Final Inspection

Walking the Razor’s Edge

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UAW Vice President Bob King served notice this week that as the auto industry rebounds workers will expect to benefit – and that’s sure to have union bashers and Detroit detractors ready to pounce.

But no one should take King’s comments as a sign it is destined to be “business as usual” for auto makers and labor leaders once the recession is declared dead and gone and the two sides sit across the negotiating table again.

Speaking at a conference in Detroit, the labor leader cited the sacrifices made by the rank and file in the midst of the downturn that put two of the three U.S.-based auto makers in bankruptcy.

The list includes a 2-tier wage scale, transference of retirement health-care fund management to the UAW, the end of a defined-benefits pension plan for new workers and cuts in pay and perks.

But those who blame the union as the chief cause of Detroit’s near demise and now see King’s new line in the sand as the beginning of Round 2 should keep two things in mind.

First, this is an election year for the UAW. And although he is considered a slam-dunk shoe-in as the successor to a retiring Ron Gettelfinger once the voting for a new president begins in June, King still has a campaign to maintain. So signaling to the rank-and-file he’ll have their backs is simply good politics.

After what’s gone on during the last few years, no one should make the mistake any longer of equating the union’s public posturing with an unwillingness to bend behind the scenes when the future is on the line.

Second, King is right. Workers will demand a bigger share of the growing pie once the market rebounds, and General Motors, Ford and Chrysler better be ready with a more creative game plan that rewards employees but avoids dragging the industry down the same old contentious path.

“Profitability is going to be astronomical,” King is quoted as saying. “We (want) to make sure in that turnaround our members are treated fairly.”

Who knows how that will translate? A realistic profit-sharing plan that won’t cost management during a downturn? Programs that reward workers for quality scores and improvements in productivity?

Whatever the case, the Detroit 3 and the UAW will need to walk the razor’s edge to keep the peace while ensuring the labor-cost gap with non-union foreign transplants, narrowed to nearly nothing under the weight of the current recession, doesn’t begin to widen again.

Campaign rhetoric aside, I’m betting the wounds of the past couple years are too fresh for either side not to recognize that.

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What's Final Inspection?

WardsAuto editors share insights and observations on the global auto industry.

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David E. Zoia

As Editorial Director, I oversee much of what goes into WardsAuto.com, enjoying a ringside seat that lets me observe up close just about every facet of the industry worldwide. I have covered the...

James M. Amend

James Amend is an associate editor at WardsAuto.com, covering day-to-day business and product news at General Motors. He also leads coverage of regulatory and environmental issues, as well as the...
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