UAW Will Trade Concessions for Health Care, Organizing Rights

On September 15 United Auto Workers President Ron Gettelfinger will announce victory in contract talks with automakers. The UAW will hold the line on health care cost-shifting, Gettelfinger’s only clearly announced goal. And the Big Three will agree to pressure non-union parts supplier companies to allow the UAW into those plants.

Contracts expire September 14 at Ford, GM, DaimlerChrysler, Visteon, and Delphi, covering 291,510 active workers, 369,810 retirees, and 105,420 surviving spouses. (Visteon and Delphi were created in 2000 and 1999 when Ford and GM spun off parts plants into separate companies.)

The labor press will hail Gettelfinger’s victory, in particular on “bargaining to organize” the parts companies. The mainstream media-subjected to a relentless barrage from company PR departments about the backbreaking cost of health care--will wonder how the companies can afford to pay. They’ll attribute the settlement to Gettelfinger’s negotiating skills.

UAW skeptics, though, say that the union will pay for health care simply by taking cuts somewhere else. What matters to the companies is the overall size of the package, after all.

The UAW Solidarity Coalition, a small reform group meeting in Toledo for its annual conference July 27, resolved to put out a series of leaflets warning fellow members what they’re likely to forfeit in order to retain their current benefits. Calling for “No Concessions on Health Care, No Concessions Nowhere,” the group will also urge members to “Vote No Until You Know.”

In 1990, UAW dissidents threatened to file suit in order to force the UAW International to make copies of the entire proposed agreement available at union halls, rather than just the union’s “Highlights” pages. This year, they want the contract on line. “If it’s going to be such a good contract,” said George Windau, a millwright at the Toledo Jeep plant, “why can’t we see it?”

Members planned to scan the agreement and put it on the the Coalition’s website, along with an analysis of losses and gains.

They forecast any number of possible concessions: a wage freeze for one or more years (with a lump-sum payment as a “signing bonus”); deductions from COLA; work rules that increase company flexibility and reduce workers’; worse pay and benefits for new-hires, who currently hire in at 70% of base pay and take three years to catch up.

A key question will be wages and benefits for the 52,000 workers at Delphi and Visteon, many of whom are near retirement. One UAW insider said, “The thing to watch this year will be whether they put in a two-tier wage scale at Delphi and Visteon.” As retirees were replaced with low-wage new-hires, such a set-up would soon cut costs substantially.


On the companies’ side, one of their main goals is shrinking their union workforces even further. For several contracts the union has negotiated language to put a brake on attrition, but that language has gone unenforced. Last year, for example, 7,500 hourly workers left GM, but only 800 new workers were hired.

The Oakland (Michigan) Press reported that Ford and Visteon plan to cut their union workforces 5% per year, from 94,000 to 73,000 over four years. At the beginning of the last contract, in 1999, Ford, which still included Visteon, had 102,000 workers.

The companies have also announced about a dozen plants they plan to close or sell.


When Gettelfinger was elected in 2002, the business press fretted that he seemed ready to take a more aggressive approach than his predecessors. He immediately called a strike at parts supplier Johnson Controls to win recognition there. But Wall Street is pressuring the companies hard to trim expenses this year-and, given the companies’ continuing loss of market share to imports and foreign-owned plants within the U.S.-the UAW brass are willing to cooperate, up to a point.

As in previous years, the union has not mobilized its members for a contract fight. Members are engaged in no discussions of the issues, no strike preparations, no community outreach. Most locals cancelled meetings for the summer.

And Gettelfinger made clear in advance that he had no intention of striking. It’s customary for the UAW to choose one of the Big Three as the target and to negotiate a pattern there that the other two companies then follow (GM is likely this year). The UAW Local 6000 newspaper wrote, “Gettelfinger has referred to the pattern company as a ‘lead company,’ rather than a ‘strike target,’ the traditional term.”




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The auto industry in the U.S. includes both large and small parts factories and assembly plants where workers make those parts into cars and trucks. Historically, the Big Three owned both parts and assembly plants, and wages among parts companies varied widely, with some near Big Three scale and some lower.

As the companies began, in the 1980s, to outsource more work to Mexico and to non-union plants in the U.S., the UAW at first seemed complacent. Few organizing drives (in the auto industry) were undertaken. During this time the union was focused above all on the inroads into the Big Three’s market share made by Japanese brands. UAW President Owen Bieber appeared to see outsourcing as the solution that would help lower domestic companies’ costs and keep assembly workers working.

Today, UAW leaders have changed their tune, to a degree. They have a master plan for organizing the auto parts industry, but they have accepted the idea that parts workers should make substantially less money than assembly workers. The reality of competition has made this necessary, says UAW Vice-president in charge of organizing Bob King.

Therefore the union is seeking neutrality pacts with supplier companies, to make it easier to organize their workers. To get the pacts, the union agrees in advance to keep wages in those plants at a level acceptable to the supplier companies and to the Big Three.

Since last year the union has signed three such agreements, with Johnson Controls, Metaldyne, and Dana. (See July Labor Notes, “UAW Trades Pay Cut for Neutrality,” click “Archives.”) Around $16 appears to be the union’s target ceiling wage for workers in those factories.

In a teleconference with Wall Street investors, King said, "Ron Gettelfinger, when he gave me the assignment of working with suppliers, said my number-one charge was to make certain we were a value-add [that is, that unionization made the plants more profitable].

“If we want to keep manufacturing jobs in the United States, which is a major objective of the UAW, then we can't be fighting management where we represent members. If we have an adversarial relationship, then we'll see more work go overseas.”

Granted, this is language designed to make Wall Street happy. Actions speak louder than words, and the UAW’s policy towards the big supplier companies was signaled in August (as the Big Three talks were proceeding) when the International insisted on a three-tier wage scale at the Three Rivers, Michigan plant of American Axle and Manufacturing (AAM). AAM is a supplier that was once part of GM. (See accompanying article on AAM, “Keep Voting Till You Get It Right.”

New-hires in that plant will now make $13.50 an hour with no COLA for three years-slightly more than half the pay of the older workforce. First-tier workers also took a 63c per hour wage cut.

At AAM, local union officers, local management, and corporate officials had agreed on an across-the-board wage cut that would avoid creating a third pay tier. (The local had accepted two tiers in 2000.) But the UAW International vetoed that plan, and the three-tier plan was eventually approved by a two-thirds vote.

In a leaflet urging fellow members to vote no, rank-and-filer Pete Bennett wrote, “In order to preserve the jobs at the Big 3, the UAW chose to allow the spin-offs of parts plants, then undercut those locals by having them compete against each other for supplier work at the Big 3. As the plot thickens we see other plants, outside the original 5 AAM plants, joining both AAM and magically the UAW and SURPRISE! Now the original 5 plants will have to compete against other UAW/AAM plants and either lower wages or lose jobs… The ultimate plan is to gain members for the UAW while lowering costs for AAM and the Big 3….

“It sucks, yes, but it is the truth and we must find a way to deal with it without losing our jobs, without taking unequal wage cuts and without selling out the next generation, again!!!”


The UAWSC planned to issue three leaflets during August and early September. The first would urge members not to vote without knowing what the proposals contained. The second would warn of the likely concessions, and the third would mention the positive demands not on the table this year, such as ending two-tier, making temporary workers permanent, COLA on pensions, and a three-year contract rather than four.

In his shop floor paper, Soldiers of Solidarity, GM worker Miguel Chavarria of Local 22 in Detroit wrote, “The mantra has been ‘No Concessions on Health Care!’ If that’s all we win, will it be a victory if we settle for neutrality language that allows plant closings and pay cuts such as the agreement at [parts supplier] Metaldyne? Wages were cut from $26 an hour to $16.

“Will it be a victory if we settle for three or even four tier wage scale? …if we settle for work rule changes that affect our seniority, transfer rights or lines of demarcation…if we settle for COLA diversions?…if we settle for an agreement that gives up our Right to Strike?”

The UAWSC did not realistically expect to have an impact on bargaining, as it has supporters only in a relatively small number of plants, scattered throughout the five companies. “This contract may be bad,” said one retirement-age AAM worker, “but can we build for the future?”