Promises, promises -- UAW falls in love again

Promises made the UAW contract with GM a reality. GM promised to build specific vehicles in the future including the Volt in Hamtramck in 2010. GM's promises gave Chrysler workers pause as they considered their own contract, which did not contain any such promises. Chrysler would not, and further claimed it could not, make those sorts of promises. To do so would have been irresponsible, irrational and unrealistic. In the end, the UAW did accept the Chrysler contract.

The International Herald Tribune reminds us that the Volt "is a concept car that cannot be built until the technology is available, and one that the company has not even officially announced it will build."

The piece quotes Professor Walter McManus, an auto industry economist at the University of Michigan:

"The problem," he added, "is the battery technology is still not ready. I would say, when they break ground on a plant to make batteries, two years later the Volt will come out."

For the car to be built starting in 2010, he added, "a factory has to be built soon, and it doesn't look like the batteries are that near production."

Those promises to build the Volt, while well-intentioned and seductive, are premature.

Less than three weeks after ratifying the GM contract, nearly 2000 Michigan workers were laid off -- 767 of them in Hamtramck. Lay offs are a rational response to market conditions. You shouldn't build cars you can't sell. GM is in the business of building and selling cars, not guaranteeing employment. So how could they make promises about future production? After the recent lay offs, those promises seem suspect. How can GM assure future employment or promise to build something it cannot build?

Although the Chrysler agreement made no predictions beyond its four-year term, it may end up a fairer, honest commitment to workers.

Now, on to Ford...as negotiations have resumed.

UAW resistance grows to Chrysler contract offer

UAW local opposition to the proposed Chrysler contract continues to grow. Detroit Axel; St. Louis North; Twinsburg, Ohio; St. Louis South Assembly; Newark, Delaware and Fenton, Missouri have all voted against the agreement.

The contract needs majority approval of all members voting to be ratified.

At issue, a lack of commitment to build future products and a two-tier wage system. Experts expect opposition to gain momentum as more locals decline the offer. Chrysler has some room to stand its ground. Reuters reported Wednesday that Chrysler will be eliminating some products in the near term. Fourth quarter auto sales are expected to continue to lag. So, the company is anticipating lower production demands.

According to the Detroit News, ratification votes will include:

Local	City	Vote Date
75	Milwaukee	Today
76	Fremont, Calif.	Today
212	Detroit (Conner)	Today
412	Auburn Hills	Today
868	Conyers, Ga.	Today
889	Warren (Clerical)	Today
1649	Orlando, Fla.	Today
7	Detroit (Jefferson North)	Sunday
509	Pico Rivera, Calif.	Sunday
624	Syracuse, NY (New Process Gear)	Sunday
2149	Syracuse, NY (Engineering)	Monday
685	Kokomo (Transmission)	Tuesday
1166	Kokomo (Casting)	Tuesday
140	Warren (Warren Truck, Sterling Emission)	Wednesday
869	Warren (Stamping)	Wednesday
1264	Sterling Heights (Stamping)	Wednesday
1700	Sterling Heights (Assembly)	Wednesday

Baseball in Motown--Tigers Win in Extra Innings!

Last night, Detroit squeaked by Kansas City in the bottom of the tenth when Inge nailed a two-run homer for the 10-8 win. It wasn't a pretty game (Verlander threw three wild pitches early on), but in the end our guys won.

I'm not a baseball expert, just a fan. I know just enough to enjoy a game from start to finish. The huge scoreboard showing player stats, rosters, and a running tally of plays helps.

At Comerica Park you can't miss Detroit's car culture. You are steeped in it from the General Motors Fountain that erupts for home runs and strikeouts to the incidental music -- Car Wash, Glory Days, Rock the Casbah (unofficial anthem of U.S. forces during the first Gulf War), Love Shack ("...I got me a Chrysler as big as a whale and it's about to set sail!"). The park is situated so that Detroit's skyline--with the GM Renaissance Center directly to the right of the scoreboard--completes it.

Baseball, hot dogs, apple pie--all American. But there is more to that litany--oil, nearly a century of European and American meddling in the Middle East, giant gas-sucking cars, suppression of alternative energy technology. Michigan finds itself in an identity crisis. As does Motown; The Big Three, displaced by Toyota's ascent to number one in 2006, became The Detroit Three. These rankings matter more than baseball team stats because as our guys lose market dominance, Wall Street loses confidence and workers lose jobs.

But this week there was some encouraging news from General Motors. According to GM and Toyota (source), GM sold more cars in the first quarter of this year than Toyota. It would appear that we are in extra innings.

From the Wall Street Journal online:
"Through the first six months of the year, GM's global sales were up 1.7% to 4.67 million, and the auto maker said it's on pace to have its second-best annual sales performance world-wide in its history."

That is, emerging markets (Asia, Latin America, Africa and the Middle East) are hot for GM's cars.

Good news for investors. Good news for Motown. For American workers, not so much.

Detroit Three and UAW Prepare to Talk

The Globe and Mail reports that the UAW and GM, Chrysler and Ford will square off in talks that could result in massive off shoring of North American jobs.

According to the article, pressures on the Detroit Three include health care obligations to retirees and current employees, high hourly labor costs, and reduced demand for pickups and SUVs. Unions can expect to be asked to take large cuts in wages and to assume greater responsibility for funding health care and retirement.

Sounds grim, but it really isn't news. In the context of global competition and production, well-paid American workers have much to lose and have been losing for years. The former Big Three, now the Detroit Three, will ask workers to make greater concessions than ever before in order to remain viable.

Did it have to be this way? We have known since the early 1970s that our excessive use of oil would create economic vulnerability. Yet, here we are in 2007 producing gas guzzling cars, trucks and SUVs. And why? Because, say the auto makers, "consumers wanted them." Who are these consumers and how could they have been so short sighted? Are these consumers also workers?

What happened to Henry Ford's idea that workers who produced cars should be able to afford them? It seems today's auto manufacturers have a different vision for their workers. Workers are workers; consumers are consumers. And producers are producers.These days, it is a lucky worker who can also be consumer.