Job Security Chief Issue as UAW, Big Three Open Talks

After decades of struggle against Japanese auto makers, Detroit’s Big Three once again constitute an industrial powerhouse--leaner, more innovative and with billions of dollars in profits to show for it.

Theirs is a remarkable turnaround, achieved with the help of the 420,000 union workers who run the assembly lines and parts plants of General Motors Corp., Ford Motor Co. and Chrysler Corp.

Today, those workers’ representatives will begin to tell the Big Three what they want in a new national contract.

The talks will get underway when negotiators for the United Auto Workers and Ford ceremoniously shake hands at the auto maker’s world headquarters in suburban Detroit.

Similar ceremonies will take place Tuesday at Chrysler and Wednesday at GM. The big negotiating committees will then break into subcommittees, which will meet throughout the summer to narrow the issues in dispute.

At the top of the union’s wish list is greater job security, reduced overtime and protection of health-care benefits.

The typical assembly worker now makes $55,038 a year.

“We think we worked very hard and played no small part in the turnaround--probably the most significant industrial turnaround in peacetime ever,” UAW spokesman Frank Joyce said last week. “The result is in 1996 we are negotiating with a very healthy set of companies, by any criteria.”

Although none of the companies is pleading poverty, GM and Ford are pushing for increased labor flexibility to remain competitive against foreign auto makers building vehicles in the United States with cheaper nonunion labor.

“From our standpoint, ‘job security’ stands for people wanting to buy your cars and the company being competitive,” Ford spokesman Jon Harmon said.

Accompanying job security is “outsourcing,” the cost-cutting practice of farming out company jobs to outside, usually nonunion, suppliers.

That was a key issue three months ago in the 17-day strike at two GM parts plants at Dayton, Ohio. That strike virtually shut down the No. 1 auto maker’s U.S. production.

But the event also signaled to the UAW that GM is not willing to give in on the issue. GM agreed to hire more than 400 workers at the plants in the next three years and made cash payments to settle some grievances. But GM retained its right to award parts contracts to the most competitive bidder.

GM makes far more of its own parts than does Ford or Chrysler. It says it needs to be able to buy parts from others when its own plants cannot compete.

The fact that outsourcing is a major issue helps the auto makers, said Craig M. Brown, a labor relations attorney in Cleveland.

“The threat to outsource can be used to get the UAW and the employees to revisit old ways of doing business and to work together with the company to develop more efficient ways to produce the product,” Brown said.

UAW contracts began protecting jobs or substantially guaranteeing the income of Big Three workers in the mid-1980s, but overall employment has declined by nearly one-fifth since then, mainly through attrition.

With smaller work forces, the auto makers have used overtime to boost production when demand required it. The UAW wants less overtime and more new hires.

The major issues are unlikely to be resolved until after Labor Day. That’s when the UAW will select the “target” company with which it expects to get the best deal. It then will enter intense negotiations with that company before Sept. 14, when the current contract is scheduled to expire.

Under this traditional “pattern bargaining” strategy, the UAW then offers the resulting contract as the standard to the other two auto makers.

“The target to a greater degree has its destiny in its own hands and the ability to shape an agreement that fits the particular needs of that company,” Ford’s Harmon said.

Some analysts say GM might balk at a pattern contract that puts it in a less competitive position. But Brown said GM also realizes the threat a strike would pose at a time when GM is gearing up to produce several new models for 1997.

“The stakes are so high at GM,” he said. “GM has a boatload of new stuff coming out. You’re talking about a real high-risk roll of the dice.”