Thursday, May 31, 2007

"Taking the High Road: The Role of Unions in a Global Economy"

The following is a speech given May 31, 2007, by UAW President Ron Gettelfinger to the Detroit Regional Chamber at the Mackinac Policy Conference, Mackinac Island, Mich.

Thank you very much Mayor Dennis Archer for the kind introduction. Thank all of you and good morning everyone.

On behalf of the UAW International Executive Board, and the women and men of the UAW, both active and retired, I want to thank Mayor Archer and Mr. Blouse as well as your board of directors for the invitation to speak with you this morning. It is a pleasure to address the Detroit Regional Chamber at your Mackinac Policy Conference.

I am sorry I missed Teamster’s President James Hoffa’s speech last night because he is a powerful voice in the labor movement and I want to thank you for inviting him. I want to recognize Mark Gaffney, president of the Michigan State AFL-CIO and all of your distinguished attendees. I want to especially acknowledge all of the elected officials who are in attendance.

Also, I want to thank Senators Levin and Stabenow for arranging a June 6th Manufacturing Summit in Washington for the Big Three auto executives and myself to discuss health care, trade and energy.

It is my understanding that arrangements are in the works for a meeting with our Michigan Congressional Delegation prior to this Summit and I hope that it works out.

And, thank you to the Dean of the House of Representatives, John Dingell, for your leadership on health care and energy.

When leaders from business and labor come together, we often find we have more in common than we might realize. That’s why one of our key messages to members, and potential members, of our union is this: “You don’t have to be anti-employer to be pro-union.”

We have no interest in tearing down employers. Just the opposite: We want employers to succeed, so that workers have a chance to share in that success.

Workers join unions for the same reason employers join the Chamber of Commerce: Because we can speak more effectively together than any one of us can speak alone.

And we would not assume that a company is “anti-union” simply because they belong to a pro-business lobby like the Chamber of Commerce.

In sharing our thoughts this morning the topic our union has chosen to address is “Taking the High Road: The role of unions in a global economy.”

The changes demanded by today's intensely competitive global marketplace can be extremely difficult -- for employers, for communities and for workers and their families.

That’s where unions come in. We all know that employers have to be highly efficient and productive in order to succeed. The pressure is relentless, there is little margin for error, and the cost of failure is enormous.

In the face of all this pressure, ordinary workers need a voice. We need a voice about our working conditions -- because somebody has to make sure that changes in workload and staffing don’t compromise our safety.

We need a voice about our pay and benefits -- because somebody has to make sure women and men who work hard every day can still earn a decent living.

We need a voice in the political arena -- because somebody has to make sure that when laws and regulations are passed and international treaties are negotiated, the interests of working people are protected.

That somebody is us -- organized labor.

The role of our union is to advocate for workers here and in other countries. But that doesn’t mean, necessarily, that we are advocating against employers.

Sometimes, yes. But certainly not every time.

Even in an age of rapid change, it’s possible for employers and workers to succeed together. We can get there by taking the high road to a high-quality, high-performance workplace that leads to success in the marketplace for companies and good wages and secure benefits for workers.

A case in point is a global company that is in the midst of a very dramatic change: The Chrysler Corporation.

Some people were surprised to learn that our union is ready to work with a private equity group like Cerberus to help rebuild and renew the Chrysler Corporation.

We certainly have some concerns about the private equity sector of the finance industry, especially the “strip and flip” reputation that exists in many of these firms.

But in the case of Cerberus and Chrysler, we weren’t asked to evaluate the whole industry. We were asked to evaluate a particular transaction with an identified company, under specific circumstances.

What we saw was an auto company with a commitment to billions of dollars in new investment -- including an additional contribution to the pension fund that protects UAW members at Chrysler and their families.

That looks like an opportunity for our membership and our communities -- and we’re going to do everything we can to make the most of it.

If any company knows how to adapt to change, it’s Chrysler. In the past 25 years, the company survived a near bankruptcy, with help from our union and loans guaranteed by the federal government.

Chrysler expanded by acquiring American Motors and the historic Jeep brand; then became part of Daimler, and now has embarked on a new chapter as an independent company.

The decision by Cerberus to invest $7.4 billion into a unionized manufacturing company is, by any definition, a high-road investment.

Most of that money is going into the Midwest, and a lot of it is staying here in Michigan.

Conventional wisdom says the only way to succeed in manufacturing is to travel the low-road, by chasing low wages in Mexico, or China or in non-union facilities.

We believe the low road is a dead end. For workers, for communities -- and in the end, for employers.

The high road can work -- and our members are committed to making it work at the new Chrysler Corporation. You won’t find a workforce more dedicated to workplace safety, quality, and productivity than our UAW membership.

As we work together at Chrysler and at other companies to adapt to changes in our industry, it’s important to keep one constant in mind: the consumer.

The consumer has one primary concern, and it doesn’t have anything to do with private equity or public offerings or any of the other things that many of us within the industry focus on from day to day.

The consumer has a very simple question: When I pay $200, $300, $400 or $500 a month for a lease or a car payment, what kind of value will I get for my money?

Consumers want to know about quality, reliability, safety and state-of-the-art technology. They want to hear about vehicles with high mileage and low emissions.

On these topics, UAW members and our employers have a compelling story to tell.

For example, as we all know, GM won Car of the Year and Truck of the Year at the Detroit Auto Show. Ford is outperforming the Japanese competition in customer surveys. And Chrysler has the freshest vehicle line-up in the industry.

Unfortunately, there’s an impression among the car-buying public that the Big Three build nothing but gas-guzzlers, while Toyota is a division of Greenpeace.

That impression is not based on fact. To be sure, Toyota makes fine vehicles, and we have nothing but respect for the women and men who work hard every day in Toyota facilities.

That includes, of course, the UAW members who build Toyota Corollas and Tacoma pick-ups at New United Motor Manufacturing in Fremont, Calif. That plant is a very successful joint venture between Toyota and GM.

We’re also quite proud of the UAW members throughout Ford, GM and Chrysler who are building a wide variety of high-mileage and low-emission vehicles: advanced technology vehicles like flex-fuel, clean diesel, and hybrids. And, our employers are literally investing billions of dollars for the development of current and future advanced technology vehicles.

All of us in the domestic auto industry or anyone associated with the industry -- labor and management -- should be talking about the positives that are taking place in our industry.

But that’s not the only story we have to tell.

We’re working diligently to address the challenges that face the companies where our members work. But not all of the problems in the domestic auto industry can be solved in our facilities.

Our members certainly understand the need to be competitive in the global economy -- but competition has to take place on a level playing field.

Our plants are competitive -- but our federal government’s policies aren’t.

The U.S. auto industry today, and the state of Michigan for that matter, is in part paying the price for decades of deeply flawed trade policies, which have left the U.S. with the most open market in the world, while other countries are free to practice various forms of protectionism.

One of the role of unions in the global economy is to act as a check and balance on corporate and government policies, so that workers in all countries can truly benefit from trade and economic growth.

For many years unions, among others, have been making the case that the high road to the global economy must include significant protections for working people and the environment.

Earlier this month, Republicans and Democrats worked together to take an important first step towards raising international standards instead of lowering them.

On May 10th, Congressman Charles Rangel and Congressman Sander Levin, both Democrats, reached an agreement with the Bush Administration to include labor and environmental protections in bilateral trade agreements with Peru and Panama.

For the first time ever, the key principles of international agreements on labor rights and the environment will be included in the main text of trade agreements.

The labor standards, adopted from the International Labor Organization, include freedom of association, the right to collective bargaining, a ban on child labor and forced labor, and a ban on all forms of discrimination.

Signatories to these agreements will also be required to enforce environmental laws and regulations, and to uphold international treaties on environmental protection.

For the first time, workers and the environment will receive the same priority as copyright, patents and other property rights.

It’s only fair: If your business makes an auto part, or a handbag, or a DVD, you should be able to enforce a claim against a pirate producer overseas who tries to gain an unfair advantage by stealing your design.

But stealing a product isn’t the only form of piracy that ought to be punished under international law.

Regardless of the circumstances that bring it about, when an employer steals the childhood of a 9-year-old laborer in an offshore factory, that is heinous. All trade agreements must include enforceable language that will forever prohibit this act from occurring.

When an unscrupulous company steals from us all by dumping harmful chemicals in the drinking water of a developing nation, we ought to be able to stop such behavior.

These aren’t just business issues, labor issues or environmental issues. These are moral issues.

To operate a business in this country, you are expected to comply with minimum wage laws, health and safety laws, workers’ compensation laws, environmental regulations and a host of other requirements.

Business should not be forced to compete with producers from countries where the laws are weak and enforcement is even weaker. And, employers should not have an incentive to run there because they see it as a land of opportunity.

Business should have a right to compete on a level playing field -- and the bipartisan agreement between the Bush Administration and Congressional Democrats is a step in the right direction.

We will continue to review the exact language of the agreements, but UAW members are pleased to finally see some progress on trade policy -- but we’ve got a long way to go to undo the damage of past agreements.

And, there is no reason to do further damage with additional unfair free trade agreements that will put American companies and American workers right here in Michigan and around the country at a further disadvantage.

American workers and American companies should not be forced to compete with countries which are unable to guarantee the most basic human rights for their citizens.

That’s why organized labor is strongly opposed to a proposed free trade deal with Columbia. Four hundred trade unionists in Columbia have been murdered since President Alvaro Uribe took office in 2002 – 72 in the last year alone – by police and government-backed paramilitaries.

The low road doesn’t get much lower than the brazen murder of individuals who stand up and speak out on behalf of themselves and their co-workers.

Its organized labor’s obligation to urge Congress to reject any deal with Columbia until that nation agrees to put an end to these unconscionable murders and other violations of human rights.

In Columbia, the key issue is human rights. The proposed U.S.-Korea Free Trade Agreement has a different flaw, but it’s just as fatal. It fails the basic test that must be applied to any trade agreement. Reciprocity.

Last year, Korea exported 695,134 vehicles to the U.S. About 554,000 of these vehicles were made by Korean companies. The United States was allowed to export 5,732 vehicles to Korea, about 4,000 of which were made by DaimlerChrysler, Ford and GM.

This is a classic example of free, not fair, trade. No reciprocity here.

The proposed trade deal will reduce or eliminate tariffs on Korean vehicles entering the U.S., and encourage the import of Korean cars and pickup trucks into the United States. But the agreement does nothing to increase U.S. exports into Korea.

The jobs of tens of thousands of workers will be at risk if this agreement is implemented as written.

This isn’t just a labor issue, however. Chrysler and Ford also oppose this deal -- because it isn’t fair to U.S. producers. Both companies stand to lose significant market share to unfair competition.

If you’re a supplier to the auto industry, you can be sure that when your customer loses out to unfair foreign competition, your business will lose out, too.

There will be widespread economic impact, not just in Southeast Michigan, but across the country if we let this unbalanced, unfair agreement go through.

Let’s be clear. Organized labor is not opposed to fair trade, but, these unfair free trade agreements are robbing our nation and our state of good-paying jobs and creating a huge trade deficit for our country.

Instead, our message should be: Let’s take the high road. Let’s level the playing field. Let’s take steps to make sure South Korea opens its market to American-made goods, before we reduce tariffs and open our borders to more imports that will drain U.S. jobs and harm U.S. businesses.

A new approach to international trade is a necessary condition to creating a high road path to economic growth for workers and employers.

This is necessary, but it is not sufficient. We also have to get our own house in order, here in the United States.

First on the list must be a meaningful effort to address America’s health care crisis.

Our continued failure to enact serious health care reform puts U.S. companies at an enormous competitive disadvantage. All of our major trading partners -- every one -- have national health care systems which deliver quality care at an affordable price.

We don’t -- and it’s not just the 46 million people in this country who lack any form of health insurance who are paying the price. Or, the millions more who are underinsured.

It’s also American businesses, who are footing a major share of the highest health care bill on planet earth: in 2007 estimated to be as high as 2.2 trillion dollars!

Despite all this spending, the Institute of Medicine reported that America’s infant mortality rate ranks 27th in the world; life expectancy for women ranks 30th and for men 27th.

Why do we spend so much on health care and achieve so little? Perhaps, according to OWL, The Voice of Midlife and Older Women in their May ’07 issue, it’s because about one-third of health care dollars doesn’t pay for actual health care: 20 percent goes to insurers, 12 percent goes for administrative burdens on hospitals and providers who must deal with differing drug formularies, insurance provisions, and forms for over 1,000 different insurers, each with multiple plans. Maybe it’s because since 1970, the number of doctors in the United States has increased by 200 percent -- while the number of health care administrators has increased by 2,500 percnt, according to OWL’s article.

The UAW’s position is clear: Our country needs to join the rest of the industrialized world and implement a single-payer, universal national health care program which covers every man, woman and child in the United States.

Obviously, not everyone agrees with this approach, but I think we can agree that while we have the best health care professionals of anywhere in the world, our current system of health care delivery is too costly and inefficient.

This crisis is not going to resolve itself, and, while we’re waiting to take action, there’s a child who has no health insurance who can’t get a vaccination. That child can’t afford to wait -- and neither can we.

That’s why, in the near term, our union supports the March of Dimes campaign to extend and expand the State Child Health Insurance Program, to provide coverage to more children.

We also support creative ideas like lowering Medicare eligibility to age 55.

That’s the right thing to do for older workers who have been laid off without health insurance.

And it’s the right thing to do for responsible employers, who want to provide health insurance for active and retired workers, but are burdened by frequent -- and uncontrollable -- cost increases.

Taking care of children, helping vulnerable workers, helping companies compete -- surely, these are areas where we can work together.

And as we work to make progress on health care, it’s also important to look for the high road on another problem which affects every business and every worker in Michigan: the issue of climate change.

Climate change is real. Labor and business can play a constructive role by advocating thoughtful and responsible solutions.

Unfortunately, some of the proposals coming out of Washington D.C. right now are neither.

Specifically, demanding drastic and unworkable increases in CAFE regulations won’t solve the problem of global warming. But it will create new problems -- by imposing huge new costs on auto manufacturers, and throwing tens of thousands of workers out of a job.

We can’t deny that the auto industry is part of the problem when it comes to global warming. But for whatever reason, some people seem to think the auto industry should be responsible for all of the solution. That’s the same thing as saying the United States alone can solve the problem of global warming for the world.

But we must do our part. Cars and trucks are responsible for about 16 percent of all carbon emissions. Of course we have to tackle that part of the problem -- but it doesn’t make sense to ignore the other sources, throughout the U.S. economy, that make up the other 84 percent of the problem.

Business and labor together have to speak out against unreasonable demands on our industry.

But that’s not all we have to do.

We can’t simply tell the Congress and the car-buying public what we can’t do. We have to talk about what we can do.

If the domestic auto industry continues to be seen as dragging its feet on environmental issues, it’s going to hurt our brands and our vehicles in the marketplace.

For our part, the UAW supports an aggressive three-part program to protect our environment, and to move our industry forward.

First, we’re in favor of an economy-wide cap-and-trade program to reduce carbon emissions. This would allow the trading of permits to emit carbon between companies and industries.

The auto industry would have to comply -- and so would other industries. We’re all part of the problem, and we all need to be part of the solution.

Second, we’re prepared to support an attribute-based approach to fuel economy that would scale mileage requirements to the overall footprint of each vehicle.

Larger vehicles would have a different mileage requirement than smaller vehicles.

But we can’t support attribute-based CAFE unless it is coupled with an “anti-backsliding” provision. This would prevent companies from simply enlarging their vehicles in order to reduce their mileage requirements.

We need to keep small car production in the United States -- for the sake of workers who build those cars, and to protect our nation’s long-term energy security.

Finally, for the past two years, we have been promoting a “Marshall Plan” to stimulate new investment in the domestic auto industry.

We want to make sure the next generation of vehicles and their key components are built here in the United States.

We’d like to see a manufacturers' tax credit, so that companies receive support for building hybrids, fuel cells, clean diesel, and other advanced technology vehicles and their key components here in the United States.

A University of Michigan study found that such a program of tax credits would pay for itself in a short time, by creating new jobs and stimulating new investment.

Taken together, we think these ideas offer a high-road approach to a revitalized domestic auto industry.

It’s an approach that protects our environment -- but which also recognizes that workers are part of the environment.

A realistic approach to climate change. Fixing our broken health care system. And a new more balanced approach to international trade.

These are the types of issues, we believe, where business and labor can join together to find common ground.

Nobody expects either one of us to give up long-held principles or to compromise on core values.

But if we have a commitment to listen, and to respect one another’s point of view, we can make real progress and deliver real results.

Once again, on behalf of our entire union, thank you for your invitation, and thank you for your kind attention.