State of the Union September 28, 2011

Sept. 28, 2011 online at www.uawlocal2250.com

• From Chairman Mike Bullock: Local negotiations are heating up and we are hopeful that they will be resolved by the end of the week and have a vote next week. Also, there are 16 members in Fairfax who are eligible to return that should arrive sometime next month. And efforts are underway to start the National Hire process to identify the workers who wish to transfer here. As more details for second shift preparation are finalized we will communicate them.

•Voting on the national agreement concludes at 10 am this morning. Here are some more results for other facilities around the country:
o UAW Local 2164 Bowling Green – 55% prod. 53% skilled in favor
o UAW Local 977 Marion metal fab – 50.1% prod. 55% skilled in favor
o UAW Local 14 Toledo transmission – 68% yes
o UAW Local 440 Bedford powertrain – 53% yes
o UAW Local 163 Romulus engine – 60% no
o UAW Local 23 Indianapolis metal center – 59% no

From Automotive News: General Motors will idle its Fort Wayne, Ind., plant for one week in November to adjust to market demand for full-sized pickups, GM spokesman Chris Lee said today. "We make adjustments at our plants based on demand, whether it means adding overtime or in this case taking a down week," Lee wrote today in an e-mail to Automotive News. Early last month, GM canceled Saturday shifts at the Fort Wayne plant for the rest of the year. Later in August, GM canceled five Saturday shifts scheduled for September and October at its Flint, Mich., plant, which also builds large pickups. GM's pickup inventory has declined steadily since the high point in June, falling to 115 days at the end of July and 108 days at the end of August. Next week, GM will disclose its September inventory levels when it reports monthly sales.

From the Detroit Free Press: This week, UAW Vice President Jimmy Settles and Ford are planning "to hold very long negotiating sessions," according to the UAW's Ford Facebook page. They could reach a deal by the end of the week. Settles told local leaders in his Facebook message that they "should begin assembling their strike committees and preparing any documentation regarding strike rules and assistance for our membership, in the event we are forced to call for a strike." After reaching a tentative deal with GM, the UAW decided to focus on Ford rather than on Chrysler. (continued on back)
Difficulties between Chrysler and the UAW became evident in a Sept. 14 letter Chrysler and FiatCEO Sergio Marchionne sent to UAW President Bob King. The following week, Chrysler and the UAW agreed to extend their 2007 labor contract until Oct. 19. Both sides have said that talks are ongoing. On Friday, King and Marchionne met and had "productive discussions," according to the company and the UAW. High-level discussions continued over the weekend. On Monday, Marchionne was in Turkey to celebrate the 600,000th tractor produced by Fiat Industrial.

From Bloomberg: General Motors Co. is now profitable in all of its regional units, Chief Executive Officer Dan Akerson said. That’s a sign of a turnaround for a company whose European Opel unit is still in fix-it mode. Akerson, speaking at Bloomberg’s Dealmakers Summit in New York today, said GM’s global presence was one of the selling points during the company’s initial public offering last year. In July, Akerson squelched rumors that GM planned to sell Opel. GM was correct to have reversed an agreement to sell its European Opel unit in 2009, he said. “It was a bad deal,” Akerson said. “We were giving Europe away.” GM, the largest U.S. automaker, predicts that its European business will be profitable this year, excluding some costs. Losses at the unit were a question mark for investors when the company went public in November 2010. Opel earned $102 million in the second quarter before taxes and interest. The German business unit lost $390 million in the first quarter because of $395 million in goodwill impairment costs. GM’s goal for Europe is to be “profitable by just better than break-even before restructuring charges,” Nick Reilly, president of GM Europe, told reporters Sept. 13 at the Frankfurt auto show. “In 2012, we won’t have those restructuring charges,” Reilly said at the time. “They’re mostly done. We’ll get the full 12-month benefit of the restructuring that we’ve done.”

From the “we already knew that” file comes this from the Wall Street Journal: For years, economists have told Americans worried that cheap Chinese imports will kill jobs that the benefits of trade with China far outweigh its costs. New research suggests the damage to the U.S. has been deeper than these economists have supposed. The study rated every U.S. county for its manufacturers' exposure to competition from China, and found that regions most exposed to China tended not only to lose more manufacturing jobs, but also to see overall employment decline. Areas with higher exposure also had larger increases in workers receiving unemployment insurance, food stamps and disability payments. "There are really huge adjustment costs to local communities that were far worse than people had appreciated," said David Autor of the Massachusetts Institute of Technology, who helped conduct the study. In a 2004 article, the late Nobel Laureate Paul Samuelson argued that while trade may benefit some Americans, it does so by "decimating" the wages of blue-collar factory workers. Princeton University economist and former Federal Reserve Board vice chairman Alan Blinder, once a champion of free trade, in recent years has argued that U.S. firms' increased outsourcing to low-wage countries puts millions of American jobs at risk. Factory job losses were just the beginning. High-exposure areas tended to see employment outside manufacturing fare worse than in low-exposure areas. With fewer high-paying factory jobs supporting the local economy, and a growing pool of former factory workers entering the labor market, nonmanufacturing wages in the high-exposure areas were depressed.