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.

[Source: Reuters]

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]

Chrysler Auto Workers in Trenton Caught Smoking and Drinking During Lunch Breaks: MyFoxDETROIT.com

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.”

[Source: Bloomberg]

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.

[Source: Automotive News], [Photo Credit: Al.com]