Come fall, the United Auto Workers' contracts with Chrysler, Ford, and Chrysler will expire and UAW President Bob King is ready to put his foot down. He has announced that the UAW will make no new concessions in contract negotiations with the Big Three American automakers. However, this hard stance is being taken at the same time that King hopes to woo foreign automakers with plants in the U.S., such as Volkswagen, to help the union survive in the future.
This will be the first union contract negation for GM and Chrysler since their 2009 bankruptcies. During the restructurings and negations in 2007, the UAW made a number of concessions regarding starting pay and healthcare cost; King says that the organization will not budge from those points. He states that the union's members are not willing to pay more into their healthcare benefits, and that since older workers are being replaced, it is "reasonable to ask for a higher wage for entry-level workers."
According to The Detroit Free Press GM, Chrysler, and Ford average $56, $49, and $58 per hour per worker in labor costs, respectively; that is generally more than the $55, $50, and $44 that it respectively costs Toyota, Honda, and Hyundai.
King does understand, however, that higher fixed costs for the automakers effectively means higher new car prices, less sales, and future layoffs. But King believes "It is a very legitimate goal that everybody working in the auto industry should be at a middle-class standard of living. Entry level, for a family of four, is barely there."
Furthermore, King wants to see the automakers' profit sharing programs revised to give more money to the workers during more times of profit. He is also standing firm in his determination for the UAW to receive permanent board seats at GM, Chrysler, and Ford.
While King the king is determined to hold the UAW's ground with the American automakers, he also feels that it is necessary -- and possible -- to unionize foreign automakers' plants here in the U.S. Most of the foreign-owned plants are located in the southern part of the country, which has long been anti-union, and are largely right-to-work states. King has previously said that the unionization of these southern plants could be crucial to the long-term existence of the UAW.
New reports indicate the union has already begun talks with Volkswagen to unionize its new Chattanooga, Tennessee plant, which builds the new 2012 Passat. Having dealt with tough labor unions in Germany, Volkswagen has so far been receptive to the talks with the UAW. It is this kind of global experience that the UAW hopes to play it its advantage with Chrysler (and its parent-company, Fiat).
The UAW has seen its membership fall by 44 percent in the last decade, according to Automotive News, down to around 377,000 -- far from its 1.5 million-member peak in 1979. If the contract negotiations with the Big Three don't go well or southern plants aren't receptive to unionizing, it could spell the end for the UAW.