Howes: GM transformation imperils decade of auto labor peace

Daniel Howes
The Detroit News
General Motors Co.'s plans to idle one plant in Canada and four in the United States is sparking backlash from auto union's in both countries. Jerry Dias, president of Canada's Unifor union, was in Detroit and Windsor Thursday to meet with GM officials and to rally support behind the union's efforts to persuade GM to reconsider.

Detroit’s decade of labor peace is coming to an end.

With the exception of United Auto Workers members in 2015 rejecting Fiat Chrysler Automobiles NV's first contract offer, this town’s automakers have reaped the benefits of steadily rising sales and record profits — the proverbial rising tide of good times rewarding both labor and management.

Hourly workers have profited, too. They've pocketed record profit-sharing payouts even as demand for traditional sedans wanes and company planners increasingly move to pare shifts and up production elsewhere to more profit-rich pickups and SUVs.

General Motors Co. is changing all that. Its plan to idle four U.S. plants, kill production at a fifth in Canada and imperil the jobs of nearly 6,000 North American union members is rocking auto unions on both sides of the border. It's roused members amid multi-front trade battles ensnaring the auto industry and shining new light on old beefs about GM's federally backed bankruptcy and the practice of building products where you sell them.

Politicians, led by President Donald Trump, are enraged at GM's perceived betrayal, delivered the Monday after the Thanksgiving holiday. Communities from Detroit to Lordstown, Ohio, and Oshawa, Ont., are reeling. And the unions are using holiday sentiment to make a point they’re likely to repeat in the run-up to national contract talks with the Detroit automaker over the next two years: “U.S. and Canadian workers made GM.”

This is just the beginning of a year-long drama that is equal parts theater, politics and economics. The first act opened Thursday on Canadian networks scheduled to carry an ad dubbed "Betrayal" and on both sides of the Detroit River — at Unifor Local 444 in Windsor and at a UAW vigil at GM's Detroit-Hamtramck Assembly Plant.

The messages outline the contours of a looming rhetorical battle that easily could morph into confrontation because the stakes are so high. They pit the unions, their strike funds and part of their institutional foundation against an automaker desperate to prove its mettle to investors during a transformative time for the auto industry.

"Why should our jobs and products go to Mexico?" asks a four-page ad Unifor placed in the Thursday editions of The Detroit News and Detroit Free Press. "GM has made excuses for closing five plants in Canada and the U.S. But really, it's about moving our jobs and our products to Mexico."

It's actually about much more than that. GM management and its key North American unions are navigating a future none can clearly discern — not GM CEO Mary Barra and her management team, not UAW President Gary Jones and his vice presidents, not Unifor President Jerry Dias and his deputies, and not investors.

Even the Silicon Valley tech heavyweights greedily eyeing the revenue possibilities conjured from marrying self-driving technology to automotive platforms are learning how difficult it can be to meld their knack for technological innovation (and its implicit risk of failure) with tightly regulated automotive engineering.

The result is an auto industry being forced to think and act differently, to hire differently, to field product portfolios that look different from the traditional balance of cars, trucks and SUVs. Over time, those changes should balance the workforce and production needs, but not without some painful disruption culminating in fewer employees and more productivity.

This is not business as usual. With the thinnest of public explanations, GM is pushing its unions to help shape a new business model from the pieces of the existing one. The transition is likely to defy some of the industry's most enduring, if unofficial, rules:

First, management doesn't move to close plants and eliminate employees in good times, but it is. Second, labor doesn't decide what products to develop and build, management does. Third, automakers should build where they sell, but the post-bankruptcy GM is increasingly straying from that mantra.

It sells vehicles in the United States and Canada that are produced in Mexico, Germany, China and South Korea. That's far more than its crosstown rivals, which means it's likely to be a frequent flashpoint — and metaphorical cudgel — in next year's talks. Get used to it.


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Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.