The Contract Struggle at an Auto Parts Plant

Against the Current, No. 110, May/June 2004

Dianne Feeley

A NEW T-SHIRT has appeared at the American Axle and Manufacturing (AAM) plant where I work, and it is selling like hotcakes. The hi-lo driver shuttling parts to my job was wearing it.

On the front there’s a cemetery with a prominent tombstone, on which is written “R.I.P. UAW.” On the back there’s a demonstration, with workers carrying signs that say: “We were sold down the river by the 2004 negotiations.” “Lower Wages, More Work, Indefinite Layoffs.”

This appeared right after a new contract where we received a $5000 signing bonus–the largest signing bonus in the history of the auto industry. How come?

When General Motors sold off its core gear and axle plants ten years ago to Dick Dauch, the property was run down and the machinery ancient. The dynamic new corporation spruced up the outside and, plant by plant, installed new equipment.

Specializing in the design, engineering and manufacturing of driveline chassis systems and forged products for light trucks, buses, SUVs and cars, AAM has diversified its customer base, although 80% of its products are earmarked for GM.

Most GM workers elected to transfer back to GM plants, and AAM hired a new work force. It’s relatively young (average age is 34), about 20% female. The composition is about 60% African American, with the other 40% white, including sprinklings of newer immigrants from Albania, Poland, Mexico and the Middle East. Just about everyone graduated from high school and many have attended college. A few still manage to take classes.

Last year AAM’s sales totaled $3.7 billion, up 5.8% over the previous year. AAM reduced its net debt to capital ratio from 51% to 31% and recorded earnings of $197.1 million. In 2003 CEO Dick Dauch earned the highest salary in the state of Michigan.

When the AAM workforce heard the company’s state of the business report, added to the success story was a cautionary chart showing that AAM workers, who are represented by the UAW, make more and have greater benefits than nonunionized workers in the parts sector, and much more than Mexican and Chinese workers.

While acknowledging that company profits are soaring and that quality and on-time delivery is good, management beat the drum that AAM must “compete” with businesses that have significantly less labor costs. “Globalization” demands it.

AAM management was signaling the union that despite its profitability it expected to get a concessionary contract in 2004 in order to build its competitive advantage.

A New Beginning

Last fall, DaimlerChrysler sold a machine plant in New Castle, Indiana to Metaldyne. The proposed contract the UAW negotiated with Metaldyne cut the hourly wage by half, with a wage ceiling that is 70% of the wages Big 3 workers make. Benefits were reduced as well.

The 1200 workers at the New Castle plant voted the agreement down by 2-1; then the majority took the option to transfer to another DaimlerChrysler facility. Yet Metaldyne and the International must have been worried that the 227 remaining workers would vote the contract down a second time.

Management brought in 200 new hires (with a start date of January 12) for a three-hour orientation in December, just before the contract came up for a vote. At that time the new hires signed up to join the union and were urged by local officials to vote on the contract, and to vote yes. The contract passed by 71%. The new wage (for all workers) is $12.50 an hour and caps at $16-17.

When the 2003 contract negotiations were concluded last September for the Big Three plus Visteon and Delphi, the proposed contracts contained two-tier provisions with the two suppliers that were spun off, respectively, from Ford and General Motors. These contracts, however, did not set the wage for the new hires but stipulated that to be negotiated between the UAW International and the companies within ninety days.

United Auto Workers President Ron Gettelfinger defended the UAW’s decision to negotiate two-tier wages in a speech he gave at Madonna College in Livonia, Michigan in March 2004. He asserted that the strategy of allowing the employer to bring in new workers at a lower wage was necessary to “preserve jobs,” claiming that negotiating two-tier was “nothing new to our union.”

He also announced he’s not going to get hung up on the technicalities of a written agreement, but will continue the negotiations with Visteon and Delphi past the ninety-day period.

These contracts along with Gettelfinger’s speech signal acceptance by the UAW International that unionized workers in U.S. parts suppliers need to reduce wages and benefits so that the employer can be “competitive” against the nonunion and outsourced-abroad sectors.

The union is now willing to negotiate a permanent lower-tier wage for new hires. The payoff for the International is that nonunionized parts suppliers will agree to remaining neutral when the UAW organizes a unionization drive.

While Gettelfinger asserts that two-tier is in the interests of the autoworker, in fact the historical basis of the UAW pattern contracts is to take labor out of competition by having a uniform wage.

Article 2 of the UAW Constitution outlines the union’s objectives, beginning with “To improve working conditions, create a uniform system of shorter hours, higher wages, health care and pensions; to maintain and protect the interest of workings under the jurisdiction of this International Union.”

Even back in the 1940s, `50s and `60s, uniform wages were the reality only for workers in the Big Three and a few supplier plants, like the Budd Company, which came within a few pennies of what workers in the Big Three made.

In general suppliers always paid less. What’s new today is that as the Big Three shed their parts divisions this two-tier structure is being imposed on plants that were formerly Big Three plants. This is occurring without a fight on the part of the UAW; in fact, it is the union’s proactive strategy to do so, as Gettelfinger makes explicit.

Preparing the Fight at AAM

With this as a backdrop, AAM opened contract negotiations with the UAW at the end of 2003. Even though the company is in much better financial shape than Visteon and Delphi, AAM went into the negotiations with the attitude of “we want at least the same concessions as the UAW gave Visteon and Delphi.”

The president of our local, Wendy Thompson, puts out a monthly newsletter “Shifting Gears” and distributes it at the various plant gates in our complex. Over the course of the fall she kept us informed about the developments at Metaldyne, Visteon and Delphi, and about another of the American Axle plants, Three Rivers, opting for three tiers in order to get new work.

Before negotiations opened she suggested, in her newsletter, that the local produce and distribute a button in opposition to two-tier wages. The motion failed at the December membership meeting. Although no one would speak against the motion, I think the appointed reps (there are more than fifty in the plant of 2,900, and they were a majority at the meeting) were afraid to vote for something they felt the UAW International might oppose.

A small group of us got together at a restaurant near the plant and discussed trying to organize a campaign opposing two-tier wages being written into our contract. We hoped to influence the members of the negotiating committee to take a stand against two-tier, and to prepare ourselves in case the proposed contract contained the provision.

We decided to go to the January meeting and reintroduce the motion, but meanwhile take up a collection and order the button so that no matter what happened at the meeting; we were proceeding with the campaign. We added the words “Solidarity Forever” around the rim of the button to signify that the song, which is the official UAW anthem, reminds us that we need to stand together.

We wanted to initiate a discussion about why two-tier wasn’t in our interest. Most autoworkers know that we didn’t win the wages and benefits we have by negotiating them from scratch–they are the product of several generations of autoworkers.

At the union portion of time during AAM’s orientation session for new hires, it shows a movie about the history of the UAW featuring the 1937 sitdown at GM in Flint, which led to the first contract.

Every worker in the plant knows the story of the sitdown. Many are also the children or grandchildren of autoworkers. They have grown up hearing about the UAW from their parents, grandparents, relatives and close family friends.

There is a strong bond between the generations of UAW workers. We honor those who have come before us: they have paved the road and we feel an obligation to make sure they live their retirement years with adequate pensions and benefits.

What will workers who are hired after us think if we don’t defend them? Of course prospective new hires aren’t faceless individuals–they are our brothers and sisters, our children, our friends–and if we break the chain of solidarity that unites the generations of autoworkers, why would they protect us?

Bull’s Eye on Our Back

Some coworkers initially said, “Why worry about two-tier? It doesn’t affect me.” I think a woman in my work group said it best when she answered, “If we pass a two-tier contract, there will be a bull’s eye on everyone’s back.”

Once there is formalized inequality written into the contract, you know management will use that in every possible combination. There will be a lot more friction between workers; management will harass the higher-tier worker in an attempt to drive out or fire us; there will be resentment on the part of the lower-paid workforce–who will be working next to us but earning half our wages.

Eventually the lower-paid work force will predominate. When they are the majority, what incentive will they have to maintain the higher tier? Wouldn’t they vote to abolish it in order to gain more for themselves? Wouldn’t we have set ourselves up?

While we were waiting for the button to come back from the printer, one woman suggested we organize a petition against two-tier. We did, and gathered about 500 signatures. It enabled us to talk one on one to coworkers. We turned them in to the national negotiating team, which was sitting in session.

When the button came back from the printers, about fifty people in various plants and on different shifts helped to sell the button. What this showed those of us involved in distribution was that both the long-time GM workers (from before the plant was spun off) and the newer, younger workers stood together.

African Americans and whites, production and skilled trades, men and women understood how it would affect us. Skilled trades wouldn’t be directly affected, but they see how much of their work has been outsourced. They understood the connection between the introduction of two-tier and their own struggle.

Some appointed officials immediately went into the plants and told people they shouldn’t be wearing the button–that it wasn’t officially sanctioned by the local, that the shop chairperson didn’t support the campaign–and sad to say, some stopped wearing their buttons under pressure. But I think the tactic boomeranged and actually strengthened our support.

Early in the year the local held a strike authorization vote, which overwhelmingly passed. Unfortunately, during negotiations the UAW negotiating team doesn’t come to the membership and discuss some of the problems they are having and get suggestions about what approach we might take.

In fact, unlike other unions, there are no rank-and-file members on the negotiating team. This meant that the main discussion about the contract was generated from our organizing against two-tier.

Power of the Strike

During the previous round of negotiations, as the contract expired without the negotiators reaching agreement, the old contract was extended. So this year, as the contract expired at midnight February 25th, we suspected the same approach would be taken.

Instead the committeepeople came and told those at work to walk out at midnight. Many of us who had finished our shift heard the news and came to the union hall, which was overflowing.

President Wendy Thompson, just back from the negotiations, described how aggressive management had been, and that they were unwilling to put any language against plant closings in the contract. Their refusal caused the International to implement our strike vote.

After a question-and-answer period we got picket signs together and set up around-the-clock at all the plant gates.

What was to be a one-day strike was pretty powerful. Some first-shift workers stopped trucks from entering one of the gates and got arrested. The vast majority of the workforce had never been on strike before.

People took a serious attitude about having the gates covered at all times and showing the media we were militant. As the day wore on GM assembly plants in Fort Wayne, IN and Pontiac, MI announced that they were shutting down for lack of parts. Not only did we feel powerful as picketers, but also we felt the strike was having an immediate impact.

Negotiations restarted the day we were on strike and continued through the night. By the following morning a tentative four-year agreement was announced. The pickets were taken down and second shift was to report to work. But it was a beautiful early spring Friday and probably no more than a third of the workforce showed up. For most, it was a day of celebration.

By Monday Wendy Thompson was leafleting at the plant gates with a “Vote No” flyer. She had gone into the negotiations pledging that she would not support a two-tier contract and she stood firm. Unfortunately the other negotiators crumbled.

Thompson felt that especially given the one-day strike, which allowed the UAW negotiators to get a better contract than the one that had been on the table, we could have also won without two-tier and with the same wage package GM workers had received–a $3,000 signing bonus, $2 added to the basic wage of $23.58 an hour (folded in from COLA), and a modest 5% wage increase over the last two years.

Our contract mirrored the Delphi and Visteon agreement about setting a two-tier wage, based on negotiations between AAM and the UAW International to occur within ninety days. But it contained a second important concession—a wage freeze—hidden by the big bonus.

During the following three years we were to receive a lump-sum payment equal to 2% of our previous year’s gross pay, and a $1,000 Christmas bonus. In her informational leaflets Thompson pointed out that AAM’s throwing up-front and lump-sum money at us would be a long-term loss.

The supposedly higher-tier worker would start the next round of negotiations $2.29 below the Big Three and the higher-wage workers at Delphi and Visteon. People said, “When they offer you that much money up front, hold on to your wallet!”

Many wondered why we didn’t just stay out on strike a few more days and get what we needed<197>instead they were throwing money at us but freezing our wages and leaving two-tier to be discussed later. (The President reported that the tentative agreement that went out the window with the strike did have two-tier wage levels, starting at $13.50 and topping out at $17.50 after eight years with fewer benefits.)

Selling the Contract

Then the rumors began: Our president wasn’t “really” on the negotiating team; if we voted no, the AAM CEO Dick Dauch would close all the plants and the International wouldn’t support us.

The next day the appointed reps in each plant distributed a leaflet put out by the shop chair, Jerry Richardson, on why to vote yes. It didn’t directly contradict anything Thompson had said. In effect we had the lowlights of the contract from our president and the highlights from our shop chair!

Our president invited every member of the national negotiating team to attend the informational shift meetings at Local 235, and a couple attended, as did the chief UAW negotiator.

At my shift meeting, following two presentations in support of the settlement, Wendy Thompson attempted to give a minority report. The shop chair would not allow her to speak, but did ask us if we wanted to hear her. When we answered yes, he gave her the floor.

The hour-long discussion might be characterized as a bit rowdy, but it was so in a very democratic way. Most of us from the floor were opposed to the contract, and all of the officials on the stage were for it, except for our president. But having even just one voice in a leadership position magnified our voices.

The other factor that gave the “no” vote strength is the fact that the company is so profitable. As one of my coworkers remarked, “If these are the concessions they demand when they are making record profits, what will they expect when there’s the inevitable downturn?”

At first even some of the appointed reps were saying the contract didn’t look good, but that got turned around fast when a meeting was called to set the record straight: UAW International and local representatives present were told they could not oppose the contract and keep their jobs. The impression left was clearly to get out and sell the contract–and many did so over the next few days.

When I went to vote, an appointed rep was standing in the middle of voting area, haranguing us to vote yes. I asked him what his job for the day was (I thought he might be part of the election committee), he pointed at me and said, “My job is to watch you!”

I asked a member of the election committee what he was doing there and she said he’d come to vote, but according to coworkers he spent most of the next three hours talking up the contract right in the middle of where the election was being conducted.

Limited Victory

When the vote was announced, the total was 1330 (56%) against the national contract and 1027 for (44%). I was so proud of all of us–we had withstood the lure of the signing bonus, the fear that the company would shut down its plants, and the pressure from the union officials, who said this was the best we could get.

The older, former GM workers had predicted that younger workers would just care about the signing bonus; younger workers predicted that the older workers would only be interested in the retirement package. But we stood in solidarity.

The next day at work the atmosphere was subdued. Most appointed and elected reps were stunned by our vote. But we knew that while we’d won our battle–and we represented the largest of the five AAM facilities–the workers at the other plants had a united management-union team playing on the fear of plant closings.

Coworkers who have friends and relatives in the other plants reported that at the informational meetings the leadership commended the ranks on the strike and the solidarity it generated. But when rank-and-filers said they agreed with the leaflet they’d read put out by Thompson and they’d heard that our local voted the contract down, they were told that our local doesn’t care about them and their problems.

Solidarity among UAW members working for the same company in different sites should be a given, not something we have to fight to achieve.

The vote totals at the various locals were kept under wraps so that supposedly we wouldn’t influence the vote at another site. When voting was completed the contract passed by 56%.

We have been under the new contract for little more than a month. With a downturn in production management choose to implement indefinite layoffs rather than send workers to educational classes. (Management used to claim that the “average” worker would receive 44 hours of education/training a year.)

So far 100 have been laid off. I’m sure this is done to keep us in fear for our jobs. I tell everyone I know who is laid off they should be sure to enjoy the break, and I hope to see them after the regular July retooling shutdown.

The Five Zeros

As for the hi-lo driver wearing the “R.I.P. UAW” T-shirt, I told him that I hoped the tombstone message wasn’t true. I said we had to work to make our union more democratic.

Another worker said she’d heard there’s another T-shirt out there that has “the 5 zeros.” (This is a reference to management’s 5-zero campaign for quality and on-time delivery.) The zeros are pictures of union officials that supported the contract.

The most popular T-shirt reflects a gallows humor. Above the graphic of a prisoner in jail is written the name of our employer, below it says “24/7 LOCKDOWN.”

It’s true that we didn’t “win” the fight for a decent contract. Management is not only laying off on a weekly basis but also attempting to write everyone up for any violation or perceived violation of the shop rules.

In the past, a worker who was chronically late was reprimanded. Now a favorite tactic is to write up everyone who comes to work a couple of minutes late everytime it occurs. One afternoon a crane hit the overpass on the I-75 freeway near the plant and traffic was backed up for seven miles. It was such a big accident CNN covered it on the national news. That day at least thirty workers were written up for reporting to work late!

Every three months AAM presents the company’s quarterly report at shift meetings. At least two were interrupted by booing when management laid out their draconian absentee policy.

Not only were workers enraged about the policy, but even more so because management saw us as machinery. Later I talked with various coworkers and confirmed my impression that if the contract vote were to take place now, there would be an even stronger “no” vote.

It’s clear the bull’s eye is on our backs and we can’t count on most elected or appointed reps. Is it possible that a newer layer of leadership can develop from the strike and contract vote, one willing to take positions based on our real needs, not on what will get them brownie points with the-powers-that-be?

ATC 110, May-June 2004