Detente amid distrust: GM, UAW miss chance to improve their relationship

Another round of head-knocking, table-pounding, test osterone-splattered bargaining between the United Auto Workers and General Motors Corp.left only a small pool of blood on the floor. Compared with the pitched battle that raged for three weeks in Canada, where workers threatened to occupy a plant to block management from moving some tooling, the talks in Detroit were downright collegial. Sure, there were minor skirmishes in Janesville. WI, and Indianapolis. But what's a few hundred Suburbans, Tahoes and Yukons when customers are already waiting months to get them?

The greatest cost was both sides, failure to stem a downward spiral of distrust that triggered nine local strikes over the last three years. What will GM's Delphi Automotive Systems look like in 1999? Will it be spun off as a stand-alone company?y Is there a cooperative role for the UAW to play in that transition?

None of those crucial questions were answered in this year's talks.

Then GM Chairman John F. (Jack) Smith Jr. and UAW President Stephen P. Yokich chose not to appear together as the UAW president did with Ford Motor Co. Chairman Alex Trotman and Chrysler Co. Chairman Robert J. Eaton when announcing the agreement early on the morning of Nov. 2. That alone tells you more than 20 readings of the contract's fine print.

Sure, Mr. Yokich can point to GM's conceptual acceptance of the 95% minimum employment level and say, "See we still have a pattern."

Mr. Smith just as credibly can explain that there are no limits on management's ability to sell off marginal parts plants, and reduce its hourly employment 25,000 or more jobs by 1999.

Hey, this is a company on the mend. Even with three costly strikes this ear that cost roughly $1.6 billion, GM likely will make close to $6 billion for 1996. Many will argue that GM's new hard-line stance with the UAW will yield even bigger future dividends.

Unfortunately, it also will generate more local strikes, disrupt GM's ability to launch new models on time and prolong a market-share shrinkage that its improved quality and inspired new products should reverse.

The whole automotive world has known for several years that GM eventually plans to spin off Delphi, possibly by creating a new class of stock. That would require a detailed prospectus, in which the company would tell potential investors everything they could want to know about Delphi's $28 billion-a-year parts business, including which plants are world class and which 12 or 14 or 20 aren't going to make it in the ruthless cost-cutting environment of today's industry.

Yet as recently as late October, Delphi President J.T. Battenberg III had not given Mr. Yokich any idea which plants Delphi may want to sell beyond four that were put on the block last spring.

It doesn't take a Harvard MBA to understand that sharing information early and often, not just in the heat of bargaining, is necessary to build cooperation. Is it unthinkable that the UAW could become an equity partner in a restructured Delphi?

It also doesn't take the political wits of Walter Reuther to understand that $20-an-hour parts plant wages can't stay in Flint when workers in Juarez or Shanghai are stringing wiring harnesses for 97 cents an hour. It may or may not be healthy for the U.S. economy, but it is today's reality.

Mr. Yokich understands that the UAW can't reverse the decline in its auto industry membership simply by resisting change and building its older member's a bridge to a comfortable 21st century retirement.

"Quite frankly, there's some dog parts plants around the system." he says. "We don't expect General Motors to make nuts and bolts and washers. But there's a lot of parts they make good money off of. There's got to be a happy medium."

Mr. Yokich is among the first to admit that in some parts businesses UAW members are more secure with new owners. American Axlek Manufacturing Inc. is thriving in a venture where GM bled for years because it chose not to invest. AA&M has added about 1,400 jobs in Detroit and Three Rivers, MI.

So it can be done.

Ultimately relationships matter. Mr. Yokich bristles whenever his enduring friendship with Ford's top labor negotiator Peter J. Pestillo is mentioned in the media. But they don't go to the theater or play golf together to create photo opportunities. They have a friendship and underlying trust that is clearly lacking at GM. "Battenberg and I could be good friends, I don't know," says Mr. Yokich. l don't associate with him. But I have to associate with who I trust through the way they treat us. When someone gives you their word, that should be good enough."

Mr. Battenberg says he respects Mr. Yokich, but "sometimes we have different opinions on how to help General Motors become competitive."

Circumspection is usually admirable, but we're dealing with the corporate equivalent of gridlock here.

What's to lose by making a phone call some day asking the feisty labor leader if he'd like to have a couple of beers, or even play a round at Bloomfield Hills Country Club?

This contract has now been ratified and will govern the industry's most tempestuous relationship for the next three years. It goes into microscopic detail, from the formula for cost-of-living-adjustments to how much time Delphi plants will be allowed to submit a revised bid if a certain supply contract is tentatively awarded to an outside supplier. Altogether it covers 1,733 pages.

Nowhere does it say which plants are likely to be sold. Mr. Yokich and his troops are left to guess and react. Management, meanwhile, will prepare to suffer more short-term pain for long-term gain. Wall Street will call it progress. Cooperation will have to wait for another day.