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Howes: Next week's union negotiations will reflect changing future of auto industry

daniel howes
Daniel Howes
Detroit News

Not since the dark days of bankruptcy a decade ago are contract talks between the United Auto Workers and Detroit’s automakers likely to be as tough as the round beginning next week.

It’s not because times are bad. It’s because times are good – a run of profitability and strong sales not seen since the 1960s. Yet change is coming faster than four-year contracts can manage. And that’s an ominous sign for both sides, especially union members seeking certainty.

Among their questions: Which plants will get a vehicle to sustain jobs and profit-sharing payouts through the next contract? Will future product allocation decisions favor UAW-represented plants in the States and not cheaper operations in Mexico? How will union bargainers reckon with the production implications of battery-electric vehicles?

Ask the folks who manned the assembly line at GM's Lordstown Assembly Plant. In less than the life of their current contract, the sprawling plant in northeast Ohio went from three shifts building the Chevrolet Cruze to none. The line is idled now, awaiting sale to an electric truck startup.

Ask the folks at Ford's Michigan Assembly in Wayne. Their Focus-building days are over, replaced by a new Ranger pickup and, soon, a revived Bronco SUV. Ask the folks who’ll be building hybrid variants of the new Jeep Grand Cherokee in Detroit. They’re a bid by parent Fiat Chrysler to join the electrification push transforming the industry and injecting more uncertainty into labor’s future.

Understand, the cyclical economic swings that buffet and reward UAW members are still here, if muted by the current long run of prosperity. What's new is the increasingly real prospect of radical change driven by regulators in China and the European Union, in California and a dozen other U.S. states determined to deep-six gas and diesel engines as we know them.

Yes, the numbers of electric vehicles sold in the world’s major markets are a tiny fraction of total sales. But there should be no doubt that creeping regulation and technological advancement threaten to reshape the industry.

Detroit and its foreign rivals should buckle up: Electric vehicles have fewer parts. They need fewer workers to assemble. And they last longer than the internal-combustion engine models that have defined the industry’s first 100 years. All of which could have profound implications for union members and the communities where they live and work, starting with southeast Michigan.

In theory, the UAW sees the threat. In a white paper issued last year, the union’s research department warned that a shift from gas and diesel engines to electric powertrains could erode employment.

Facing this looming transformation is an 80-year UAW bargaining tradition built around incremental change and the occasional crisis-induced concession. And the expectation that members will get their fair share of the tens of billions in pre-tax profits the Detroit Three have reaped since their climb back from the Great Recession.

They will because the automakers can’t plead poverty. They also can’t guarantee that electrics won’t reshape assembly lines and the UAW’s future.

Daniel Howes is a columnist at The Detroit News. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.

Daniel Howes is columnist and associate business editor of The Detroit News. A former European correspondent for The News, he has reported from nearly 25 countries on three continents and in the Middle East. Before heading to Europe in 1999, Howes was senior automotive writer and a business projects writer. He is a frequent contributor to NewsTalk 760-WJR in Detroit and a weekly contributor to Michigan Radio in Ann Arbor.
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