UAW Reaches Agreements with Detroit Three and Kohler

Dale Heckerman

Summary: Strong rank-and-file mobilization in the auto industry leads to a contract that limits two-tier pay scales, improving the initial one negotiated by the “business unionists” of the United Auto Workers Union (UAW), while UAW Kohler workers in Wisconsin end up with a less favorable contract — Editors

The recently concluded negotiations between the United Auto Workers Union (UAW) and the Detroit Three (Ford, General Motors and Fiat Chrysler Automobiles, NV) were long, contentious and were all passed by narrow margins. Workers were suspicious of union leadership and expected a rich contract to make up for several years of concessions. The UAW surprised many industry analysts by beginning their negotiations with Fiat Chrysler Automobiles, NV (FCA), the weakest of the Detroit Three and with the largest percentage (40%) of entry level or Tier 2 workers. This was the first time Tier 2 workers have had the opportunity to vote on a contract and veteran workers promised their Tier 2 colleagues to support wage parity.

The workers at FCA showed their resolve by rejecting the first agreement between the UAW and FCA because it fell short of achieving eventual wage parity between Tier 2 and veteran workers. The final agreement between the UAW and FCA puts Tier 2 workers on an eight-year path to near wage parity with veteran workers. Traditional workers will see their first wage increases in 10 years with health care and other benefits improved. This is a notable accomplishment, considering the fact that real wages for auto manufacturing have declined 21% since 2003. The agreement between the UAW and FCA set the tone for agreements with Ford and General Motors (GM). The Detroit Three also agreed to billions of dollars worth of factory upgrades and promises of thousands of new jobs.

Social Media played a large role as a forum of information for a new generation of workers during the UAW’s negotiations. The specter of jobs being lost to Mexican plants was also on the minds of UAW negotiators.

The signing bonuses varied, with the richest going to the most successful company, Ford, with approximately $10,000 going to its workers, GM workers getting about an $8,000 signing bonus and finally, FCA workers getting a signing bonus of approximately $4,000.

What was not highlighted in the UAW’s negotiations with the Detroit Three was ending the cap on hiring entry level workers and the hiring of temporary “temp” workers, a fact which will come back to haunt the UAW’s workers in the future. Highlights of the agreement between the UAW and Ford, for example, include:

  • An end to a cap on entry-level employees
  • Improved ability to use temporary workers
  • Use of alternative work schedules, along with additional daily and weekly mandatory overtime
  • Flexibility to leverage Ford’s global manufacturing footprint to improve cost competitiveness for products the company may sell in North America
  • Maintaining the current Supplemental Unemployment Benefit agreement, which allows Ford to remain competitive in a downturn.

Early-retirement offers will usher thousands of workers out the door, who the company will be able to replace at a lower pay rate.

The UAW Reaches an Agreement with The Kohler Company in Sheboygan, Wisconsin

After nearly five weeks on strike, striking workers represented by UAW Local 833 at the Kohler Co. in Sheboygan, Wisconsin didn’t fare as well as workers at the Detroit Three. The UAW and the Kohler CO. were at odds over the Kohler Company’s intransigent insistence on maintaining its two-tiered wage structure that the company contends is essential to keeping its manufacturing operations here competitive.

The union would like to see the system phased out in the coming years, arguing that it has left new workers unable to earn a livable wage and forever behind co-workers performing similar work.

The company has said its 1,600 so-called Tier A workers currently earn $23.45 on average, whereas union estimates are in the $21-$22 range. The company says its 375 permanent Tier B workers currently average $12.70 per hour — the union’s estimate is $12.50-$13.

The UAW dropped its demand to eliminate the two-tier wage system. The company in turn agreed to very modest wage increases for both Tier A and B workers. The company is also moderately lowering health insurance premiums “for some workers” while others will “only see a minimal increase”.

In the end, the company agreed to pay Tier B workers an average hourly wage increase of $4.70 by the end of the contract. That will bring the lowest wage for those workers to about $15 an hour in four years, versus about $11 now. Tier A workers, meanwhile will see a $2 hourly increase on average during that same span.

Striking workers received support from local unions, which sent food and other donations along with a toy drive. In addition, the Wisconsin AFL-CIO asked union supporters to join the picket line on Saturday, Dec. 19, 2015.

UAW Essentially a Business Union

The membership of the UAW has dwindled significantly from its high point in 1979 of nearly 1.5 million members to its current level of approximately 403,500. The disparity in the agreements reached between the UAW and the Detroit Three and the UAW and the Kohler Co., with the Detroit Three getting the better deal, reflects this trend. The UAW, along with the rest of American business unionism, is in capitalist business survival mode. Another aspect of the agreements between the UAW and the Detroit Three not highlighted, is the agreement that allows the Detroit Three to send its less profitable vehicles to Mexican plants while it produces its “premium” vehicles e.g. suv’s and trucks in the US.

The UAW has become more diversified in its unionizing efforts by expanding its organizational reach into the southern states and college campuses: “DETROIT (Reuters) — The UAW, after decades of failed attempts, won its first organizing drive at a foreign-owned auto assembly plant in the South when skilled trades workers at Volkswagen’s Chattanooga, Tenn., factory voted, 108-44, to join the union.”

This organizing effort has already hit a snag according to this news release from Yahoo News on December 21, 2015: “NASHVILLE, Tenn. (AP) – The United Auto Workers is bringing charges against Volkswagen for refusing to bargain with a group of skilled workers who won a union vote at the German automaker’s lone U.S. plant in Tennessee earlier this month.”

Here is an example of the UAW’s college campus organizing effort as well as an example of its conservative ethic from an “Informed Grads” December 16, 2015 news release: “Detroit, MI – In a landmark decision yesterday, United Auto Workers (UAW) International Union granted an appeal filed by a member of the University of California student group Informed Grads, thereby striking down a Boycott, Divestment, and Sanctions (BDS) resolution adopted by UAW Local 2865 last year. UAW 2865 represents graduate student workers at all of the University of California campuses. UAW International, the body that oversees all UAW locals in the United States, set national precedent by denying the local organization the right to adopt such a divisive and alienating measure.”

What is needed to get beyond the machinations of business unionism is to take on the very difficult task of developing an alternative to capitalist society grounded in Marx’s vision of a post-capitalist society. Note the following passage from our Statement of Principles, “The International Marxist-Humanist Organization (IMHO) aims to develop and project a viable vision of an alternative to capitalism—a new, human society— that can give direction to today’s freedom struggles. The IMHO is based on the unique philosophic contributions that have guided Marxist-Humanism since it was founded in the 1950s by Raya Dunayevskaya. We do so by working out a unity of theory and practice, worker and intellectual, and philosophy and organization.”

The author is a Denver area roofing contractor and a former auto worker


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