UAW discussing recall costs
The United Auto Workers union is in talks with Detroit automakers about recall costs taking a bite out of members’ profit-sharing checks, according to President Dennis Williams.
Union officials, he said, are “in continued discussions about the profit-sharing versus the recall,” as automakers spend hundreds of millions, if not billions, of dollars this year to fix and repair cars and trucks.
Williams, speaking with news media Monday at the UAW’s Solidarity House headquarters in Detroit, did not provide details about the discussions. It’s likely the union is arguing that the cost of the recalls — many of which are older models — shouldn’t detrimentally impact members’ annual profit-sharing checks. Payments are based on each of the automakers’ North American profits.
Automakers have recalled nearly 60 million cars and trucks this year, shattering the all-time record set in 2004 of 30.4 million.
Representatives for General Motors Co., Ford Motor Co. and Chrysler Group LLC could not immediately be reached for comment about the discussions or would not comment directly on the discussions.
“GM’s relationship with the UAW is founded on creative problem-solving and a shared commitment to solutions that benefit our employees and the business,” GM said in a statement. “We discuss a full range of business topics with our union partners on a regular basis. Right now, we are focused on achieving fourth-quarter results together, and it’s too early to comment on 2014 performance.”
GM has led the industry in recalls this year, following a highly-publicized recall of 2.59 million 2005-10 Chevrolet Cobalts, 2003-07 Saturn Ions and other cars with defective ignition switches that can inadvertently turn the engine off and disable power steering and air bags.
Brian Hartman, president of UAW Local 2209, last week told The Detroit News that the union is working to ensure profit-sharing checks are not reduced because of GM’s recall costs.
Hartman said it shouldn’t be the union workers’ responsibility to pick up the tab for problems that stemmed pre-bankruptcy and before the UAW contract on profit-sharing was in place.
“The president and vice president are going to fight as much as they can to make sure it doesn’t impact as much,” he said.
Profit-sharing checks started after the last round of collective bargaining with the Detroit automakers in 2011. The union opted for the annual lump-sum payments and promise of jobs rather than wage hikes.
Williams said profit-sharing was a good idea as automakers dealt with the recession, but it’s now time to balance it with general wage increases.
“I think profit-sharing was a good way to help our members out with the unknown,” he said. “Normally, when you get a wage increase you know it’s coming … profit-sharing was a way that we would give people an opportunity through the success of the company to have another means in wages.”
Automakers have paid billions of dollars to hourly employees, as a result of profit-sharing. For 2013, Ford had the top payout of approximately $8,800 to 47,000 eligible U.S. hourly employees — totaling $413.6 million.
Staff Writer Melissa Burden contributed.