UAW President Says His Union Now Rejects Adversarial Approach

United Auto Workers President Bob King, opening contract talks with U.S. automakers next month, said the union is no longer an adversary and seeks to cooperate with management.

“The public is looking at us now to see if we’ve learned anything from the crisis or if we’ll return to business as usual,” King said today during a speech at the Detroit Regional Chamber’s Mackinac Policy Conference on Mackinac Island in Michigan. “The 21st century UAW views management not as an adversary and the enemy, but as a partner.”

King, 64, elected president of the union a year ago, will negotiate new contracts this year with General Motors Co. (GM), Ford Motor Co. (F) and Chrysler Group LLC. The agreements expire Sept. 14. King 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.

In that time, the union surrendered raises, bonuses and cost-of-living adjustments. The UAW also agreed to a two-tier wage system, in which new hires earn about $14 an hour, half the amount paid to senior production workers.

King said the union seeks to take a “moderate, pragmatic and inclusive” path to ensure that automakers succeed.

“Our union has learned many lessons from the crisis in the auto industry, and we are in the process of instituting radical change,” King said. “We recognize we can no longer take the same approach as 20 or 10 or even five years ago.”

UAW Concessions

The UAW’s concessions helped the U.S. automakers lower labor costs to about $58 an hour for wages and benefits from about $75 an hour and get close to the $52 an hour Toyota gives its U.S. workers, according to Sean McAlinden, chief economist with the Center for Automotive Research in Ann Arbor, Michigan.

Labor rates at U.S. automakers remain above the $44 to $48 hourly rate South Korea’s Hyundai Motor Co. pays its U.S. workers in wages and benefits, McAlinden has said.

“The 21st century UAW recognizes the U.S. auto industry faces critical challenges in the global auto industry,” King said. “Our members know the success of their employers is in their mutual long-term interests.”

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.

“We all made sacrifices and we all decided to work together and because of that, there’s been an amazing revival of the U.S. auto industry,” King said. “For the first time in seven years, all the U.S. automakers are making money this year.”

To contact the reporters on this story: Keith Naughton in Southfield, Michigan, at knaughton3@bloomberg.net;

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

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