State of the Union August 19, 2011

August 19, 2011 online at
UAW Local 2250
Open House Update: The plant tour route has been finalized. It will begin in the Tour Holding Room, where there will be displays from stamping, body and paint shop as well as the environmental group. Then it’s on to the shop floor, heading east down the A-aisle until the 26 aisle, where there will be a hands-on electrical display and the return of the famous Dancing Robots. The tour will continue south down that aisle to the P aisle, where it turns right (west) and will go to the 40 aisle. Visitors will go right (north) up that aisle that bisects GA, see a display at cab set and then go to the bleachers, where they will be treated to videos of the plant, displays from UAW Committees and live music from a special plant band.

From Crain’s Detroit Business: A day after unionized workers at its Cheektowaga, N.Y., plant announced that they had rejected a contract offer, American Axle & Manufacturing Holdings Inc. said it would close the plant. Two months ago, after it was unable to reach a labor contract with the UAW, American Axle announced it was closing its Detroit manufacturing complex. The closing in New York affects 66 employees represented by the UAW and up to 34 salaried employees. Negotiations broke down when the workers rejected American Axle's offer, according to the UAW. "Shifts in market demand toward more fuel-efficient passenger cars and crossover vehicles significantly reduced customer production volumes for the programs supported by this facility," Chris Son, director of corporate and investor relations, said in a statement to Crain's Detroit Business. In June, Son told Crain's that American Axle, a former General Motors Co. unit, continued to seek a competitive labor contract with the UAW that was much like a pact in place at the supplier's Three Rivers plant in southwest Michigan. Axle wanted to reduce total compensation to $30 an hour from $45 at its Detroit plant, which is likely what the supplier was seeking in New York. The Detroit complex and Cheektowaga plant will close after Feb. 26, 2012, when the current UAW contracts expire. Said UAW Vice President Cindy Estrada: "Here is a business that started out as an American company providing good-paying jobs to 6,000 employees. As a result of the hard work of these employees, it has grown to an international company with 32 factories worldwide. All of this success was achieved off the backs of the original 6,000 hard-working Americans." Said Scott Adams, director of UAW Region 9, which includes the Buffalo area: "The men and women in Cheektowaga stepped up to the plate and made huge sacrifices when the company was in trouble. Clearly, American Axle CEO Dick Dauch is more concerned with advancing his pay from millionaire to billionaire status at the continued expense of his employees."

From the Detroit News: Forecasting firm J.D. Power and Associates lowered its auto sales outlook Thursday, saying the uncertain economic outlook will hinder the market's recovery not only this year, but also next. The firm shaved its 2011 sales forecast to 12.6 million cars and light trucks from 12.9 million estimated previously. It lowered its 2012 forecast to 14.1 million units from 14.7 million. "The economy and automotive industry continue to wrestle with a series of unsettling developments, which are now likely too strong to overcome within 2011," said John Humphrey, senior vice president of automotive operations at J.D.Power. "Ascending from the recession is proving to be just as bumpy as the decline into it, and a full recovery in vehicle sales is further down the road than previously thought," he said. J.D. Power estimated this month's selling pace at 12.1 million light vehicles, up from 11.4 million in August 2010, but little changed from last month's 12.2 million units. Commenting on J.D. Power's August sales estimate, Itay Michaeli, analyst at Citi Investment Research and Analysis, said: "In light of the current market volatility, this is actually an encouraging data point suggesting that auto sales have not been significantly impacted thus far in the month." Edmunds.com, an online research firm, estimated this month's selling pace at 12.2 million vehicles. "Since the industry maintained sales in the face of last week's turmoil and uncertainty, then it is likely that confidence has not been undermined enough to prevent the release of pent-up demand this fall," said Lacey Plache, chief economist at Edmunds.com.

From the Detroit Free Press: Matt Blunt, Washington lobbyist-in-chief for the Detroit Three automakers, made his first visit to the Motor City this week since taking over in February as president of the American Automotive Policy Council. And for a "conservative Republican," as the former Missouri governor insists he is, Blunt said a bunch of nice things about the Obama administration, about the federal bailouts of General Motors and Chrysler -- and even about the UAW. Of the widely held perception that nonunion foreign-owned auto plants are more efficient than those of UAW-represented GM, Ford and Chrysler, Blunt said, "That's wrong." "There are great partnerships between management and labor" at the Detroit Three, he added in an interview with the Free Press. He did caution, though, that a strike or other labor strife during current UAW contract talks would be very damaging. Blunt applauded President Barack Obama's administration for standing by the auto industry and for forcing a restructuring of companies that enables them to be profitable even at today's low sales levels. Perhaps the most jarring episode for Detroiters in the near-demise of their hometown industry was the scorn heaped upon auto company CEOs and the UAW's Ron Gettelfinger by members of Congress who rejected rescue proposals in late 2008. Many, but not all, of the critics were from Southern states where Toyota, Nissan, Hyundai, BMW, Mercedes and others have nonunion plants. What nobody articulated clearly during those hearings were facts such as these:
• The three Detroit-based car companies have 41% of their worldwide work forces in the U.S., versus only 6% for their 13 major competitors.
• Domestic content in GM, Ford and Chrysler vehicles is 67%, compared with 32% for foreign rivals.
• GM and Ford spent, respectively, $6 billion and $5 billion in 2009 on research and development, dwarfing the amount spent by tech hotshots Google ($2.8 billion) and Apple ($1.4 billion).