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UAW Will Seek Seats on GM, Ford, Chrysler Boards

Union doesn’t believe VW plant’s low wages set new precedent.

by on May.25, 2011

The UAW will seek to get seats on the boards of all three of the Detroit automakers, according to union president Bob King.

The United Auto Workers is preparing to tell General Motors Corp., Ford Motor Co. and Chrysler Group LLC it wants seats on the boards of directors of all three companies during contract negotiations this summer.

UAW president Bob King said he did not want to negotiate through the press, but he said as a “general principle,” union members should have board representation.

“I believe there should be workers’ representation on all boards,” King said, noting workers are routinely given a seat on the boards of German companies by Germany’s codetermination law.

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German employees and unions elect members of what is known as the Board of Supervisors, which has authority to hire and fire top executives. By law, workers hold a minority of seats on the Board of Supervisors, while representatives of shareholders hold the majority of spots.

The Voluntary Employees’ Beneficiary Association, responsible to the UAW for retiree health care, already has representatives on boards of both the restructured GM and Chrysler. The directors appointed by the VEBA are independent of the UAW.

King said it is the board of the VEBA, which is independent of the UAW, that will decide whether Chrysler can move ahead with an initial public offering of stock.

The 64-year-old UAW chief said he was also interest in a more direct kind of worker representation on the boards of all three automakers.

The UAW had a seat on Chrysler’s board for a time during the 1980s, but then UAW President Owen Bieber was voted off the board after objecting to executive pay increases.

The UAW also had spots on the German Board of Supervisors of Daimler AG during the eight years it owned Chrysler, from 1999 to 2007.

King also said the UAW was still working on its strategy for the upcoming contract negotiations with all three automakers. However, the UAW’s relations with all three Detroit automakers has steadily evolved over the last decade.

“We talk all the time,” he said. “I’m very confident of the strength and maturity of relationships,” said King, who described the negotiations as an exercise in advanced problem solving. “It’s not about an adversarial relationship. We believe in a global economy, you have to work together,” King said.

While he declined to talk about specific projects, King said another union objective will be to secure more investment and jobs “for our communities.”

That subject came up again during an announcement that General Motors will add a second and third shift at its Detroit-Hamtramck Assembly Plant.  The facility currently produces the Chevrolet Volt plug-in hybrid, among several models, and will soon add the Chevy Malibu and next-generation Impala. Production of the Volt, in particular, will increase nearly four-fold next year, to 60,000.  A total of 2,500 jobs will be added at the factory.

GM has announced billions in new investments since emerging from bankruptcy protection, as have its cross-town rivals, but the makers also are asking for help remaining competitive.  Ford, for example, has noted it is paying several dollars an hour more than Japanese “transplant” assembly lines.  And the gap is even larger in comparison to the new Volkswagen plant, in Chattanooga.

That facility, which formally launched production this week, is initially paying wages and benefits of just $25 an hour, less than half what 97% of UAW members working for the Detroit Big Three make.

Joe Ashton, the UAW Vice President overseeing GM operations, dismissed any idea that Detroit workers need to match the VW labor costs.  “It’s a new plant,” he said during a conversation at the Detroit-Hamtramck Assembly Plant, and one that expects to increase its own labor costs by more than 50% over the next three years.

Considering the multi-billion-dollar profits the domestic automakers have reported during just the first quarter of 2011, said Ashton, there is no need to be cutting wages and benefits even more.  But, like King, Ashton acknowledged that the primary goal of the UAW during upcoming contract talks is to preserve and even add new jobs.

One possible approach that could satisfy both sides, insiders say, is to use enhanced profit sharing programs that would potentially share the wealth while also putting worker wages more at risk when times are tough.

Paul A. Eisenstein contributed to this report.

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21 Responses to “UAW Will Seek Seats on GM, Ford, Chrysler Boards”

  1. Tatersalad says:

    If the UAW pushes ahead for seats on these auto companies it will be the start of the end and it will turn off the people of the United States in buying these products and they will again go back to the Japanese and Asian products. Trust me!

    • Paul A. Eisenstein says:

      I believe you also said that having the UAW involved in the bailout would send potential customers running. Yet, even before the March 11 disaster in Japan — which will likely benefit Detroit in the short-term — we were seeing strong gains by the Detroit makers. I think your politics have clouded your view to the point your opinions, sorry, cannot be trusted to be anything more than a political rant. Should the UAW hardball the Detroit makers this year I think they WOULD do serious harm to both themselves and the makers. But short of that, I believe the Detroit Big Three are actually starting to look quite good. I actually have been surprised by the number of folks I talk to in NY and CA, in particular, who are suddenly quite interested in Detroit products.
      Tater, at this point, I think it’s time to turn off the “government motors” rants and start taking a view that’s more real world and less angry polemics.
      Paul A. Eisenstein

  2. Tatersalad says:

    Union executives, Trumpka (AFL-CIO) & Bob King (UAW) tell us to “Forget about the Law”. I do believe that the taxpayers of the United States will have something to say about this one would believe and the 2012 elections will prove it. Are these executives willing to go to jail or are they sending Union members to do the dirty work and get arrested? Pathetic!

    Right to Work Petition:

    Union dues Refund application:

    • Paul A. Eisenstein says:

      I am a little reluctant, Tater, to buy the quote marks around “forget about the law,” having no indication that was actually a quote from the sources you ascribe it to, and providing a legitimate, rather than highly-politicized “source.”
      Paul E.

  3. Tatersalad says:

    Will King address this issue?

    The UAW is getting involved in “Price Fixing”.

    • Paul A. Eisenstein says:

      Tater, this is, yet again, seriously flawed and highly politicized speculation that tries to make a point but doesn’t really back it up in any form. If the FTC bars price fixing now, organizing one or more of the transplants doesn’t somehow mean the rules will be waived. Interestingly, most Asian makers are now charging MORE than comparable Detroit models, not less. Is that because of collusion back in Japan, where their plants are unionized (albeit by largely corp.-friendly unions)? The author you cite is making a very large reach: if they unionize they will collude. That’s far from being able to point to any clear example and say: see, this is what happened, or at least to point out something that is being clearly proposed by the carmakers and unions. BTW, if wages at union plants is within a few dollars of non-union plants, it’s difficult to see where the big costs are that would be passed on.
      Paul E.

  4. [...] three automakers at the same time instead of picking one target for pattern bargaining. [Source: | Images: Bill [...]

  5. [...] If this marvelous success story isn’t enough, the very same people whose company-killing benefits and legacy costs helped destroy GM and Chrysler are now demanding seats on their boards. That is a great idea – like putting the rooster in charge of the hen house. Read here: Give the greedy ones control [...]

    • Paul A. Eisenstein says:

      Of course, on the flip side, it could be argued that the UAW made massive changes to help keep the makers alive, pulling health care off the company books with their VEBA programs, permitting two-tier wages, putting a lot at-risk with the bailouts, etc. Intriguingly, some data suggest that UAW-organized plants now have better quality and productivity than their non-union transplant rivals. I don’t think you’ll find many to question the matter of legacy costs based on high benefits (like many American senior managers and elected officials get, BTW). Concessions on those are likely even yet necessary, though the VEBAs are certainly a first step. But your very one-sided assumptions belie the source, the “Independent” Sentinel, with an extremely politicized view that leaves out rather than debates or discusses.
      In Europe, for example, union auto workers get pay and benefits that make American UAW members seem positively underpaid. They also have legally-defined representation on the management boards. Nowhere is that more so than in Germany. Considering Porsche is about the most profitable carmaker, and VW is on its way to nudging into a three-way fight as global king-of-the-hill, would you make the same case that unions have been a bad thing? (Actually, to ensure you don’t think *I* am being one-sided, I can express plenty of concerns about Germany’s IGMettal union, in particular. But the record shows their position in management has not been the disaster you outline. And if you go back to when the UAW had board representation at Chrysler you may find some surprises.)
      Paul A. Eisenstein

  6. sara noble says:

    Dear Mr. Eisenstein:

    I appreciate your comments on the Independent Sentinel and the opportunity for me to post here as admin of Independent Sentinel.

    “Independent” in Independent Sentinel does not refer to a wishy washy, middle-of-the-road presentation of all things or independent as in the political party. It refers to its definition: – self-governing and a strong desire for “freedom,” “ freedom” being the operative word. The motto is audi altera partem and I mean it. I welcome comments and articles that prove me wrong or present another view.

    Whether union workers do a better job than non-union; whether the unsustainable salaries of Europe are higher than here; whether union workers gave a little through VEBA were non-sequiturs to me and not relevant to purpose of my article.

    The point of the article was to show that this entire process, the political favoritism, the breaking of laws and precedents were flawed and dishonest. The loss of $14billion dollars to taxpayers, the loss of dealerships and their employees, the relegating of investors to last place in a capitalist country is no success story. That is fact. If it’s one-sided, it’s because the facts play out that way.

    Am I glad the companies survive and the workers have jobs – absolutely. Do I believe in private sector unions – I do if they maintain an appropriate role. But that was not the subject of the article. I do believe a good result could have been obtained without this flawed and dishonest process.

    • Paul A. Eisenstein says:

      Thanks, for the reply, Sara. What disturbs me is that an assortment of words, like “freedom,” are being co-opted as an excuse for political diatribes under the banner of journalism. That’s a weak excuse for lame and lopsided writing that is, in fact, simply editorial content, not reportage. Sadly, I am seeing much more of this, lately, on the conservative side, where it is often used to cover for anger, resentment, fear, etc. Using high-mannered terms, seemingly noble goals and, if all else fails, Latin, does not excuse one-sided rants that are guised as balanced or, if you prefer, “independent” journalism.
      Please call what you write what it is.
      Per my own comments, both here and posted on your own site, there are plenty of reasons to debate the role the UAW has played within the auto industry, past, present…and future. One can certainly look with caution at the approach Bob King is outlining for his “21st Century” union. But the totally lopsided coverage I read on the “Independent” Sentinel speaks only to those who have already made up their minds and continue to natter back and forth hoping to further convince themselves. It is the new diatribe-as-journalism that is leading to a very polarized America where dialogue and discussion are becoming less and less possible.
      BTW, to cautiously defend the bailouts, recall that a generally conservative Supreme Court upheld as legal all that was done. I find it humorous to hear opponents often say they’d prefer to have seen the makers fail in a free-market economy. Indeed, how many are aware of the protectionism from their home market governments that has served to prop up virtually all of the foreign brands competing with Detroit’s makers?
      If, as you suggest, “the facts play out” any way, then let the facts play out. A perusal of both your comments and your site suggest you have predetermined what you interpret the results to be and only see and seek out the “facts” that justify your position.
      Disappointing, to say the least.
      Let me sum it up as “permissum lector caveo”…let the reader beware.
      Paul A. Eisenstein

  7. sara noble says:

    Yes, thank you for your reply again. lol Love the civil discourse, “objectivity,” and warm reminiscences about the lost art of journalism. It’s good you warned everyone about the site because, of course, people are too stupid to figure out that the site is a combination of facts and commentary, which it clearly cites in the mission statement. The site offers facts and commentary that have been concealed by the lamestream and propaganda sites such as yours. If you don’t like the site, don’t be sad, just don’t read it.

    The two-tiered salaries you brag about are one example of your propaganda. The UAW kept the salaries the same for the higher salaried employees, gave up nothing, and sold out the new people. BTW, do the new people (who were sold out) receive a deduction on their union dues for getting paid less? The people who invested and who owned cancelled dealerships made all the sacrifices.

    I don’t have a problem with the UAW workers and wish them well, but the bailout process and the union thuggery was and is appalling

    Your site is replete with misinformation and political diatribes aimed at catering to your “friends.” I am independent of those special interests, which obviously govern you and your site.

    The bailout process has nothing to do with free markets and everything to do with power and redistributed dollars at taxpayer expense. I don’t feel free when I am taxed without representation – you disagree furiously apparently.

    Your arguments are based on side issues. You argue by diverting from the core issue to distort and obfuscate. If I deal with your SCOTUS, protectionism and other side issues, you will go off on another rant. The core problem is the fact that private companies negotiated unsustainable deals & were then forced upon the taxpayer with one big pity party and a transparent appeal to Americanism. As if that wasn’t enough, we must now suffer being lied to repeatedly.

    I don’t know what the results will be, but I can conjecture that Government Motors or other private companies might well be picking the taxpayer’s pockets again and become nationalized – the door has been opened and the basic problems are not resolved. Now that GM has found a way to fund excesses and bad deals, why would they not come back to the trough?

    In fact, I do want to see GM and Chrysler succeed, but as private companies, not as nationalized gluttons feeding off the taxpayer pig-out. I am going to buy Fords or one of the Japanese cars made in the USA myself. Chrysler – not sure about them yet.

    I don’t think the name of your site is honest. Instead of The Detroit Bureau, why not call it the Politburo? And if the UAW also gets on the boards of these car companies, the monster will grow more heads. Unions are overstepping their roles.

    • Paul A. Eisenstein says:

      Wow, Sara, a little angry? Politburo, I’d say ouch if it wasn’t such a sad revelation of how completely one-sided your approach clearly is.
      The thing that makes me pleased about and the way it is received is that we anger both sides of the political spectrum because we believe in balanced reporting. It’s clear that’s neither what your “independence” represents, nor what you believe in.
      I won’t bother to call out specific comments you’ve made but leave it to our readers, left, right and center, to read and respond, again…reader beware.
      Thanks for the follow-up.
      Paul E.

  8. sara noble says:

    You don’t understand irony, do you?

    Your site is not balanced. It’s Alinsky-style with subtle propaganda.

    I’m sure you’re thankful, so you’re welcome. lol

    • Paul A. Eisenstein says:

      Sara, you’re the one who doesn’t get the joke.
      But I’m impressed you can reference names like Alinsky and spell Politburo. Your Latin needs some work, however.
      Thanks for dropping bye. I’m sure you’ll have more rants in the future. We welcome that.
      Paul A. Eisenstein

  9. sara noble says:

    Paul, What’s with you and my Latin? It’s fine btw, but thank you for your concern. I can spell and reference because I have 6 college degrees. Thank you for noticing (irony again).lol

    All your carrying on doesn’t change the fact that:-the taxpayers were forced to pay for a failed private company; billions were lost to taxpayers;dealerships were closed in a non-transparent way; investors were put to the back of the line despite precedent and prior law; accident victims’ cases were tossed; employees of dealerships were out of luck; Ed Woody (in his TV ad) lied about GM paying back the loans with their own money and GM continues to lie about paying the taxpayers back; we saved a “U.S.” car company that is 40% Italian and will eventually be mostly Italian; the union made out; and GM hasn’t solved their basic problems. Ford made it without stealing from the public purse and GM and Chrysler should have gone that route as well because they are private companies.

    The side issues you mentioned don’t balance the truth, they obfuscate it.

    I know you think an opposing opinion is a rant, so let me “rant” this – you’re spinning. If the unions get their way by becoming members of the boards, they will continue to be in a place they do not belong – feeding off the company in an unhealthy, self-interest kind of way.

    • Paul A. Eisenstein says:

      Clearly, Sara, you don’t actually read anything that’s either 1) not in Latin, or 2) that doesn’t signal within a matter of words (ie “union thugs”) that someone agrees with your personal point of view. Anyone actually reading will recognize the wide range of opinions carried here. Indeed, many of my own pieces reflect facts that I find in conflict with my personal beliefs…a hallmark of legitimate journalism.
      What you produce is significantly biased opinions. There’s a place for that. Just call it for what it is.
      I’ll stop engaging in this, now. Thanks for taking the time. You’re welcome to continue. I don’t see any need to continue nor room for anything close to dialogue with you.
      Paul E.

  10. sara noble says:

    What’s with you and the Latin? I quote from Shakespeare also – so shoot me. lol

    Your hallmark includes bad grammar, misused words and poor spelling. For instance, “Thanks for dropping bye” and what about this beaut – “I think your politics have clouded your view to the point your opinions, sorry, cannot be trusted to be anything more than a political rant.”

    I wonder if your readers will notice you never address the real issues. I have indeed seen some differing opinions on your site, and they are slyly used.

    You’re right – no need to continue. You just attack and insult, but never address the substantive points so how can we debate? Typical.

    • Paul A. Eisenstein says:

      Apparently you have problems using archives. We have extensively covered the debate from all sides since launching publication in January 2009. That includes significant coverage of the legal debate giving voice to bondholders, dealers, etc., who came up short on the deal.
      Again, it is apparent that anyone who does not follow your rant-and-slant philosophy is the enemy.
      The irony is you simply think you are smarter than the world at large, typical of those who cannot tolerate dialogue.
      A good web search would reveal that I have, in fact spent decades writing for both left, centrist AND some significant conservative media outlets.
      End of discussion.
      Meanwhile, might you also assist Tater on his spelling and grammar? Or do you not fault those who mirror your narrow-mindedness?
      Paul E.

  11. Tatersalad says:

    Very well spoken Ms. Sara! Excellent. You are not the only person in the United States with the same opinion that you have spoken. The bail-out is still a scam on the taxpayers to the tune of at least $30 Billion to the taxpayers. Einsten must have his hand in someones pocket at the UAW.