By Christine Tierney / The Detroit News
<http://www.detnews.com/2005/autosinsider/0511/22/C01-390273.htm>
The United Auto Workers reacted angrily to General Motors Corp.'s plan to slash nearly a third of its manufacturing jobs in North America, but the union is caught in a bind as it weighs the plight of its members against the automaker's struggle to recover.
"It's always tough for unions in that situation. They have a real stake in keeping American automakers viable and able to compete," said Zachary Hummel, an attorney specializing in labor law at Bryan Cave LLP in St. Louis.
"Both sides will differ on where to draw the line, but there's a realization at the UAW that they have to be careful about pushing too hard because they might end up with a worse situation than they have now," he said.
Rarely has the UAW faced such intense pressure as it does now, with the two biggest U.S. automakers losing money in North America and losing ground to Asian rivals led by Toyota Motor Corp. The UAW membership has dropped by more than half since 1980.
After giving GM breathing room by agreeing to a deal that would increase workers' and retirees' share of their health care costs, the UAW is under pressure now to give Ford Motor Co. and DaimlerChrysler AG's Chrysler Group similar concessions.
Ford plans to announce a deep restructuring in January -- its second in less than five years -- that will call for significant plant closings and jobs cuts.
The union already faces a tough adversary in the management of Delphi Corp., the largest U.S. supplier and onetime GM subsidiary that filed for bankruptcy in October. Delphi is seeking steep reductions in wages and benefits to restore its competitiveness.
Delphi Chairman Robert S. "Steve" Miller told The Detroit News he appreciates the dilemma facing UAW President Ron Gettelfinger and other union leaders.
"I don't underestimate the political problem they have in helping their membership make this transition," Miller said. Gettelfinger is up for re-election next year.
GM, which has lost more than $4 billion in North America so far this year, announced a restructuring plan Monday that would close five assembly and four component plants and downsize others. In all, 30,000 jobs will be eliminated.
Because the current labor contract bars GM from closing plants, it will idle some of them until it can negotiate the closures at the next contract talks in 2007.
"Today's announcement clearly makes those negotiations much more difficult," Gettelfinger said in a statement.
"There's going to be a very tough bargaining in 2007 about the future direction in which GM goes," said Harley Shaiken, a professor at specializing in labor issues at the University of California-Berkeley.
"The union wants to see a competitive GM -- their members' jobs depend on that. The long-term issue is, will we have a middle class with a more competitive GM? That'll be the issue in 2007," he said.
But the UAW will have a difficult time securing any job guarantees unless it softens its stance on the preservation of benefits and wages -- something it has been reluctant to do in the past, Hummel said.
"The challenge for the UAW is that, within any collective bargaining, a management retains the option to decide the size of the work force."
GM flagged the outlines of its restructuring plan in June, when Chairman and CEO Rick Wagoner told shareholders at the annual meeting that the automaker needed to cut 25,000 jobs in the United States and shutter plants.
At GM's engine plant in Flint, a town gutted by past restructurings, most of the workers have been there 30 years or longer and will be eligible for retirement. "Still, it's not easy for anybody concerned," said Phil Smith, education director at UAW Local 599.
Canadian employees were stunned to hear that one of plants slated for closure was a factory in Oshawa, Ontario, that was rated North America's highest-quality plant twice in the past four years by J.D. Power and Associates.
"It's a gem in GM's operations," said Basil "Buzz" Hargrove, president of the Canadian Auto Workers union. "If you're going to restructure and make money, why would you close your best plant?"
He said he would fight hard to secure early retirements, instead of layoffs, for the plant workers.
Union leaders said their members had cooperated closely with Detroit's automakers over the years to improve quality and productivity -- and were being penalized for poor strategic decisions.
"GM's return to prosperity depends on its offering products that consumers find attractive, exciting and want to buy," Gettelfinger said.
"Being successful in this regard is the exclusive responsibility of management."
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