by Bill Onasch
After the stunning 2-1 rejection of a Tentative Agreement with Fiat Chrysler Automobiles, UAW president Dennis Williams decided to take another shot at a deal with his Fiat “partner” Sergio Marchionne. If approved it will also serve as a pattern for contracts with General Motors and Ford. Both Sergio and Dennis had cautioned there was little if any more money available to sweeten the overall package. But with much imaginative tweaking, and deferring, they hope there are enough perceived improvements to convince a majority to now say yes.
Many news stories about the new TA proclaimed the second-class Tier 2 would be eliminated. This is an exaggeration to say the least.
The Tier 2 wage rate, around 19 dollars an hour in the expired contract, will catch up with the new Top Tier rate of 29+ change—in eight years. Since the contract currently being voted on would expire in four that requires faith—perhaps misplaced–in the company to voluntarily abide by today’s promise in the next negotiations. At best, it is a lengthy journey to the two rates coinciding, not merging.
No Tier 2 workers will actually be upgraded to Top Tier where the differences include not only wages but, among other advantages, defined benefit pensions rather than a 401(k) and better health coverage as well. And, there are other new reminders of their still inferior status. The new TA increases the signing bonus for Top Tier by a thousand dollars while Tier 2 gets nothing additional. The rejected deal provided bigger profit sharing payouts to Tier 2; now, in this regard, they will be equal. Even if all goes as projected, in eight years Tier 2 will still be second-class members of Unequal Auto Workers.
Still, a ten dollar raise, even so spread out, will look attractive to many making 19. Dennis and Sergio hope this will change a lot of minds. The Wall Street Journal estimated the 25 dollar goal for Tier 2 in the first TA would have increased Chrysler labor costs ten percent. Since most of the four dollar increase is backloaded to the next contract the current deal should leave that ten percent pretty much intact. Currently, Chrysler labor costs are somewhat lower than GM and Ford and close to the biggest nonunion transplant, Toyota. To the relief of both Dennis and Sergio that shouldn’t change much.
Deleted from the current TA is any mention of the Dennis Williams pipe-dream of establishing a health care co-op covering all employees of the Big Three. This ill-advised and even more clumsily motivated proposal vaguely mentioned in the first deal would be a sort of super-VEBA–like UAW pensioners got stuck with in 2007. This understandably made many members nervous. Except for a new emergency room co-pay, current health benefits remain unchanged. But unchanged isn’t so great for Tier 2 who have a six percent co-pay of sure to rise medical expenses.
Instead of trying to win adequate, affordable health care through collective bargaining, the UAW should be working with other unionists to win Canadian-style single-payer. The Labor Campaign for Single-Payer will be a host of an important strategy meeting in Chicago October 30—details here.
What Workers Don’t Get
There’s no reinstatement of the Cost of Living Adjustment (COLA), pioneered by the UAW, that protects wages from inflation. For many years the formula of annual productivity raises coupled with COLA made UAW members the highest paid workers in manufacturing.
Top Tier workers will get two three percent raises under the proposed contract—their first boost in a decade—and two four percent lump sum payments that don’t get folded in to the wage rate. Inflation was one factor in the 21 percent decline in real wages in the auto industry in the last available comparison of 2003-2013.
A very big issue for affected workers is the Alternative Work Schedule requiring rotation through different shifts of four ten-hour straight time days. Not used by GM or Ford, this mean-spirited work change was solely devised to get nearly 24-7 production without paying overtime rates. Most workers consider it exhausting and unhealthy and hate the disruption it causes to family and social life. The September 18 Detroit Free-Press ran a story titled “UAW Wins Changes to Hated FCA Alternative Work Schedule.” But this tempting appetizer was followed by pretty thin soup,
“The UAW says its new [first] tentative agreement with Fiat Chrysler includes ‘significant alternative work schedule changes,’ designed to quell discontent among workers over the schedules. The tentative agreement, reached Tuesday, would pay workers more for Saturday shifts and prevent workers from being scheduled on consecutive Fridays.”
That hardly addresses the complaints about the loss of the eight hour day, regular shifts and regular days off, much less exhaustion and safety concerns. I could find nothing beyond this tweaking in the highlights of the new TA.
And What About Jobs?
Jobs are what defines workers—and, in union shops, payers of union dues. From World War II to the 1970s the American auto industry was nearly 100 percent unionized in the UAW. The UAW strategy since the 1980s has purportedly been all about jobs. Saving jobs was the rationale for give-back bargaining.
UAW membership peaked at 1.5 million in 1979. Today the number of active working members is about 390,000, along with more than 600,000 retirees who receive pensions and health care payments negotiated by the UAW. Membership at Big Three plants has dropped 42 percent in just the last decade. Only 15 percent of parts-makers are unionized. A substantial number of today’s UAW members are outside the auto industry. For example, I pay dues to UAW Local 1981—the National Writers Union.
Much of the membership loss has been due to automation, outsourcing, and offshoring. But a bigger factor has been the game-changing rise of Asian and European owned transplants building cars, SUVs, and light trucks in the USA–and taking nearly half the share of American production away from the Big Three. Counting parts suppliers and transplants, the auto industry still employs 900,000 workers. The UAW has failed to organize any transplant start-ups. Their effort to organize the Chattanooga VW plant through a sweetheart deal with the employer was shot down by VW workers—and this embarrassing episode will haunt them in other campaigns elsewhere.
Chrysler took advantage of unrestricted Tier 2 to go on a hiring spree, adding about 15,000 workers the last few years. That’s coming to a halt. The union summary of the new TA projects Chrysler adding 2,959 jobs at some plants over the next four years while eliminating 2,856 at others. That means a whopping 103 new jobs are expected. There has been no change in plans to move Dodge Dart and Chrysler 200 work to Mexico.
No Winner, Winner, Chicken Dinner
Some will congratulate brother Williams for crafting a win-win settlement that gains some improvements for workers while preserving Fiat Chrysler Automobile’s ability to successfully compete in the American and global markets. Suffering from both memory loss and myopic vision, they are only half right.
My take is that Sergio has bought labor peace on the cheap at a time when consumer demand is finally coming back with purchases deferred during the Great Recession and Jobless Recovery. Relatively cheap gasoline is luring more to the gas-guzzlers that are most profitable for the Big Three.
No one knows how long these favorable market conditions may last. Gasoline prices will eventually rebound and the decline in value of the Mexican peso will make that country even more attractive for job exports. Right now is a window of opportunity for the workers to at least be reclaiming some of what was surrendered—or confiscated through bankruptcy—in tougher times. An adversarial union would have been preparing the ranks for a fight for substantial gains rather than tweaks—including an old-school strike if need be.
Dennis entered negotiations proclaiming what has become the slogan of an online dating service aimed at my generation—It’s Our Time. But the one-party regime of the ruling Administration Caucus has devolved in to the polar opposite of adversarial. They are irrevocably dedicated to partnership with the boss. Far from being part of the solution, the Solidarity House bureaucracy is a big part of the problem for the workers they represent.
A reliable observer of worker trends at Chrysler recently wrote in an e-mail message, “If a worker isn’t ready to face a strike, there are enough excuses provided here. Plus a total lack of confidence in the top leadership to properly conduct a strike. If a worker is ready to face a strike, then they will voice their displeasure at all that is missing.”
I suspect he is, as usual, spot on. I won’t make any predictions. If this TA is rejected Dennis will probably try his luck with GM or Ford for a pattern agreement. If ultimately UAW workers decide to strike it will be a big battle deserving the unconditional solidarity of all class aware workers. We shall see.
An Even Longer View Is Needed
Today auto workers are properly focused on wages, benefits, and working conditions for the next four years. But it’s also high time to start seriously addressing the challenges facing an industry based on consumption of fossil fuel that is changing our climate and threatening the future of civilization. I’ll soon return to the topic of how auto fits in to the fight for both class and climate justice.
In closing I again thank my Detroit friend Larry, a UAW Chrysler retiree, for the articles and other information he has diligently supplied.
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