Contract negotiations between the UAW and the "Big Three" were supposed to be over by September 14. That looks less likely as each day passes.
Several big issues remain unresolved. The largest is whether pension and health liabilities will be transferred off the car companies' balance sheet to a fund run by the UAW. This would cost over $60 billion, but may be desirable for the long-term financial health of Detroit car industry.
The UAW may try to get more job security for its workers in exchange for agreeing to take on the medical and retirement liabilities. Of course, Detroit does not want to guarantee jobs in an environment where it loses market share to the Japanese almost every month.
The possibility of a strike is not off the table. While the UAW management is trying to put on a calm face, many of its members are voting to authorize a strike. The benefits funding issue may be important to UAW management and the car companies.
The rank and file just want to keep their jobs.
Douglas A. McIntyre is a partner at 24/7 Wall St.











Reader Comments (Page 1 of 1)
9-07-2007 @ 1:29PM
Gumby said...
There is a coming major major train wreck onthe way. No wonder the stock market is spooked today for no reason other than weak job hirings. We are anticipating a big worker lock out at GM and Ford if UAW remain to dig heels in past the September 14 deadline. UAW is more interested in job securities than the existence of GM and Ford. GM and Ford survival is superseding UAW security. UAW should throw in the thick white terry towel and let the managements and shareholders do what they wish . If this mean closing down every friggin North American plant you can find, so be it!!
9-07-2007 @ 1:29PM
Gumby said...
GM and Ford is dragging the stock market down so much that UAW owes every investor a major concession and get it over with!!
9-07-2007 @ 2:46PM
Gumby said...
There had been a fatal attraction to GM and Ford by UAW. UAW is dangerous to the financial health of GM and Ford.
9-07-2007 @ 2:52PM
Gumby said...
UAW just sign the damn contract and get on it. UAW , you know you can not plan the future, That is absurd! You cant plan job security!! Your job security rests entirely on the shareholders not management. We decide whether to keep you or not. We dont forget that you are Americans but we remember that you cut dividends since 1989. We feel that you owe us a lot for that. Just sign the damn contract and forget about the damn strikes. Just go back to work and start making money for your shareholders. If GM and Ford soar to new highs and start taking market share from Tokyo Inc, we will buy GM and Ford stock, but we will never trust you UAW ever again!!!
9-07-2007 @ 7:06PM
Jerry Sombati said...
Gumby, why dont you go back to school and learn English, you UAW, sounds like a 5 year old kid wrote your comments. moron
9-08-2007 @ 8:37AM
superbee said...
To the new leadership team of Chrysler: use this as a mission statement that the great Lee Iaccoca used: "Lead, Follow, or get out of the way". Next demand to the current UAW leaders to invest in training, team building, and lean manufacturing initiatives with the current workforce. Set a goal to improve worker efficiency and workmanship by 35% in 6 months then another 35% 6 months thereafter. If this is not achieved refuse future contract negotiations with the UAW, lay-off all union workforce, begin an internal program to hire non-union employees with training and team building exclusive to growing the business to rapid and sustained success. Focusing on Lean Manufacturing and team building as the main focal point. When this workforce begins to grow profit start incentives programs for efficiency and quality for employees. Praise them when they do well, challenge them when they lag behind. Restore the icon of America. Good Luck! If you need a good plant manager I am available...ha ha. MOPAR rules!
9-08-2007 @ 8:48AM
superbee said...
U.A.W. = Unemployed American Workers
We have become a working society of lazy, undereducated, obese, whining, greedy people. What will these same people do when the Chinese yen is worth twice as much as the american dollar? China doesn't have UNIONs, they just kill you if you don't perform. Think it about this is no joke. Get to work America stop the WHINING, support American industry! Be glad you have a job the alternative is not so cheerful.
9-08-2007 @ 3:37PM
jeff said...
why all the haters? old gumby, your stock isnt going to go through the roof even if general motors dumps health coverage on its retirees. the same people who who helped gm build a fortune 500 company get the shaft? you actually think gm stock is gonna make you a couple bucks? ha the ceo's and top tier managment reap all the benefits and stock options. fact of the matter toyota doesnt do anything different than gm when it comes to assembling vehicles. toyota doesnt have any legacy cost and the real issue should be health care in america period, not just in the auto industry. its always the same story w/ you greedy pigs who dont care about anything or anybody just as long you can make a buck, and thats really the american way isn't it? oh and superbee, i reward my dogs when they do whatever i ask not people.
9-09-2007 @ 2:53AM
Sstar said...
According to a recent survey by J.D. Powers 11 out of 12 GM assembly plants were deemed most efficent. The UAW has been giving consessions since 1981 and managements can't seem to capitalize on them. Maybe we ought to start looking at this another way. Lets start with the cash bonuses and stock options given, even when they lose billions of $$$s.
9-09-2007 @ 7:18AM
Rob McLean said...
As a recently retired autoworker from Canada, I would like to add my 2 cents worth. To Gumby, people like you are large part of the problem. Your greed & short sightedness amazes me.
To superbee, the N.A. Big 3 have been using the tools of "Lean Manufacturing" since the early to mid '90's. Problem is they decided to pick & choose the parts of the process to use. They cut the people that actually work, but not the managers.
Jeff, you hit the nail on the head. In Canada, we have public medical. As of late, there have been issues, but they have come because of the efforts of some to move away from a system that provides everyone equal access.
Japan Inc. is just starting to get to the point of having to deal with legacy costs, but they are not the issue. The issue will be the Kia's & Hyundai's. Without fair trade, we will become countries where our children will become 7-11 clerks or Wal-Mart greeters. When the playing field is leveled, and everyone has to follow the same rules, there will be hope.
As for the quality of the product, there is more impact from “business decisions”, than there is by workers.
And finally, the average cost of direct labor for a vehicle produced in N.A. is less than $1000. If we worked for free, would this change our market share?
9-15-2007 @ 6:21AM
Wayne said...
Hey subparbee,even wal-mart has a union in china. Talk to someone who has had any real dealings with China. Knowledge is power.
9-09-2007 @ 12:30PM
RJH said...
As a current UAW Chrysler employee, I would like to add some comments. Chrysler has been using SMART training, Lean manu. WOM, and the "Team Concept" for some time now. As a whole the UAW workers at the big 3 are highly intelligent, motivated,and efficient. I work with several who have college degrees. A report that came out at the end of Aug. said that "American" workers were the most productive. There have been several reports about "FORD" and their great quality (I mean that in a good way). Labor costs per vehicleis at 10% or less. These are all facts, and all quite good. Here is the down side. #1 Health care is a major problem for our entire country.(46million with no health care) #2 The negative bias in this countries press about American Auto Cos.(Toyota hid quality problems for years) #3 Executive compensation. Why do we give underperforming execs, managers rewards for losing 1 billion dollars in a quarter. (DCX execs bonuses in 1st quarter 07, after losing money in 06) #4 Delphi Bankruptcy, Company loses millions of dollars, slashes wages, and benefits, and still asks bankruptcy court to let them pay "bonues" to their management.( Management ran them into the ground, not the workers.#5 The UAW. people can say what they want, without the UAW, and "ALL" the other legit unions we would be a third world country. No union is perfect, nor is anything. Without union rep. you could have a job w/15yrs sen. and be terminated for being late to work one time. As far as the current contract negos. I hope we do not lose to much in our benefits, however if it helps to save good American jobs then I would be willing to help. I want to see progress on the "Company" side. Stop blaming the American worker, and WORK with them to help the big 3.
9-11-2007 @ 10:45AM
rnemedi said...
Everyone should pay for their own health insurance, the government is not your mommy. Your employer is not your mommy. All this benefits crap started during WWII when the federal government put compensation regulations on these manufacturing companies. A lot of these so called uninsured people choose not to have insurance, they spend their money on something else such as cable TV, cell phones, plasma TVs, second cars... They also know that if they do need medical assistance they can get it and the rest of us pick up their tab, bad system all the way around. If you use something pay for it otherwise it is stealing. Do you really want the federal government to handle your health care, what government program has ever worked as planned and for that matter cost as much as planned, just take a look at Social Security? Change the restrictions placed on the insurance industry and on the consumers and let the market solve the problem. Maybe open it up to foreign competition like other industries.
There should also be no bonuses for poorly performing management, they should be replaced for poor performance just like any other employee. They all work for use, the share holder.
What ever happened to our individual freedoms and responsibilities?
9-14-2007 @ 10:17PM
OINKJOHNSON2 said...
Some degree of tension between labor and management is good, as it keeps competing interests in balance. However, ultimately, the interests of the workers and the company are parallel. That is, if the company survives and thrives, then it can provide jobs, decent wages and benefits, etc. If the company fails, or is driven into bankruptcy, everyone loses. No jobs, no pensions (or, at best, pension foisted off on the Government), no health insurance, etc.
The history of U.S. automakers and the UAW is a classic example of how to engineer a train-wreck. Insulated by little or no foreign competition (back in the 60's and early 70's), incompetent management agreed to overly-generous pay and benefit packages for too many workers. The workers greedily pushed their UAW to demand more and more. The result, Delphi paying simple assembly workers $27/hour. They simply could not visualize the Japanese coming on like a freight train to take market share away by selling better cars for less money.
I see little future for auto manufacturing in the USA. When the disparity in benefit costs between US companies and Japanese companies is more than $2000 per vehicle (not to mention the Korean companies, and soon, the Chinese companies), it would seem to be a prudent move to sell short Ford and GM. The stock will certainly be worth less 5 years from now.
I have no answer for the dilemma--short term, maybe some compromise, like profit-sharing, limiting executive bonuses, increased labor participation on the Board of Directors, etc. Long term, sell the stock and get out of town?