AAH #659 - The New UAW and The Labor Revolution

I'll online after hours. This brought to you by Bridgetone Tires, Solutions for

Your Journey and by Borg Warner. Hello, Gary John, how are you.

I'm doing well. I'm very excited about this show. You know,

we're going to wait to talk about the new UAW That's what I'm calling it, the New U a W and the labor revolution that's going on in this country because everywhere I go everyone asked me first question about the auto industry, is there going to be a strike? And I know we've got a chance

here to get into a lot of the details of what are going to go into these negotiations. You know, before we started in speaking of that sort

of a coincidence. So last week, if you remember, at the top

of the show, you broke down the history of Chrysler, the Damler Chrysler situation and beyond that. And I happened to discovered today that on August tenth,

nineteen seventy eight, Leiah Cocas sold Chrysler Europe to Citrone Pougeot for a dollar Yeah, and they got worked off. So I mean, just just

think about how how you know we're gonna be talking about, you know what, what has become Stilantis because you know, they're they're a big, big aspect of this. But you know, just just to think about how you

know, industries are in a churn even as far back as nineteen seventy eight, that's right, that's right. I remember that. Well, you know,

GM and Ford had expanded a big time in Europe, and Chrysler decided it had to do the same thing, and it picked up some pretty poorly run companies. There was Roots root Es I believe, out of England and

Simca if I remember, out of France, and they couldn't do anything.

I mean, it was hopeless even before they bought it. Anyway, that

that that's just for those who who liked to know some of the ancient details of this history did so, Hey, let's bring in our guests. We've

got Merrick Masters, professor of Business and Labor I think I got that right at Wayne State University in Detroit. And we got Kaylee Hall from the Detroit

News who's doing a lot of reporting on the UAW and labor. And did

we lose Kaylee? We did lose her. Okay, she'll be back here

in a minute, I'm pretty sure. But Merrik, Wow, I mean,

I call it the new UAW. This is not like the UAW of

even just last year. Well, what do you make of all the changes

going on. Well, it's distinctly different in outlook, in philosophy, and

it's also operating under a new set of demands as a result of the consent decree. It's under government monitorship, and that has a lot of implications for

the behavior that you observe terms of openness and transparency. There's a tremendous amount

of pressure on the UAW leadership to be transparent with its members. There was

a very close election for the presidency in which Sean Fame, the dissident representative, won by just a handful of votes, and he's trying to generate as much support among his constituency as he possibly can and at the same time put an umbrella over the UAW as a whole, so that they're able to go into these negotiations with as much of the United Front as possible. It's a

challenge, but it really reminds me. In the prelude, you were talking

a little bit about the history of the auto companies. Well, in the

history of the UAW, there was a large communist and socialist influence in the UAW during its formative years, and that is reminiscent. I think more of

what you see today in terms of the militancy and the outlook that is a little bit less tolerant of business per se. Well America speaking of history,

So for our viewers that are not well versed in the UAW, could you sort of give us a sense of what they do and how we've gotten to today with that organization Visa v. The Detroit Let me give you a very

very brief sketch of their histories, some high points. They were formed in

the mid nineteen thirties as a result of the Flint sitdown strikes, and they went through a very very fractious period initially, but in the late nineteen forties Walter Ruther solidified the leadership and began to rule the UAW as part of the what is called the administration Caucus, and he rolled it in the nineteen fifties and nineteen sixties until his untimely death in nineteen seventy. And during that time

period the ua grew into a national powerhouse economically and politically. There were a

series of strikes which were usually targeted against companies such as GM in sequence with the bargaining agreements, but with international competition in the nineteen seventies and the energy crisis, the rank membership in the UAW began to plummet as the auto company's market share dropped, and they were peaked at one point five million. Today

they're at about three hundred and eighty three thousand members, really a skeleton of their former selves, and about sixty five percent of those members are in auto related industries. They've had a history of being progressive socially liberal, but this

new faction is of a different ilk ejected after seventy years the administration caucus, which takes a lot, and it reflects the fact that you had the first director action for UAW leadership in its history, and that allowed the rank and file to express its voice. And I think what you're seeing on the part

of Sean thing today that's different from what it has been in the recent past.

He's trying to stay more in tune with the membership. That's why he's

giving Facebook Live presentations and perhaps being more vocal than we're used to. Kaylee,

what do you make of it? I mean, you guys at the

Detroit News I bet you get your hands full trying to keep up with everything that's going on right now. And you know it's only going to get more

intense as we get closer to the deadline of September fourteen, when the contract expires. So tell us about it. How are you guys all approaching it

and everything? Yeah, I mean, it's definitely a lot of once.

I think all of us are a little bit concerned about that week of the September fourteenth timeframe because we have this these contrasts expiring as well as General Motors has a subsidiary workforce that has a contract that expires the same day, Uniform has a contract that expires the same a few days later on the eighteenth, and we also have an auto show to top it off, because why not.

So, yeah, we are preparing as best we can. We're you

know, constantly on the phone of sources to find out what's happening behind the scenes, because you know, they are in committees negotiating, and we've we've seen that there there have been demand sheets given to the automakers. One that

was just recently thrown in the trash by President Sean Fayne. The stellalanis proposals

specifically, So there we go. There it is, so yeah, it's

I think all of us are preparing to work some overtime over the next few weeks coming up here. So yeah, yeah, Mark. So as we're

going into these contract negotiations, I mean, again, how are they conducted?

I mean, what is it that Kaylee and her team are are trying to discern and and you know who are the members that that go in and talk to the executives or management boards at the big three companies. Well,

let me say, we're very fortunate to have reporters like Kaylee and our colleagues cover this because they're very good, and they're very diligent and very well informed, and I learn a lot from my conversations with them. But typically what

has happened is that the UAW and sometime in March of the year of the contract negotiations, will have a bargaining convention that will formulate their bargaining demands across industry, and the leadership will take that it will meet with the bargaining committee in the respective companies and it will formulate a plan to present to each of the companies. Prior to that time, the companies and the union have various

degrees of information sharing that goes on. In some cases, they may even

have joint training that goes on between their labor and management representatives to try and get everybody on as much of a collaborative time a frame of mind as possible, and then they will start the contract negotiations. They kick off. They

had these ritualistic ceremonies, handshake ceremonies, so to speak, that were jettison this year. The UAW opted for meat and greed at the plants, which

I think was a wise moves politically on their part. The last round of

meetings in twenty fifteen and twenty nineteen, I mean, they just really don't do anybody a whole lot of good in terms of getting ready for the negotiations.

But then they begin to present their proposals, and usually that's been done in confidence, and they bargain and at some point in time prior to the strike date, UW will pick a target. UAW this time has indicated that

it may not pick a target, and I wouldn't be surprised very much if it didn't. In fact, I would be surprised if it did. And

I think they're going to keep their options open. What's different about this time

is, as you reference before, Gary, the new leadership with a different tone, and also that means that the old thinking has gone and the new approaches to negotiations are very much different in terms of their accent. Now when

push comes to show, they're still going to have to deal with the devil in the detail, and that will require skill on both sides. And you

have to ask yourself how experienced is the overall UAW team going into this negotiation compared to what they've had in the past. That's sort of an unknown question,

but we'll find out soon. You know my concern, And I think

this is probably what management is thinking about. Sean Fayne and his group are

asking for everything in the kitchen sink, and I think there's a recognition that even amongst top executives in the industry that yeah, UAW deserves big raises, But some of the other things just seemed totally unrealistic to me. A thirty

two hour work week, which I see as a move to force the car companies to hire even more workers. I mean, people are only working four

days instead of five days a week. You're not going to be able to

get the production out of them does request for full define benefit pensions. I

can't see them going for that, uh, you know, retiree healthcare.

I thought that's what the VIBA was all about. And my concern is that

what you're saying there, Americ is these guys are new to it. I'll

bet you they're very good negotiators, but I wonder if they see the big picture, I mean, in the grand scheme of things. He keeps pointing

out all the big profits that GM, Ford and Stellantis are making, but in reality, GM and Ford are not very competitive on the global stage.

They really aren't. Their their profit margins are at the bottom of the list,

really and I'd just like to get you know what your thoughts are are.

Do these union negotiators see what the big picture is? Well? I

think they see a big picture in terms of the labor movement and the desire for workers to get a higher share of profits and more generous wages. And

they would like for them to be able to restore some of the benefits that they had in the past, the gold plated benefits that they had, which very few workers now have. I think that you've hit something, John,

that is very important and that concerns me. And this reminds me a little

bit of the situation with the professional air traffic controllers in nineteen eighty one when they went out on strike. Although it was a different industry covered by a

different law and strikes where illegal in the federal government still are. You had

a dissident group of leaders take over the union in a close election under the name of mister Poli, and they really refuse to believe at they were dispensable the air traffic controllers, and they went out on strike and they were fired summarily by Ronald Reagan. He did that on the South Moon of the White

House and said basically, you have twenty four hours to come back to work or you're going to lose your jobs, and he meant it ironically. The

air Traffic Controllers were one of the few unions that endorsed Ronald Reagan running for president in nineteen to eighty. What I worry about in this time is that

you may have self fulfilling expectations or prophecies, and that they get people so worked up and expect so much. I don't know if you've seen the recent

numbers that I saw yesterday, that you probably have seen them in the press that it's estimated that these contract proposals of the UAW would total about eight billion dollars and raise the costs to one hundred and fifty dollars an hour sixty four dollars an hour forward. I thinking about the same amount that on GM,

and I think maybe a little bit under that at Chrysler, but I mean Stilantis, those are just simply unaffordable. And if they think they're going to

get that, if they're going into the negotiations they become intransigent no matter what the membership says, then they're going to be very, very disappointed. And

this is the concern that I have is typically in the past, oftentimes leaders have been willing to modulate the demands of the rank and file and say, we understand you're mad and mad at the world, and you want to get the world and you want to pay everybody back. But if you do that,

you're going to really put yourself in the point where you're going to jump off the cliff, and thats suicide. Let's not do that. Let's try

and be more realistic and get the best deal that we can't. I don't

know how much that modulating voice is present at the present time. I'm not

saying it's not there, but if it's not there, and the membership are really aggressive, and you know you're only hearing those members they want to speak to you. When you go on Facebook Live, there may be a thousand

to four thousand members. That's not all the UAW, but that's what you're

listening to. And the danger that some leaders have as they get into echo

chambers and they start believing that everybody thinks the same thing those people are telling them. And I worry that there may be a miscalculation. Mark before before

we leave the pet Co subject the air traffic controllers, so over eleven thousand people lost their job as a result of that, and you know, which is a sizeable percentage of the workforce that had existed at the time. Now

they were replaced. But do you see it conceivably that something like that could

happen with the UAW. I think that the possibility of that is remote.

But what I can see happening is is that if this negotiation were to produce business consequences that are unacceptable, that you would see companies thinking about moving out of North America and elsewhere and that may you go back. You know,

GM and Ford, although they're nominally international companies, they've had to exit some of their foreign enterprises, and I think they are lagging behind globally in terms of electrification and they may have to partner with somebody else in order to survive into the future. And obviously stilantists may have to think about doing the same

thing. But I think you've got to keep all options open, and that

that means that the companies cannot make piduciary, elite, irresponsible decisions. And

I think that's an important point we need to remember. These managers are they

have produciary responsibilities to their shareholders, and they just can't give everything away because they want a generous contract for their rank and file, no matter how much is I like to see everybody. I don't want to be an autoworker myself.

I couldn't do that job. I don't begrudge people from a good living.

But I think we have to deal with reality here and that there are options and companies can exit, they can move around, they can reorganize, restructure, and I wouldn't be surprised what may happen if they were stuck with contracts that they can't live with. Kaylee, what are you picking up when

you do? You're reporting what's your sense of the union leadership and you know,

apropole of what Merrick was just talking about. Yeah, I mean the

ground. It's interesting I get a mix of answers from the workers in terms

of what they think of the proposal. Like the big thing that came out

last week was this forty six It was it was forty percent, but really it's it's forty six percent wage increase over the life of the contract. That

is the uaw's uh, you know, request to the companies. And some

of them said, wow, that seems like pretty steep. I don't know

if we're going to get that. Others said, you know what, we

need it, we deserve it. We gave up a lot during the bankruptcy.

They did give up wage increases over several different contracts, and they want to see that return to them. But at the same time, I think

a lot of them are realistic that there are some requests in there, like the like you were mentioning, the pensions and the retiree healthcare. I think

they probably recognize that there's some things in there that they're not going to get.

But they also say, you know, shoot for the stars and see what you can get, you know, don't And and I think Sean Fayne and ways knows that he has to go after as much as he can.

I mean, look, we had a union leadership that was plagued with corruption for years and the members in some cases didn't don't trust the process. So

I think that he has to come out with the firm requests to you know, show that he isn't. You know, we've moved past that. But

yeah, I think that it will be very hard for them to get everything that they're they're seeking in their demands. For sure, when you talk to

these workers at the plants, what's your sense of their support for Sean?

And here here's the reason why I asked Dad. As you guys know,

eighty six percent of the union membership did not even bother to vote in the election, right, you know, only fourteen percent of the membership voted and Sean Fayne won by fifty point one percent. I mean, the smallest margin

possible America. You said it yourself, just a hand all of votes.

And so to me, he doesn't necessarily have a mandate if you look at those numbers, But kay, what do you find, what sense of support do you find when you talk to the people at the plants. Yeah,

I mean I think that there are many folks who just go to work, clock in, clock out, you know, do their job. I think

that Sean Fayne making that move and going to the plants and doing those handshakes was a really good decision on his part, I think because I saw him taking people aside and talking to them. I don't know that workers ever really

had that chance before members did, you know, to just have their president walk up to their plant and shake their hand as their exiting work or going to work. So I think that that shifted some opinions. For sure,

our people didn't even know who he was, you know, and he was just there. But of course, I mean, the Admin caucus ruled for

so long. They're definitely still are folks who are like, not a fan,

but a lot of the folks I talked to who you know, because the majority of them do just go in, clock in, and go out.

They like it. They like they like what he's saying. They think,

you know, this whole record record profits means record contracts. They love

that and they want to see all of these things that he's talking about.

So I think a lot of I think the support is starting to really get amped up, and especially with the social media campaigns the UAW is doing, I think they're getting a lot more attention. It's a whole different strategy from

the uaw's end. They're not just I don't think they're just trying to rally

like their own members. They're trying to rally everybody in support of them.

So so Marrek, I'm sticking with his handshake. So for for people who

don't read the Free Press or the Detroit News, they may not be familiar with effect that at the beginning of these to be a second there, it's okay, So I think so at the beginning of no problem. So at

the beginning of these negotiations, it would be the president of UAW, Sean Fain would shake hands with Bill Ford or Mary Barra or Jim Farley or you know, I mean, and pictures would be taken. And instead of doing

that, as Kaylee said, he was at the gates of factories and shaking the workers' hands. From the point of view of someone with a background in

negotiation, as you said, you are what tone does that set for the negotiation. Well, this is when I try and differentiate between what I consider

to be noise and signal. The ceremonies were kind of nice. They brought

in all the union representatives of their bargaining team with the leadership of UAW and they wore same colored on golf shirts are or whatever, and they set across the room from the men and women dressed up a little more formally usually, and the leadership would shake hands in front of everybody. And it was a

nice ceremonial introduction that they went through. And this time they decided to forego

that. And it's you can read a lot of consternation into that. But

I think what's really important is to what Cayley said is that they were they were trying to reach out to their membership and say, look, we want to hear your views. We're here to talk to you before we go into

the negotiating table. We want to sit down, make certain we understand your

views, and if we get an agreement, we're happy to shake hands with them. So that what I think is the signal behind this, however,

is they departed from past practice and old thinking is gone. And when I

look at that I look at that in a couple of different ways. They're

looking at sharing profits differently. It's not just getting a profit sharing payment,

it's getting profits plowed back into the workers base and other benefits that may be part of a fixed cost structure that the companies would have to deal with.

And also what means departing from the usual practice recently of targeting a company and if you strike, just striking that company like they did GM in twenty nineteen.

I think now there's a distinct possibility they'll strike all three if they are to that point. And that's what I really look at and try to get

my arms around. But to raise an issue that I think is really important

in this understanding from Garrier right from a negotiating strategy, both companies have to be thinking about this like chess game. Almost we moved this way, they

moved that way. How do we try and influence their behavior by what we

do? And it's important to realize that there are two parties to each of

these negotiations. Now, obviously public opinion is important, lawmakers viewpoints are important,

and other constituencies have relevance. But the company and the union sit down.

But that means there are three concurrent negotiations taking place. There's one between

the two parties, there's one on the management side within itself, and there's one on the labor side within itself. And I think this particular negotiation a

set of negotiations. The labor negotiations are going to be as difficult within the

union itself as those perhaps between the two. And it's important to remember that,

as John pointed out, the election with close, and it was not only close in terms of the presidency, but the board is evenly divided.

There are fourteen people on the International Executive Board, which has the authority to turn whether or not you go out on strike. That splits seven to seven.

And actually, if you pro rate the members the votes of each one of those officers, the dissident faction group, their seven does not have a majority of the votes. It's a little short. And so I don't think

it's a slam dunk that Sean Fame's going to walk in and just dictate what everybody's going to do. And you've got people in the LOOT leadership team like

Chuck Browning who've had a lot of experience and they're at the forefront of the negotiations with Ford, and you know their voices are going to have to be heard too. Wow, very interesting, you know when you say you think

if they could shut all three down, as you know, that'd be really easy. All you have to do is target key, power train and stamping

plants, you know, a handful at each company, and you bring them to their knees. They quickly run out of the parts they need to make

anything you can cripple them that way. Is that what you're thinking that they

would do? And if you only target a few plants like that, those

are the only workers on strike technically, and so you preserve your strike fund because as you know, everybody else is just going to file for unemployment.

Well, it would be very similar to what they did in nineteen ninety eight, in which they struck About nine thousand workers struck, but it brought production to a halt, I think, to a much broader number because of the saliency of the plants themselves. So I think that's an option. It doesn't

mean that they have to strike all the company. They could strike parts of

the company, critical parts of the company, or they could choose to strike corporate wide. In each of the cases, I think they're keeping all those

options open, and I wouldn't be surprised if they did something just along those lines. John, Hey, look, you know this is probably a good

time to take a quick commercial break, and well back, there's a lot more topics I'd love to get into here, how to bridge stone tire stock shorter on what roads? Is there hydrotrack technology? But you don't have to

know how the science works, just where the brain is. What really matters

is they're bridge stone. All right, we're back and talking about the UAW,

the potential of a strike and all kinds of things. But Mark,

let me come back to you. We really have in this country right now

the tale of two seawans. They're Shawn Fagne at the UAW and Seawan O'Brien

at the Teamsters, And he just got whopping big raises forty five percent, forty six percent raises for his members. Isn't that helping to set the tone

of what's going on with the UAW negotiation? Well? I think they are.

And they've cited the Teamsters contract as being indicative of the kind of thing they'd like to emulate, and there are parallels between them in terms of their background. They both represented dissidant factions. They overtook the dominant factions, and

they have a new approach towards negotiating, which means that they're more open with their membership, and they're more open with the public, and they're more savvy about using social media. And so if I were advising the companies in this

negotiation, I would say, treat every conversation that you have with a UAW representative wherever you have it as if it's going to be reported on television that night, and that there is no such thing as a closed or confidential conversation anymore. I think that you're going to see things. I mean, I've

seen this Atlantist proposals. I'm certain Kayley has two, and they're pretty ambitious

proposals. I mean, they weren't just growing together, you know, and

drawn on the backsheet of a newspaper and said to them. They are detailed.

It's thirty pages of detailed proposals. And you know, when they talk

about absenteeism, they cite data in there and they say, you know, we've had an absenteeism rate of twenty three percent in the past two years, and it cost us the production of sixteen thousand vehicles that cost us to lose two hundred and twelve million dollars impossible revenue. So when they cite that,

they're not just saying things that, you know, this is just a minor issue we have to deal with. And they went down the list. There

are lots of things in terms of healthcare pensions that they want to you know, tweak with and change and scheduling. They want to tie pay and profit

caring more towards reductions and absenteeism. And you may see some some worker behavior

dimensions negotiated into how you calculate profit sharing payments for individual workers going into the future. So what would that mean? What give give the same example of

that, Well, it would mean that you had to have a certain attendance record to get your payment, that you might forfeit some of that if you had a bad attendance record, or that they aggregate things and say that you're the workers. Payments overall are tied to certain reductions in the absenteeism ring.

What you're saying is stunning. I hadn't seen that figured over twenty percent absenteeism.

I'm sure it varies from plant to plan, but that is far harder than I've heard. General Motors in the past has talked about eleven twelve percent

at the bad plants, you know, twenty percent, that means, you know, two out of ten workers just don't show up to work every day.

That's yeah, you can run a plant. Well, it's pretty difficult.

But I was watching something on television today and they were showing the head of a company going through the offices of his business in the morning and noticing that nobody was there, and he said, well, how do we really run a business with nobody here? And they were talking about remote work and

all that kind of thing. But I remember several years ago working with a

company at its union and we went to a meeting in Scottsdale, Arizona, which was a nice meeting at a golf resort, and the two sides met and we had one of the vice presidents from the company coming and say, you know, on any given day, twenty percent of our workers don't show up. And the union folks leaned back and they just remember one said,

one senior guy said, you try working here for thirty years and see how much you want to show up for work. Yeah, But I would say

go take a look at Honda in Ohio. Go take a look at Toyota

in Kentucky. They don't have unscheduled abs and teeism. They have scheduled abs

and teeism. You know, when you call in ahead and say I got

a doctor's appointment, I got to take the kids to this, or something's come up, and they'll tolerate a three percent scheduled absenteism. When I said,

well, what's your A wall rate? And I said what do you

mean? I said, you know, absent without leave And they said,

you mean unscheduled the absent teism. I said, yeah, I said,

you can't do that here. Well that's you know, those kinds of numbers

suggest to me that you've got a management problem. Some of it lies with

worker or lack of worker ethic, but some of it also lies with mismanagement of workers. It comes down in pivotal relationships between supervisors and workers, and

I think also in terms of how they schedule and do things like that.

Stilanti says, these twelve seven schedules, which I think have created a lot of angst among workers. So twelve hours a day, seven days a week,

right right when I when I see things like this. When I see

numbers like twenty three percent, twenty percent, I want to go in there and say, what is causing? What's the root cause? Rights? Right?

And I'm agnostic about going into it. I just say, you know,

let the chips fall where they may. I'm willing to blame the workers.

I'm willing to blame management. But finding a solution is what you have

to do. And if you start pointing the finger and blaming each other,

you're not going to get there. Right, great point, you know,

you know in that twelve seventh thing, i'd be absent. You know,

you really take that for so long? You know you just got to get

a break. Yeah. It's kind of like the same thing with nurses.

I mean when they have to work double shifts or something like that. It's

pretty I mean, I don't know how people can do it. I know

that I couldn't do it. Call me a whimp, whatever, but I

can work long out. But I'm sitting at a desk writing. Not to

me, that's hard work, but I know that it's nowhere near the hard work that goes into working in some way plan right, Isn't that simply indicative that you would need more employees in order to have a more equitable working relationship.

I think that may be one of the points they're trying to make is that they are short staffed when you have situations. There was a strike of

the Service Employees International Union in Los Angeles the other day. It's called a

general strike, but it cut across several public sector entities from the airports, the docks, etc. And they were talking about work among custodians at LAX

the airport, and they were saying that they have substantially fewer custodians than they have in the past, and that they're overworked and really need more but they can't find them. And right now there are about five hundred and eighty thousand

jobs open in manufacturing and they're looking for people. And they're also looking for

people to be truck drivers and lots of other kinds of jobs where people don't want to do that kind of work anymore or they can't do it for as long as they were willing to do it in the past. And so as

if it's people have more options and they think of you know, work life balance, those kinds of things. You know, when when I started working,

not to talk about my age or anything like that. But when I

started work, I mean, if I had told one of my first deans that I wanted to work like balance, he'd said, he would have said, and it would have been a heat. Then he would have said,

that's a very easy decision for us to make. You can have all the

leisure you want because you won't be working here anymore. Wow. And they

used to walk around on Saturdays and see if we were there Sundays even you were supposed to be there cranking away. And those days are gone. But

I think that, you know, we have to reorient ourselves to a new workforce, and I think it's one of the things. You know, Sean

Thing was alluding to, maybe more of a European situation in which the average work week is maybe thirty six hour or something like that. But take a

look at all things and see how you can get Garyot's an excellent point.

I mean, do you have enough people to get the job done? If

you don't, then you maybe need to do something about that, But obviously that's costly. Yeah. Look, I mean this is why because people have

asked me, you know, with the Detroit three higher new workers, if the UAW went on strike, so they can't get the people. In fact,

you know, this talk of starting at sixteen fifty an hour at the battery plants like in Lordstown, Ohio, the market's going to take care of that. You can't hire people to go into a factory at sixteen fifty an

hour. They're gonna go work at Wendy's for the same money and have more

flexible work hours. Yeah, I mean, that's the reality that you know,

you you know, and they say that the the wage rate. You

know, we talk about hourly wage costs for the auto workers. We typically

include all the components the benefits in that compensation, which are are pretty lucrative relatively speaking. But the the hourly average hourly wage in the US is about

thirty three dollars. And when you think about that, they were talking about

UAW workers when they worked at GM under the old plant that's now the Ultium Joint Venture battery manufacturer in Lordstown, Ohio, they made thirty two dollars an hour. So I mean, I think that, you know, people are

saying that these are tough jobs and that you know, the take on pay that workers make is not as great as those hourly figures that are really the employers cost rather than the take on pay that workers get that they see create some of the different perspectives that exist out there about compensation. Well, why

don't they think out of the box here? I mean, you know,

I'm looking at the figures right now, I got them written down. GM

claims it's employee healthcare costs UAW healthcare costs or twenty three thousand dollars a year.

Why not take those people, put them on Obamacare, have the government foot part of the bill. Maybe you buy some supplementary insurance so that you

keep them at the same kind of levels right now that they've got, which remember no monthly premiums, no co pays for anything for the vast majority of them, and you could probably save some money that way. Take that money

and put it in the paychecks. Are the workers maybe even give the company

a little bit of a break. Is anybody talking about thinking of clever and

new ways of putting more money in the paycheck without driving hourly labor costs up higher? Well, I think interestingly enough. In twenty fifteen, if you

recall, Dennis Williams floated a proposal that maybe the three companies are to combine their healthcare programs and that that would give them more leverage in negotiating with the insurance companies so that they could bring down the costs and with other providers.

I think, really, what you're hitting something that's critically important to this country.

We spend more than any other country in the world on the care about yet we don't have the best outcomes. And why is it that we have

to pay so much to get healthcare? And I think we need to look

at what are the principal drivers behind that and what we can do to bring about the reduction because one of the major contentious issues over the past two decades or more and collective bargaining agreements has been healthcare and it eats into the pay that people can take home. And so if you if you've got to pay

you know, if you have to pay retiree healthcare, if you have to pay active worker healthcare, and if you pay first dollar coverage, you're going to be paying a lot of money for each worker. And that's not money

that they're going to be able to take home in wages. Something's got to

give and people have, you know, struggled with this, and I don't think anybody's found a good solution to reduce the cost of healthcare, but we're going to have to do something about controlling that. I mean, we can't

afford the exponential costs and Medicare, Medicaid and healthcare in general, and our society as we age more and as our fewer workers, paying end to these programs that supplement or provide these kinds of benefits, particularly for retirees. Mark

Kayley said earlier that the proposals the UAW are putting out there, like you, you ask for the stars and maybe you hope to get the moon.

And I mean, so one of the on the one hand, they're asking for reduced hours, on the other hand, they're asking for increased wages.

There's got to be a balance there somewhere. I mean, how do you

see this sorting itself out? I think that they're going to be forced to

make some difficult choices. And obviously not all their proposals can be considered equal

and importance our realism. Some of them are pretty far fetched and they you

would have to be smoking something quite irregular and in order for you to actually believe you're going to get those things. But that being said, I think

if I were looking peeling the onion a little bit, I think that they're trying to make a big ass so that they have a lot to trade off in the negotiations and what they probably want. If I were looking at it

from their perspective, I'd be thinking along these minds, we know the companies are moving rapidly towards electrification. That means they're going to be fewer unionized jobs.

That means that wages in certain parts of that sector are going to go down if we don't unionize them. So for as long as the workers are

they're represented by us in the Detroit three, let's get as much as we possibly can for them in terms of increases in their base. Because we're not

quite so certain that electrification we're going to be as profitable going into those and therefore our profit sharing payments may not be as big. And let's realize that

in order for our workers to be well compensated and get a good sizeable increase, we're going to have to ask for a large increase in the base.

And also we're going to have to ask for cola. But we might not

get cola, but we may get larger performance bonuses. Annually are other things.

I know something very interesting between two thousand and fifteen. In two thousand

and nineteen, Ford gave to each hourly worker on average fifty four thousand dollars and payments and profit sharing and bonuses. And in two thousand and twenty two

the three company across the three companies, the total amount of profit sharing given was larger than thirty six thousand dollars fourteen thousand at Statlantis, twelve at General Motors, in about nine at at Ford. So I mean, if you

think creatively outside of the box in terms of how do you come to a packet a compensation member, and if some of that goes into the base, if some of that goes into increased profit sharing or whatever, and you tie profit sharing to improve performance on absenteeism and you make operational improvements that are going to reduce your costs, that may be an area where you can trade things off. I would hope that the union would be recognizing that nobody benefits from

absenteeism and it only ends up costing the company and the worker, and that also they've got to be realistic and understand that the companies have huge demands on the resources to compete and nothing is certain the threats they faced in this environment or existential. Yeah, from the standpoint of the global competition existential, Well,

I think it is the global competition that makes it as existential. I

think you've got you know, somebody, you know, China looming so greatly and largely in this domain, India and other companies with you know, other countries with that are more endowed with relevant natural resources and have greater populations to base their domestic markets on. That All those things to me suggest that,

you know, if you're relying increasingly on the United States, given our anemic growth rates and otherwise capability of managing the economy, I think that we're going to be hard pressed going into the future. Yeah. I think there's some

other things to consider here too. You know, as you drive up labor

rates, there's always a by switch between labor and automation. You know,

the more you raise the costs of labored, the more attractive automation starts to look. And the one thing that I'm not sure that the Union is aware

of or doesn't want to pay attention to, is Earlier this year, Tesla announced a new assembling process that it's going to introduce at an assembly plant in Mexico that revolutionize as the assembly line. In fact, there is no assembly

line. Everything is built up in modules and then k bloque it all comes

together at one point, so there's no moving assembly line. That'll throw half

the people out of the every assembly plant. And if Tesla is successful with

this, and I'll bet they are, every automaker in the world is going to be forced to follow suits. And so, you know, earlier in

the show, I asked, is the union aware of the big picture, because I think these things are a big threat to it, and I'm not sure that they're paying attention well. With the advances and automation, all different

kinds of automation. I think that that's a really good point that you just

made, and that companies will look for alternatives as labor becomes more expensive.

This is across industries. You see it in the strike involving the screen actors.

You see it in the strike involving the writers they're concerned about artificial intelligence.

You can see it in a number of different other industries in which people are saying, you know, look, we can we can redesign the assembly process. We can redesign manufacturing, make it less worker dependent, and across

the board. I would be you know, if I were to forecast anything,

I would say, in ten years, you will be lucky to find a waiter in a restraint. Now we don't have any gas station attendance.

I think the last state to really eliminate that to some extent was not required anymore was New Jersey. It just did that week off it, and so

I thought that was very interesting. I didn't even know there was a state

that still required you have gas station attendance. But you think about this,

when was the last time you spoke to a telephone operator? Never when it

was the last time you spoke to a real person. So that may be

a long time going forward. But I think the point is very well taken.

And Tesla is the competition that they're looking at. Tesla, according to

the numbers i've seen, pays forty five to fifty dollars an hour, yes, and the transplants pay about fifty five. Ford pays sixty four. And

so I mean, if you're talking about kicking that price up to one hundred or one hundred and twenty or ninety or eighty, you're really putting these companies in jeopardy and workers in jeopardy, because people will make choices. They will

relocate, they will modernize, they will substitute technology, they will do anything to avoid having to pay those costs because they know it's just you. You

can't operate the business in that model. But I do think that Sean Fayne

knows these things. I'm certain he's aware of. I mean, they've been

automating the process for years, so I think he is aware of these things.

And I know he's aware that he has not organized the UAW, has not organized the transplants. And I really think maybe after these negotiations, if

they're able to win major gains, that will see them try to do that again, because that maybe that will help them. I don't know, maybe

Mary could talk more about that, but I think if they do get major gains, that could open them back up to going back to Toyota Hana VW and saying hey, yeah, I think that's an important point to make.

Kay Lee that another thing the UAW is looking at is that when they try and sell themselves to the transplant workers, are the workers that Tesla and Rivion, They've got to have something to sell right, and higher wages are a thing that most people can resonate with, and better working conditions safer. I

don't think it's by you know, accident. They release this report on all

team talking about the hazardous working conditions that the land so soon before these negotiates.

They've never done that, mirk, and which puzzles me greatly. The

UAW and I swear it's in all of their transplant negotiating efforts have turned it into a social justice issue, and they bring in social justice leaders from around the country, and I don't think that resonates with people. I think what

I'm saying is talk show me the money, Show me how you can put more money in my pocket. Now I'm interested. Well, I think been

able to. I think you're right. I think they're not. Only has

the UAW suffered from the scandal and the image problems associated with that, it's suffered from just having a bad style of organizing that I think as we reflected the heavy handedness of the administration Caucus and the international I mean, you talk to UAW members, you know, rank and file people in the regions and locals, they'll say the last place they want to go to help is the International. They don't like talking to the international. They don't trust the international

anymore than they touch the companies. And so therefore I think, you know,

the more and more they get off on what I would call important but yet not bread basic bread and butter issues, the more difficult they're going to find it trying to get people to support them. Because people, when they

have to vote for a union or take an effort to create a union in the workplace, they are taking a decided risk. And it's not only a

risk that they may be retaliated against by their employer while they try and support a union, but also arrested if the union comes in and represents them, then it's got to get the first contract. If they're not volded under a

master agreement or that they've got to you know, if they're stuck with unacceptable working conditions, then you know, companies will look for alternative options about where they want to do business. Hey, look, we're getting close to the

close of the show, but we still got one thing I want to get into with all three of you. Really, and if there, I'm going

to start with you, what do you think they're going to be a strike?

We're literally just some weeks away before we're going to know for sure.

What's your sense of it? Well, if you'd asked me before a recent

Facebook Live presentation, I would have said that we're likely to avoid one.

Now I'm not. Now I'm not quite so certain. But there is there

is a I will say this, There is a path for the parties to get a lot of what they want to come to a mutually satisfactory without jeopardizing their futures. And I hope they have the wisdom to see that. And

I agree with Kaylee. I think Sean Fay knows these realities. He's just

got a difficult job managing his own union at the present time, and he's got to really thread the needle, and it's a it's going to be a heart filing in tax for him. Jayley, what do you think strike or

no strike be surprising if there wasn't some sort of work stoppage. And I

don't know what it looks like, Like Merrick mentioned, we don't really know if we could have a lead company, it could be something else, you know, it could be all three at the same time. We just keep

going and then they strike one or they strike both. I don't know,

it's a whole new it's a whole new set of rules now with the new leadership and place, so but I do think there will be something, some sort of work stoppage. Yes, yeah, Gary, what do you think?

Well, I would agree with Merik having watched the same Facebook live.

I would be surprised if there isn't. I'm not sure how long it would

last, but it just seems to me that, you know, when you have a list that's like this long, I don't think people can see this of the demands that even if you pare them back, it's it's still a big lift. And to be able to achieve those in the short period of

time between now and when the contract expires, I just don't know how they're going to do it. And that you know, Sean Fay needs to save

face, the executives, that the oams need to save face and manned, that's got to be a tough, tough job. What about you, John,

Well, I look, I'm positive there's going to be a strike and hopefully they'll prove me wrong. But I'll tell you why. And I said

this as soon as John Fayne was elected. You know, he didn't have

to throw the Stilantis contract in the trash for me to think, oh, there's going to be a strike. And here's why he barely won. As

we said, fifty point one percent is the margin that he wanted by.

He's got a very small base. They're very agitated there. I mean,

they're hardcore. They want to take the companies to the mad If there's not

a strike, those people are going to say, John, you weren't tough enough. You could have gotten more. And so I think there has to

be a strike just for his own political reasons. Now, if it's a

couple of weeks long, that's manageable. If it goes on for months,

that's going to be a real problem. And if Merrick's right and they take

all three of the companies down, now it's a real big problem because and this is when I talk about the big picture. Another thing on the sidelines,

there's a lot of very small Tier two and Tier three suppliers here in the United States, especially in the Michigan area, that are in deep financial trouble even before the strike comes. They've just gone through three years of devastation

where volume fell and the automakers raise their prices and the car dealers raise their prices, and suppliers barely were able to raise their prices. And there's a

lot of these small tiers, suppliers whose total business is not just with one company. It's often on one program. You know, I make the X

component for the F one fifty. Right, if that thing shuts down,

I'm toast. And with interest rates where they're at right now, these guys

can't borrow money to keep operations going. They can't afford it. And so

that's why I'm saying, if this thing goes on for more than a couple of months, the big losers are not just going to be the Detroit three and their suppliers and their dealers. The Union's going to lose as well,

because the transplants, the foreign automakers will absolutely take advantage of it and gain more market share. All right, So you're leaving one aspect off here,

Janet, and I'd like to comment on this. That would throw the proverbial

historic wooden shoe into the works, shut things down, and Bidenomics would be in bad, bad shape if that were to happen. Is it possible that

the President of the United States would step in? I think it's distinctly possible

if you had a strike that wore it looked like it was going to be prolonged, and the ripple effects that John talked about, I think that they've already appointed a go to person. I don't think that was just because they

wanted to make headlines in the newspapers. I think it was because they intend

on playing a role and they will be a part of the negotiations. And

I don't think it's accidental that John fame with the President a few weeks ago in Washington to sit down and just have a nice chat. I think that

they are They are very interventionist oriented kind of an administration, and they realized that they're endling of the economy is one of the weak points that they have, and so therefore they're worried about inflationary pressures and they're worried about anything that might throw the economy into a recession. They're gonna be watching this with a

keen eye. Real good. On that note, We're going to wrap it

up and I want you guys to come back on the show after this is all over. We're maybe in the middle of it, because we know about

a month from now as we take this show it's going to be spectacular.

Hopefully I have a good, happy ending. But as you guys just heard

from me, I don't think it's going to go that way. Well well,

well, I hope that you're wrong, but I'm not betting that you are. I think that there's a distinct chance, and so we'll just keep

our fingers crossed. Real good, Kaylee, Thanks so much, Marik,

thanks so much, and I was great to be with you. Thanks,

thank you. Autoline After Hours is brought to you by bridge Stone Tires,

Solutions for Your Journey, and by Borg Warner. If you liked this program,

I would like to learn more about the automotive industry. Check out our

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AAH #659 - The New UAW and The Labor Revolution

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