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Howes: UAW deal ignores the existential threat to union jobs

daniel howes
Daniel Howes
Detroit News

The United Auto Workers walkout at General Motors was inevitable, ensured by the automaker’s decision to close four U.S. plants.

Was it necessary? Probably.

But the reasons justifying the walkout mostly ignore the existential threat to union jobs from the move to electrification. Even the UAW recognizes the danger, but its new four-year deal does almost nothing to address it save forming a committee with GM to study advanced technology and its impact on union jobs.

Of course they were going to strike — especially after GM CEO Mary Barra’s moved last November against four U.S. plants that so outraged UAW leaders and the rank-and-file.

The union spent years bargaining protections against plant closings. And they got to the place where automakers basically couldn’t do them without union approval. That’s why it couldn’t stand.

Strike GM? You bet. It’s making the most money of the Detroit Three. Its financial success means the union is more likely to make progress toward its goals of limiting the use of temporary workers, shortening the so-called “grow in” period for people hired in after 2007, and abolishing the “two-tier” wages the union swallowed as all three companies headed for the financial reckoning of 2008.

And a central tenet of bargaining in good times is to get the most you can when you can. That’s not faulty logic. It’s perfectly rational.

GM's remedy for its plant-capacity problem struck at the heart of an implicit bargain between the automakers and the UAW: When times are good, wealth is shared, jobs are secured and product investment flows.

These are arguably the best times since the Motor City's Golden Age in the 1960s. But these aren’t normal times. The steady approach of the Auto 2.0 spaces of mobility, electrification and autonomy — thanks regulators in China, the European Union, even the United States — is forcing automakers to maximize earnings now to reduce costs, to invest in expensive new technologies to navigate a future no one can see clearly.

The union won on most counts. It delivered raises and lump-sum bonuses. It retained Cadillac health care and pensions.

Whatever the walkout costs the automaker in lost profits — and it will be measured in billions — it won’t cost the striking union members. A ratification bonus of eleven grand will replace lost wages and leave a few thousand left as a reward for striking their employer.

The future promises more product built in fewer plants. It sees the coming electrification of vehicles having a dramatic impact on UAW employment. Electric vehicles require fewer parts in their drivetrain — fewer people to assemble — and they’re expected to last longer.

Put aside the economics of the UAW-GM deal and focus on what didn’t happen. Production isn’t “coming back” from Mexico. Lordstown and two transmission plants are closing. And the looming threat posed by electrifying the portfolio — and all that implies for jobs in engine and transmission plants — remains, a challenge to be confronted by someone else.

What a surprise.

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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