In the next few months, United Auto Workers President Ron Gettelfinger will be at the bargaining table with management at General Motors (GM) and Chrysler, as well as the federal government, to hammer out a deal that will restructure the industry. While Gettelfinger has always managed to get something for his union though tough bargaining, this time might be different.
If the Obama Administration wants the same givebacks that President Bush has asked for, then Gettelfinger may have to cut the union's tightly held paid layoff clause, wages, and benefits. BusinessWeek Detroit bureau chief David Welch sat down with Gettelfinger at the union's Solidarity House headquarters in Detroit on Dec. 18. In the following interview, Gettelfinger defended his union members' pay and says that the cost for retiree benefits can be managed. Here are some excerpts:
How much more are you prepared to give when the government comes calling?We have given at the office. The [health-care concessions were] a considerable reduction in 2005. Last year we gave even more. The men and women of the UAW were hailed for that agreement. We have more than stepped up. Labor is 10% of the cost of a vehicle, and everyone wants to squeeze another drop of blood out of the workers.
The government may ask you to make even more concessions than you have. What is the union's relevance if you keep conceding pay, benefits, and job security?Workers in foreign-nameplate factories recognize the value of the UAW. They know that if the UAW goes down, their compensation goes down. We're not ashamed to say that Toyota (TM) workers make more than us if you figure in their bonuses. We're here for a cause, and it's not just our membership. We're working for everybody we can.
Toyota's cars sell for more, on average, than American cars. One can argue that they create more value and, hence, should be paid more. Should you take a pay cut because of that?So we agreed that $14 an hour is the new entry-level wage for new workers.
But because the carmakers are downsizing, they haven't been able to hire anyone at that new wage.That's why we have to do something to get the economy started now.
If you have to give in on health-care coverage and accept a greater share of the cost for your members, will you do it?I can't negotiate in the media. I'll have to wait and see what the government wants.
You have a VEBA [health-care trust] coming in 2010. But the companies may not have enough cash to fund it. How will you manage to keep from having to renegotiate benefits?We're willing to stretch out the 2010 cash obligations for the companies. The deal includes some equity instead of cash. Look, this retiree obligation gets painted a few different ways. What's wrong with being socially responsible? We're not going to have someone who worked for us all of these years and just throw them out in the street.
The hearings in Washington proved that your union has no shortage of critics. How do you respond to them?The men and women of the UAW get grease on their hands every day. We need to march some of the critics into our facilities. Nine of the 10 most productive plants in the U.S. are UAW plants.
Do you like the idea of Chrysler and GM merging up?No.