The United Auto Workers may have declined in numbers, but its taste for confrontation appears as strong as ever. And its new leader, Dennis Williams, isn’t about to let anyone forget. Last Wednesday, June 4, Williams, the UAW secretary-treasurer these last four years, overwhelmingly was elected president at the union convention in Detroit. Inaugurated the following day, Williams, now 61, replaces one-term President Bob King, who at 67 retired in the face of the union’s mandatory age limit. Williams’ main priority is ending the two-tier wage system to which the union agreed in 2007 as part of a deal to keep General Motors, Ford and Chrysler afloat. He’ll get to test his mettle in contract negotiations next year. The union shouldn’t lack for funds in this or any other endeavor; delegates approved a 25 percent dues hike.
Founded in 1935 amid bitter strife in American labor relations, the United Automobile Workers over the next several decades grew to become one of the most powerful economic forces in the nation. But its numbers, like those of auto workers generally, have declined. Whereas the union had 1.5 million members at the dawn of the Eighties, it could claim only 650,000 in the middle of the last decade. It now claims 390,000 members. Growth in consumer demand for foreign vehicles, construction of new nonunion foreign-owned plants in the U.S., and unsustainable union-negotiated wage and benefit packages each have gone a long way in explaining this drop. During the last decade, a time when major domestic automakers were struggling, even UAW leaders and members realized the need for concessions to preserve their jobs.
The Great Compromise occurred in 2007 under then-UAW President Ron Gettelfinger. GM, Ford and Chrysler agreed to keep open a certain portion of their unprofitable assembly plants, upgrade plants generally, and transfer $46.7 billion in net outstanding retiree health plan obligations to a new, union-managed Voluntary Employee Beneficiary Association (VEBA). In return, the union accepted a new two-tiered wage system that created a $14 an hour starting wage for new hires with a peak of only $19 an hour. By contrast, the top rate for established workers doing the same kinds of jobs would be $28 an hour. The union also agreed to a no-strike clause. These were bitter pills to swallow for the UAW, but the union knew that institutional survival was at stake. Rank and file voted to ratify the agreement by 79 percent to 21 percent. But the falling fortunes of domestic automakers would continue. The union made additional concessions, including a wage freeze for longtime employees. This was a “lose-lose” situation, not a “win-win.” Yet viewed from a distance, it represented a certain poetic justice. For decades, the UAW had used the threat of a strike to negotiate wage and (especially) benefit packages exceeding the ability of employers to absorb them. Now the union was getting a lesson in austerity.
In 2009, the Detroit-based UAW found itself with a bargaining trump card: an ally in the White House. President Barack Obama, whose successful campaign the previous year owed much to labor unions – including the UAW – believed that the opportunity for a historic partnership was at hand. Whereas President Bush had provided emergency loans to keep GM on life support, Obama and his team took this approach to a new level. They delivered emergency bridge loans totaling about $50 billion to GM and $12 billion to Chrysler. And in the spring of 2009, the White House forced the two companies into bankruptcy and reorganization. The United Auto Workers couldn’t have been happier with the arrangement. The union received a 17.5 percent equity stake in GM and a whopping 55 percent stake in Chrysler. When the companies became profitable, the union prospered. The UAW also has made out very well under the new Obama health care law (i.e., the Affordable Care Act) under a provision called the Early Retiree Reinsurance Program. This $5 billion program has funneled money to states, corporations and unions for retirees aged 55-64. The UAW-sponsored VEBA quickly established itself as the largest recipient of the money.
As far as advancing union interests went, outgoing President Bob King, elected in 2010, has left a mixed legacy. Despite his best efforts, the UAW campaign to organize workers at the Volkswagen Passat plant in Chattanooga, which opened in 2011, failed to muster the necessary secret-ballot majority; the margin was 712-626 against unionization. And Indiana and Michigan voted to adopt their own Right to Work laws. The Michigan laws – one each covers private- and public-sector employees – especially had to sting, as this was the UAW’s home turf. On the plus side, the union organized about 22,000 workers since 2010, though mainly in jobs outside auto manufacturing. And the in-sourcing provisions of its 2011 collective bargaining agreement added or saved an estimated 28,000 jobs. GM, Ford and Chrysler each have paid their workers generous profit-sharing and bonus checks. And GM is set to add outgoing UAW Vice President Joe Ashton to its board of directors. At age 67, King called it a day; union by-laws require that any new president be younger than 65.
Thus, the stage was set for Secretary-Treasurer Dennis Williams’ victorious campaign for president. Facing only token opposition from Local 600 member Gary Walkowicz, Williams received 98 percent of the 3,270 ballots cast by convention delegates. He framed his appeal to rank and file as someone who can use political leverage to deliver strong contracts. Williams and President Obama, in fact, go back to the latter’s years as an Illinois state senator. Williams provided crucial backing for Obama during the Iowa caucus campaign of 2008. President Obama knows how to reciprocate. Last Thursday, on UAW inauguration day, he congratulated delegates via recorded video message.
Dennis Williams, in his own words, is “not afraid of confrontation.” An ex-Marine who has served the union in one capacity or another since 1977 (though he does not have experience on an auto factory floor), Williams has an extensive history of strike participation. Indeed, he played a key role in a pair of strikes against Caterpillar Inc. during the Nineties, the first lasting five months and the second lasting 17 months. He’s an unabashed populist of the Left, remarking on the day of his election: “There’s a movement growing in this country and there’s a huge dissatisfaction. Millionaires and billionaires are growing in their economic status but the common person is not. We can’t continue to allow the middle class to shrink.” He’ll have help from his management team. Gary Casteel, director of the UAW southeast region for the past dozen years, was elected secretary-treasurer. This looms significant in organizing plans because Casteel was the point man in the union’s recent Chattanooga campaign. Meanwhile, Norwood Jewell was elected as an international vice president, while incumbent Vice Presidents Cindy Estrada and Jimmy Settles were re-elected.
Williams was on fire during his inauguration speech. He declared: “No more concessions. We are tired of it. Enough is enough.” Later he told reporters, “We are all committed to eliminating the two-tier system,” referring to the 2007 agreement with the Big Three automakers. About a fourth of unionized auto workers in this country are “second-tier” employees who make a good deal less than what their veteran counterparts make. In addition to being unfair, say critics, this set-up has created dissension in the workplace. Many other union officials share this view. “Williams definitely needs to negotiate better contracts and take the two-tier system away,” said Stevetta Johnson a delegate from Local 6000, which represents state employees in Michigan. Raymond Herrick, a delegate from Local 163, which represents workers at Detroit Diesel, states, “We need to eliminate two-tier.” The union will get its chance to put words into action in 2015 when industry-wide contract renewal talks begin. Unionized workers have received profit-sharing and bonus checks, but they haven’t had a base wage increase in nearly a decade.
The United Auto Workers, however, is set for an increase in revenues. Convention delegates approved a proposal put forth by outgoing President Bob King, his last act in office, to raise monthly dues by 25 percent. It was the union’s first dues hike in 47 years. The new figure represents 2.5 hours of a worker’s base pay, up from 2.0 hours. The union estimates this move will generate an additional $45 million a year. That should cover a lot of organizing, contract negotiation and political activism. Membership may be only somewhere between 380,000 and 400,000, but that’s actually well up from 355,000 during the trough year of 2009. Flush with additional cash, the UAW can be expected to make its presence known.
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