At Large with Dave Smith: A Marriage Made in Heaven

Pete Pestillo and Steve Yokich outwardly would seem to have little in common.

Mr. Pestillo is an easterner with a law degree from Georgetown University and a long career in corporate labor relations - at the B.F. Goodrich Co., General Electric Co. and, since 1980, at the Ford Motor Co.

Mr. Yokich was born in Detroit, where both of his parents and his grandfathers were active in union affairs. He proudly recalls joining his mother on a United Auto Workers union picket line at General Motors Corp. when he was just 22 months old. He's a tool and die maker by trade, and has been a UAW official for 30 years, the last four as president of the international.

Despite being on opposite sides of the bargaining table in some stormy sessions, they've forged a close relationship that arguably has helped Ford maintain relative labor peace and avert a company-wide strike for some 20 years.

Their golf outings and other social contacts have been widely reported, but they've carried over their mutual trust and respect as well to their day jobs as each has moved up in his organization.

They first faced off when Mr. Yokich took over as vice president and director of the UAW's National Ford Dept. in 1983, a post he held until 1989. That included 1987 when Ford was named the "target" company in new-contract bargaining, which led to a peaceful conclusion as the UAW won important job-security provisions.

Although always keeping a hand in labor relations, Mr. Pestillo has gotten numerous promotions during his nearly 20 years at Ford. Last January he was named vice chairman and chief of staff, a new Ford title, with responsibility for governmental affairs, human resources, the office of general counsel and public affairs - a heap of territory.

Not widely reported, last July he also took responsibility for Visteon Automotive Systems, Ford's huge components group, as well as the Hertz rental car unit and Ford Land operations.

It was the Visteon appointment, however, that proved to be an ingenious move. In that role he would once again face his old friend/foe Steve Yokich during last summer's contract bargaining, over the complex issue of Visteon's future.

Here's the background: Despite grave concerns on the UAW's side, GM had successfully spun off its Delphi Automotive Systems unit earlier this year. The price was assurance that for-mer GM employees moving to Delphi would keep their GM wages and perks. GM's motivation was to establish Delphi as a separate entity so that it could compete on par with other components manufacturers in winning non-GM business.

Ford sent signals, at least for public consumption, that it planned to do the same thing with Visteon. So the UAW took on DaimlerChrysler AG and GM first, winning lucrative new 4-year contracts calling for 3% annual wage boosts, $1,350 signing bonuses and other concessions including protection against job losses.

Overshadowed by the Visteon issue, Ford was saved until last, and there was even talk of a walkout as the UAW extended a Sept. 14 strike deadline into October. Ford workers ratified the pact by an 85% margin on Oct. 26.

Having followed the careers of Messrs. Pestillo and Yokich for years, I personally was convinced that once again they'd settle without a strike. Smart, canny negotiators, they also know a deal when they see one.

In the end, Visteon's 23,500 employees were guaranteed Ford wages and benefits for life even if Visteon is spun off or sold. Moreover, new hires after a spinoff get the same terms covering this and two future UAW contracts. One chief difference: Visteon profit-sharing will be based only on its performance, not on Ford's.

Then, wonder of wonders, Mr. Pestillo in mid-November was appointed Visteon chairman. He'll be 62 next March, suggesting he'll be in command for at least three years. It took longer than that for Delphi to gestate, but Ford already has moved in that direction by spinning off some Visteon assets and otherwise greasing the skids for its independence.

Mr. Yokich turned 64 last August. He was re-elected to a four-year term as UAW president in June 1998, so he's eligible to remain at the helm until June 2002, when he'll be 67. The UAW has no mandatory retirement age, but officers can't seek another term after they've reached 65.

What all of this means is that the Pestillo/Yokich story likely will continue to play out at Visteon where, despite the new contract, numerous thorny issues such as supplier outsourcing and plant closings likely will emerge.

Who better to have in charge than Pete Pestillo? And across the table, Steve Yokich?

Visteon, it seems, already has sailed over its biggest hurdle now that its old adversaries/admirers are calling the shots. Happy New Year, guys.