UAW readies for Big Three contract showdowns
The new president of the United Auto Workers is moving to restructure the union as it gears up for one of its toughest challenges in years: next fall's critical labor talks with U.S. automakers as it seeks pay raises for veteran workers and more equitable wages for newer workers.
"We're shaking it up a little bit. We're actually restructuring internally," Dennis Williams told The Detroit News in his first wide-ranging interview since taking office in June. "We know we have a lot to do — but we don't want to put so much on our plate that we can't achieve nothing."
The Detroit union wants to convince U.S. automakers — who made $14.4 billion in profits last year — to agree to significant improvements in compensation, including for older workers who haven't had a raise since 2007. Williams is under heavy pressure to bridge the gap with newer employees known as "Tier 2" workers who earn significantly less than veteran employees — and get less in the way of benefits, including no defined-benefit pensions.
"We have to be focused on bridging that gap," the 61-year-old Williams said last week in his office overlooking the Detroit River at Solidarity House, the UAW's headquarters. "The companies need to recognize the fact that the (veteran employees) haven't had a raise."
The UAW faces significant pressure to deliver, in part because thousands of UAW members in Michigan will have the right to opt out of membership for the first time after Michigan approved controversial "right to work" legislation.
At the same time, Williams says, the union has to be "mindful that we are in a global economy with real competition."
Next year's contract talks are the first since 2007 in which workers at General Motors Co. and Chrysler Group LLC have the right to strike; the UAW gave up that right for the 2011 talks as one of the conditions of the government bailouts for the automakers. Workers in June approved the first dues increase since 1967 — a 25 percent hike — to replenish the strike fund that had fallen to about $600 million. Union leaders said they needed a healthy strike fund so companies would take seriously the threat of a work stoppage.
Williams said a strike is not inevitable next year in contract negotiations, despite suggestions by some observers.
"We don't want to have a confrontation unnecessarily. I just think there's too much at stake for any of us to pick a fight with one another," he said. "We have big issues — there's no doubt about it — but I think, realistically, companies have to know... our members have sacrificed. I think that new people coming in want a higher standard of living and I don't think that's unreasonable. We'll find out when we get to the table."
Williams, who previously was secretary-treasurer of the union, said he is rethinking all of its operations. He says the UAW is making progress in its bid to win representation for workers at Volkswagen's Chattanooga plant. He confirmed the union expects to launch a similar local for workers at Daimler's plant in Vance, Ala., asking to workers to volunteer to join.
He plans to again push the automakers to add more jobs in the United States. The 2011 labor agreements resulted in Detroit's Big Three automakers adding or retaining 28,000 jobs, and resulted in record-setting profit-sharing checks for UAW workers and pay raises for newer workers. By next year, those newer workers will make at least $19.28 an hour, up from about $15.50 in 2011.
'Right to work' impact?
Kristin Dziczek, director of the Industry & Labor Group at the Center for Automotive Research in Ann Arbor, said next year's talks with Detroit automakers will include a "whole list of things that are going to be really hard."
With younger, lesser-paid workers representing a bigger chunk of UAW membership than in 2011, the union will need to have their support to ratify contracts. That's why the UAW will need to win benefits for both new and older workers.
And because of "right-to-work" laws, Michigan workers will be able to opt out of the union if they don't like it. "We haven't been in this situation," Dziczek said. "We don't know how it will play out."
It's going to be a balancing act, Dziczek said. "I don't think they can get rid of second tier, but I think they can get darn closer." She said the UAW might be able to win a phase-out of the two-tier contract in the next negotiations in 2019.
Williams said the fact that UAW members in Michigan will have the right to quit the union after the next contracts take effect is not going unnoticed: "This is new to our members, this is new to the state of Michigan — so we'll deal with it, but it's not going to be a total focus of mine."
He said that in other right-to-work states, the union has been successful in retaining the vast majority of its members. "I've always believed that if you do your job representing people, that people will be there to support you."
Beyond wages, other issues will be contentious. Dziczek said automakers likely will seek to reduce pension costs as they did with salaried retirees. GM and Ford Motor Co. both offered lump-sum buyouts to salaried pension recipients if they agreed to forgo future benefits. GM off-loaded its pension plans to Prudential, while last year Chrysler froze its salaried pension plans for 8,000 people.
Harley Shaiken, a University of California Berkeley professor and labor expert, said the labor talks will pose a challenge. A deal "is going to be tough. It's going to require some swallowing hard on both sides." Much may depend on the economic conditions a year from now and if U.S. automakers are still posting billions in profits.
Williams dismisses suggestions that the UAW will focus solely on the Detroit's Big Three automakers: "We're not going to give up on organizing. In fact, actually we have more organizing going on right now than we've had for a long time — but we're going to approach it in a different way."
Beyond negotiations with Detroit automakers, the UAW will have to negotiate major contracts with John Deere, Mitsubishi and UAW Local 6000, which represents 17,000 state of Michigan employees. "This is not going to be an easy task," Williams said. "It's a full plate."
Growth opportunities seen
Williams, who moved to Detroit four years ago, has kept a low profile since winning election in June at the union's constitutional convention in Detroit. He's been meeting members, visiting plants and local union halls.
Since taking office, Williams has met with GM CEO Mary Barra and Fiat Chrysler CEO Sergio Marchionne. He plans to meet with Ford CEO Mark Fields soon. The meetings haven't been a "deep dialogue," he says. Rather, he characterized them as sessions to get to know each other.
The 2015 contract talks will be the first with Fields and Barra at the helm. In an interview last week, Barra said GM has a strong relationship with the UAW and a good relationship with union leaders. "We're having productive conversations about our approach," she says. "We're going to work together. There's a lot of creativity."
In 2013, the UAW's membership rose about 2 percent, or nearly 9,000 members to 391,415 — the most since 2008. It was the fourth straight year of membership gains for the union. Membership is still down about one-third since 2005 and down dramatically from when its 1.53 million members in 1979.
Williams says the union sees foreign automakers, parts companies, the gaming industry and higher education as potential areas for new members. "The UAW has a great opportunity to grow," he said.
Williams' election marked the first time in the union's history that the president is someone who has not worked in an automobile factory. Williams, who served in the U.S. Marine Corps as a younger man, got a job as a salvage welder at tractor company J.I. Case and joined the UAW in 1977. His past isn't lost on him: Williams sits behind the president's desk in a makeshift tractor chair with his name and UAW logo embossed on it. It was built by an Iowa UAW local.
His wife recently retired from working for the U.S. Navy Department and the couple is putting their Illinois home up for sale. He puts in long hours and been quietly visiting plants and union locals to take the pulse of union members — especially at plants and locals that his predecessors haven't bothered to visit.
In a sign of his low profile, he's still so unknown that some members at union locals haven't recognized him when he visited.
"I love it when they don't know who I am."