Saving jobs tops agenda in UAW talks

By Karl Henkel

khenkel@vindy.com

LORDSTOWN

Sales are up, profits have returned, and General Motors Co. is looking forward.

But to keep the momentum rolling, experts say the Detroit-based automaker and United Auto Workers must quickly and fluidly come to an agreement during the national contract negotiations, which begin next week.

GM is in much better condition today than it was when the last national negotiations were finalized in 2007, just two years before GM accepted a $50 billion bailout from the federal government and the UAW agreed to enhanced concessions.

Last year, the company posted a $4.7 billion profit, its first profit since 2004.

Experts say this round of bartering, with expected completion by mid-September, should be relatively low-key and focus more on employment numbers and fixing the image of both entities.

Bill Visnic, analyst and senior editor at Edmunds.com, said he expects the UAW to push hard for the retention and creation of jobs, instead of higher wages, as in the past.

“The UAW certainly wants to claw back,” he said. “They want to bring back some of that head count. Union power at the very basic level is based on bodies and membership.”

Visnic called it the UAW’s “chief concern” during this round of negotiations.

Jim Graham, president of UAW Local 1112 in Lordstown, said although the plant is running three shifts and working most Saturdays, more could be done to increase the head count locally.

“There’s always things you could do,” he said. “We have a lot of open space right now. We are looking at everything at this point. “If GM says, ‘We want you to build an additional product,’ we can do it.”

Wages, normally a sticking point, aren’t something either side wants to jump into, Visnic said, because it could appear contentious, especially considering the stagnant U.S. economic situation.

“[Looking for higher wages is] going to be a little tough to defend,” he said.

The automaker, meanwhile, wants to continue to increase flexibility when it comes to work rules, curb health-care costs and simplify its profit-sharing formula, said a person familiar with GM’s plans.

Health-care costs have decreased significantly in the last handful of years, dropping from $4.8 billion annually in 2006 to $665 million last year.

But what the automaker hopes to save by fixing wages and lowering health-care costs will be countered by larger shares of the company’s success.

To do so, GM likely would have to modify its profit-sharing formula, which is difficult for some workers to calculate. By simplifying the formula, workers could better understand and predict the size of bonus checks.

“It will help educate our membership as to what to expect,” Graham said. “That in itself would be a good thing because there’s always speculation about profit sharing. That would just put everything to bed.”

In March, each of the more than 4,000 GM Lordstown workers received $4,000 profit-sharing checks that injected an estimated $16 million directly into the Mahoning Valley economy.

“This contract should be completed with little fanfare,” Visnic said because it’s the first negotiations for big players within GM and the UAW.

This will be UAW President Bob King’s first negotiations in his new role. He has already indicated there will be no new concessions. On the GM side, Dan Akerson has been CEO for less than a year and Cathy Clegg, GM’s vice president of labor relations, is also new.

There’s also no fear of a labor stoppage. Under current terms, workers cannot strike. Instead, if a deal is not reached, the case would go to binding arbitration.

“I don’t think anyone wants to see it get to that point because it’s not going to look good,” Visnic said.