The UAW and General Motors: Union News & the Business Press

Posted by Cutler on September 30, 2007
Labor

Members of the United Automobile Workers (UAW) will soon be encouraged by the union leadership to ratify a settlement reached with General Motors.

Will the membership ratify the contract?

That may depend on what they are hearing about the deal.  There are two distinct accounts out there and they offer up profoundly different lessons for the membership.

One version of the settlement comes from the UAW, the mainstream media, and pro-labor academics.  It celebrates the settlement as an enormous victory for the UAW and the American labor movement.  Who wouldn’t vote Yes?

The other version of the settlement comes from the business press.  If the membership were to get wind of the business press perspective, they would likely vote NO.

The Official Union Story

Union officials, led by UAW President Ron Gettelfinger and the UAW Vice President of the General Motors Department Cal Rapson, are doing its best to sell the deal to its membership.

As I noted in my book, “Labor’s Time: Shorter Hours, the UAW, and the Struggle for American Unionism,” Walter Reuther built an “administration caucus” that consolidated control of the UAW in the 1940s and 1950s.  That caucus remains firmly in control of the International Executive Board of the union and retains the loyalty of most local union presidents.

Hence the unanimous endorsement of the GM settlement by official delegates to the National Bargaining Council in Detroit.

Within the UAW, discussion will be limited to the monologue selling job of the top leadership.  At the local level, union officials from the administration caucus haven’t exactly promoted or invited deep debate about the issues.

Consider Flint UAW Local 659 in the heart of the General Motors empire.

Historians of the UAW will recall that Local 659 and its feisty newspaper, “The Searchlight,” played a prominent role in the cantankerous internal factionalism of the early UAW.

Today, the official website of Local 659 makes a mockery of that tenacious legacy.

The most recent on-line version of “The Searchlight” features an article on the annual Local 659 Walleye fishing Tournament–held in July–but makes no mention of the subsequent contract negotiations.

The website link to “retiree” issues (a centerpiece of the UAW-GM contract negotiations) comes up blank.

Bill King, shop committee chairman of the powerful Flint Metal Center unit, promotes his role as the elected chair the UAW/GM Top Negotiating Committee.  But his discussion of the contract is limited to a warning about the dangers of unauthorized chatter:

There is plenty of rhetoric and speculation in the media about this set of negotiations. Take this news with a grain of salt, as it is only opinions of people who will not be bargaining the contracts. Unless the information comes from a direct quote or a report from your union leadership, it is only an outside view.

The UAW selling job has received some welcome “outside views” from academics and the mainstream media.

Consider, for example, a September 30 article from the Detroit Free Press entitled, “Improved Prognosis: GM-UAW Agreement Begins New Era for Organized Labor.”

Labor unions, derided as dying organizations, saw in the UAW’s pending takeover of General Motors Corp.’s retiree health care burden a new mission and perhaps a new recruiting tool.

“It shows the labor movement is willing to stand up for the members, stand up for the retirees and take some risks,” said Glenn Feldman, director of the Center for Labor Education and Research at the University of Alabama at Birmingham….

Harley Shaiken, a professor at the University of California at Berkeley who specializes in labor and globalization issues, described the deal as a landmark moment for the American economy, as defining for this era as the wealth-sharing contracts won by the UAW in the 1950s were for an earlier generation.

“Overall, what these negotiations sought to forge is a social contract for the 21st Century — a more competitive General Motors, translating into middle-class jobs,” he said. “In the context of the pressure of globalization and the stumbling of the domestic industry, that’s not a small feat. That proves a relevance for unions under these circumstances, rather than a hint of their demise.”

The Business Press: Reading “Against the Grain”

Factionalism and dissident organizing is not entirely dead within the UAW.

Several groups have mobilized internet campaigns (see “Future of the Union,” the Center for Labor Renewal, and “Soldiers of Solidarity,” to name a few) to establish more lively debate about the UAW settlement with General Motors.

The “Soldiers of Solidarity” website includes what appears to be a link to a PDF file of the actual settlement between the UAW and GM.  You can’t find that on the Local 659 website.  But it makes for interesting reading.

The most “dangerous” sign about the dissident internet campaigns is not that they are reading and quoting Marx but that they are reading and quoting the business press.  The “Soldiers of Solidarity” homepage currently features a quote from JP Morgan analyst Himanshu Patel:

While the devil will be in the detail, our first reaction is that GM captured a much broader set of concessions than we previously anticipated.

Is the business press an “objective” source on labor relations?  No.

It is unabashedly and transparently pro-business.  But that transparent bias is precisely what makes it potentially more interesting and more reliable than mainstream media accounts.  Business press bias means that union victories are often disparaged while union defeats are celebrated.

To read “against the grain” of business press bias requires only that one reverse the terms: expressions of fear, disappointment, and rage in the pages of the business press are best interpreted as signs union strength.  Expressions of euphoria and/or indifference in the business press can signal union weakness and a raw deal for workers.

So, what is the business press saying about the UAW-GM deal?  Are the signs of fear and trembling at a labor movement is willing to stand up for the members, stand up for the retirees and take some risks?

Hardly.

The editorial page of the Wall Street Journal was delighted with the terms of the settlement.

This week’s deal between General Motors and the United Auto Workers is being hailed as a new era for Detroit, and for once that advertising may be justified. The UAW in particular made historic concessions that show a new awareness of global competition.

The most extraordinary review comes from my favorite business press source, the Financial Times.

FT Associate Editor John Gapper is well pleased with the outcome, but offers a devastating portrait of the UAW in his essay, “Reality Intrudes at General Motors.”  It is worth quoting at length:

“[T]here was something about the United Auto Workers’ short-lived strike this week that felt fake…. [T]he strike was hard to take seriously. It seemed more like role play than a genuine threat, something the UAW’s leaders had to do to show their members they were not a pushover rather than a fight they thought they could win. So, after two days, they came back, having accepted watered-down contracts…”

[The UAW] is now allowing GM to buy out thousands more contracts and hire workers at lower rates… [T]he Jobs Bank [a “scheme” in which GM gave “workers who were laid off full pay for years at a time”]… is already considerably diminished and this deal will weaken it further…

The financial risks usually imposed on employers by the health insurance system will instead be borne by the union…

[I]f the role of a union is to advance the interests of working people by negotiating steady improvements in pay and conditions, the UAW did a bad job this week…  [The UAW effort] was distinctly pusillanimous.”

Needless to say, Gapper considers all of this “preferable” to the alternative of a fighting union.  But that is precisely the point.

As for the much-touted “VEBA” agreement to which Gapper alludes, in which the union has agreed to bear the “financial risks” of the health insurance for retirees, the business press offers some insights that might be of interest to UAW members trying to judge the deal on offer from the UAW.

In an essay entitled “A New Era for U.S. Auto Makers?,” Thomas G. Dolan–editorial page editor at the financial weekly, Barron’s–seems to think UAW members are in for a rude awakening:

If ratified, the new contract with GM hands the union “responsibility” for GM’s $51 billion present-value liability for retirees’ health care. GM gets to buy back its promises for something like $35 billion in cash, stock and bonds (in proportions and timing so far unspecified), to be invested in a trust called a Voluntary Employee Benefit Agreement. The VEBA pays the benefits from principal and investment income for as long as it can — UAW President Ron Gettelfinger made the absurd claim that it will last 80 years.

Don’t ask what happens if the VEBA isn’t viable. GM isn’t telling. Neither is the union. We expect the liabilities will grow faster than the assets.

Dolan predicts UAW retirees may “pay more than they think” once the VEBA runs out of money.

Which Side Are You On?

For some, there is nothing more blasphemous than to criticize a labor union.  Is not reliance on the perspective of the business press–rather than the official union press release–not telltale sign of an anti-union ideologue?

Perhaps.

But it is one thing to absorb the bias of the business press (i.e., Harley Shaiken’s notion that “a more competitive General Motors”–guaranteed through a two-tier wage system and a wage freeze–somehow translates into “middle-class jobs” and a “social contract for the 21st century”).  It is quite another to read the business press, but to do so against the grain of its bias.

There is also a difference between criticizing a union for doing a bad job and hoping it does a bad job (i.e., being anti-union).

The union leadership wants its membership to rely exclusively on  “a direct quote or a report from your union leadership” and to eschew any “outside view.”

Insofar as the membership can be shielded from any “outside view,” the contract will be ratified.

If, however, the membership finds its way to the on-line business press… then all bets are off.

1 Comment to The UAW and General Motors: Union News & the Business Press

  • I was surprised by how short the “strike” was, but there’s only a few explanations for it–either GM was horrified by the strike and immediately full to their knees or the union bosses were unable/unwilling to push to protect previously won gains so they called it off. Of course a labor loss doesn’t prevent union bureaucrats from selling it to the rank and file as a victory.

    The point that this drives home for me has to do with the nature of contracts/union representation itself. Historically that’s what a lot of the struggle was for–corporations refused to sign contracts or to accept any agent that could bargain on behalf of workers. The unions helped direct collective resources and the contracts codified the gains that labor was making. At some point many people (labor academics especially it seems) got caught up in the idea of representation/contracts as the goal. Thus we wind up with a situation where people accept establishing a contract as a victory in and of itself regardless of whether it’s actually driving forward labor demands or simply codifying its concessions.

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