Leaders of the United Auto Workers union should try to enjoy the upcoming holiday season. That’s because, when the New Year begins, it’s going to be a hard slog.
In 2019, the Detroit-based union will continue to face an ongoing FBI investigation that reaches into the highest ranks of its former top officers.
What’s more, it will again negotiate contracts with General Motors Co., Ford Motor Co. and FCA US LLC, the U.S. arm of Fiat Chrysler Automobiles. That’s daunting enough. But those talks come around every four years.
No, 2019 is shaping up as even tougher for other reasons.
First, the union’s bargaining position is shaping up to be the equivalent of trying to bluff in a poker game while holding a pair of threes.
The U.S. economy has enjoyed a decade-long expansion. The question is whether it’ll lapse into a recession sooner than later — maybe in time for the start of labor talks.
The stock market is jumpy. On Nov. 20, the Dow Jones Industrial Average and S&P 500 nosedived and wiped out gains for the year. Meanwhile, U.S. auto sales are plateauing. It’s hard for a union to press for gains when the economy goes sour.
What’s more, GM (Detroit) and Ford (Dearborn, MI) are looking to cut their salaried workforce. GM offered buyouts to its salaried employees. It remains to be seen whether enough took GM up on it to avoid salaried layoffs. Ford also is looking to reduce its salaried workforce but few details have emerged.
The automakers can’t cut the number of their factory workers without negotiating with the UAW. It’s unlikely GM and Ford would seek to reduce the number of salaried workers without comparable cutbacks in the factory worker roster.
Put another way, it’s easy to imagine that GM and Ford negotiators will turn to their UAW counterparts and say, “Your turn.”
More broadly, the negotiations will take place at a time the union is caught up in a wide-ranging scandal.
Here’s how Automotive News, the Bible of the automotive industry, puts it on a page summarizing the scandal along with a timeline.
In July 2017, federal prosecutors revealed that millions of dollars intended to train workers was instead spent by leadership of the UAW and FCA on air travel, solid-gold pens, a swimming pool, a house and a Ferrari, among other luxuries. Four indictments and four guilty pleas — so far — have exposed fraud within the massive U.S. auto manufacturing union and called into question the collective bargaining agreements ratified in 2011 and 2015 with FCA. Will this scandal spread? Here is a timeline and our list of key players.
Needless to say, that’s not the best look.
Once upon a time, the UAW was the gold standard of the U.S. labor movement. For decades, the union was led by leaders who followed the “statesman” model of leadership.
The likes of Walter Reuther, Leonard Woodcock and Douglas Fraser not only dealt with union issues, they branched out into civil rights and broader social issues. To be fair, that was easier when GM, Ford and the former Chrysler dominated the U.S. auto market.
Still, those UAW leaders — especially Reuter — inspired union members. Reuther had what we’d now call “street cred” in spades after he was beaten by Ford guards during 1937’s “Battle of the Overpass.” The UAW would not organize Ford until 1941.
End of the ‘Statesman’ Model
The “statesman” model of UAW leadership was dispensed with by the likes of Owen Bieber, Steve Yokich and Ron Gettelfinger. Admittedly, they had to negotiate labor contracts while Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. were seizing big chunks of the U.S. light-vehicle market.
One UAW president, Bob King, who served 2010 to 2014, tried to revive social justice activism. But King was president immediately after GM and Chrysler went through U.S. government-supervised bailouts. It was not the best time to be a statesman.
The current UAW President is Gary Jones, who is largely unknown in Detroit. Jones was elected UAW president in June 2018 at the union’s 37th Constitutional Convention. The UAW has said his education background as an accountant and his time in the secretary-treasurer’s office at UAW headquarters in Detroit from 1995 to 2004 makes him the perfect person to lead the UAW out of its financial scandal.
Perhaps so. But since being elected, Jones has kept a low public profile. He’sbeen working out of UAW Region 5 in Kansas City, MO, since 2005. It’s hard to know how he will approach this challenge.
Jones and the UAW can’t change the calendar. The union has had four-year contracts with GM, Ford and (now) FCA US since 1999. After the holiday eggnog has been consumed, the union will face a more than challenging 2019.