Wednesday, February 25, 2009
Thank you, Tom, for that kind introduction, and all of you on the dais for the warm reception. On behalf of the men and women of the United Auto Workers and the members of our International Executive Board, thanks very much to all of you for inviting our union to be part of your program this evening.
The Economic Club of Memphis is a well-respected organization that includes many of the most distinguished business leaders in your community, and it's a pleasure to be here with all of you.
We certainly appreciate your hospitality and want you to know that the UAW is very much at home in Tennessee because 20,000 of our active and retired members live and work here. Tennessee is in what the UAW refers to as our Region 8, directed by Gary Casteel, which is headquartered in Lebanon, Tennessee, just out side of Nashville.
And, in addition to the GM plant in Spring Hill, we are privileged to represent the workers in the surrounding Memphis area at the Mopar & CAT PDC -- UAW Local 1086, the GM SPO & Freightliner -- UAW Local 2406, and Ford PDC, ADM, Memphis Schools & Wurzburg Brothers -- UAW Local 3036
These are some of the workplaces in Tennessee and just across the border in Mississippi where you will find UAW members, doing their best every day to provide great products and services.
I am proud that some of leadership from these local unions are in attendance this evening. As is a representative of our regional director.
The state of Tennessee, meanwhile, is at the heart of the 21st century auto industry. Major manufacturers like GM and Nissan are located here, along with a wide range of auto parts plants which provide components to these facilities and to others.
In fact, Tennessee ranks 9th in the United States in terms of auto industry employment, with nearly 80,000 auto-related jobs. That translates into more than $2.8 billion in annual payroll for people who work in assembly plants, parts plants, dealerships, and other companies.
So this is a great opportunity, from our point of view, to join with you in a dialogue about the issues that face working families. Because the state of Tennessee is important to the future of the auto industry, and the future of the auto industry is important to the state of Tennessee.
Anyone who is part of this industry, no matter where you live, has plenty of reasons to be concerned about current circumstances, and about the future.
The companies where UAW members work, Chrysler, Ford and GM, have been getting a lot of attention lately. But the crisis in the global auto industry isn't about just three companies.
While automotive manufacturing is global in every sense of the word, the United States remains a very important sales and profit center for all the major manufacturers.
So the rapid sales decline we have seen in the U.S. during the past year is a problem for every auto company, for Nissan, Toyota, Honda and BMW and other companies as well as for Chrysler, Ford and GM.
Between 1999 and 2007, U.S. light vehicle sales averaged between 16 and 17 million per year, on a very consistent basis.
But in 2008, that figure dropped to 13 million in annual sales.
And if you look at what's happened during the past few months, and project that out on an annual basis, the sales rate averages out to something between 9 and 10 million vehicles a year.
That's the lowest rate of U.S. sales in decades. And it translates into serious trouble for communities across the country where people make, service and sell vehicles for a living.
While the worldwide economic crisis, the global credit crisis, and the severe downturn in the U.S. economy are causing great difficulties throughout the entire auto industry. The U.S. is in the middle of one of the most severe recessions in postwar history.
At 14 month and counting, this is the longest recession since the 1980s.
We've lost 3.6 million jobs. Consumer confidence is at its lowest point since 1980, and consumer debt is higher than it has ever been.
Working men and women, including our members, are worried about the future. If they've still got a job, they're not sure how long it will last.
If they've been laid off, they're frightened they won't get called back or find a new job before their unemployment benefits run out.
With so much economic uncertainty and so little available credit, it's no wonder that consumers are not in the mood to make major purchases.
Our manufacturing sector, including the auto industry, is in a critical state. Orders are down, shifts are being cut back, and plants are being closed in communities all across the country.
U.S. banks and investment firms, for decades the bedrock of the global financial system, are in disarray.
With the private sector on the sidelines, it's clear that government must act to jump-start our economy.
We can't sit still when thousands and thousands of Americans are losing their jobs, more than 500,000 in the month of January, according to ADP Employer Services.
We can't sit still when thousands and thousands of Americans are losing their homes to foreclosure, 250,000 in January, according to RealtyTrac.
We can't sit still while businesses, large and small, are failing, all across America.
American workers deserve better.
American businesses deserve better.
The American people deserve better.
That's why members of our union believe that President Obama and the Congress did the right thing by enacting a far-reaching economic stimulus plan.
With targeted tax cuts for working families, and smart investments in America's infrastructure, this stimulus plan will put money into the paychecks of working families.
With millions of jobs saved and created, we can begin the process of getting America back to work.
New jobs and new income will be good news for America's working families. And their increased purchasing power will be good news for American businesses.
If we are successful in restoring consumer confidence, rebuilding consumer purchasing power, and fixing our financial system, we can also begin the process of revitalizing our auto industry.
That will be good news for workers and managers in communities across the country. And it will be good news where the auto industry is an integral part of the economy.
To be sure, there are significant challenges ahead at the auto companies where our members work.
We've got a great deal of hard work ahead of us to make sure that Chrysler, Ford and GM are in a position to take advantage of the financial recovery we hope to see take place in the coming months.
Everyone is well aware, I'm sure, of the problems facing the domestic auto industry.
But many people, I'm afraid, are not so well aware of what UAW members and our employers have done and are doing to address these challenges.
To be fair, I don't think anyone was very well-informed by the distorted national debate about our industry which took place last year in the halls of Congress and on the public airwaves.
This is another issue on which members of our union agree with President Obama: if you want to find out what.s really happening in America, you have to get out of Washington D.C.
In Washington D.C., you get the cartoon version of reality, distorted by talking heads and partisan posturing.
In the real world, where men and women are sweating it out on the shop floor, it's a different story.
In the cartoon version of the auto industry, Chrysler, Ford and GM are in trouble because they can't compete on quality, safety and fuel efficiency.
In the real world, UAW members are making vehicles that are winning quality awards from Consumer Reports and JD Power and safety awards from the U.S. government.
Our members are also building vehicles that offer a wide range of fuel-saving options to consumers, including hybrids, flex-fuel, advanced transmissions, and clean diesel technology.
In the distorted, cartoon version of the auto industry, we've heard time and again that "union work rules" are dragging down the domestic companies.
This perception has no basis in reality.
In the real world, according to the Harbour Report, the industry standard for measuring productivity, the 10 most productive auto plants in North America, are all union plants.
Not some of them. Not a few of them.
All 10 of the most productive auto plants in North America are facilities where workers are members of the UAW or the Canadian Auto Workers. We're proud that the efforts of our members to work safely, with an intense focus on quality and productivity, has been documented by independent analysis.
But let's be clear: While people use all sorts of so-called "facts" to criticize our union and our members, we don't think it is fair to use data from the Harbour Report to imply any criticism whatsoever of workers at Toyota or Honda or Nissan or any other foreign nameplate facility.
Those employees work hard every day, and they are dedicated to doing the best possible job they can for their company and their customers.
Nor does this data necessarily imply criticism of the management at foreign nameplate facilities.
When you look at the cars and trucks these companies produce, and at their long-term financial results, there's no question: They have a very impressive track record in a very competitive industry.
But it is just plain wrong to assert, as many people have, that Japanese and European companies represent some kind of state of perfection when it comes to auto manufacturing.
And it is just plain wrong to assert that the only way for U.S. companies to succeed is to copy everything that has been done by Japanese and European manufacturers.
Obviously, there are lessons to be learned from the successes achieved by foreign nameplate operations here in the U.S.
But the data from the Harbour Report shows there is also something to be learned from our success on the factory floor.
While UAW members are doing everything we can to deliver high-quality, fuel efficient vehicles to our customers, we are also hard at work trying to resolve the financial problems faced by our employers.
These problems didn't start yesterday, and we didn't just start working on them yesterday.
In the cartoon version of the domestic auto industry, the UAW has sat with its head in the sand while our employers faced financial disaster.
In the real world, we've made painful decisions, decisions that negatively impact our members, time and time again, to help our employers work towards a sustainable, viable future as profit-making manufacturers.
In recent weeks, members of our bargaining committees at Chrysler and GM have been engaged in intense negotiations, to help these companies meet the terms of the federal loan agreements they signed in December.
We have also been negotiating with Ford Motor Company, because that company also faces serious economic challenges.
Just a few days ago we reached a tentative understanding to modify the terms of the 2007 labor agreement at all three of these companies.
We are not discussing the details of these agreements, because we are still in the process of presenting information to our members for ratification.
What I can tell you is that with solidarity and support from our membership, and very hard work by elected UAW bargaining committees, we have taken the steps necessary to help these companies operate in an extraordinary difficult environment.
We still have some very difficult issues to sort through, including adjustments to the funding mechanisms for the independent trusts we established to fund retiree health care.
These are commonly known at VEBAs, for Voluntary Employee Beneficiary Associations.
But, the repeated sacrifices made by our active and retired members, we believe, set the standard of responsible actions which must be taken by other stakeholders, including management, directors, bondholders, dealers and suppliers.
Labor costs, after all represent just 10 percent of the overall selling price of a vehicle, although whenever the discussion turns to cost-cutting, it seems like we often get 110 percent of the attention.
The simple fact is that even if went beyond what we have already done, and reduced labor costs to zero, even if our members agreed to work for free we still could not solve all the financial problems facing Chrysler, Ford and GM.
Instead, we're going to keep working for responsible solutions, solutions that involve shared sacrifice by all stakeholders.
We're confident we will succeed, because if we don't, millions of jobs, thousands of companies and billions of dollars in tax revenue will be lost.
With the stakes so high, failure is not an option, so we truly believe we will be able to come together to find an equitable solution.
Even as we continue to address the issues within our industry, we must also put on the agenda the external factors that are a major part of the crisis facing the domestic auto industry, U.S. manufacturing, and the U.S. economy.
That means addressing the health care crisis which confronts not just the auto industry, but every American employer.
It means confronting the trade imbalance, which left us with a trade deficit of more than $800 billion in 2008, more than $100 billion in the auto sector alone.
And it means continuing on the path set by President Obama, a bottom-up economic recovery program that focuses on putting money in the hands of working people.
Just like the challenges we faced in the U.S. auto industry, none of these problems will be easy to solve.
Just like the auto industry, when you're dealing with health care, with trade, or the economy, there are multiple interest groups and multiple points of view which must be considered.
All of us have responsibilities to our constituents, whether we represent a labor union, a business association, or a political organization.
We have to do the very best we can to advocate for those who have chosen us to represent them.
Part of doing our best is reaching out to others, listening to different points of view, and finding new ways to put partisan differences aside so we can focus on real solutions.
And, that's the spirit in which we approached the very difficult talks to restructure the U.S. auto industry.
In conclusion once again, the active and retired members of our union appreciate the invitation to be with you tonight and to share our viewpoints about the issues which confront our industry, our economy and country.
Thank you very much for your attention.