UAW strike option would be ‘tough call’

David Shepardson
Detroit News Washington Bureau

As United Auto Workers negotiators bargain with Detroit’s Big Three automakers for a new four-year contract, the union will almost certainly face a critical decision: whether to call a strike against one of the Big Three, should they believe that action to be necessary.

It’s been 17 years since the last major strike at a U.S. automaker. The UAW struck two key General Motors plants in 1998 — Flint Metal Center and Delphi Flint East. The 54-day strike, the longest in three decades, crippled the Detroit automaker. It forced GM to idle nearly 180,000 employees and shutter 26 of 29 North American assembly plants. It idled more than a hundred auto supplier plants.

But general strikes, as a bargaining chip, have dwindled in the U.S. in recent years. They’re costly — and the UAW’s strike fund has $600 million, down from $1 billion in 2006.

In the current negotiations, the UAW and company officials have sought to play down the idea of a strike, emphasizing their strengthening labor-management partnerships while remaining mindful of how a walkout might play to the American taxpayer who bailed out GM and Chrysler during the industry meltdown. But the union has made it clear that it will call a strike if it doesn’t meet some bargaining objectives.

The UAW is under considerable pressure to deliver a good contract that shares in the companies’ rising profits.

Veteran workers haven’t had a base wage increase in a decade, though they have received hefty profit-sharing checks as the automakers regained their financial footing. UAW President Dennis Williams has made raising pay a big issue. U.S. auto sales are booming and the Big Three are all reporting hefty profits, putting added pressure on the UAW to deliver.

On the other side of the bargaining table, automakers face pressure from Wall Street and foreign competitors to hold the line against big increases in labor costs.

Williams told The Detroit News recently that a decision to strike would be a “tough call.”

“There isn’t a day that doesn’t go by that I don’t think about the impact of a strike,” he said.

“I’m not going to say it’s not going to happen. I don’t know ... It’s a tough call, but it’s one that I’ll have to make at the right time. There are certain things that I will not walk away from the table without.”

Kristin Dziczek, director of the Industry & Labor Group at the Center for Automotive Research in Ann Arbor, said she doesn’t “think everybody is itching for a strike.” A strike “would be a failure of the negotiating teams” on both sides, she said. “A strike is one of the weapons they have to get an agreement — it’s not one they use very regularly or lightly.”

Dziczek believes wages would be the foremost issue over which the UAW would be willing to call a strike. She said that among workers, “expectations are pretty high.”

The autoworkers union was barred from striking in 2011 as part of the $85 billion auto bailout that rescued GM and Chrysler. The UAW agreed to sweeping concessions as part of the restructuring of the two companies.

That strike prohibition did not apply to Ford Motor Co., which did not take a government bailout.

“All of the entry-level people have been hired since 2007 and haven’t for the most part gone on strike — and don’t know necessarily how that works,” Dziczek said.

Workers at GM, Ford and Fiat Chrysler Automobiles NV already have approved strike authorizations, on lopsided votes that are largely a foregone conclusion. Local union presidents and financial secretaries attended a strike-assistance conference last week. Some union locals are setting up food banks and have been encouraging members to save money in case of a walkout.

‘It is our time’

Strikes can occur in more than one way. The union can call a national strike or target one plant that, if prolonged, would cause a ripple effect on production and cripple operations across a company. That helps the UAW limit strike benefits it would need to pay.

For example, a targeted strike at Fiat Chrysler’s Kokomo Transmission Plant in Indiana could result in parts shortages at many FCA North American assembly plants. And a lengthy strike could significantly hamper FCA production operations. A targeted strike at a Ford or GM components plant could have similareffects .

Local unions also can go to UAW leaders and request a strike over local agreements, which was the case for the two Flint plants in 1998.

Some union locals have been emphatic about their expectations for this year’s talks. Johnny Pruitte, president of UAW Local 276 that represents hourly workers at GM’s Arlington Assembly Plant in Texas, said in a note to members last week that the union will make gains. In all capital letters, he wrote: “THIS TIME WE WILL NOT LEAVE THE TABLE EMPTY HANDED!”

He said the UAW will make up for prior concessions.

“In times past, we gave until it hurt and now it is our time to regain some of those losses. At the same time, we want to assure that not only ourselves but also future generations of UAW workers will have the opportunity to have good paying jobs with good benefits,” he wrote.

At $600 million, the UAW strike fund is down substantially from when the union has flexed its muscles in the past. That’s largely because the union tapped the strike fund over the last few years by $30 million to $40 million a year to pay operating expenses, as it resisted dues hikes during the industry downturn, when thousands lost their jobs.

To boost the fund, the UAW in June 2014 approved a 25 percent union dues rate increase, the first since since 1967. The increase is expected to generate $45 million annually. Supporters called it crucial to ensuring the union can command good contracts with a threat of a strike.

“If they have to go on strike, a short strike really isn’t going to hurt the union or their reputation,” said Art Schwartz, a longtime labor-relations executive at GM who now heads the Ann Arbor-based Labor and Economic Associates consultancy firm. “A long strike could damage their organizing efforts.”

It may be harder to win public support for strikes today. The number of workers belonging to unions continues to fall, and the UAW’s membership is about one-quarter of its peak in 1979.

In fact, strikes are becoming more rare. The Bureau of Labor Statistics said there were 11 major work stoppages last year that involved 1,000 or more workers and lasted at least one shift. That’s down from the 15 major work stoppages in 2013 and tied for the second-lowest annual total since 1947.

Fewer of those strikes are taking place in factories. Of those 11 major work stoppages, seven were in health care, social assistance and education.

The 1998 strike at GM’s Flint Metal Center and Delphi Flint East operations went on so long that GM pulled sheet metal off dozens of rail cars. Surface rust was scrubbed off by hand, and the metal was staged on the assembly line in Wentzville, Missouri.

‘Change is inevitable’

The strike prompted Jack Smith, chairman of GM at the time, to say the automaker needed to adapt to a more competitive world. “While every organization needs to preserve the appropriate aspects of its past, change is inevitable and unavoidable, even here in Flint,” he said.

Eleven years later, GM filed for bankruptcy protection — because, according to President Barack Obama’s auto task force and others, the automaker hadn’t taken enough painful steps to change its culture.

Staff Writers Michael Wayland and Melissa Burden contributed.

UAW strikes

September 2007: Thousands of UAW workers walk off the job at 82 GM facilities nationwide — for just two days. Afterward, GM and the UAW agree on a pact that shifts retiree health care tasks to a trust and allows GM to hire new workers for lower pay under a new two-tier wage system. At then-Chrysler Group LLC, the strike is even shorter, just six hours.

June 1998: About 9,200 workers at GM’s Flint Metal Center and Delphi Flint East parts complex go on strike for 54 days. It forces GM to shut down 26 of 29 North American assembly plants and idles more than a hundred suppliers.

March 1996: A 17-day strike in Dayton, Ohio, effectively forces GM to shut down its North American manufacturing operations.