>The recent negotiations in the automobile industry mark a radical
>departure in labor relations. The once powerful, militant and innovative
>United Automobile Workers has seen its membership decline dramatically by
>at least two-thirds over the past two decades and has been unable to
>unionize the transplant companies (the Toyota, Honda and Nissan plants in
>the US) or much of the auto parts industry. The so-called Big Three
>Automakers (Honda, Ford and Chrysler) are under now severe economic
>pressures because of the low-cost transplant companies.
>
>Collective bargaining in the Auto industry now means taking a step back
>for the union. Gains are rare; rather the union seeks to protect past
>gains. The traditional form of collective bargaining--patterns
>bargaining--in which the UAW settled with one company and then, under
>threat of a strike, imposed that settlement on the other companies, has
>become largely outmoded. GM, Chrysler and Ford are now quite different
>companies in their products, profitability, workforces and plans to turn
>around. GM has a plan for revival that entails growing by narrowing the
>hourly compensation between it and its main competitor, Toyota (a gap of
>about $30 per hour). Ford, with huge recent losses, merely seeks to become
>more efficient by closing plants and maintaining a smaller share of the
>auto market. Chrysler, the true wild card in all this, is controlled by a
>private equity firm, Cerebus, and is focused more in a short term return
>on in investment. The union has threatened a strike against Chrysler but
>the company will not be willing to make a long term investment in
>protecting job security (indeed it plans to cut jobs) or investing in a
>union operated fund to continue the health care benefits of retirees (GM
>agreed to such a plan).
>
>The result of the change in auto industrial relations is great
>uncertainty; what plants will remain open? Which companies can get the UAW
>to agree to terms that will ensure its survival in the short and the
>long-run. A strike of more than a week's duration could easily drive Ford
>into bankruptcy and Chrysler might chose a similar route and divest itself
>of more profitable divisions, closing others, and become profitably
>quickly. Seventy years of labor history at the Bid Three has been turned
>on its head. These negotiations are three distinct confrontations and
>their outcomes will determine which companies can stay afloat in this sea
>of international competition, which workers will keep their jobs and which
>retirees will keep their benefits. There are no happy endings.