ARC's 1st Law: As a "progressive" online discussion grows longer, the probability of a nefarious reference to Karl Rove approaches one

Thursday, October 11, 2007

UAW "Wins" after Faux Strike

This story in the St Louis Post-Dispatch just demonstrates that Unions are a thing of the past in today's global economy. The UAW had a show strike and a tentative agreement was reached after just 7 hours. They were in a position of weakness from the get-go, but wanted to make sure that their serfs - woops! - "brothers" thought they'd be tough with Chrysler.

On to the story
(with apologies for the interruptions in advance):

UAW ends 7-hour strike
By Jeremiah McWilliams
Thursday, Oct. 11 2007

At 10 a.m. sharp Wednesday, about a dozen people burst out of a small United Auto Workers union hall, carrying placards that would announce the big news at Chrysler's two nearby plants in Fenton.

"UAW on strike."

Well, not anymore.

Less than seven hours after a broken deadline in contract negotiations triggered a national strike — sending thousands of Chrysler workers to the exits in Fenton — the UAW and Chrysler LLC announced they had reached a tentative agreement. In a press release, sent at around 4:20 p.m., workers were told they should report back to work on their next available shift.

"I'm kind of surprised that it got cleared up so quickly," said Jerry Dennison, president of UAW Local 136. The local represents about 1,800 workers at Chrysler's North assembly plant in Fenton, which churns out Dodge Ram pickups.
Jerry - Are you really that surprised? I wasn't... the UAW had no bargaining position and this deal probably could've been reached without going on strike. The strike was just intended to make you feel important as a Local President and to make your "brothers" think the UAW actually gives a rat's patootie about them.
In Fenton, where more than 4,000 workers work at the North plant and a minivan factory to the south, the news of an agreement came at the end of a day soaked in uncertainty. It was the first national strike at Chrysler in more than two decades and the first walkout many local Chrysler workers had experienced.

"For a lot of people who have never been involved in it, they're not sure what to expect," said Clement Smith, recording secretary at Local 136 and a third-generation autoworker. "They don't know if it's going to be a two-day thing, a two-week thing or a one-month thing."
Exactly... most of the folks in the union today have never been on strike... and the Union wanted them to understand that it's the union bosses, not the workers, who have the power.

And Clement is a third generation auto-worker. wow... If I was an auto worker, I'd be pushing my kids to get an education, go to college, get a good paying job. with skills that can be used with any number of employers. Course, their starting salary after college wouldn't be anything near a starting salary at an auto plant... and the costs of college, etc, etc. How much do these auto-workers get paid, by the way?
Preparations for a long strike continued until its sudden end. Workers were setting up to picket plant entrances 24 hours a day, seven days a week. They would receive strike pay of $200 a week — far below their standard wage. Someone working on the assembly line earns a base wage of $26 an hour.
And, while the "base wage" is $26/hr (or $52,000 a year with 2 weeks vacation and 0 OT), it doesn't take into account the other benefits (aka compensation) that the workers receive. Let's stipulate that the burden rate is a multiple of 1.37, a standard HR figure to calculate employment taxes, soshsecurity contributions, workers comp, health insurance, etc. $26 x 1.37 = $25.62/hr, or $71,240 a year in total compensation (which accounts for 2 weeks of unpaid vacation and no overtime).

And keep in mind that's the base or starting wage.

Trading that in for $200 a week - or $10,400 a year. Yowza! Aren't union dues intended to create a fund to pay for workers when they're on strike? And hasn't it been 20 years since the last strike? Where'd all the dues go?
Joe Shields, president of UAW Local 110, rallied the troops at a 3 p.m. news conference, before word of a deal had reached the union's South plant workers.

"It's a collective bargaining agreement," Shields told 50 workers and a bank of television cameras. "Not a collective begging agreement!"

Joe Shouley stood nearby, grilling dozens of hot dogs for the workers picketing the South plant. A buddy urged him to hustle — hungry strikers were holding signs and waving to motorists out at the plant.
Well, at least they got a free hot dog roast out of the strike...
The sooner workers could head back to work, the better, said Shouley, a 21-year veteran of the South plant who installs transmissions in minivans.

"We're ready to build vans," he said.
Wrong attitude, brother... don't let your union buddies hear that! Sure, you've been with the company for 21 years, so you're raking in the dough.

And, it's a good thing that your building minivans, because those babies are selling like hotcakes!!! Right?
But for union members, the biggest concern was the perceived danger to the UAW's traditional wage structure, health benefits and job security.

Cerberus Capital Management, the new owner of Chrysler, also was seen as well-prepared to weather a prolonged shutdown if necessary. Chrysler's unsold vehicles could have lasted an estimated 72 selling days as of Sept. 1, according to trade publication Automotive News. That buildup was seen as providing potential traction for the company if it decided to dig in its heels.
And here we have the proof that the UAW was just putting the strike on for show - not to show Chrysler that they were willing to do it, but to convince their members that they controlled them.
Instead, the tentative four-year deal contains elements that both sides wanted.

Chrysler got a health care concession from the UAW similar to the one already secured by General Motors Corp.

The contract would create a UAW-run but company-funded trust responsible for a chunk of Chrysler's $18 billion in retiree health care liabilities, according to a source close to the negotiations.

The size of the trust is unclear, but allowing Chrysler to shed huge long-term costs could help it become more competitive with rivals such as Toyota.
Enjoy managing the healthcare plan, union bosses! Wonder how long before the union bosses have to start trimming the benefits?
Meanwhile, the Chrysler deal — covering 45,000 workers and more than 100,000 retirees, spouses and dependents — also carries some guarantees that vehicles will be produced in U.S. factories.
So, Chrysler was paying for health care & retirement benefits of 3 times the number of people that were actually working.

Not as bad as GM's 7x, but still ridiculous.
That built-in job security is a win for the UAW on a key bargaining point, but the victory is not complete. In many cases, the production assurances only hold for the life of the current products.
I can see the press release now:

Saturday, January 19th, 2009
Today Chrysler announces a complete redesign of its product line. Every single model has been replaced with new, 21st century cars to meet the requirements of 21st century drivers.

The UAW took a bath on this one...
Plus, newly hired workers in Chrysler's parts distribution business would receive lower pay than they currently do, according to The Associated Press.
Sucks to be them, I suppose... But, hey... the existing employees will still take in their $75k a year! Put the cost cutting on the new guys, not the guys that are already pushing Chrysler into the red, am I right? Brotherhood and all that, right?
The agreement "protects jobs for our communities and also protects wages, pensions, and health care for our active and retired members," said General Holiefield, UAW vice president and a top negotiator, in a statement.

Cerberus wants to slash costs so it can sell Chrysler in a few years for a big profit, said George Hoffer, an automotive economist at Virginia Commonwealth University in Richmond, Va.

On the other hand, Hoffer said before the strike ended, "the union may want to put the new management to the test and not be a rollover."
And what's the problem with making a profit?

And with regards to not being a rollover for new management, have to say that they were.
The deal must be ratified by a majority of Chrysler's UAW members nationwide before it takes effect.

In previous years, the UAW has engaged in "pattern bargaining," meaning it would choose a big U.S. automaker to negotiate with first and then use the resulting agreement as a template for the other Big Three automakers. The three contracts usually ended up nearly identical.
Which may explain why the entire US auto industry is in such shambles.
That process did not go as smoothly this time. But in broad outlines, the Chrysler contract appears similar to the one just approved by workers at General Motors Corp.

Still, "Chrysler, while apparently more stable (than GM and Ford), is really a big question mark," Hoffer said. He noted the company's new ownership and a need to freshen its product line, which skews heavily to minivans, Jeeps and big pickups.

Sales of minivans and full-sized pickups have slowed in the face of soaring gas prices, trendy "crossover utility vehicles" and the slide of the housing market.

In such an environment, Hoffer said, a long impasse between the union and
management would have meant "nobody wins."
So, there's even a valid business reason for Chrysler to retool their entire product line. And in today's world of CAE, it doesn't take long to go from concept to full production.

If I were a union serf (like 21 year veteran Joe Shouley), I'd be very concerned about my economic future. It's clear that both Chrysler and the UAW don't care anything about my personal economic interests. Which, when you think about it, makes sense - because they're my personal economic interests.

Heck, perhaps the union members will reject the offer and push the UAW back to the negotiating table to demand more money, better healthcare & retirement benefits - and perhaps free puppies?

But, since the only thing that the members got out of this 7 hour strike was a hot dog lunch and some time to sit on their duffs, I don't think they're going to be too confident in the UAWs ability to deliver.

Your Co-Conspirator,
ARC: St Wendeler

Comments (1)
George said...

I was in StL the last week of September for a conference. We held it at the Hyatt Regency Union Station. It was nice to see that relic from the heydays of unionism revived. I remain of the firm belief that the rail unions had a big hand in the contraction of railroads in the US.