Detroit automakers and the United Auto Workers union will sit down this summer to hash out new four-year contracts, a gloomy prospect for both sides given financial woes, job losses and plant closings that have wracked the U.S. industry.
The domestic automakers are threatened by the growing market share of foreign-based rivals and the growing number of non-unionized plants those rivals are opening in the USA. And the UAW continues to wrestle with a rapidly declining membership.
But on some factory floors, the view is more encouraging. The UAW has quietly engaged in an ongoing relationship with General Motors (GM), Ford Motor (F) and Chrysler Group (DCX) to try to save jobs and, perhaps, even create some new ones through plant innovations.
Three plants were visited — one each from the Detroit automakers — that are considered cutting edge by both the companies and the union.
In these plants, production-line workers are allowed greater latitude to perform different tasks. They are encouraged to find cheaper and better ways to assemble cars and engines. Management and UAW officials work side-by-side to resolve worker gripes on the spot. And automakers have added ergonomic, safety and comfort improvements to make jobs less tedious.
Each side has a big stake in wooing the other. As recently as 2002, 82% of the cars produced in the USA were made at union plants. By 2005, the percentage had shrunk to 73%.
"If the boat sinks, we all go down together," says Jerry Sullivan, president of the 15,000-member UAW Local 600 in Dearborn, Mich., one of the union's largest.
"Either one of us can destroy the Ford company," Ford Motor CEO Alan Mulally warned in a January conference call to announce a record $12.7 billion loss last year. "It's not about taking big stands. It's about what do we really need to do to improve the competitiveness of Ford."
GM has given buyouts to about 35,000 hourly workers, including 33,800 UAW members, and has announced plans to close nine plants. Ford is going even deeper, with 38,000 worker buyouts and shuttering of 16 facilities. Chrysler, the U.S. unit of DaimlerChrysler, says it will announce restructuring plans, expected to include job cuts and plant closings, Feb. 14.
Meanwhile, the UAW's membership has dropped from 1.5 million in 1979 to 576,000 last year.
"The union understands the severity of the crisis," says Harley Shaiken, a University of California-Berkeley professor who follows the auto industry. Detroit automakers and the union "really want to come out with more competitive companies."