In-Depth Look At The UAW Negotiations With The Big 3 [AUTO ANALYSIS]

Pay takes a more prominent role in good times like this.

Jeff Gilbert
August 30, 2019 - 6:00 am

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By Jeff Gilbert, WWJ Auto Beat Reporter

We're reaching a critical point in the UAW-Detroit 3 contract talks, and it could be a good time to go over the main issues, the big players, and what "conventional wisdom" says may happen.  I'll also take a look at some "unconventional possibilities" to offset that.

But, as somebody who's covered every set of auto talks since 1987, I have learned that crystal balls are very cloudy and predictions can soon look very foolish.

And a federal investigation into the UAW could mean a lot of surprises.  Even if it doesn't, it's a cloud that's hovering over the whole process, and could impact ratification votes.  Knowledge of that could impact strategies on both sides.

The next thing to watch for is, a lead company--something we should find out about in the coming week.  "Should" being a very important word, because the union likes to be unpredictable and has tried interesting strategies in the past.

And that unpredictability is something that's important to keep in mind as you watch developments in these talks.  We are watching from the outside.  But those who are developing strategy are on the inside.  They know what's been offered.  They've been taking the measure of the other side.  They know what's really important, and what's a bluff.  The most important thing for us to know is there is a lot going on inside that we just can't see.

With workers it always boils down to two things....job security and pay.  Pay takes a more prominent role in good times like this.

With carmakers, it's competitiveness.

That boils down to several important issues.

Health care costs top the list. Union workers get much better benefits than most of us, and want to keep them.  That's really increasing costs for car companies. Look for incremental measures here, possibly more incentives for workers to access the systems less, and keep the costs down.

Temporary workers. Carmakers like the flexibility. This is where they have a real disadvantage compared to imports. The union wants as many regular jobs and as few temps as possible. Both sides know where each other stands. This likely won't be a dealbreaker.

A real sticky issue could be getting new workers up to full pay. It takes 8 years now. The union wants to shorten that. With a lot of baby boomers retiring, the carmakers like being able to brag that they've hired a lot of new workers, and like the fact they save money on them.  This could be one of those sticky issues.

Let's not forget there are a lot of new workers who have come into plants since the recession. They  have never experienced a strike. This could make them more militant, and more likely to reject a contract. The union could see the need to strike somebody--even for a brief time -- just to show new workers what it's like to walk a picket line, live on lower "strike pay" and live with some uncertainty.

Some of that uncertainty is already with us. I'm hearing stories of workers who are moving up doctors appointments to make sure they are still covered by insurance, which could be unavailable during a strike. 

And take all that's said about "relationships" with more than a grain of salt.  "It's not personal.  It's business." as they said in The Godfather.  Workers and stakeholders want the best deal they can get. That's why nobody ever settles at the deadline.

And forget that image of people sitting facing each other at big tables for long hours. There is some of that. But there are a lot of smaller meetings, and a lot of internal meetings for both sides. And a lot of lawyers going over details, and financial people counting every penny.  Because those pennies are multiplied by hundreds of thousands of workers over millions of hours, forever.

So the lead company will be chosen not by what we know about them publicly, but by private discussions and evaluations. But doesn't mean we can't handicap things.

FORD

Conventional Wisdom: They have the best relationship. They have the fewest public issues. So the union will choose them to take the lead figuring they will get the best deal possible to pattern with the other two.

Unconventional Wisdom:  Great relationships can lead to high expectations which can lead to great disappointments. Ford also likes to talk about how they have the most manufacturing workers in the U.S. That means they are proportionately impacted by this contract more than anybody else, giving them more incentives to hold the line.

Ford also has historically been a hotbed of union dissidents, and workers have to agree to any new deal.

Ford may also have fewer manufacturing treats to give the union, as we know where a lot of their products are being made...and while it's dealt with its "fitness" issues on the salaried side, they still have to deal with a union that wants to share in a very fit profit.

FIAT CHRYSLER

Conventional wisdom: No possible way they will be the target. They were last time and it was a mess. Then there were the "fat, dumb and happy" comments about their former union leadership, and the ongoing scandal.

All that has every expert saying that FCA will be on the sidelines this September, and would never, ever, ever be able to set the pattern.

Unconventional wisdom: The UAW loves to confound the experts.

FCA is making a lot of investments and hiring a lot of new workers, which gives them the ability to give the union some behind the scenes offers that the UAW may just want to see matched at other companies.

But, how do you get workers to approve a new deal? Stage a brief strike.

I'm not predicting this, just saying it's within the realm of possibility that FCA is chosen to be the lead company, the union returns to its old policy of "no contract-no work" and walks out when there's no deal at 11:59 PM September 14th, which is a Saturday night.

You have all day Sunday to picket with minimal disruption.  Even if a day or two of production is missed when the week begins--workers get to blow off steam, while also learning the realities that come with being on strike.

Again, not a prediction...but I do believe it's a possibility.

GENERAL MOTORS

Conventional wisdom:  The union is ready to go to war over plant closings.  Get ready for a mess.  They either go first to get it over with, or last to make them impose a better deal worked out elsewhere.

Unconventional wisdom:  The UAW is run by very smart people. They are smart enough to hire even smarter advisors. Workers may have been blindsided by the GM plant closings. Everybody who follows the industry on a daily basis has been saying for years that GM had too many plants.

The UAW is all about protecting their workers. But they also know how far they can push the companies to do things that are not competitive. They are walking a tightrope in these talks.

This is where there's a lot going on that we don't know--and that's what will have the biggest impact here. What other investments is GM offering?  Did they make deeper cuts than needed, just so they can save one or more of these plants?  Is there a compromise that will keep a plant or two on stand by, just in case they are needed.

I've noticed some interesting union behavior here.  Lots of tough statements, but there protests have been very peaceful--often described as vigils. Many workers I've talked to express disappointment and sorrow---but, in the background, they seem to be treating the closings as a done deal.  I think the bankruptcy remains very much on peoples minds.

This is where there's a lot of possibility for positive surprise, or terrible miscalculation.

Behind all these talks, an uncertain future.  There are trade issues, recession fears and worries where new technology and new competition may take us.  There are smart people at the table on both sides.  

Smart people can make mistakes, but they can also come up with innovative solutions.​