TOPICS > Economy

UAW President Bob King on New Contracts: Top Priority Was Creating Jobs

October 26, 2011 at 12:00 AM EDT
Chrysler's workers on Wednesday became the last of the Big Three to ratify a new four-year labor contract. United Auto Workers officials fought hard to get members to OK the contracts after several major plants voted against the deals. UAW President Bob King discusses the contract and state of the industry with Jeffrey Brown.
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JEFFREY BROWN: Now, a new contract for autoworkers, but a continuing struggle for the future.

Today, Chrysler’s workers became the last of the big three companies to ratify a new four-year labor contract. These are the first new contracts since Chrysler and GM nearly went under two years ago, and they reflect a very changed industry.

Among the common elements: giving up annual pay raises in favor of bonuses and profit-sharing for workers; some new jobs added and the opening of several plants by the automakers, and new caps on the percentage of entry-level workers. In the industry’s growing two-tiered salary system, such workers are paid lower hourly wages, similar to foreign automakers.

Officials of the United Auto Workers fought hard to get members to ratify the contracts after several major plants voted against the deals.

The head of the UAW, Bob King, joins us now from Detroit.

Welcome to you.

BOB KING, United Auto Workers: Thank you. Good to be here.

JEFFREY BROWN: So when you came to the threshold issue in these negotiations, the thing you had to have to reach an agreement, is holding on to jobs more important now than negotiating higher wages?

BOB KING: Absolutely.

No worker is secure unless you have got new product and new investments coming into their facilities. That was our highest priority and the priority that we made the most gains and the most success.

JEFFREY BROWN: And after so many members — losing so many members in the last decades and after what happened a couple years ago, do you go into negotiations like this inevitably from a position of weakness? Or how do you feel going in?

BOB KING: No, I think that we — you know, I think that we still have considerable leverage and power in the industry. I think that our view has changed, that we understand the people who have the most at stake in the long-term success of these companies is our membership.

CEOs change, shareholders change, management changes, but our members are there. And their long-term security, their pensions, their health care, their economic security is tied into long-term success of the company.

So we’re focused on making sure that there’s new product, new investment, good technology, highest possibility quality for the consumers. So our role has kind of shifted as we have gotten into more of a global economy and global competition.

JEFFREY BROWN: Well, with this two-tiered wage system, with most of the new jobs coming in at lower wages, is that now the new normal for union workers, and is that dividing your members, two classes of workers, essentially?

BOB KING: Well, I’m really proud of our membership.

The traditional members put the highest priority on raising the wages and benefits of the newer members. That’s in the greatest spirit of solidarity. Traditional members got no base rate increase. The new members got $3.50 an hour. It’s long been a value of the UAW that people doing the same job should make the same rate of pay.

We had to deviate from that to save the companies. And this is the first contract where the companies are beginning to be healthy again. None of them are totally out of the woods, but they were in good enough economic shape to be able to do $3.50 base rate increases for the entry level. So we’re really happy with that.

We’d like to have seen more, but we thought that was financially viable for the companies, kept us competitive. And then, as you know, in the lump sums and the profit sharing, there are not two tiers. Everybody’s treated the same. And so in actual annual income, we made tremendous improvements for the entry level.

JEFFREY BROWN: Well, I said you had to work hard to get members to ratify. In fact, you faced a fair amount of dissent along the way. You had lower ratification rates than historically. You had some important plants even reject the contract.

So what do you say to workers who now say to you — they say, look, we gave up a whole lot a few years ago, we don’t seem to have gotten much back, and they’re also seeing that the CEOs at the companies are still making a lot of money and complaining about it?

BOB KING: Well, CEO pay is going to be an issue.

It has been an issue for the last 50 years in the U.S. Our country’s out of whack with most places in the world. I think we have got to give shareholders and employees as shareholders more of a voice in CEO pay. That’s a legislative issue, as well as a contractual issue.

In no contract do you get everything that you want. Did we make substantial progress in this contract? We think absolutely we did, especially in product investment. We were very — we were not concerned just about ourselves and our membership. We were concerned about our communities and getting jobs in America.

We were very appreciative of the American taxpayer and President Obama for believing in the American auto industry, believing in American workers. And so we wanted to make sure that the number one priority in this was to create jobs in America. So there will be a lot of people in a lot of communities around America that are hired into middle-class jobs because of what we did in this contract.

JEFFREY BROWN: But I guess I’m asking you about the potential rift, the frustrations within union ranks.

BOB KING: Well, you want to make — I’m sorry, but you seem like you want to make a rift where I don’t think there’s a rift.

JEFFREY BROWN: OK.

BOB KING: Traditional workers voted overwhelmingly to support entry-level workers getting $3.50 raise — an-hour raise, even though they were not.

We have seen this over and over again in the UAW. In the agricultural implement industry, we were forced into a two-tier situation a number of years ago. We have done three contracts since then. Every contract, the traditional workers have demanded that more be done to equalize the newer workers. And that’s our goal in the auto industry, too.

JEFFREY BROWN: So what is the situation for the auto industry more broadly, after we watched what happened a couple years ago? Where are we now?

BOB KING: Well, we’re in much better shape than we were.

We’re concerned about what is going on in Europe. I mean, we’re all tied together globally, economically. So we know we’re not out of the woods yet. If Europe deteriorates economically, that will have impact in the U.S.

You know, right now, we were just in some meetings with General Motors today, with global unions and General Motors. And one of the points that the company was making that I concur with is that we think that the 13 million SAAR is steady because a lot of people are buying vehicles. They are replacing vehicles now.

Of course, we’d love to see it back up to 16, 17, but if we stay in the 13, 14 area, we will have healthy companies. Our members will share in profit-sharing. We will be building capacity and building strength for the future.

JEFFREY BROWN: And, more broadly, we’re, of course, in this era where we’re seeing many states push back against their public sector unions and more states talking about or implementing right-to-work laws. How do you make a case now for the traditional union in our era?

BOB KING: Well, I think the best example is the auto industry.

Here’s business, management, and labor, and the government all work together. Rather than polarizing and taking polarizing positions, we came to the table collectively. We said, here are the issues. How do we do creative problem-solving to help the companies and help our membership?

And I think we showed both during a period of bankruptcy and now with this agreement that we can work together for the good of the companies, for the good of our membership and for the good of our communities and our country.

JEFFREY BROWN: And you think you can make a case to the American public that unions are still important?

BOB KING: I think absolutely we can. We’re proving it.

If it wasn’t for the UAW, a lot of these investments would have been all over the world and not in the United States of America. We stood up for our members. We stood up for America. And to the company’s credit, they worked with us in creating jobs and investment here in the United States of America.

And so I believe in American consumers, which are already showing more preference again for U.S.-made vehicles, because we’re making the highest-quality vehicles. We’re going to — we’re going to see the market share grow for General Motors and for Chrysler and for Ford.

JEFFREY BROWN: All right, Bob King is the president of the United Auto Workers.

Thanks very much.

BOB KING: Thank you very much.