UAW’s King Says Union May Not Select Strike Target in 2011 Talks

United Auto Workers President Bob King said that the union may break with tradition and not set a strike target for this year’s contract negotiations with U.S. automakers.

The union’s leadership hasn’t decided if it will follow its custom and pick one company to negotiate a labor deal, which would become a pattern for an agreement with the other two major U.S. carmakers, King said today a speech to the Automotive Press Association in Detroit. King said he still is discussing the matter with his bargaining team.

"We have very advanced and good relationships to make sure our membership gets their fair share of the upside," King said in a question-and-answer session after the speech. "I would hope we don’t have to get to the point of picking a strike target."

King, 64, will negotiate new contracts this year with General Motors Co. (GM), Ford Motor Co. (F) and Chrysler Group LLC. Agreements expire in September. He has said workers must be rewarded for the $7,000 to $30,000 in concessions they each gave since 2005 to help the automakers survive.

The concessions included surrendering raises, bonuses and cost-of-living adjustments as well as agreeing to a two-tier wage system, in which new hires earn about $14 an hour, half the amount paid to senior production workers.

Autoworker Concessions

The UAW also agreed to accept cash and securities from the carmakers to fund a retiree health-care trust in lieu of the companies paying for benefits with cash from their operating budgets.

In previous contract negotiations, the UAW has selected one company as a “strike target” with which it would try to reach a labor agreement. If they couldn’t come to terms, the union sometimes went on strike and turned to another of the three major U.S. carmakers to get a deal.

King has said that he wants the UAW to establish ties with other unions in the U.S. and globally and organize a foreign- owned auto plant in the U.S.

GM, which reorganized in bankruptcy in 2009, earned $6.17 billion last year. Ford, the only major U.S. automaker to avoid bankruptcy, had net income of $6.56 billion last year, the most since 1999. Chrysler, which also reorganized in 2009, posted a net loss of $652 million last year and forecast net income of as much as $500 million this year.

Ford reported a 22 percent increase in net income for the first quarter today, its biggest profit for the period since 1998.

Board Representation

King said he would like to see the UAW and other unions get more representation on the boards of U.S. corporations the way they do in Germany, where companies are required by law to include them.

The UAW has representatives on the boards of GM and Chrysler that represent the voluntary employee beneficiary associations that own stock in both companies and pay retiree health-care benefits. They don’t represent active workers.

"If I had a magic wand, I’d take the German law and put it in the U.S.," King said. "Workers should have representation on the board."

To contact the reporter on this story: David Welch in Detroit at Dwelch12@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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