UAW Braces for Contract Talks

By: Associated Press
By: Associated Press

At a massive factory complex not far from Cleveland, most of the 3,200 hourly workers know that they may unwittingly play a major role in upcoming national contract talks between General Motors Corp. and the United Auto Workers.

As the union opens its national bargaining convention in Detroit on Tuesday, the 5-million-square-foot Lordstown plant has no car to make when its current products, the Chevrolet Cobalt and Pontiac G5, go out of production after the 2009 model year.

GM won't say if Lordstown will get the next generation GM small car. It won't say if the plant will get anything. And it acknowledges that a factory is under construction in Mexico that some analysts believe could be the place where GM builds future small cars for North America. GM spokesman Tom Wickham would only say the plant's primary purpose will be to support GM sales in the Mexican market.

Lordstown, like several other plants without future products, is a bargaining chip for GM as it tries to extract concessions from the union and stem billions in losses during the past two years. The strategy is repeating itself at Ford Motor Co. and DaimlerChrysler AG's Chrysler Group, as they try to cut what analysts say is an average $2,400-per-car profit disadvantage to Japanese competitors.

"Of course we're concerned about it," said Dave Green, president of UAW Local 1714, one of two locals at the hulking Lordstown complex. "It's our livelihood."

Lordstown, which opened in 1966 and remains a major employer in a region battered by manufacturing job losses, sits along the north side of the Ohio Turnpike about 12 miles west of Youngstown. It cranked out 278,176 Cobalts and G5 small cars last year. Over the years it has made Pontiac Firebirds, Chevrolet Vegas and Impalas, as well as vans and other vehicles.

GM and other companies have in the past withheld products from plants as a strategy to negotiate worker concessions and tax incentives from local and state governments.

But with all three Detroit-area companies struggling, industry observers expect individual plants to become part of the larger national talks that officially open this summer. The UAW contracts with the automakers expire in September.

When 1,500 union members from more than 800 UAW locals in the U.S. and Canada meet for two days this week in Detroit, they aren't expected to get into the nitty-gritty of what will be discussed with individual companies. But they will set the overall bargaining agenda.

"These are the most important negotiations in the UAW's history," said Gary Chaison, a labor specialist at Clark University in Worcester, Mass. "This is where they have to reset their role as a bona fide bargaining agent. They have to try to resist concessions."

In the past few years, auto companies have been using threats of plant closures to negotiate "competitive operating agreements" on a plant-by-plant basis, convincing union locals to allow workers to do multiple jobs and letting companies contract out janitorial and other traditional union jobs to save money. At times, the bargaining has pitted one plant against another.

"The war of all against all is under way," Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, said in a recent presentation.

At Lordstown, a UAW bargaining committee has been talking with GM about such an agreement, said Jim Graham, president of Local 1112. Graham hopes an agreement will bring Lordstown a vehicle before the national bargaining begins.

"If we go ahead with this contract, I'm very confident that we'll get a product in 2009," said Graham.

GM, currently the healthiest of the Detroit Three, has said little about what it will seek in the national contract. Graham won't talk specifically about what the locals may be asked to give up, and he knows reaching such an agreement won't be easy.

"We're going to have to do things in this contract that 25 years ago would have been unheard of," Graham said. "But because of the economy, because of the position we've been put in, again not necessarily by ourselves, but by the federal government, we have to survive."

Graham said a lot of workers are skeptical about GM withholding a product from the plant.

The workers, he said, already have given to the company in a 2005 agreement involving health care cost concessions.

"The people I'm working with have given back," he said. "I just don't know how much more they can do."

McAlinden said more concessions may be necessary because it's imperative for the Detroit automakers to gain labor cost parity with Toyota Motor Corp. and Honda Motor Co.

The Detroit Three pay hourly workers about $65 per hour including wages, health care costs and pension benefits, while Honda, for example, pays about $40 per hour including benefits, he said.

In a recent filing with the U.S. Securities and Exchange Commission, GM said it would have to cut its staggering $68 billion long-term liability for retiree health care.

But many of Lordstown's retirees are leery of paying more, even if it would help bring a new car to the plant.

Don Hartman, a 79-year-old retiree from Salem, Ohio, said the 2005 concessions have raised copays, making it difficult for him to afford them on his $1,200-per-month pension. Outside a health fair at one of Lordstown's union halls, Hartman said he recently underwent heart bypass surgery and isn't sure how much he'll have to pay for the physical therapy his doctor has prescribed.

"We never had a vote or anything on it. That's what bothers a lot of the retirees," Hartman said. "I think they've just about reached how much we can afford."

Graham said he's confident that union bargainers at the local and national level can come up with deals that work for everyone.

"In today's world, you have to be flexible," he said. "With the understanding that you look out for the people who are part of your organization."

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