by James Parks, Jul 25, 2007

UAW retiree Lois Schultz’s sign lets all know how she feels during a rally Monday prior to the opening of contract talks with GM.

In the four years since the UAW signed the current contracts with the Big Three automakers, the industry has undergone significant changes. But throughout, UAW members’ willingness to address critical issues, such as health care costs, has protected the wages and benefits of active and retired members, while saving employers billions of dollars.   

Now as the two sides go back to the bargaining table—new contract negotiations covering 178,000 workers began July 20 and 23—the stakes are high. Negotiating under the theme “Fighting for America’s Future: Good Jobs. Strong Communities,” the workers are determined to continue to create a high-quality, high performance workplace where everybody wins.

But the employers may be thinking along other lines. The Wall Street Journal reports the car manufacturers will threaten to move more production offshore unless they get deep concessions from workers on wages and benefits, especially on retiree health care.

All three automakers have announced plant closings and deep job cuts in recent years, cutting more than 70,000 jobs from their payrolls. But UAW President Ron Gettelfinger says cutting wages and benefits is not the way to save the auto industry. He points to studies that show labor costs represent less than 10 percent of the cost of a new vehicle.

So it is evident that the cost structure of the U.S. auto industry cannot be adjusted in a meaningful way by focusing on less than 10 percent of costs, while ignoring the other 90 percent. 

Autoworkers are among the most productive in the world, he says, citing figures from the U.S. Census Bureau that show each autoworker adds value of $206 per worker per hour, far more than the workers are paid.           

Even the Alliance of Auto Manufacturers, the carmakers’ trade association, admits autoworkers produce a higher level of output than any other single industry. At the same time, the U.S. auto industry directly supports more than 13 million jobs.

Before the automakers start pushing an agenda to cut costs on the backs of workers, Gettelfinger says they need to look at the other factors that have contributed to the industry’s crisis that cannot be solved at the bargaining table, issues such as design, engineering, marketing and auto financing.

And the employers must join with the union to confront political leaders to make changes in trade policies, national health care and workers’ rights that make automakers less competitive.

To strengthen the automotive industry, the AFL-CIO and the UAW have called for Congress to establish a Marshall Plan to help re-tool the U.S. auto industry to accelerate domestic production of advanced technology and alternative fuel vehicles and their key components.  

At the table, Gettelfinger says workers will fight to:

• Defend good wages, secure benefits and decent pensions.
• Maintain job and income security, along with opportunities for lifelong training and education.
• Create the safest workplace possible.
• Bargain for an enhanced role in ensuring product quality.
• Find joint ways to enhance productivity.

Testifying yesterday before the Senate Environment and Public Works Committee, Bob Baugh, co-chair of the AFL-CIO Energy Task Force, reminded lawmakers of the importance of the auto industry and its workers.

The automotive industry is the single most important industry to American manufacturing…the automotive sector makes up 25 percent of all manufacturing, some 4 percent of GDP (gross domestic product). Auto is the cornerstone of an advanced manufacturing economy, not only because of its enormous economic impact but also because it involves the most complex integration and assembly of leading edge technologies and products.  From the glass, rubber, steel, and electronics to engines, transmissions, design, engineering, R&D and more, an automobile encompasses the critical elements of this nation’s industrial infrastructure.

Recognizing the value of the industry to the nation, Gettelfinger says these negotiations are important for the entire nation.

Last time around we talked about bargaining for families. This time around we’re bargaining for our country as a whole. We’re proud to stand up for what we believe is right. We believe in America. We care about jobs. We care about communities. We care about families and we have values just like everybody else. We are…defending the middle class. But these negotiations are not just about us. These negotiations are about everybody.

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