wasn’t just the compensation, it was also the rigid work rules specifying who could do what, which made the factories really inflexible. I know you’re familiar with all of that. Talk for a second about your perception of the role the unions played in the problems the Big Three had, and then tell me a little bit about your experience dealing with them.

SR: The unions were not the major reason why GM and Chrysler got into the position they got into. There are certainly issues around the labor situation, which I’ll discuss in a second, but to lay this all at the feet of the UAW, which I know some management teams have tried to do, is simply not fair. I’ll give you two data points. First, labor only accounts for only about 7 percent of the cost of a car. So, if you cut that to 6 percent, you’re going to make a bit more money, but this is not the biggest expense that an automaker has.

The second thing I would point out to you is that Ford was playing with exactly the same deck of cards. They had effectively the same UAW contract. They had effectively the same manufacturing footprint, up in the upper Midwest area. They had the same kind of dealer network issues that GM and Chrysler had. And yet while Ford certainly struggled for a while, they got through this and have been making good money for some time now.

So, what’s the difference between Ford and GM? I would argue the difference between Ford and GM is management. I don’t know what else to attribute it to. It’s one of the few cases where you actually have two examples that you can put side-by-side and it would be a very valid comparison.

Having said that, there’s no question that the UAW contract contained excesses that probably never made good sense for almost anybody but certainly didn’t make sense in the current environment. I mean, I am a strong believer in unions and in the role of unions in making sure that workers get their fair share of the pie. But what I don’t believe in are unions, union contracts, and union efforts to create inefficient work practices and feather-bedding. So the fact that at GM they had something like 300 job classifications for UAW workers, and nobody in one job classification could be asked to do even the most menial task of someone in another, is just inefficiency—and wasteful.

The fact that GM and Chrysler UAW workers got a whole series of holidays that the rest of us don’t get—for example, at GM, the entire Fourth of July week—is an example of inefficiency that I don’t think you can defend. The jobs bank, I don’t think you could defend.

So we did push hard on many of those things. And, as you suggested, my view was that the UAW and Ron Gettelfinger, in particular, were very professional people to deal with. They fought hard for their interests, they were not shy about their points of view, but they were straight shooters, it was professional, and they were good partners in a difficult bargain.