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Issue: Nov 2005


GM cuts put union in bind



Pushing hard to aid members could do harm to automakers

by Christine Tierney, Detroit News

The United Auto Workers reacted angrily to General Motors Corp.'s plan to eliminate nearly a third of its manufacturing jobs in North America, but the union is in a tight spot as it weighs the plight of its members against the automaker's struggle to recover.

"It's always tough for unions in that situation. They have a real stake in keeping American automakers viable and able to compete," said Zachary Hummel, a partner specializing in labor law at Bryan Cave.

"Both sides will differ on where to draw the line, but there's a realization at the UAW that they have to be careful about pushing too hard because they might end up with a worse situation than they have now."

Rarely has the UAW faced such intense pressure as it does now, with the two biggest U.S. automakers losing money in North America and losing ground to Asian rivals led by Toyota Motor Corp. The UAW membership has dropped by more than half since 1980.

After giving GM breathing room by agreeing to a deal that would increase workers' and retirees' share of their health care costs, the UAW is under pressure now to give Ford Motor Co. and DaimlerChrysler's Chrysler Group similar concessions.

Ford plans to announce a deep restructuring in January that will call for significant plant closings and jobs cuts.

The union already faces a tough adversary in the management of Delphi Corp., the largest U.S. supplier and onetime GM subsidiary that filed for bankruptcy in October. Delphi is seeking steep reductions in wages and benefits to restore its competitiveness.

Delphi Chairman Steve Miller told the Detroit News Monday he appreciates the dilemma facing UAW President Ron Gettelfinger and other union leaders.

"I don't underestimate the political problem they have in helping their membership make this transition," Miller said. Gettelfinger is up for re-election next year.

GM, which has lost more than $4 billion in North America so far this year, announced a restructuring plan Monday that would close four assembly and six component plants and downsize others. In all, 30,000 jobs will be eliminated.

Because the current contract bars GM from closing plants, it will idle some of them until it can negotiate the closures at the next contract talks in 2007.

"There's going to be a very tough bargaining in 2007 about the future direction in which GM goes," said Harley Shaiken, a professor specializing in labor issues at the University of California-Berkeley.

"The union wants to see a competitive GM - their members' jobs depend on that. The long-term issue is, will we have a middle class with a more competitive GM? That'll be the issue in 2007," he said.

But the UAW will have a hard time securing job guarantees unless it softens its stance on preservation of benefits and wages, something it has been reluctant to do, Hummel said.


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