President Dennis Williams is leading the United Auto Workers much like the CEO of an automaker, from plumbing Wall Street insiders for their take on the industry to overhauling operations at the union’s Solidarity House headquarters in Detroit.
The former secretary-treasurer has restructured the UAW’s regions, cut costs, offered early retirements, instituted strict budgets by departments, started training union staff in leadership and planning, and brought the organization into the digital age with an upcoming mobile app. Those efforts, and more, are putting the union on track to balancing its books in 2016, a year ahead of schedule.
This is a pivotal time for the UAW, as Williams, 62, aims to put the union on the path to long-term viability after years of losing members and dues money, causing leaders to take millions annually from the strike fund to support general operations. Those trends are now reversing, as the one-term president simultaneously works toward labor agreements with Detroit automakers by Sept. 14.
“I do a lot of analyzing of different things,” Williams told The Detroit News in a recent interview. “I do it because anybody can use a big stick; it’s not always the smartest thing to do. I don’t think about today as much as I think about tomorrow.”
His leadership style is influencing this latest round of contract negotiations. His idea for a giant health care pool covering all employees, hourly and salaried, sounds more like they’d come from the chief of an automaker. Industry officials, from factory floors to board rooms, say these talks are unique; traditional rumors and leaks have been comparatively subdued, and negotiating teams on both sides are steadily working through issues.
Bargaining committees have been meeting for weeks, including some on weekends, developing language and discussing demands before approaching critical economic issues such as pay raises, health care costs and two-tier work system over the next 10 days. Little information regarding the discussions has leaked to the media or public, but some believe the negotiations could leave the union on track to be fiscally stronger than it has been in years with mutually beneficial contracts for both its members and the companies.
“You’re seeing people get involved more and more in the business leadership,” said Art Schwartz, president of Labor and Economics Associates and a former general director of labor relations for General Motors Co. “The bankruptcies put a chill on everybody. It happened once; they don’t want it ever happen again.”
Much of the optimism is credited to the business-minded leadership of Williams, say industry insiders who call him a “focused” and “smart” leader. He’s also a realist, taking steps to reckon with a smaller union battered by recession and a global financial meltdown in 2008-09 that forced two of Detroit’s three automakers into bankruptcy.
Jimmy Settles, vice president of the UAW-Ford department since 2006, has served under three presidents as a department head. He says Williams’ experience as the secretary-treasurer has “made a major difference” in the way the UAW runs the business of the union and how it serves members.
“Our accounting systems, how you get information and how much money a department generates became more business-like than ever before,” he told The News in June. “Obviously he keeps an eye on the money now. You have to engage every sector.”
Settles describes his relationship with Williams as “excellent,” calling him “a tongue-in-cheek guy. We can go at it but have a beer and smoke a cigar and forget about it. He’s a much easier person for my personality to work with because we have similar personalities.”
Still, some UAW members have taken to social media to voice displeasure about the lack of information being conveyed, while others support efforts to keep bargaining in the committee rooms to avoid rumors and false reports.
“We won’t know until we know ... Something is finalized,” Andy Carlton, a transmission plant worker for Fiat Chrysler Automobiles NV in Indiana, recently wrote on Facebook. “There won’t be any tidbits leaked until contract is ready to be signed. Even people very close to negotiations are saying it’s very close to the vest ... hush hush.”
Staffing levels adjusted
Williams, a director of Navistar International Corp. since 2006, spent much of his first year as president studying various departments and determining which were undermanned or overmanned, adjusting staff levels accordingly. The union went through a round of layoffs, as well as offering early retirement and buyout packages to eligible employees.
Secretary-Treasurer Gary Casteel said at the union’s special bargaining convention in March that the UAW has cut employees and is paring expenditures, too. In 2014, the union employed 670 and paid out roughly $79 million in payroll and related expenses, according to Casteel’s report. By comparison, the union employed 751 and paid out $78 million in 2013.
The reason: the union was losing money. UAW financials show the union lost $21 million in 2013, winnowing the losses to $10 million last year — a bottom line that is expected to turn black as soon as next year. The UAW had predicted to book an operating surplus in 2017, but Casteel said in March and Williams reiterated last month that the union should achieve profitability a year earlier than that.
The union’s strike and defense fund — a pool of money set aside for members should the UAW wage a lengthy strike with an automaker — declined to $597 million in 2014 from $738 million in 2010. The union had been withdrawing about $42 million a year from the strike fund to cover general expenses, but under a plan that started when Williams was secretary-treasurer, the union has ceased that practice.
“We had plenty of money in our strike fund to do it, but it’s just not good practice to get into,” Williams said.
Now, the union is replenishing the fund via a members-approved 25 percent dues increase — the first since 1967 — which Casteel reported had added $3 million to the strike fund in December. The UAW is on its way to adding $45 million to the fund.
In the union’s accounting process, there’s a category in expenditures labeled “other,” which includes expenses like property insurance, building and office costs, donations and meeting expenses. That number dropped to $46 million in 2014 from $50 million in 2013, and stands to fall even further.
The union has trimmed expenses by selling land, instituting strict department-wide budgets and putting employees through training programs to improve efficiencies. Employees — everyone from janitors to secretaries — have gone through extensive training in everything from properly formatting letters and working computer programs to doing research in a timely manner.
The personalities involved in the UAW-Big 3 contract negotiations can be as interesting as the issues themselves, turning boardroom discussions into beneficial business transactions, childish tantrums and soap operas, or all three.
During the last round of negotiations in 2011, then-UAW President Bob King missed a meeting scheduled with FCA CEO Sergio Marchionne close to the contract deadline, prompting the outspoken executive to pull out his MacBook and pound out a searing letter he released publicly just minutes before his company jet departed for overseas. He accused King of failing workers by not finishing negotiations on time.
Heading into talks this year, analysts expected FCA discussions to be challenging, given its high percentage of second-tier workers; the displeasure some workers have expressed with alternative work schedules; and significantly lower profit-sharing and bonuses.
However, when talks likely come down to the end with a handful of people in the room, Marchionne and Williams appear willing to work with one another. The duo have known each other for nearly a decade and have voiced mutual respect on numerous occasions.
“We’re not trying to interfere in the work that they’re doing — the day-to-day,” Marchionne said at the opening of contract talks in July. “But there is a fail-safe mechanism and it is the two of us. Before he and I ever blow, it will take a long time.”