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Former US House Speaker and REpublican party nominee Newt Gingrich recently touched on the auto industry at a campaign stop in Des Moines, Iowa. At his first real test as a candidate for the Republican presidential nomination, Gingrich responded to a question about jobs leaving the United States and targeted the United Auto Workers (UAW).
Gingrich praised the international automakers with nonunion plants such as BMW, Mercedes, Honda and Nissan, and then stated that “the real problem is the UAW. It’s a work-rules problem; it’s not an hourly cost problem,” he told a Rotary Club breakfast meeting. “You can’t have continuous improvement if you’re not allowed to constantly modify and improve.”
The UAW has yet to respond to Gingrich’s comments.
[Source: Automotive News]
Local 551 of Chicago’s Ford Plant gave a resounding “no” to the new four-year labor contract. Local 551 represents about 6 percent of Ford’s United Auto Workers (UAW) employees and according to secretary-treasurer Scott Houldieson of Local 551, the two-tier pay scale was one of the biggest reasons the plant’s workers voted against it.
The current agreement would pay less experienced second-tier employees $19.28 per hour, 70 percent less than the first tier. According to Houldieson, that wasn’t enough to sway many second-tier voters. There was also no cost-of-living allowance and a provision for profit sharing and a signing bonus instead of wage increases for veteran employees.
The negative vote might seem like a sign of things to come, but there are still two weeks left for the agreement to be ratified. “The Chicago vote is a troubling, though hardly fatal sign,” said Harley Shaiken of the University of California-Berkeley in an interview with Reuters.
“In the 2007 Chrysler ratification vote, some early plants voted ‘no’ but the later plants voted strongly ‘yes’ when, in part, they understood their vote could prove decisive. We won’t know the result until the last vote is counted,” he said.
Tom Saybolt, a former Ford attorney who now teaches at the University of Detroit-Mercy law school agreed and pointed out that some Ford plants historically vote “no.” In fact, the current tentative agreement is more generous than what workers at GM are getting and significantly better than the deal Chrysler made.
Saybolt said that gives more leverage to the UAW to push the contract with Ford forward. If that isn’t enough to convince workers to vote “yes,” it could mean Ford losing patience and moving jobs to Mexico. If the agreement passes, 20,000 new jobs will be created, but if it fails there is a chance that 12,000 jobs will move south of the border.
The plant currently builds the Ford Explorer, Ford Taurus and Lincoln MKS.
Ford is opening the floor to 2011′s contract negotiations with the United Auto Workers—which always ends in suspense.
Will the UAW walk away in anger? Will they threaten a strike? Will Ford shut down a couple more plants and idle production for months on end? Or will the ghost of Henry Ford send in the Pinkertons? It’s all up in the air, which makes for breathlessly thrilling news. Hey, automotive journalists have to keep themselves entertained somehow.
“We are reflecting upon our proud 70 year history of working together—a history of working with mutual trust and respect to effectively address difficult business challenges,” said John Fleming, vice president of Ford’s labor relations. ”We are committed to negotiating this year with the same transparency and honesty we always have upheld.”
Ten months ago, a scandal at a Chrysler plant in Detroit broke when workers were caught drinking during their lunch break before returning to work. Now, at a different plant, the boys are at it again.
At the Trenton Engine Plant also in Detroit, Chrysler workers were filmed driving a mile from work, then drinking and smoking in their cars—on a private lot, maintained by the UAW. Workers at the plant say they’re tired of working next to someone who’s buzzed, because “it’s dangerous,” as one source said.
Naturally, Chrysler is indignant. “Again, we have Chrysler workers in a compromised position, without regard for the impact of their actions, the reputation of their coworkers, the plant, of the company, not to mention their own reputation and that of their families,” said Scott Garberding, the vice president of manufacturing. “The employees that we identify, as soon as we understand who they are, will be suspended indefinitely without pay and anybody else involved will be dealt with swiftly. It’s very frustrating to us, we take it very seriously.”
Click the jump to see the snarky news story. And all of a sudden, the Chevy ad that airs before it makes sense.
[Source: WJBK Fox 2 Detroit]
UAW President Bob King is angling for seats on the Big Three’s respective Boards Of Directors, and will likely use this as a negotiating point when contracts are discussed with automakers this summer.
“I believe there should be workers’ representation on all boards,” King told The Detroit Bureau, arguing that German car companies employ the same practice, although German law legally mandates worker representation on car company boards. King also argued that the UAW should be given board seats as a “general principle”.
The Voluntary Employees Beneficiary Association (VEBA), an organization responsible for UAW retiree health care benefits, currently holds seats at GM and Chrysler’s boards, and King claimed that VEBA would ultimately decide whether Chrysler can issue its IPO later this year.
[Source: The Detroit Bureau]
General Motors will invest $2 billion across 17 plants, as the company retools existing plants to build new products and hire more workers. GM confirmed that their Toledo, Ohio plant would receive $250 million in improvements and create 250 new jobs.
CEO Dan Akerson didn’t announced which plants would be infused with new capital, but the Detroit-Hamtramck assembly plant that builds the Buick Lucerne and Cadillac DTS will almost certainly be one of them. The plant also builds the Chevrolet Volt, making it to be a prime contender for GM’s attention.
GM announced prior investments in other plants, including the Corvette’s factory in Bowling Green, Kentucky, but the latest round of capital is considered separate from these announcements. Some have speculated that GM’s reluctance to announce their plans could also be a means to gain publicity and avoid affecting upcoming negotiations with the UAW.
[Source: The Detroit News]
UAW President Bob King said that the union may abandon their tactic of targeting one automaker during contract negotiations and negotiate with Chrysler, Ford and General Motors at the same time.
The UAW previously targeted one automaker during negotiations and used that to set an example for the others. However, King says that the relationship between the Big 3 and the UAW is better than previous years. King would like a deal to be completed before the union’s contract expires on September 14th.
King is hoping to extract concessions from the Big 3 after workers gave up thousands of dollars worth of compensation during the automakers lean periods. The resurgence of the Big 3 has spurred some union members to demand King take a more aggressive tone with the automakers. King previously criticized Ford for offering CEO Alan Mulally a $26.5 million compensation package, calling it “morally wrong”.
[Source: Detroit Free Press]
General Motors will recall 2,000 laid off workers by September according to a Detroit News report, allowing the company to start hiring new workers for its American plants.
While G.M. representatives would not confirm any timeline, Joe Ashton, UAW VP in charge of GM, confirmed that the workers would be back, stating “We will have full employment in September for the first time in a long time,”
Many of the workers are situated in Southeast Michigan, an area devastated by the decline of the auto industry. GM is adding a third shift of 750 employees to its Flint truck plant, a second shift of 600 workers to its Lansing plant to build the Cadillac ATS and recalling 1,550 workers to its Lake Orion small car plant.
New workers will have to contend with a wage of $14-$16 an hour, roughly half of what recalled and current employees will make. The two-tier wage system is a point of contention among union members, but the contract under which is was implemented is scheduled to expire this year and will be re-negotiated by the union and the Big Three this summer.
[Source: Detroit News]
UAW chief Bob King slammed Ford CEO Alan Mulally’s $56.5 million stock package, claiming that “I don’t think any human being in the world deserves that much money.”
While certain to raise the ire of Ayn Rand fanatics everywhere, King is amping up the rhetoric ahead of the United Auto Workers “bargaining conference” where strategies will be outlined for the upcoming labor negotiations with Ford and other automakers. King’s rhetoric was particularly inflammatory and reflected the unions hard left leanings, with King quoted as saying “…It seems like one individual is getting all the gains instead of gains being shared by everybody.”
Ford’s stock was up 68 percent in 2009, with share prices quadrupling in 2008. Ford spokesman John Stoll told Bloomberg that Mulally’s compensation “…reflects Ford’s goal of retaining a world-class CEO.”
With Ford awarding more than $130 million in stock to its top executives, the UAW official in charge of Ford is optimistic that the company will also compensate union members who build the vehicles that Ford sells.
“I am going to look at that on the up side and say that I know that they compensated them very well at the top, so I feel that they are going to compensate us at the bottom very well,” said Jimmy Settles, in an interview with the Detroit News. The comments come as Settles, a UAW Vice-President, prepares to negotiate with the automaker, after it posted a $6.6 billion profit in 2010.
Ford handed out profit sharing checks to UAW members in February, worth an estimated $5,000 each on average. The UAW is holding a conference next month related to collective bargaining issues which settles described as a “barometer” to gauge union opinion.
[Source: Detroit News]
A Chrysler worker, claiming to have been fired after ending a relationship with the son of a United Auto Workers official, is now suing the UAW for sexual harassment, gender discrimination and retaliation. The lawsuit was filed in U.S. District Court in Detroit.
Janet Burney began dating Pat Byers, son of John Byers, who was head of the UAW-Chrysler National Training Center. Shortly after, Burney was promoted and given a substantial raise. Burney claims that after the relationship ended, her position was terminated.
“Pat Byers had told the plaintiff repeatedly that as long as she was with him her job in special assignment was secure,” Burney’s lawyer Richard A. Meier said in the lawsuit. “[Burney] was terminated because she is a female who refused to continue a sexual relationship with Pat Byers.
[Source: Detroit News]
Even though Toyota saw its dealerships and other facilities picketed by UAW members in 2010, Honda is taking a tough stance on any interference by the United Auto Workers, with John Mendel, Honda‘s executive vice-president, dismissing them in a speech made on Tuesday.
“The union announced that they’re going to target the operations of international automakers this year,” said Mendel, while speaking to the American International Automobile Dealers Association. “The issue of union representation is one for our associates to decide, not us. Having said that, we do not believe that an outside party will improve upon [our] outstanding track record of success … over the past 30-plus years.”
Mendel stressed that the prime directive for dealers was to “remain focused on your relationship with your customers and associates.
The United Auto Workers continued its campaign of irrelevancy as its President, Bob King, launched a series of veiled threats at foreign automakers with American plants (such as the Honda plant seen above), while simultaneously stating that the very survival of the UAW is at stake – and the organization of a foreign automaker’s plant is the key to the UAW’s continued existence.
“If we don’t organize these transnationals, I don’t think there’s a long term future for the UAW — I really don’t,” said King in a speech to members of a political conference held in Washington, D.C.
Despite the fact that foreign automakers offer equivalent or better wages than UAW plants, King is aggressively targeting them, with King planning to pick a target within 90 days. Other actions include targeting dealers of the chosen automaker for protests, and asking automakers to comply with “fair bargaining” principles, despite that fact that it runs counter to the complete absence of collective bargaining in foreign auto plants. “They don’t fear us and they think they can’t get away with it,” King said, in an almost naked display of insecurity regarding his own relevance.
King was at least cognizant enough to acknowledge that the UAW was a spent force, stating “Here’s the terrible position we’re in autos. Because we’ve fallen so far in the percent of workers represented by the UAW in autos” the union can’t demand big increases because of non union competitors. “So if we go in, we dramatically raise fixed costs for Ford, General Motors or Chrysler, we’re shooting ourselves in the foot. … We don’t want to disadvantage the (Detroit 3) companies.” King ended his speech by telling UAW members that Barack Obama’s re-election in 2012 would be beneficial for the UAW, due to his pro-union stance.
[Source: The Detroit News]
A column in today’s Wall Street Journal was hidden behind the “subscribers only” section to the detriment of many industry watchers, as the Journal’s Holman Jenkins outlined what he sees as GM’s biggest threats to becoming successful again; a resurgent Volkswagen, and a UAW that Jenkins feels is representing interests that run counter to the workers and the company’s recovery.
While Jenkins labels VW a “has-been” in the U.S. market, he notes that while other manufacturers are adopting the “world car” approach and creating one model for the entire globe, VW is tailoring their efforts to the U.S. and the rest of the world, while cutting their sticker prices. Purists may complain that the cars are losing their character, but the current generation Focus, which was a U.S. market car, trounced Saturn’s Astra, which followed the “world car” formula, in the sales race. Jenkins cites the new 2011 Jetta as a promising example of VW product to come.
Jenkins reserves an equal quantity of barbs for the UAW, blaming them for the foreign automaker’s decision to move all future plants to the South and escape the clutches of the UAW, after a disastrous effort by VW to establish a UAW staffed plant in Pennsylvania. Stating that “The union has no function except to seek uncompetitive wages, benefits and work rules from the Detroit segment of the industry,” he questions whether the policies of the Obama administration and the UAW are really in the best interests of GM and America as a whole.
[Source: The Wall Street Journal]
After acquiring the former NUMMI plant jointly owned by General Motors and Toyota, Tesla Motors was immediately targeted by the UAW for a guilt-trip campaign by the United Auto Workers to re-hire the 4,700 workers set to lose their jobs as the plant closed.
In an interview on a California radio show, Tesla CEO Elon Musk was asked about the hiring situation, Musk affirmed his commitment to getting the workers their jobs back, telling listeners that “It is always easier to hire from the neighborhood” and that “hiring former HUMMI workers is a priority for us.”
Being a low volume manufacturer, Tesla will likely only need 1,000 workers, but the opportunity always remains for expansion. More interestingly, the plant’s union status could be a future contention. No doubt the UAW will want to see it continue, but past issues with the union, and the need for strict quality control in an ultra-premium vehicle will likely not mesh well with the union’s mentality towards hiring and firing workers.
[Source: Autoblog Green]
The United Auto Workers is busy inserting itself into the Toyota/Tesla joint venture barely 24 hours after it was even announced. The two companies announced that they would be collaborating on electric vehicles, and Tesla would be taking over the revolutionary (at the time) NUMMI plant in Fremont, California, to build their new Model S sedan.
The NUMMI plant was a groundbreaking venture between Toyota and GM that saw one of the first instances of Japanese management practices and American-style union labor. Before the collaboration, the Fremont plant was responsible for some of the most notorious horror stories regarding American auto workers, such as on-the-job intoxication and workers putting coke bottles inside vehicles so that the rattling would annoy customers. By the time the plant had closed at the end of 2009, the plant had experienced a 180-degree turnaround, with quality levels on par with Toyota’s best-performing Japanese factories.
4,500 NUMMI employees lost their jobs when the plant was shuttered, and it’s no surprise that the UAW is pushing hard to get the jobs back. An all-American, union made electric car would probably go along way to boost the perception of electric cars in the public eye, but with a pricetag of over $100,00, you can be certain that the amount of tomfoolery and quality defects that Tesla will tolerate is essentially zero.
Late Sunday a judge approved the sale of GM’s assets to a group comprised of the U.S. government, the UAW and the Canadian and Ontario governments under the name NGMCO, Inc. The decision will see GM exit bankruptcy court quickly with the ‘New GM’ assets going to NGMCO, while the ‘Old GM’ assets will be sold off to the highest bidder.
Judge Robert Gerber then placed a stay on the proceedings to for four days to hear objections or appeals, but as most of those have already been dealt with, GM is expected to reemerge as a new government-owner company by Thursday.
In a statement Judge Robert Gerber said that he would, “prevent the death of the patient on the operating table.”
Gerber pointed out the seriousness of the matter and the alternative, stating that, “The only alternative to an immediate sale is liquidation – a disastrous result for GM’s creditors, its employees, the suppliers who depend on GM for their own existence, and the communities in which GM operates.”
The New GM will be majority owned by the U.S. government with a 60 percent stake in the automaker. The UAW will get 17.5 percent, while the Canadian and Ontario governments will get 12 percent.
In response to the news GM’s CEO Fritz Henderson released a statement saying that, “A healthy domestic auto industry remains vital to the global economy and we deeply appreciate the support the U.S., Canadian and Ontario governments and taxpayers have given GM, and the sacrifices that have been made by so many. This has been an especially challenging period, and we’ve had to make very difficult decisions to address some of the issues that have plagued our business for decades. Now it’s our responsibility to fix this business and place the company on a clear path to success without delay.”
The Obama Administration’s auto task force has said that sale of GM back to the private sector could begin as early as next year.
[Source: Automotive News]
As a government imposed June 1st bankruptcy deadline looms on the horizon, the UAW is reporting that it has reached a tentative agreement with General Motors and the U.S. Treasury.
The specifics of the agreement will not be made public until the contract is ratified, however, the UAW did say that changes have been made to the employees retiree health trust, referred to as the Voluntary Employee Beneficiary Association. It is not clear if the UAW has worked out a deal similar to the one with Chrysler that would see the union take control of a portion of the company.
Negotiations between the Canadian Auto Workers (CAW), GM and the Canadian Federal and Ontario Provincial governments have yet to result in an agreement.
As with Chrysler, a ratified contract would not necessarily mean that GM would avoid filing for Chapter 11 bankruptcy protection.
[Source: Automotive News]
From start to finish, Chrysler’s bankruptcy proceedings could take as long as two years, according to a Bloomberg report. The article cites an administration official, and says that the initial period of 30 to 60 days for the “quick and surgical” process only refers to the period required to sell the major assets to a new company.
The remaining “bad assets” would then be divvied up by the courts to the remaining debt holders.
This may not be as big of a setback as it sounds at first, however, as the new Chrysler would no doubt be able to begin operations once it is able, which could turn out to be long before all of the court proceedings have concluded.
Currently Chrysler is still in bankruptcy court and the process does seem to be moving along swiftly as parties opposed to the merger have either withdrawn or been denied. It is not clear how much longer it will take to approve the sale of the “good assets” to the new company owned by Fiat, the UAW and the Canadian and U.S. governments
Starting Monday, Chrysler will idle most of its plants as the company restructures under a Chapter 11 bankruptcy filing. This will include 8 U.S. assembly plants, as well as facilities in Canada and Mexico. Other pre-assembly facilities will also face temporary closure including five North American engine plants, six stamping plants and seven transmission plants.
The temporary shut-down will effect 26,000 UAW workers and 10,000 Canadian Auto Workers.
Chrysler is using the bankruptcy proceedings to its advantage, as the production stoppage will allow it to deplete the ever-increasing stockpile of vehicles.
The temporary shut-down is expected to take from 30 to 60 days, however, there is potential for it to extend beyond that.
[Source: Automotive News]
UAW oWn3S Chrysler... literally
Less than a day after the UAW, Chrysler and Fiat agreed upon the terms of a contract that would keep the struggling U.S. automaker afloat, details of the agreement have surfaced in which the union will take a controlling share in Chrysler.
At first it seemed almost too good to be true that all sides had reached an agreement without the need for decreased wages. Instead the agreement stipulated that Chrysler would significantly reduce its participation in the employee retirement program.
The agreement came just days after a similar agreement had been reach between Chrysler Canada and the Canadian Auto Workers union – an agreement that was ratified the same day Chrysler and the UAW put together the current proposal.
Now word has leaked that in exchange for Chrysler’s reduced payments to the company’s retirement plan, the company had to essentially hand itself over to the union. In total, the UAW will get a 55 percent stake in the planed Chrysler-Fiat partnership, with Fiat initially taking a 20 percent share, with up to 35 percent ownership possible if certain conditions are met.
The agreement now has to go before Chrysler’s 26,000 workers, with voting on Wednesday in order to ratify the agreement ahead of the government’s end-of-month bankruptcy deadline. If the deal is reached and Fiat signs on, the Federal Treasury will provide Chrysler (or should we say the UAW) with $6 billion to keep the automaker afloat.
Meanwhile, one other major player (which has been incredibly quiet during this ordeal) has agreed to remove itself from the situation. Daimler will shed its 20 percent stake in Chrysler and rethink ever working with a U.S. automaker again.
[Source: Automotive News]
Extended shutdowns seen as a way to reduce costs as vehicle surpluses continue to grow.
Several major news outlets are reporting that General Motors is planning extended shutdowns of its U.S. plants this summer. The plants would be idled for as much as nine weeks from mid-May through July.
While it is common practice for plants to idle for a “summer break” during the sunny season, that period has traditionally only been two weeks and not the two months that General Motors is planning.
The move is considered a necessity as the struggling automaker suffered a sales decline of 49 percent in March and currently has a stockpile of vehicles that can last 122 days.
A representative of the United Auto Workers union told the Associated Press that plan managers will be meeting with the union today and tomorrow to discuss production changes and some plants.
There is no word on if the extended shutdowns would apply to GM’s other North American facilities.
[Source: Automotive News]
Fiat is about ready to walk away from a potential partnership with Chrysler says CEO Sergio Marchionne unless the U.S. automaker can significantly cut labor costs. While the United Auto Workers union has made it known that it is willing to work with Fiat and Chrysler management, the Canadian Auto Workers union isn’t.
“From what I can tell from a distance, the CAW may have taken more rigid positions,” said Marchionne in an interview with Canada’s Globe and Mail newspaper.
Currently Chrysler and the CAW do not see eye-to-eye. The automaker has asked the union to cut labor costs by $19 CDN to $55 to match hourly wages in U.S. plants but the CAW will only go as far as reducing hourly wages by $7.25 (an amount GM workers agreed to recently).
Marchionne did not mince words in his interview with the Globe saying that a sense of entitlement in an organization that is technically bankrupt was nonsense and that the involvement of the U.S. and Canadian governments in a bailout plan was a sign of last resort for Chrysler.
Marchionne said that there is currently only a 50 percent chance the deal could go through. Meanwhile Moody’s Corporate Finance recently said that Chrysler has a greater than 70 percent chance of going into bankruptcy.
Meanwhile the Obama administration’s April 30th deadline is fast approaching.
[Source: Globe and Mail]