Monday, October 5, 2015

UAW Struggles to Fix Contract Standoff


United Auto Workers - Gennady Barsky

Union members are growing increasingly frustrated after a proposed labor agreement between the United Auto Workers (UAW) and automaker Fiat Chrysler went up in smoke. According to various media reports UAW President Dennis Williams and Fiat Chrysler VP Norwood Jewell recently told local union leaders that negotiations would continue. While union leaders are, at least at present, not talking about a strike, they have yet to take that option off the table.

But Chrysler is far from the only car company facing labor PR issues. At Ford’s pickup and van factory in Missouri, workers are threatening to walk out over contract disputes. In both of these cases, perception of the opponent’s position is at least as important as the actual position. No matter what each side tells the other, there will always be What is Said and What is Believed.

Strike One against the automakers is the fact, despite a growing US auto market, workers still face the threat of losing jobs to nonunion lower-wage workers in Mexico or even nonunion factories in the southern United States. Everything the workers and union bosses hear will be tinged with waiting for the other shoe to drop. When will the automakers play their “Fine, go ahead and strike! We’ll just move.” card.

That particular nuclear option has yet to be revealed … or even hinted at … but Chrysler did telegraph plans to resist boosting US labor costs, stating that it would base its decisions on “industrial objectives.”

The proposed contract allowed for raises for both veteran workers earning $28 as well as newly hired UAW members who earn about $19 per hour. Some lower tier workers hoped to see their salary number rise, closing the gap between the more experienced and less experienced workers. Some concessions were met for both tiers, but not to the satisfaction of the union reps.

These local reps said “confusion” over the changes in the proposal lead to frustration and falling support. There’s a strong lesson here. People objected, not because they understood and disagreed, but because they MISunderstood and feared the worst. Communication was lost in the messaging process, leading to the current détente. While workers may not have been happy with the changes if they understood them, at least the two sides could start somewhere specific. Now they are just trying to find center in the dark.

Roman Temkin is a real estate developer from Russia who currently lives in NYC.

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