State of the Union March 22, 2011

March 22, 2011 online at www.uawlocal2250.com


Earthquake update: There have been no new announcements of any downtime at any GM facilities in the US because of parts shortages due to the earthquake in Japan. Toyota and Honda announced that all of their plants in Japan would be down through the end of this week. Nissan which still has five plants closed by the quake, said it is aiming for a March 24 restart of all of them. Mitsubishi was able to operate three assembly plants with parts that had been made pre-quake but couldn’t be delivered until now. Ditto for Mazda. A report released Monday by automotive forecasters IHS Global Insight of Northville said that every major automaker worldwide would be affected by the disaster in Japan by mid-to-late-April. "It is not a matter of if, but when," said Michael Robinet, IHS's Director of Automotive Forecast. He said it could take seven weeks of full production, with overtime, for each facility to make up for one week of lost production.

This week is the UAW Bargaining convention in Detroit. Here are some comments from industry watchers:
o David Cole, chairman emeritus of the Center for Automotive Research - Leaders of the UAW “understand that the union’s future is tied to the future success of the industry. The union as an [entity] is not very strong…..Unions aren’t in a position of favor with the American public as they once were, and as a consequence, it’s just a different world they’re working in.”
o Ron Harbour, manufacturing consultant - “There’s more UAW interest in profit-sharing than ever before, because they know they won’t get those old wages and benefits back. You might have the companies push for more than 20 percent (tier two) but agree not to do so if the union would agree not to push for compensation that makes the companies non-competitive. So if the union strikes a bad deal with Chrysler this time, and it drives the share price down because the stock market perceives it as a bad deal, the union has just hurt itself. The union has never been in that position before.”
o Daniel Howes, columnist for the Detroit News – “United Auto Workers bargainers are coming to town to prepare for national contract talks later this year with Detroit's automakers. All you need to remember are three numbers: First, $6.6 billion, the profit Ford Motor Co. booked last year. Second, $4.7 billion, General Motors Co.'s earnings in 2010. And, third, $133 million, the sum total of long-term stock awards Ford granted its top 20 executives — $56.5 million of which, pretax, ended up in CEO Alan Mulally's portfolio. Cash bonuses for last year? Those are still to be released. That sound you hear is the slow-motion crash of the UAW's collective jaw hitting the ground, partly at the size of the executive bonanza and increasingly at the realization of the union's good fortune. I mean, it ain't easy to plead poverty at the bargaining table when the haul of 20 execs leading a single company exceeds — in one year — the endowments of many small colleges. Paint, meet the corner.”