GM Contracts With UAW Setting Precedents
The innovations in industrial labor-management relations during the past five years or so by progressive companies and unions already seem old-fashioned compared to new agreements being fashioned by General Motors and the United Auto Workers.
While many corporations are spending huge sums to break unions, other companies have been working with employees to give them a larger voice in decision-making. But such advances seem modest next to the precedent-setting, three-year contract that took effect July 1 between the UAW and New United Motor Manufacturing Inc., the joint venture of GM and Toyota that will build small cars at the former GM plant in Fremont.
And this week, finishing touches are being put on an agreement between the UAW and GM’s new Saturn Corp. that could make even the Fremont agreement seem outdated.
Bruce Lee, the UAW’s Western regional director, who led the negotiations at Fremont, says the NUMMI pact takes a dramatic step forward while preserving some traditional aspects of UAW contracts, such as a regular seniority system, a grievance procedure and a base pay that does not depend on company profits. Fremont production workers will earn $14.11 an hour compared to the present base of $13.23 at most other GM plants. That higher rate at Fremont includes, for the first time, pay for lunch breaks; in addition, workers got a $180 bonus for approving the agreement.
The pact continues a cost-of-living adjustment clause and includes other improvements in medical and vacation benefits.
Before the company lays off any worker because of “severe economic conditions that threaten the long-term viability” of the company, Lee said, it must first reduce executive salaries, cut down the number of employees in middle management, call back all work that had been subcontracted and then demonstrate to the union that worker layoffs are needed by opening company books.
Management expects to dramatically increase productivity in a variety of ways, including by eliminating the nearly 100 job categories for production workers in most GM plants. There will be only one category, which means that workers will be able to move easily from one job to another.
Worker participation is a key element in the NUMMI agreement. Employees will work in small groups and help decide the best ways of producing the cars. In addition, a “union coordinator” will be assigned to each group to assist in “solving problems and potential problems”; the company will pay the coordinator for that work.
The proposals for the Saturn agreement are even more far-reaching. They include a “lifetime” work guarantee for the 80% of all Saturn employees who will be salaried, not hourly, workers. The rest of the work force will be subject to layoffs if there is a downturn in sales.
Critics fear that the company will not live up to the lifetime-guarantee agreement and that union solidarity will be eroded if 20% of the workers are subject to layoffs and end up resenting those who are not.
Another feature of the Saturn proposal is that the base pay for the first year will be $13.45 an hour, less than the rate in Fremont but more than the average GM worker earns. After the first year of production, the workers will get 80% of their base pay automatically, and the rest will be based on productivity, company profits and the quality of the cars.
Don Ephlin, UAW vice president and director of the union’s GM department, said that, while no final agreement has been reached on the Saturn contract, “I believe the concepts that require full cooperation between the union and management are crucial both to the future of all of our members and to the future of the American auto industry.
“And we are going to build the whole damn car here, not import the engines, transmissions and other parts from Japan as they are doing at Fremont.”
Both plans are so dramatically different from traditional UAW contracts that they are drawing significant opposition inside the union from conservatives and militants alike. Those opposing the agreements fear that they could result in the elimination or weakening of the union by giving the workers a false feeling of security.
Nevertheless, the NUMMI contract was ratified by 92% of the workers at Fremont. And the Saturn plan is expected to go through even though the company still has not hired any workers and the plant’s location is uncertain, although several sources are predicting that it will be in Tennessee. The plant will cost an estimated $5 billion to start up, and GM workers, including those on layoff, will be offered the Saturn jobs first.
While the plans admittedly involve risks for workers and management, the alternative could be more drastic job losses to foreign competition or substantial reductions in wages and fringe benefits to make General Motors more competitive. And, if the plans succeed, they could give the workers more job satisfaction and better pay than almost any other industrial workers in the United States.
Teamsters-L.A. Taxi Pact
The first contract between L.A. Taxi Co. and Teamsters Union Local 572 here could help refute the old contention that relatively high labor costs at union companies put them at such a disadvantage that they can’t compete with non-union firms.
The local last week signed a contract with L.A. Taxi. Hugo Morris, the Teamsters’ public affairs director, said the new contract with L.A. Taxi includes fringe benefits such as a company contribution of $50 a month for medical care through Kaiser Permanente as well as prepaid prescriptions and a life insurance policy.
Instead of paying drivers a percentage of taxi fares, which is customary for unionized drivers, L.A. Taxi charges them about $45 a day to use company-maintained taxis and cover the costs of fringe benefits, a radio dispatching system and workers’ compensation. The drivers keep whatever they earn above that.
The contract makes this the first unionized taxi company serving the major part of Los Angeles since 1981. That year, Yellow Cab Co.’s 800 drivers called the first taxi strike in the Los Angeles area in more than 30 years after the company stopped paying for medical benefits.
Yellow Cab stopped operating after the City Council canceled its once exclusive franchise. A legal battle over the council’s action continues, with Yellow now before the U.S. Supreme Court trying to get its franchise renewed.
The union taxi drivers had made substantial contract concessions to help Yellow, but management said the concessions were not enough, and the union opposed renewing Yellow’s franchise.
Mike Riley, president of the Southern California Joint Council of Teamsters, said at the time that it would be outrageous for the city to renew the franchise of a firm that “is trying to break the union and cut the income of its drivers.”
Without union taxis in the city, many drivers started buying or leasing cabs. Los Angeles, never known as a “taxi town,” now has about 1,200 licensed taxi drivers, who must cover payments for such fringe benefits as health care and pensions. Their incomes range from an estimated $200 to $500 a week including tips, with the average said to be close to $300 a week, usually for a six-day workweek.
Morris of the Teamsters said the taxi business here is now strongly competitive, even though rates are fixed by the city. But he maintained that, despite higher labor costs for union drivers, they and their company can win the competitive battle because the union drivers, “who will be uniformed, will have the advantage of being able to offer customers new, well-maintained, air-conditioned taxis and quick pickups through the new dispatch system.
“And, because of the contract benefits, the company should be able to attract the best drivers in the city whose improved morale will be reflected in the kind of service they offer customers.”
The idea that a unionized firm, with higher labor costs, can successfully compete with non-union rivals has long been argued by unions in many industries. For example, relatively well-paid union construction workers across the country have contended with some success over the years that their companies can compete with non-union firms because union craftsmen are better trained, more reliable and therefore more productive. Nevertheless, non-union construction in the United States is on the rise. Faced with foreign competition, workers in such industries as autos and steel have taken substantial cuts to help themselves and their employers.
If L.A. Taxi is able to compete with non-union rivals in the coming months, it could bolster the argument that relatively good wages, working conditions and efficient management, not “cheap labor,” are the best ingredients for success in business.
Ban on Short-Handled Hoe
The argument over the use of the short-handled hoe should have ended a decade ago when the California Supreme Court agreed that it should be banned because it can lead to severe back injuries in farm workers.
Other less liberal states, such as Arizona and Texas, have also put restrictions on the use of the implement, and growers are required to provide hoes with long handles to help workers avoid having to bend over.
Despite the state’s ban, however, a recent survey by California Rural Legal Assistance, a government-sponsored agency that aids the rural poor with their legal problems, showed that many California growers are still requiring their workers to use short-handled hoes and that the state Occupational Health and Safety Administration is not adequately enforcing the ruling against it.
In fact, Cal OSHA has recently proposed that the short-handled hoe be allowed as long as workers don’t have to bend at the waist by more than a 45-degree angle and as long as the tools are not used for more than five minutes per shift.
Cal OSHA has temporarily withdrawn that proposal because of complaints from critics who charged that it would be an invitation for even wider abuse.
A spokesman for the Western Growers Assn. said the growers are not trying to eliminate the ban on the short-handled hoe, although the group says it still is not convinced that the implement is dangerous.
The 1975 state Supreme Court decision actually was a limited one for the farm workers because it applied only to the tool’s use in the weeding and thinning of crops. Many growers now use knives and other implements in the harvesting of lettuce, celery and broccoli that have resulted in worker injuries.
But Claudia Smith, an attorney for California Rural Legal Assistance, and others acknowledge that there is no practical alternative for harvesting many crops.
In the meantime, the ban on the short-handled hoe for weeding and thinning should be strictly enforced, without loopholes.
