Summary
As a former member of the UAW who continues to receive the UAW Magazine free of charge, there is continuity between this labor agreement and past labor agreements, with one slight difference, buy-outs, replacement, and then reduced salaries for one level of employees. The UAW has also recognized the difficulty the auto industry is presently facing in negotiating this agreement.
Analysis
A former member of the UAW, I will keep this analysis simple and brief. There is continuity between this labor agreement and past labor agreements mad e by the UAW, with one slight difference, permitting the buy-out and then replacement of 46,000 non-core employees with employees who make substantially less pay. The UAW has also recognized the difficulty the auto industry is presently facing in negotiating this agreement.
Ron Gettelfinger, UAW president, said the UAW's new contract with the Big Three automakers would save about $1,000 per car built in the USA. The UAW has tried to be flexible in negotiating this agreement, recognizing present difficulties in the economy, and downsizing by the automakers, especially GM which has been downsized from several hundred thousand workers to about 70,000 workers.
Slumping US auto sales, the result of factors that include a weak economy, and foreign competition, has led to cost cutting by the automakers. Chrysler is in a particularly difficult situation, and is negotiating additional cuts with the union.
The Union also addressed the US government's recent tightening of fuel emission standards, or CAFE, Corporate Average Fuel Economy, which will force automakers to revamp their product and will cost the automakers billions of dollars. The UAW is hoping that automakers will produce a subcompact car in the USA, and has stated that it has helped the companies to lower costs to where US production of a subcompact car is a consideration.
Although the market for subcompact cars in the USA is growing, not one manufacturer produces a model in the USA, presently producing their B-segment cars in Korea and China.
Chrysler has been researching the implementation of fuel saving technology such as electric cars, hybrid, battery powered, and other technologies. Chrysler placed three battery powered automobiles on display at the recent automobile show in Detroit. However, this technology is very expensive, costing in the billions of dollars.
The new UAW contract follows a line of continuity with previous contracts in that it permits autoworkers to make cuts, or downsize, a polite way of saying to lay-off workers. GM has announced it will offer to buy-out about 46,000 non-core workers in February. General union policy administers lay-offs by seniority. This has the effect of protecting the jobs of the most senior workers, and usually sweetening their pay and benefits.
The new agreement will permit the automakers to replace thousands of non-core workers at less than half the hourly wage. This is an interesting move by the UAW, who usually opposes replacement of full-time workers with workers for reasons of less pay, or part-time replacements. It appears the UAW is concerned about the state of the automakers, and difficulties that may lay ahead. The UAW appears to be negotiating from an economic rather than a labor position. There is no mention of whether the automakers would be required to give these new positions first to workers who were forced to leave their jobs, as it is usually UAW policy, to use seniority in hiring and rehiring workers who have suffered lay-offs.
The new non-core workers would be receiving about $26 per hour compared to the $62 per hour of the previous workers.
The new contracts show a line of continuity in making concessions of cut-backs to the automakers in return for security and new contract for senior workers within the UAW. The UAW, in permitting the automakers to buy-out and replace 46,000 non-core workers, with workers of lesser wage, shows that the UAW is concerned about the economic future of the Three US automakers, and the competition they may be facing from overseas.
