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UAW Contract Talks Present Predictable but difficult Communication Challenges

A delicate, high-stakes communication dance between the UAW and the Detroit Three will play out over the next three to four months as the union and the automakers sit down to hammer out a new four-year contract for about 158,000 auto workers.

At stake – billions of dollars of investment in U.S. auto plants along with the job security that comes with those investments as well as the pay and benefits workers will get for years to come.

On the surface, it may look like Kabuki theater as leaders from the UAW, General Motors, Ford and Fiat Chrysler all play carefully choreographed and predictable roles. The contract talks between the UAW and Ford officially kicked off during a ceremony on Monday. A similar event is planned between the union and GM today (Tuesday) and with Fiat Chrysler this afternoon.

Expect to see lots of smiles and handshakes at these events as the union and the automakers portray their relationship as mutually beneficial and express respect for each other.

At the same time, UAW leaders will want to talk tough in public as they seek to convince workers they are pushing automakers as hard as possible for better wages and benefits and for U.S. plant investments.

This round of contract talks will also test UAW President Gary Jones’ ability balance the art of negotiation with automakers with the art of communication with his membership while the union is still in the middle of its worst scandal in decades. Jones, who was a regional director in Missouri from 2004 until June 2018, is not as well known in the automotive industry as most prior presidents, so he must win the trust of his members and his Detroit Three counterparts.

Automotive executives will need to talk tough because they must reassure investors that they will not cave in to UAW demands and return to the kind of excessive contracts that contributed to losses in year’s past.

The UAW’s existing contract with all three automakers is set to expire at midnight on September 14. As that date draws near, automakers will say it is counter-productive to negotiate in public will decline to talk about the specifics of any potential contract.

But don’t be fooled.

The UAW as well as General Motors, Ford and Fiat Chrysler have already been spent months publicly positioning themselves in advance of these contract talks and they each all have key messages that they will work hard to repeat over and over again.

GM made its first move last fall when it announced it will eventually end production at five plants in North America including assembly in Lordstown Ohio, Oshawa Ontario and Detroit. (Oshawa Assembly, in Ontario, will remain open, but not as a traditional assembly plant and production has been extended until January 2020 at the Detroit-Hamtramck plant.)

In January, the UAW sued GM for using temporary workers instead of laid-off full-time workers at a Fort Wayne plant and GM is expected to push for the ability to use more temporary workers at its plants during negotiations.

And the UAW announced during its bargaining convention in March that the union’s leadership has raised the weekly strike fund pay from $200 to $250 per week effective March 2019.

“No one goes to the bargaining table expecting to strike. But the UAW goes to the bargaining table prepared to strike if our members need to strike,” UAW President Gary Jones said at the time. “Raising the strike fund is an important symbol that we have their backs.”

The messages and talking points that will be heard from the UAW and the automakers over the next three to four months will be aimed at many constituents, but none are more important than the workers, who will decide whether or not to accept the deals. Here are some themes you are likely to see and hear as the process plays out:

  • The automakers have been making billions in profits in recent years and those profits have been driven by the North American operations of the automakers, therefore workers deserve a bigger share of those profits.
  • Automakers can afford to reduce the time it takes a newly hired worker to reach the top tier of pay and should shorten the wage progression, which currently takes eight years.
  • Workers deserve permanent, full-time jobs – not temporary jobs – and automakers should agree to reduce the number of temporary workers that they employ.

And here are some key talking points you are likely to hear from automakers:

  • U.S. industry sales of new cars and trucks are slowing, a recession is looming, and automakers must make investments in new technology to stay competitive – therefore this is not the time to increase wages and benefits.
  • Health care costs are climbing, UAW workers pay less than salaried workers for their health care benefits and therefore should pay a larger share of those costs.
  • The all-in hourly cost of wages and benefits for U.S. autoworkers at the Detroit Three remains $5 to $13 higher than for workers at U.S. assembly plants operated by Asian automakers, according to the Center for Automotive Research, and the companies cannot afford to let that gap get larger.

Meanwhile, workers and union activists will express distrust in both the automakers and their own union leadership that will be even more challenging because of an ongoing federal investigation into how money was spent at the UAW’s training centers.

Even U.S. President Donald Trump will likely play a predictable role. By September, as tensions rise at the negotiating table, Trump will have golden opportunity to publicly pressure automakers to invest more in the U.S. and create jobs as he continues to try to get USMCA, the possible replacement for NAFTA, through Congress.

But keep in mind, as the auto executives and top elected UAW officials play their assigned roles over the next three to four months in public, they are making decisions that impact thousands of jobs and families across the U.S. and impact the fiscal health of the automakers.

And, ultimately, after UAW and auto executives reach tentative deals it will be the workers who will decide whether or not those contracts are good enough to ratify them. The UAW and automakers know they must effectively communicate their goals, the challenges the auto industry faces in the future and the contracts they negotiate. If they don’t, they won’t get the votes.

Brent Snavely is a director in the crisis communications and automotive practices at Lambert.