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UAW to Begin Labor Talks Amid Slowing Industry, Internal Issues

Bill Koenig
By Bill Koenig Senior Editor, SME Media

COMMENTARY

The United Auto Workers union this month commences labor negotiations with General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles. The timing isn’t the best.

U.S. deliveries of cars and light trucks are slowing after four consecutive years of 17 million or more. The figures go beyond normal ups and downs.

Sales of sedans are being crunched as (relatively) low gasoline prices encourage customers to buy crossovers and trucks. The Detroit Three have, essentially, given up on cars with a few exceptions. In turn, GM is ending production at five plants in the U.S. and Canada. One of them is a Lordstown, Ohio, a small-car plant that may be sold to an electric-vehicle startup.

The union also is coping with legal trouble. The Detroit-based UAW has seen former officials plead guilty in a scandal related to millions of dollars intended to train workers. (CLICK HERE for a timeline by News.)

Finally, the UAW – for the second time – was unsuccessful in attempts to unionize a Volkswagen factory in Tennessee. VW’s factories in Germany and elsewhere have union representation. But VW resisted the UAW’s organizing drive in Tennessee, according to the union.

Thus, the UAW lacks positive momentum going into the talks with GM, Ford and Fiat Chrysler.

What will occur this month is akin to Kabuki theater – it’s a ritual that follows familiar patterns.

The UAW-Detroit Three Ritual

The UAW will meet with the bargaining committees of the three automakers during July 15 and 16. Union leaders will have a handshake with a company counterpart. Everyone will then turn toward cameras and pose for photos. It’s kind of like the labor equivalent of ribbon cuttings with giant scissors to start off trade shows. The two sides will have a formal meeting. Then they’ll probably come out, take some questions from reporters and try to say as little as possible.

In reality, much of the heavy lifting occurs in smaller gatherings. Committees on both sides will meet to discuss detailed issues. Later, closer to the 11:59 p.m. Sept. 14 deadline, the two sides will attempt to close a deal, based on what the committees have accomplished. The question is whether a strike happens.

Traditionally, the union selects a “target” company to go first. The idea is to strike an agreement with the automaker who’s in the best shape financially, then try to apply the basic terms to the other two companies.

Negotiations are never easy. In this case, the labor talks will occur in the shadow of major industry changes. Automakers are investing in self-driving and electric vehicles while it’s uncertain just when, or if, they will pay off. All three automakers are trying to make as much money as possible from trucks for now. Pickups generate the bulk of profits for GM, Ford and Fiat Chrysler.

The hope is that will tide them over until the automotive future is clearer. However, union leaders must deal with the here and now. UAW members have seen the automakers pile up profits since the last negotiations in 2015. Those members are going to want their share.

The negotiations may begin with Kabuki theater elements. But there still is uncertainty ahead – for the union and the automakers.

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