TOPICS > Economy

Autoworkers, GM Continue Talks During Strike

September 24, 2007 at 6:10 PM EDT

JUDY WOODRUFF: From Michigan to Indiana and Texas, thousands of United Auto Workers walked off their jobs at General Motors plants and joined picket lines.

UNITED AUTO WORKER UNION MEMBER: Today is like, I guess, just a boiling point, because for the last four years we’ve given up so much trying to help the company itself, and we’ve just gotten nothing in return.

JUDY WOODRUFF: Representatives from the union and General Motors failed to reach an agreement for a new contract.

UNITED AUTO WORKER UNION MEMBER: Nobody wins. Nobody ever wins. It’s a shame that grown people can’t sit across the table from one another and not try to take something from somebody else.

JUDY WOODRUFF: GM’s contract with the union expired 10 days ago but was extended hour by hour. Both sides were mum on specifics, but talks centered on job security and on health care benefits; those benefits cost the company more than $5 billion a year, or about $1,500 a car.

GM has been pushing a so-called “health care trust,” known as the Voluntary Employees Beneficiary Association, or VEBA. That would allow the company to move $51 billion in unfunded health costs off its books into a trust to be managed by the union. For its part, the union sought more job security for its workers.

Ron Gettelfinger is the president of the UAW.

RON GETTELFINGER, President, United Auto Workers: We’re talking about investment, and we’re talking about job creation. We’re talking about product being committed into the plant. We’re also talking about what our workers deserve out of this contract from an economic standpoint.

We were very disappointed in this round of negotiations to discover as we moved forward that it was a one-way set of negotiations. It was going to be General Motors’ way at the expense of the workers.

JUDY WOODRUFF: General Motors did not hold a news conference. Instead, they issued a written statement and expressed disappointment with the union’s decision. It said, “The bargaining involves complex, difficult issues that affect the job security of our U.S. workforce and the long-term viability of the company.”

Perspectives on the strike

Harley Shaiken
University of California, Berkeley
Job security has become the linchpin of the negotiations, but that issue really goes well beyond the table in Detroit.

JUDY WOODRUFF: For now, union workers picketing GM's 82 plants will receive $200 a week from the UAW. Officials on both sides returned to the bargaining table this afternoon.

Now, we get two perspectives on the strike and its possible impact. Rebecca Lindland covers the auto industry at Global Insight, an economic and financial analysis firm. And Harley Shaiken is a professor at the University of California at Berkeley. He specializes in labor issues.

Thank you both for being with us.

Rebecca Lindland, to you first, GM said they were disappointed that the union has chosen to strike. The union is saying it was pushed into this. What's your sense of why this happened?

REBECCA LINDLAND, Global Insight: Well, thanks for having me on, Judy, first of all. And I think that any time that you're talking about the two different sides, they're both going to say it's the other one's fault.

But when we really look at it, it's a situation where GM needs, requires for its long-term viability, to have flexibility in terms of maximizing its plant utilization. They want to be able to make their vehicles at different plants depending upon how efficient it is. So that's what they're looking at; that's in the best interest of the company.

Ron Gettelfinger's, as president of the UAW, responsibility is to protect his constituents. And so he's looking and saying, "We want job security." So when new programs come on board, when new vehicles are going to be built, he wants to be able to say, you know, "Let's keep the Chevy Cobalt at Lordstown and not move it to Mexico," and that type of discussion. And that's where they're having the issue.

JUDY WOODRUFF: Harley Shaiken, Mr. Gettelfinger, who is the head of the UAW, at one point, he said, "You could be pushed off a cliff," and he said that's what happened here. How do you read this?

HARLEY SHAIKEN, Professor, UC-Berkeley: Well, I think he's actually probably correct. The union went nine days in tough negotiations, hour-by-hour past their deadline. They've never done that in their history.

My sense is Ron Gettelfinger, the top leaders of the UAW wanted to avoid a strike. They realized the condition that GM is in, but for them there's a core issue here. Will a recovery at GM translate into middle-class jobs for UAW workers? And in that sense, job security has become the linchpin of the negotiations, but that issue really goes well beyond the table in Detroit.

The issue of middle-class jobs is central to the whole economy, not just to Arlington, Texas, or Flint, Michigan. And the ability of the auto industry historically with the UAW to drive generations of American workers into the middle class resulted in economic growth. For that to be unwound today is a real fear the union has, and it's a strong enough fear to push them onto the picket line today.

The plant efficiency issue

Rebecca Lindland
Global Insight
This is a situation where GM is saying, "We're not just moving jobs offshore; we're just looking to build in the most efficient place."

JUDY WOODRUFF: Rebecca Lindland, let's pose that question that we just heard from Harley Shaiken. If the union is saying, "We want to know that those jobs you're creating are going to result in jobs and salaries for us," what's the answer on the part of GM?

REBECCA LINDLAND: Well, I think in a very strategic move, GM announced today that they've come to an $800 million agreement with GM Shanghai to export to China the Buick Enclave that's made in Lansing, Delta Township in Michigan. So this is a good example of where it's not just about moving jobs overseas; it's about building product in the most efficient plant.

And the Buick Enclave is one of their large crossovers, a huge success story, and gaining momentum. And Buick is actually one of the best-selling brands in China. So this is a situation where GM is saying, "We're not just moving jobs offshore; we're just looking to build in the most efficient place."

They're going to be building the Buick Enclave here in the U.S. and shipping them to China starting in 2008. It's a very strategic move for GM to make this announcement today, but I do think it needs to be called to the attention that this is an example of where they're maximizing their plant utilization and, in turn, saving jobs for the union.

JUDY WOODRUFF: So how would the union read that move, Harley Shaiken?

HARLEY SHAIKEN: Well, it's got a lot of different implications. Just mentioning China in the context of the auto industry is something that's very frightening to the union. But the union has made with General Motors major strides in the efficiency, the utilization, and the quality of their plants. Some of the highest-quality auto plants in the world are now UAW plants within the United States; some of the most productive plants are also UAW plants.

This is a very new story. So from the union's point of view, there's a sense, "Look, we have made major strides forward. We want to continue that. We want to see a more competitive GM. But we want that to translate into something for autoworkers, something for their communities, something for the whole U.S. economy."

The danger from the union's point of view is GM could become very competitive by being the Nike of the automobile industry; that is, a company based in the U.S. that does its manufacturing elsewhere. That's not only not good for the UAW; that's not particularly healthy for the U.S. economy. So what the union is seeking to do is to ensure that a more competitive GM does mean something for communities and for the economy here in the U.S.

Job security and unions

Harley Shaiken
University of California, Berkeley
The UAW had over 350,000 members in negotiations in 1990. They now represent 73,000. They have made some tough, bitter sacrifices. Just to drive through Detroit or Flint or many other towns in the Midwest will give you an idea of that.

JUDY WOODRUFF: And, Rebecca Lindland, how hard is it for GM to give them that assurance?

REBECCA LINDLAND: It's dangerous or close to impossible, I mean, because if the strike goes on for an extended period of time, GM is not healthy enough as a company financially to really survive a long-term strike. So nobody is going to win if this strike continues.

And GM really -- I mean, everybody would love job security. Wouldn't we all love that? But it's just not possible anymore. If you look at the aviation industry, the pilots association has had to give in a lot, the flight attendants association. Unions are a very antiquated way of doing business, so GM is not really in a position right now to be able to say, "Absolutely, we're going to be able to support all 73,000 of you," similar to their white-collar nonunion workers that have had to take tens of thousands of people who have lost their jobs at GM on that white-collar nonunion side.

JUDY WOODRUFF: Harley Shaiken, it sounds like Rebecca Lindland is saying what the union is asking for is something that's almost impossible for the company to grant.

HARLEY SHAIKEN: Oh, I think it's just the opposite. It's necessary for the company to grant, I think, to make this a realistic partnership. Otherwise it's just a one-way street. What motivation do people have to get the boat upright again if they're being asked to jump over the side?

The UAW had over 350,000 members in negotiations in 1990. They now represent 73,000. They have made some tough, bitter sacrifices. Just to drive through Detroit or Flint or many other towns in the Midwest will give you an idea of that.

They understand the fragility in the company. They understand how critical it all is. Both sides do. Both sides want to see a more competitive company. The issue isn't guarantees out of thin air, but rather a commitment that if the UAW steps up to the plate, in some very unchartered directions in this set of negotiations, there will be jobs at the end of the day.

That goes beyond something that's unrealistic; it's something that's decent. It has been the key to economic growth and to the growth of the middle class in this country's history.

And to go onto another path today is more than an issue of the UAW and GM. It's a very different society we will all be living in if competitiveness does not translate into well-being for workers.

JUDY WOODRUFF: Does either side, Rebecca Lindland, have the upper hand at this point in these talks?

REBECCA LINDLAND: That's an interesting question. You know, neither figure is particularly sympathetic. I mean, on the UAW side, you could say that they are asking for a lot. And they're asking for reassurances that the majority of American workers don't enjoy themselves. On the other side, you can certainly look at GM and say, "Well, they got themselves into this predicament."

So it is hard to say who is really in the lead or has the advantage here. But in the end, nobody wins if GM goes bankrupt. And there won't be a boat to jump off if GM is bankrupt because it's going to be completely on its side. And so, in the end, it's in everybody's best interest to get this settled and to get back on track and to get back to producing cars and trucks in the U.S.

Looking toward resolution

Rebecca Lindland
Global Insight
The ripple effect is dreadful, and the ripple effect will be heard throughout the world, because parts come in from all over the world.

JUDY WOODRUFF: Harley Shaiken, you see it the same way, that it's in everybody's interest to get this settled?

HARLEY SHAIKEN: Oh, absolutely, I think there's a strong motivation on both sides to get it settled. No one wants a strike. But what comes out of this could be a model for the kind of society we've become, for the ways in which the United States competes in the global economy today.

We all know that famous statement often misquoted from a GM executive 50 years ago that, "What's good for the United States is good for General Motors and vice versa." Well, it's important to make that prophetic, to say that what's good for General Motors ought to benefit the United States, it ought to benefit autoworkers, but also be a part of a vibrant, healthy economy that creates jobs and creates well-being for ordinary Americans.

Without that, essentially we're asking workers to sacrifice to provide caviar in first class while their tenancy even in coach remains very problematic. That's not the kind of society we want to see, and I think that's not the kind of competitiveness that needs to come out of this. There are better alternatives.

JUDY WOODRUFF: So, quickly, Harley Shaiken, you're saying neither side has the upper hand here?

HARLEY SHAIKEN: In a real sense, no. But the union has considerable leverage. The overwhelming consensus among analysts going into this was the strike was an impossibility. The union didn't want to use it, but having struck, it creates considerable leverage against GM to settle sooner rather than later.

JUDY WOODRUFF: Final question then to both of you, how long before this gets resolved, Rebecca Lindland?

REBECCA LINDLAND: As soon as possible. Some estimate within the week. It's really hard to say, though.

JUDY WOODRUFF: I saw a report, Associated Press report that Canadian officials saying there could be 100,000 Canadian workers laid off just in the next few days.

REBECCA LINDLAND: Oh, the ripple effect is dreadful, and the ripple effect will be heard throughout the world, because parts come in from all over the world, and throughout the U.S. economy, also. And then it filters into U.S. and Canada and Mexico and everywhere else.

JUDY WOODRUFF: And, Harley Shaiken, how quickly resolved, do you think?

HARLEY SHAIKEN: Impossible to predict. These are complex issues, and strikes can take a life of their own. There's one bit of good news for an earlier settlement. Both sides are back in negotiation today. That indicates a desire to get this settled; that may indicate sooner rather than later. But much beyond that, it's very difficult to say.

JUDY WOODRUFF: We appreciate both of you being with us, Harley Shaiken, Rebecca Lindland, thank you.