Facing the loss of tens of thousands of unionized, blue-collar auto jobs in coming years, the head of the United Auto Workers on Sunday called for a more collaborative approach to the deep-seated problems facing the U.S. industry, including high health care costs.
The challenges we face aren't the kind that can be ridden out. They're structural challenges and they require new and farsighted solutions, UAW President Gettelfinger said in his report to a union convention that convenes on Monday and will elect a new leadership team.
The UAW meeting in Las Vegas comes at a pivotal time for the U.S. auto industry. Membership of the union has fallen by more than 77,000, or 12 percent, since 2002, and more sweeping job cuts are on the horizon.
The two largest U.S. automakers -- General Motors Co. and Ford Motor Co. -- have announced plans to cut about 60,000 factory jobs and shutter two dozen factories in coming years in order to adjust to their loss of share in the U.S. market.
The fact that our biggest employers are losing sales and share has serious implications not only for our members there, but also for those employed in their respective supply chains, and for our entire union, Gettelfinger said.
With a crucial round of contract talks with U.S. automakers less than a year away, analysts are watching the UAW convention this week to see what the incoming leadership signals about its approach to those negotiations.
Under Gettelfinger, who is expected to be easily re-elected to another term as president, the UAW has shown a willingness to negotiate cost-cutting deals that U.S. auto executives say are needed to stave off deeper financial problems.
The UAW last week reached a deal with Delphi Corp., a bankrupt auto parts supplier, that offers all of Delphi's UAW workers payouts of up to $140,000 to accept early retirement.
Delphi, a former GM subsidiary, is seeking deep wage and benefit cuts as it emerges from bankruptcy. Although the UAW has accused Delphi of manipulating bankruptcy law to throw out negotiated contracts, Gettelfinger acknowledged the underlying crisis in its industry.
The U.S. auto parts sector has shed more than 20 percent of its payroll since 2000 or more than 160,000 jobs, as problems have deepened for U.S. automakers, he said.
Dig into the reasons behind this state of affairs and there's no getting away from the fact that bad management decisions have played a role, he said. But it's not all a matter of bad management.
DEEPER PROBLEMS THAN EVER
Saying the auto industry's problems were more serious than ever, Gettelfinger called for reform of U.S. health-care policy. The current system imposed an unfair burden on the traditional Big Three auto makers and their aging workforce compared with their Asian and European rivals.
Gettelfinger said the burden of rising U.S. health-care costs could not be fixed in negotiations with a single employer.
Both Ford and GM have struck deals with the UAW that shift a higher share of their health-care costs to workers and retirees. DaimlerChrysler AG's Chrysler Group is in negotiations on a parallel deal that analysts say could save it hundreds of millions of dollars annually.
The UAW has failed to organize any of the U.S factories run by Asian and European car makers, even as their combined share of the U.S. market has risen to more than 22 percent, up from less than 15 percent a decade ago.
A text of Gettelfinger's report to the union membership was released on Sunday. He was expected to touch on many of the same themes in his address to UAW delegates gathered in Las Vegas for a four-day convention.
In a crucial item on the agenda, the UAW membership will pick three new vice presidents to replace those in charge of the upcoming negotiations with GM, Ford and Chrysler.
UAW membership has fallen to fewer than 600,000, down from more than a million in the 1970s.