DETROIT – Has the UAW’s time passed? A majority of respondents to Ward’s 26th Annual Supplier Survey think so.

Some 58% of supplier respondents and 53% of OEM respondents (almost all of whom are not union members) disagree with the statement, “With so many jobs being lost overseas, U.S. auto workers need the United Auto Workers union more than ever.”

Some survey participants disagreeing with the statement say the union is partially to blame for the current outflow of automotive jobs from the U.S., and say the union ironically seems more harmful than helpful to the auto industry.

“High union wages and high legacy costs at the domestic OEMs is causing part of the pressure for suppliers to move offshore,” says one supplier employee.

With so many jobs being lost overseas, U.S. auto workers need the UAW more than ever.
Do you feel secure in your current job?

Another supplier employee concurs, saying “(UAW workers) are pricing themselves out of a job.”

UAW supporters participating in the study, however, say the union is the only voice left for the forgotten middle class. “The last good thing for preserving U.S. manufacturing jobs is the UAW!” an OEM respondent writes.

“The UAW protects U.S. workers from greedy management,” writes another. “High-level managers are ruining manufacturing in the U.S.”

Still, even pro-union respondents appear to be ambivalent. “American labor needs to be protected more than ever, but they also must be realistic as to their salary requirements,” writes one respondent.

The survey participants work in the manufacturing, engineering, design, management and purchasing ranks at auto maker and supplier companies.

The study lays bare the difficult nature of labor relations in the auto industry today, less than a year after the UAW and Big Three auto makers reached agreement on a new 4-year contract.

In recent months, the UAW has swallowed a big concession: a 2-tier wage structure, which means lower pay for new hires at Delphi Corp., Visteon Corp. and American Axle & Mfg.

“I think the real question is, what is the role of the UAW today?” says John Henke Jr., president of automotive consulting firm Planning Perspectives Inc. of Birmingham, MI.

“In the past it was to protect the workers. This (survey) is saying, ‘No, we don’t need the UAW,’” Henke says. “It suggests if a company is moving operations elsewhere to survive, they’re going to move, and the union isn’t going to stop the movement.”

That’s not good news for the UAW, which long has been trying to stem membership losses as more and more Big Three workers (i.e. traditional UAW members) retire.

The UAW has been especially aggressive in trying to organize supplier plants (as well as U.S. vehicle assembly facilities owned by Japanese and European auto makers, without success) to increase membership.

The UAW has won commitments from Dana Corp., Magna International Inc. and Johnson Control Inc. to remain neutral as the union attempts to organize some of those companies’ plants.

Those efforts must be relatively isolated, however, as some 45% of supplier respondents say management at their companies appear unwilling to speak with the UAW about potential organizing activities.

And some 43% of supplier respondents say their companies’ non-union plants are not being more aggressively targeted for unionization.

Survey respondents suggest the UAW could grow its ranks by allowing more white-collar workers to join, as German automotive unions do, and by accepting more health-care co-pay expenses.

Has your company moved any white collar/professional jobs to low-cost countries during the past two years?
Supplier % OEM %
Yes 25.7 48.4
No 63.7 27.9
Not sure 8.2 23.8
No answer 2.3
Do you believe that moving jobs to low-cost countries benefits the domestic automotive industry over the long term?
Supplier % OEM %
Yes 12.9 22.1
No 67.8 55.7
Not sure 16.4 21.3
No answer 2.9 0.8
Do you know anyone personally who lost a job within the past year because of outsourcing to a low-cost country?
Supplier % OEM %
Yes 45.0 49.2
No 43.9 42.6
Not sure 8.2 7.4
No answer 2.9 0.8
To what low-cost country or region has your company moved the most manufacturing operations?
Supplier % OEM %
Mexico 36.8 46.7
China 21.1 24.6
India 4.7 4.9
Eastern Europe 2.9 2.5
South America 2.9 2.5
Other 11.7 8.2
No answer 29.8 18.9
Is your company considering moving U.S.-based manufacturing operations to a low-cost country during the next 18 months?
Supplier % OEM %
Yes 32.7 27.9
No 37.4 20.5
Not sure 26.9 47.5
No answer 2.9 4.1
Has your company moved any white collar/professional jobs to low-cost countries during the past two years?
Supplier % OEM %
Yes 25.7 48.4
No 63.7 27.9
Not sure 8.2 23.8
No answer 2.3
Is your company being pressured by OEMs to build manufacturing operations in China?
Supplier %
Yes 22.2
No 32.7
Not sure 24.0
No answer 21.1
Can you foresee a time when your company no longer does business with the U.S. Big Three?
Supplier %
Yes 19.9
No 42.1
Not sure 14.6
No answer 23.4
Can you foresee a time when some suppliers refuse to do business with the U.S. Big Three?
OEM %
Yes 54.9
No 22.1
Not sure 9.8
No answer 13.1
How will your company’s overseas parts purchasing for North American operations change within the next five years?
OEM %
Decline 2.5
No change 6.6
Slight increase 18.9
Double 18.9
More than double 9.8
Not sure 29.5
No answer 13.9


cschweinsberg@primediabusiness.com