September 7, 2011

In Detroit’s Big 3 Auto Talks, AP ‘Forgets’ GM and Chrysler Workers Can’t Strike, UAW’s Conflicts of Interest

UAWfordHandshakeIt’s hard to figure out why Tom Krisher at the Associated Press bothered filing a report on the status of contract talks between Detroit’s Big 3 automakers and the United Auto Workers. The only reason I can discern is that he wanted to brag about how he and his wire service pals have access to anonymously-sourced info about how the talks are going. Surprise: As has been the case almost always for about the past 30-plus years, It’s coming down to the wire with the two sides supposedly far apart at two of the three companies. Knock me over with a feather.

Krisher failed to inform readers of three quite important sets of facts. First (seriously), he never told readers that General Motors and Chrysler workers have no-strike contract clauses prohibiting them from job actions until 2015, i.e., only Ford is financially vulnerable. Second, he failed to note that the government still holds a significant (and probably board-controlling) share of GM, or that a UAW healthcare trust owns 46.5% of Chrysler (down from an original 55%). Finally, because he didn’t disclose the ownership stakes, he failed to note the obvious conflict of interest the UAW has in negotiating with Ford, or the possible government-influenced pressure on the union to drive a hard bargain with Ford on GM’s behalf.

Here are several paragraphs from Krisher’s report (bolds indicate language misleading readers into believing that a strike is possible at any one or more of the companies):

AP Sources: UAW, Ford, Chrysler far apart in talks

Ford, Chrysler and the United Auto Workers remain far apart in labor talks with just a week left before their contracts expire, two people briefed on the talks said Wednesday.

Negotiators for the two companies and the union have started serious talks on wages in the past few days, even though the union’s contracts with all three Detroit carmakers expire at 11:59 p.m. on Sept. 14, the people said.

General Motors Co., on the other hand, has been talking pay with the union for about two weeks and is ahead of its crosstown rivals, said another person briefed on the talks. All three people asked not to be identified because the companies and union have agreed to keep negotiations private.

Contracts between the UAW and Detroit’s automakers are widely followed because they set the wages for about 111,000 autoworkers nationwide. They also set the bar for wages at auto parts companies and other manufacturers.

This year’s talks are the first since Chrysler and GM accepted government aid and emerged from bankruptcy protection in 2009. So far, talks between the union and the companies have been amicable, despite little movement on wages with Chrysler Group LLC and Ford Motor Co., two of the people said. The lack of progress raises the possibility that the contracts could be extended beyond next week’s deadline.

Both sides must reach agreements and union members must vote on the deals before new contracts can take effect.

UAW President Bob King has said he’d like to reach agreements with the companies before the contracts expire.

… When union negotiators reach agreements with the companies, they may have a tough time selling them to the rank-and-file, many of whom want to win back lost pay raises and other concessions made to the companies during the financial crisis.

… Ford workers are particularly sensitive about compensation after CEO Alan Mulally’s $26.5 million pay package for last year and the company’s restoration of merit raises for white-collar workers.

As to the “concessions” referenced in the second-last excerpted paragraph, there were very few, at least at current workers at GM. I’m not saying that; now-retired UAW President Ron Gettelfinger said so in announcement to GM workers in May 2009:

UAWcontractOutlineIntro0509

As to Mulally’s pay, while it does seem excessive to yours truly, I’m not on the Board of Directors, and it’s not my call. In any event, what Mulally made last year is not that far above what a few players in big-league sports make — and they don’t run multibillion-dollar enterprises, and they didn’t keep one of them from heading down the path to a government bailout that executives at the other two firms did.

But getting back to AP’s Krisher: Why even bother writing up such an embarrassingly incomplete report so heavily reliant on anonymous sources speaking in broad generalizations?

Cross-posted at NewsBusters.org.

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