U.A.W. Facing Tough Choices, Leader Warns By MICHELINE MAYNARD
LAS VEGAS, June 11 — The president of the United Automobile Workers union told his members in a strikingly blunt report released Sunday that they cannot ride out the automobile industry crisis and should be prepared to make tradition-breaking decisions to help rescue the industry.
In the report, to be given to members at the union's convention, which opens here on Monday, the union president, Ron Gettelfinger, pointed to many causes of the industry's grave malaise, including "bad management" and declining auto sales.
But Mr. Gettelfinger acknowledged that the union's health care benefits helped create a ballooning health cost crisis that had become "unsustainable" in the face of the auto companies' declining sales. This, he said, was a reason why the U.A.W. agreed to substantial health care concessions last year.
"This isn't a cyclical downturn," Mr. Gettelfinger said in the report. "The kind of challenges we face aren't the kind that can be ridden out. They're structural challenges and they require new and farsighted solutions."
Mr. Gettelfinger declined to say what specific moves he would ask union members to make and said he believed things could improve for the union, which he argued is gaining political and social momentum. But seasoned labor experts said the report and a speech Mr. Gettelfinger is scheduled to give on Monday on the state of the U.A.W., are meant to prepare union members to expect more concessions in critical contract talks that begin next year.
"Usually you rally them for the fight that's ahead; he's rallying them for the hard times that are ahead," said Gary N. Chaison, a professor of labor relations at Clark University in Worcester, Mass.
The U.A.W., long the envy of the labor movement for its contracts with high wages and extensive benefits, is now experiencing the same demands for givebacks that have swept workers in the steel, railroad and airline industries, and it is losing jobs rapidly. The union's membership, which peaked in 1979 at 1.5 million fell below 600,000 last year, its lowest point since 1942, a separate union report released Sunday showed.
And more members are likely to disappear in coming months. Workers at General Motors, and its former parts supplier, Delphi, must decide by June 23 whether to accept buyouts and other retirement incentives to leave their jobs.
Those still working are finding that their lives have changed. In the past year, the U.A.W. reached landmark agreements that will require workers to pay more for health care coverage at G.M. and Ford — an action that Mr. Gettelfinger told Time magazine was "probably the most difficult backward step to take in the history of our union."
Despite that, Mr. Gettelfinger, 61, who joined the union in 1964 as a repairman at the Ford plant in Louisville, Ky., is expected to win a second four-year term this week. He also will name new vice presidents in charge of bargaining with G.M., Ford and Chrysler in next year's contract negotiations.
Hanging over the convention, however, is the crisis affecting Detroit automakers, whose market share fell to just under 53 percent last month, the second-lowest level in history. Asian auto companies, meanwhile, took 40 percent of the market, their highest ever.
Moreover, G.M. and Ford, which are losing millions of dollars on their automotive operations, collectively plan to cut 60,000 jobs over the next six years, when they plan to close all or parts of two dozen plants.
The situation facing the companies is "unlike any we have faced in the past," Mr. Gettelfinger said in the report, including the near- bankruptcy at Chrysler that required a Congressional bailout, the industry downturn of the 1980's and G.M.'s deep financial problems in 1992 that triggered the ouster of its chief executive.
As he has before, Mr. Gettelfinger criticized industry leaders for failing to act in the face of foreign competition. Auto industry leaders, he said, were guilty of "missed market opportunities" and "bland designs" while money that could have been invested in new products and updating plants was "squandered in ill-conceived international ventures."
But Mr. Gettelfinger, long a proponent of national health care coverage, said the extensive health care benefits, coupled with Detroit's declining fortunes, had created a situation that was "unsustainable" — a reason the U.A.W. agreed to the benefit concessions.
"That reality was painful, but it was the reality," Mr. Gettelfinger said in the report.
Further, he argued, "We can be proud that our union doesn't shy away from making tough calls and even prouder of our members' willingness to make sacrifices for those who preceded them and those who will follow."
Mr. Gettelfinger's pragmatism in the auto crisis contrasts sharply with the previous determination of other past U.A.W. leaders to fight concessions, Professor Chaison said.
"There's a word that kept coming up several times, and that's the word reality," he said. "What he's really saying is that we live in extraordinary times, and we have to do what reality demands we do, not what we'd like to do."
On Friday, the U.A.W. reached agreement with G.M. and Delphi to offer buyouts and other retirement incentives to all 23,000 U.A.W. members at Delphi, which is operating under bankruptcy-court protection.
Initially, the deals were offered to only 13,000 Delphi workers, along with 113,000 workers at G.M. Workers face a June 23 deadline for deciding whether to take the deals, which G.M. will finance.
Delphi, which was part of G.M. until a 1999 spinoff, has asked a federal judge for permission to impose deep wage and benefit cuts on Delphi workers.
But Friday, the judge put off hearings on the request until August.
The three parties must now consider critical questions.
Unless those discussions end in a stalemate, analysts see an increased likelihood that the union will grant concessions to Delphi, opening the door for cuts at the major auto companies next year.
So while the U.A.W. convention will have its usual round of parties, dinners and cocktail receptions here, they are taking place against a somber backdrop.
Professor Chaison said: "This is probably going to be the gloomiest convention that you've ever seen. Everyone is just waiting for the other shoe to fall."