Newhouse News Service

The national labor negotiations between General Motors Corp., Ford Motor Co. and the United Auto Workers are never easy, but next year the struggle could be among the most complex, important and unusual ever.

Faced with a withering market share, Ford said this week that it wants to close 14 plants and eliminate 25,000 to 30,000 jobs by 2012.

In November, GM announced plans to close seven assembly plants and several other facilities with the loss of up to 30,000 jobs by the end of 2008.

The UAW has called the actions “devastating” and said they mean the 2007 national negotiations will be “all the more difficult and all the more important.”

These negotiations might be the most important ever because for the first time the viability of the automakers is in question, said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.

“There were tough periods, difficult things, but the company was always treated like the Rock of Gibraltar, a fixture that was not going to go away,” Cole said.

Now officials from Ford and GM have warned that major changes including plant closings are necessary to eliminate billion-dollar losses in North America.

Under the national contract, the automakers can “idle” plants and take workers off the job. But they can’t formally close the plants until the national contract expires next year.

In Ford’s case, the automaker provided details on only five of the 14 plants, saying the others would be identified later. Ford Chairman Bill Ford also said the automaker plans to build a new, “low-cost” manufacturing plant in North America.

Failing to identify most of the doomed plants and then holding out hope for a new plant could mean negotiating room in 2007, some observers said.

But Cole thinks the closings are inevitable. “That is a done deal,” he said.

Cole predicted that the major negotiating issues will include getting the UAW to contribute more to health-care costs and allowing the automakers more flexibility in how employees do their jobs, moves that can improve efficiency and quality.

Another target could be a provision that currently guarantees workers who lose their jobs will still get most of their pay.

The automakers would probably like to see that eliminated in the next contract, Cole said. But if the companies are convinced their remaining plants will be kept busy, executives might agree to renew the provision.

The issue is whether Ford and UAW can somehow find their way through the financial and political complications so each will benefit.

The UAW is still a powerful union and it could cause problems for Ford, but it simply isn’t rational for a union to bring down its company, said Paul Gerhart, a professor of labor and human resources at Case Western Reserve University’s Weatherhead School of Management.

“Why would they want to do that? What they want is to get the most out of Ford they can. If I were in their shoes, I would be thinking, what can I do for my members to give them some better chance in life, better personal security down the road.” That would include seeking money to help them get retrained or relocated, Gerhart said.

There are signs Ford is thinking along those lines. The automaker is offering some laid-off workers buyout packages that include as much as $15,000 a year for tuition.

While attending school full-time, they would continue to receive full medical benefits and half their salary. But they would have to agree to leave Ford and the salary would end when they complete their educational program.

Ideally, the UAW and the automakers will work together to help save the companies and secure as many jobs as possible, Cole said.

“The confrontation has to move to collaboration. Their only hope is to define a new business model for labor.”

Christopher Jensen is automotive editor for The Plain Dealer of Cleveland. He can be contacted at cjensen@plaind.com.

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