UAW Caught in Industry Turmoil Again

Undercut by General Motors’ plant-closing announcement, rank-and-file unrest and the trade policies it has long promoted, the United Auto Workers’ new leadership team is facing a difficult year as it prepares to negotiate new contracts with GM, Ford and FCA US by next autumn.

The union also is under pressure from its members and retirees who are looking for better pay and benefits as the three automakers continue to post hefty profits and top executives pull down record paydays in an era when the gap in pay between top company officers and workers is becoming a political issue across the entire U.S. economy.

Coming on the eve of the Christmas holidays, GM’s announcement that it planned to close five plants, including those in Baltimore, Detroit, Lordstown, OH, (below, left) and Warren, MI, was a stinging blow for the union and reminiscent of other plant closing announcements by GM in the years before the automaker’s 2009 bankruptcy.

The UAW represents 3,800 of the 14,500 employees GM plans to drop in early 2019. Aside from political and community pressure, the union appears to have few tools to halt the plant closings or layoffs, which are expected to come as soon as March 1 at Lordstown and the Detroit-Hamtramck (Poletown) plant, notes Art Wheaton, a Cornell University expert on labor relations.

“It all sounds like the early ’80s to me,” Wheaton says. “Not too much the UAW can do except negotiate the best deal they can. Management retained the right to allocate work and locations. The UAW can negotiate buyouts or severance or try to extend work if possible.”

Wheaton says GM could seek additional concessions prior to contract talks, but he speculates the plant closings are a reaction to slowing car sales and (increasing) consumer tastes for SUVs and trucks.

“President Donald Trump can provide huge funding incentives to keep the plants (open), but he won’t. It is bluster and campaign rhetoric. There is little he can do to GM unless he is willing to commit big dollars,” he says.

GM Chairman and CEO Mary Barra may be trying to keep her job and boost the automaker’s stock price, Wheaton says. “(Ex-CEO) Mark Fields was fired by Ford for low stock price and cutting plants, and people sometimes help increase the stock price at the expense of workers and families at the holidays,” he says.

“There is more greed than compassion in business these days.”

The UAW is accusing GM of forgetting its obligations to those whose sacrifices helped keep the automaker alive during the Great Recession.

“GM’s production decisions, in light of employee concessions during the economic downturn and a taxpayer bailout from bankruptcy, puts profits before the working families of this country whose personal sacrifices stood with GM during those dark days. These decisions are a slap in the face,” says Terry Dittes, the UAW vice president responsible for bargaining a new contract with GM.

While GM now is solidly profitable, it cites business reasons for phasing out the slow-selling passenger cars built at the Detroit-Hamtramck, Lordstown and Oshawa, ON, Canada, assembly plants. Oshawa also is set to close in 2019.

SUV sales in 2018 have been “the ultimate lesson in ‘if you build it, they will come,’” says Ivan Drury, senior analyst at Edmunds.com, who notes that SUVs now account for more than 40% of all vehicles sold in the U.S.

None of the plants GM targeted for closing build SUVs and in 2015, the UAW acknowledged the direction of the market when it elected to let FCA, Ford and GM shift small-car production overseas in return for new investment at SUV and truck plants.

GM’s plant-closings announcement, however, brought a harsh reaction from Trump, who threatened to pull electric-vehicle subsidies, and from political leaders in Ohio and Michigan, who accused the company of being callous with employees’ lives.

“GM is committed to maintaining a strong manufacturing presence in the U.S., as evidenced by our more than $22 billion investments in U.S. operations since 2009,” the automaker says in a statement released the day after announcing the plant shutdowns.

“Yesterday’s announcements support our ability to invest for future growth and position the company for long-term success and (to) maintain and grow American jobs,” the statement says. “Many of the U.S. workers impacted by these actions will have the opportunity to shift to other GM plants where we will need more employees to support growth in trucks, crossovers and SUVs.”

For the UAW, not all its bets have paid off.

The union has long advocated for the kind of protectionist measures imposed by the Trump Admin. But the tariffs on aluminum and steel enacted by the administration has raised GM’s and Ford’s operating costs as much as $1.4 billion and helped drive cost cuts at both companies. Ford has not announced plant closings but is offering buyouts or early retirement to salaried workers.

The union, meanwhile, faces new challenges in its prolonged efforts to organize workers at non-union auto plants in the South. The Trump Admin. has proposed new limits on picketing and pro-union campaigning on company property and is seeking to limit the ability of small units, such as the one the UAW has established at the Volkswagen plant in Chattanooga, TN, to bargain effectively.

Threads on social media suggest UAW members have become more skeptical of the union leadership and may make it harder to offer any concessions that might keep the GM plants from closing.

The union is preparing for its spring bargaining convention, and a wish list circulated by the Autoworkers Caravan, one of the older websites critical of UAW leadership, is calling for the restoration of wages lost to diversions of cost-of-living adjustments. It also seeks the restoration of vacation time, pension improvements for current retirees, better pensions for younger employees and language that would make it easier for new hires to qualify for full-time status once they have worked in the plant for 90 days.

Members also are questioning union leaders’ bargaining strategy.

“I always found it ironic that the UAW leadership often remind the membership that the old days are gone. They say, ‘Times have changed and we have to do things differently now because what worked then cannot work now,’” notes a post on Solidarity Review, another website critical of the UAW's leadership.

“However, we have 40 years of proof that the strategy of jointness and joint programs do not work for UAW workers, and yet, our leadership never implements a new strategy. Even as we continue to lower the standard, and cut more jobs, and close more plants, our leadership never wavers from the corporate strategy,” the post continues.

“Workers should be asking themselves why they believe that is the case.”