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UAW's President Facing Tough Choices in Grim Times

As U.S. automakers lose market share, the union finds itself in a struggle to keep pay, benefits and pensions from eroding.

May 21, 2006|P.J. Huffstutter | Times Staff Writer

LOUISVILLE, Ky. -- A bronze plaque bearing a portrait of Ron Gettelfinger, president of the United Automobile Workers International, hangs inside the entrance of the union hall named after him.

Each day, scores of factory workers pass by this homage to a hometown hero -- the man charged with preventing America's blue-collar autoworkers from joining the ranks of the working poor. Some come for information about their retirement pensions. Others, faced with salary cuts and diminished healthcare benefits, seek reassurance.

A few autoworkers simply head to a table and pick up pamphlets advising on ways of "dealing with depression" and "planning your future."

"It's grim in the industry," said Aaron Duke, 51, a forklift driver here at Ford Motor Co.'s Kentucky Truck Plant. "My brother works for Ford. So does my daughter, my son and my son-in-law. We have a lot to lose if the industry keeps going downhill."

General Motors Corp., Ford and, to a lesser degree, DaimlerChrysler all face swollen union payrolls, idle factories and soaring healthcare and pension costs. Gettelfinger and his UAW sit in the cross hairs of the Big Three's aim to cut employee and retiree costs as a way to survive.

UAW officials and automakers have long faced each other as adversaries. But as American carmakers see their hold on the domestic market shrinking, the union's influence has been slipping as well. Labor is now wrestling with frustrations among its rank-and-file members who are angry at both the automakers and the union leadership.

This comes at a time when the UAW, its membership roll declining, has found itself unable to organize workers at U.S. plants operated by foreign car companies.

A generation ago, things were vastly different. In the mid-1960s, American automakers controlled 95% of the U.S. market and sales of imports were a statistical blip. But foreign brands, led by Toyota Motor Corp., steadily won converts with innovative designs, better fuel economy and a reputation for reliability. By 2005, foreign makes accounted for 43% of U.S. car sales, while the Big Three's share shriveled to 57%.

Foreign automakers also opened 27 North American plants -- employing 134,000 workers -- but most are nonunion. By last year the UAW's membership had fallen to 557,000 from 1.5 million in the 1970s.

To try to turn things around, GM, whose North American operations bleed cash at the rate of $13 million a day, will lay off 30,000 hourly workers and close 12 plants. Ford, which reported a $1.2-billion loss for the first quarter of this year, plans to close 14 plants and other facilities.

The UAW also will face a bruising round of negotiations next year with GM, Ford and Chrysler over a new labor agreement.

But the union's most immediate threat comes from Delphi Corp., GM's leading parts supplier.

Delphi this month petitioned a U.S. Bankruptcy Court judge in New York to void its UAW contracts and retiree healthcare benefits because it has insufficient money to pay them. Delphi wants to cut union wages drastically -- to as little as $12.50 an hour from the current average of $27 -- and lay off 67% of its nearly 34,000 U.S. hourly workers. The UAW represents 24,000 Delphi workers.

A bankruptcy judge will rule on Delphi's request next month.

Gettelfinger got a clear sign of his membership's mood Tuesday, when more than 95% of the UAW-Delphi workers who voted said they approved going on strike against the parts maker.

Wall Street analysts say a Delphi strike could shove GM into bankruptcy. It also could have a devastating domino effect on the rest of the U.S. auto industry.

"Gettelfinger's legacy will be the epitaph of the UAW," said Gregg Shotwell, 55, a machine operator at Delphi's fuel-injector plant in Coopersville, Mich. "I believe we need to strike. There's no other choice, because we have no other weapon to force GM into more serious negotiations."

Yet it's unclear whether Gettelfinger will actually call a strike, or use the threat as a ploy during the Delphi negotiations, said Gary N. Chaison, professor of labor relations at Clark University in Worcester, Mass.

"It's a vote of confidence at the bargaining team and a vote of anger at the automakers," Chaison said. To actually strike "would be a move of desperation, because [it] would mean mutually assured destruction for both sides."

Just days before Gettelfinger called for the strike vote, Delphi quietly began running ads in newspapers in Alabama and Michigan looking to hire factory workers, even as it plans to radically cut back its staffing.

Company executives say they are only making sure that the factories will stay open if too many workers take buyout offers. UAW-Delphi workers -- who have taken to using mugs with "W.G.A.F." or "Who Give A [expletive]" written on them -- insist that the company is looking to hire strike-breakers.

As Delphi's workers wrestle with their fate, other UAW members nervously ponder whether they might soon face the same future.

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