June 18 (Bloomberg) -- Bob King, new president of the United Auto Workers union, said organizing the U.S. factory workers of foreign companies such as Toyota Motor Corp. is his top priority.
“If we don’t support Toyota, Honda, Nissan, Hyundai, Kia and all the non-union plants by supporting the right to organize, we cannot win back the concessions we have given up,” King said yesterday in his first address to delegates at the UAW’s constitutional convention in Detroit.
King, 63, was elected president on June 16, succeeding Ron Gettelfinger, 65, who helped persuade President Barack Obama to organize rescues of General Motors Co. and Chrysler Group LLC last year. King takes over amid calls from workers to restore the wages and benefits they gave up to bolster the industry, and as membership in the union has fallen to 355,000 from 1.5 million in 1979.
UAW members who work for U.S. automakers have each given $7,000 to $30,000 in concessions in the past five years, King said last month. The union surrendered raises, bonuses and cost-of-living adjustments at GM, Ford Motor Co. and Chrysler. It agreed to a two-tier wage system, in which new hires earn about $14 an hour, half the amount paid to hourly production workers.
“The only way we can get back what we’ve sacrificed is by coming up with a comprehensive strategy to rebuild the power of the UAW,” King said, adding later in a press conference: “It’s not possible to get everything back that we gave up because we’re not going to put ourselves in a position where the vehicles we make are not competitive.”
Toyota’s Mississippi Plant
King criticized Toyota President Akio Toyoda for moving forward with plans to open a non-union factory in Mississippi after closing the New United Motor Manufacturing Inc. plant, known as Nummi, that it had operated in Fremont, California.
“Toyota is moving production in violation of what Akio Toyoda’s father told us, ‘Produce a quality vehicle and be productive and you have lifetime employment,’” King said in a press conference following the convention. “How is it morally right or fair to its largest market, California?”
The Japanese automaker’s joint venture with pre-bankruptcy GM was its only U.S. plant where workers were represented by the UAW.
“The only reason they closed that plant is because it was a UAW plant,” King said. “Mr. Toyoda, if you care about safety and quality in America, you’ll go back to Fremont and build Corollas there and not in Mississippi.”
‘Long Way From Suppliers’
Toyota, the world’s largest automaker, will begin installing assembly equipment at the facility in Blue Springs, Mississippi, with a goal of starting production of Corolla compact cars by late 2011, the company said yesterday in a statement. The decision reverses earlier plans to use the plant to build Highlander sport-utility vehicles and Prius hybrids.
“Nummi closed because when GM abandoned the factory, we could not sustain that plant by ourselves,” said Mike Goss, a Toyota spokesman. “It was a long way from our suppliers and was getting engines made in West Virginia. Nummi was not economically feasible.”
Toyota said in May it would buy a $50 million stake in electric-car producer Tesla Motors Inc., which purchased the Nummi plant to build its Model S and other vehicles.
Tesla had hired back 90 former Nummi workers at that time and expected to add about 50 a month, Chief Executive Officer Elon Musk said. Nummi had 4,700 workers before its closing.
King said yesterday the plant closing was “a crazy business decision” and the UAW would conduct protests at Toyota dealerships.
“We’re going to show these corporations that if they do something unjust to our members, they’ll pay a price,” he said after his speech.
‘Bad Business Decisions’
“There’s a direct parallel between the decision to close Fremont, which was a bad business decision, just like they made bad business decisions on quality and their safety recalls,” King said.
After the convention adjourned, King led the 1,200 delegates along with Teamsters President James P. Hoffa on a march on Detroit’s banking district to protest Wall Street lending practices. The demonstration was part of new social activism the union will undertake, King said.
“We’ve been under attack for eight years and we hunched down and protected the union,” King told the crowd from the back of a flatbed truck. “We will never have the justice we deserve if we’re not part of a much broader social movement.”
The recession combined with the financial crisis that began in 2008 led to a 35 percent industrywide plunge in U.S. auto sales from 2007 to 2009. Sales this year through May rose 17 percent.
As auto sales recovered in the first quarter, GM posted net income of $865 million, Chrysler had an operating profit of $143 million and Ford reported earnings of $2.1 billion. The automakers are boosting production, expanding plants and hiring workers.
GM said yesterday it will operate 9 of 11 U.S. assembly plants through the customary summer shutdown because flexibility under the new UAW contract allows the automaker to respond to customer demand. The move will boost GM’s output by 56,000 vehicles.
King cited Ford’s No. 5 ranking in J.D. Power’s initial quality study yesterday as proof that UAW workers build better cars than they ever have.
“We’ve learned from our mistakes in our past,” King said. “We cannot let bad quality come out of our facilities.”
To contact the reporter on this story: Keith Naughton in Detroit at Knaughton3@bloomberg.net.
To contact the editor responsible for this story: Jamie Butters at email@example.com.