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UAW WANTS 'FAIR SHARE' OF PROFITS, BUT NOT OF LOSSES

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UAW WANTS 'FAIR SHARE' OF PROFITS, BUT NOT OF LOSSES [OP-ED]

By Mark Kleis

The economies of the world are still in shambles, with many industries celebrating improvements compared to last year that are still far below figures from two and three years ago. To say that the outlook for economic recovery is dismal at worst and uncertain at best would likely be a fair assessment for most industries. Although some analysts believe the worst is behind us, others predict a double-dip recession lies ahead as the lion's share of mortgage defaults prepare to come due.

In the auto industry things haven't been much different. 2009 proved to be one of the toughest years in history, even for giants like Toyota which posted a record quarterly loss. Sales volume for the U.S. market has dropped off by roughly five million vehicles compared to its peak, representing new challenges for automakers facing economies of scale-related challenges.

For American automakers it has been particularly tough on the whole, with two thirds of the automakers emerging from bankruptcy earlier in the year. It's been just over a year that Ford Motor Company has been able to report multiple consecutive quarters of profitability, while General Motors has posted just two consecutive profitable quarters and Chrysler has yet to post a profit post-bankruptcy.

Despite the fact that most consider the auto industry - specifically the U.S. automakers - to be far from out of the woods, United Auto Workers Union president Bob King has already come out and said that it's time to give the UAW its "fair share" of the profits. King answered questions for Free Press editors and reporters, mainly centered around King's future goals and how he views the current contracts in place for his workers. Setting the tone for his agenda in the interview, King told the Detroit Free Press, "I want to see that when the upside is shared, that it is shared on some fair, proportional basis."

Is it time for the Detroit Three to pay up?

Prior to the second quarter of 2009, Ford recorded four consecutive quarterly losses including their worst-ever quarter, ultimately totaling $16.16 billion in losses. Since then, Ford has five consecutive quarters of profits which total just $10.2 billion.

At GM the losses were even more staggering, dating back to Q2 2007 with consecutive losses leading all the way up to bankruptcy. In 2008 alone, GM reported losses of $19.2 billion. Since emerging from bankruptcy the automaker has posted just two consecutive quarterly profits, totaling $3.2 billion.

Chrysler's struggles also date back to 2007, with net losses for that year totaling $3 billion, followed by losses of $5 billion just in the first three quarters of 2008. Since recently emerging from bankruptcy, the Auburn Hills-based automaker has reported two consecutive quarterly losses totaling $362 million in the red.

UAW then compared to UAW now

Given that all three Detroit-based automakers suffered years of substantial net losses leading up to the bankruptcies of GM and Chrysler, as well as the internal restructuring of Ford, the recent moves by Ford and General Motors to begin their return to profitability, it seems as if King's request for more profit sharing now may not be as based on fairness and equitable terms as he says.

In years past when the Detroit Three automakers have struggled to make a profit the UAW did not jump to make concessions as soon as the automaker suffered a quarter or a few of losses, instead taking several months to years to approve concessions - concessions that ultimately still left the Detroit Three with higher labor costs than their non-union competitors.

These actions of the UAW should create reason for pause and to pose questions concerning King's argument that the automakers must immediately restore the concessions made by the UAW after such a limited period of profitability for Ford and GM.

It is also worth reiterating that the concessions made by the UAW in 2009 were unequal across Ford, GM and Chrysler, with GM and Chrysler receiving the largest concessions, and Ford only receiving part of the concessions they requested after failing to get UAW approval. This unequal issuing of concessions goes against the long championed idea of equal concessions across the Detroit Three sought by the UAW for their personal gain.

It would seem that the UAW only seeks equal contracts when those contracts result in increased pay or benefits for the UAW, and not when struggling automakers are seeking an equal playing field. The actions of the UAW over the last year also appear to directly contradict the words of King during the same interview.

When asked to "paint a picture of what bargaining does look like if pattern bargaining is reduced," King answered, "Between Ford and General Motors and Chrysler, you do have to keep fairness. ...Overall, we are not going to put one company at a disadvantage to the other companies. That wouldn't be right. That wouldn't be fair. What we don't have the ability to do right now is to make sure that that pattern stays throughout the whole industry.

Freep also asked King to clarify what he meant when he said that workers have sacrificed a lot through the collapse of the auto industry and should gain as things recover. King told Freep, "It's gaining financially. How we do that is an open question. ...and I think there is a pretty broad understanding that we can't bargain agreements that make the companies long-term uncompetitive. We don't want to get back into the spiral that we just got out of. We have to figure a path that really gives our membership...their fair share of the upside."

King went on to mention something that is very key to his agenda, King's aspirations go beyond simply securing jobs and benefits for his membership, but he also seeks forms of economic and social justice, as shown in members' own photographs found on their Facebook page (see gallery).

King speaks

When Freep asked King if there was a chance for further concessions to be made by the UAW King responded, "I don't see any more concessions in this round of bargaining. My view of the world, American manufacturing talks about being globally competitive. We buy into that, and yet American CEOs are not globally competitive. They are paid outlandishly more than anybody else in the rest of the world. So that has to be addressed."

King says here that the UAW has no intentions of making any further concessions, as he clearly has ambitions to do the exact opposite of that. Previously, King said that he feels that the Detroit 3 should have "fairness," so does that mean that King is already planning to lessen some of the concessions made for GM and Chrysler in order to match the lesser concessions given to Ford since they avoided a bailout?

If history is any indicator, we wouldn't suggest holding your breath while waiting for the UAW to volunteer concessions in the name of fairness and equality.

link:

http://www.leftlanenews.com/uaw-wants-fair-share-of-profits-but-not-of-losses-op-ed.html

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