UAW president: Union monitoring FCA-GM merger reports

Michael Martinez
The Detroit News

Detroit — United Auto Workers President Dennis Williams said Thursday the union is monitoring reports of a potential merger between Fiat Chrysler Automobiles NV and General Motors Co., but he doesn't believe it will affect upcoming contract negotiations.

"Any time a CEO makes a comment, the UAW starts researching what they're saying and what the value is," Williams told reporters during a roundtable Thursday at Solidarity House in Detroit. "We'll continue to monitor it. I don't think it has an impact on our bargaining."

Marchionne in April expressed his belief that the auto industry needs to consolidate; he sent an email to GM CEO Mary Barra asking about a potential merger. GM so far has rebuffed his advances.

In an interview with The Detroit News last week, FCA sales chief Reid Bigland said there are many opportunities for collaborations with engines and other components.

"The opportunities for increased economies of scale and increased leverage are certainly there in this industry, and I think we need to put some of our egos aside and really look at what's in the best interests of our shareholders in order to survive in this business long-term," he said.

Williams joked with reporters Thursday that he can't "sit down at a restaurant without being asked about Marchionne," but said he wants to do more research before taking a stand.

"We're not going to support anything that would hurt our members," he said. "I want to be very thoughtful about the advantages before I comment. When people make those kinds of comments, you have to do a deep dive."

Williams said he tries "not to second-guess Sergio."

University of Turin business professor Bernardo Bertoldi, who recently finished a Harvard Business case study on Marchionne, said his reported push to GM shareholders about the industry's need for consolidation is an attempt to bring about a "sense of urgency" that a company needs to take action.

"The sense of urgency today can arrive only by shareholders," he said Wednesday night in Turin, Italy. "It's not the CEO of GM, it's not the CEO of Fiat Chrysler who can take a decision and press, it's the shareholders."

FCA Head of Group Purchasing Scott Garberding, who started with Chrysler in 1993 and now is based in Italy, said the merger talks and reports have not had any impact on his productivity or his groups.

"I think there's history behind this, our leadership, our board, our owners have been extremely responsible in dealing with people in the company over the years, and I think people would expect that that wouldn't change," he said Thursday night in Turin. "People know if things get bad they can lose their jobs. If we have to take steps to avoid things getting bad, then that's the right thing to do."

Contract talks between the UAW and Detroit automakers are set to begin next month, with handshake ceremonies in the middle of July. Williams reiterated the union's position of hoping to "bridge the gap" between wages for first-tier and second-tier workers.

"We went through some very hard times together," Williams said. "As you look around the industry you have seen new products and processes we have put in place that have made these companies a lot of money. We plan on them sharing some of that with us."

He confirmed he will pick a lead automaker to negotiate with, but said the decision will be made more on hard work than experience.

"Eventually you will recognize the lead," he said. "I don't plan on picking it until I see it. The decision will be made on who's doing the best work and who's doing the most work."

Labor negotiators for both Ford and the UAW on Monday said they'd like the Dearborn automaker to be the lead. Ford has the most experience, from Executive Chairman Bill Ford and CEO Mark Fields, to vice president of labor affairs Bill Dirksen and Ford of the Americas chief Joe Hinrichs. And it has established relationships with Jimmy Settles, the most experienced UAW vice president.

Its rivals have relatively new faces working with the UAW after the retirement of top negotiators. FCA said last week that its North American labor relations chief, Alphons Iacobelli, 55, elected to retire, effective immediately. GM confirmed to The Detroit News the same day that its top bargainer, Rex Blackwell, 60, quietly retired June 1.

"Corporations make changes all the time," Williams said. "Some of the changes are not always at the best of times, but what I have found is that sometimes new faces and new thoughts actually helps."

Among the issues that could be at the forefront is health care. Williams said the union is open to pooling workers from all of Detroit's three automakers to save money on insurance costs.

"I would love to create a pool to insure members across companies," Williams said. "The more people that pool together in the system, the more leverage you have with the institutions such as hospitals and clinics and insurance companies."

UAW workers are currently insured by plans through each company. Active members pay for about 6 percent of the health care they use through co-pays and deductibles; retirees pay about 11 percent. Both numbers are far less than what most other insured Americans pay.

On the possibility of a strike, Williams said the union is prepared, but not expecting one. "We believe we can get through collective bargaining without a confrontation."

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Detroit News auto critic Henry Payne and staff writer Michael Wayland contributed