Auto Talks

It all starts with a handshake.
But four years ago, this longstanding, across-the-table tradition was followed by one heck of a roller-coaster ride that would give pause to even the bravest amusement park fan.

A July 24, 2007, New York Times story dubbed upcoming Big Three negotiations “the most crucial talks in a generation.” Six weeks later, they ran this headline on a grim Labor Day story: “For UAW, a year of uncertainty.”

It was – with apologies to Charles Dickens – not the best of economic times.

On Sept. 24, 2007, more than 73,000 UAW General Motors members went on strike against the company over job security, economic issues, benefits for active workers and winning investment in future products. Two days later, the UAW national bargaining team reached a tentative agreement with GM in the wee hours. Highlights included job security and unprecedented product guarantees. On Oct. 10, thousands of UAW-represented Chrysler workers went on strike for nearly six hours before settling with the company. And in November, UAW Ford Motor Co. workers ratified a new contract with product and investment commitments.

One of the most important aspects of the labor agreements reached during 2007 bargaining was the establishment of an independent trust fund called a Voluntary Employee Beneficiary Association, or VEBA, to provide protections for medical benefits for UAW-represented retirees from GM, Ford and Chrysler. (On Jan. 1, 2010, the VEBA took over responsibility for providing retiree medical benefits.)

But who would have guessed that by late 2008 and into 2009, our nation’s economy – and the auto industry in particular – would enter its deepest crisis since the Great Depression.

It was indeed the worst of times.

Almost overnight, demand for new vehicles fell from an annual rate of more than 17 million units to an annual rate under 10 million units.

Former UAW President Ron Gettelfinger, along with the CEOs of GM, Ford and Chrysler, met with House and Senate leaders and later testified before Congress to describe the dire situation facing the industry. In the final weeks of his administration, President George W. Bush granted GM and Chrysler federally guaranteed loans that allowed them to survive into early 2009. Within a month after taking the oath of office, President Barack Obama appointed an Auto Task Force to review available options.

Without a government-supervised and supported restructuring of their debt, GM and Chrysler would have collapsed, throwing millions of American workers on the street and leaving retirees without medical benefits of any kind. And even though Ford had mortgaged everything for a $26 billion loan, if GM and Chrysler had collapsed, the supplier industry would have failed as well, in turn affecting Ford.

Current UAW contracts with Ford, GM and Chrysler will expire at midnight on Sept. 14.

Between now and then, the union’s national bargaining teams, who represent UAW members employed by each of the domestic automakers, and the companies’ respective teams, will open negotiations in late July, spend long days and nights hammering out a new tentative agreement and present it to our membership for a ratification vote.

What follows is a comprehensive look at the amazing turnaround following this historic auto industry crisis and the UAW’s bargaining goals for 2011 auto negotiations.

Perhaps this time, amid growing signs of improvement, they’ll open bargaining with a high-five – or maybe even a fist-bump.

Jennifer John

Auto Talks continued