1 / 16

LABOR RELATIONS IN THE UNIONIZED AUTOMOBILE ASSEMBLY INDUSTRY IN THE UNITED STATES: 1961-2006

LABOR RELATIONS IN THE UNIONIZED AUTOMOBILE ASSEMBLY INDUSTRY IN THE UNITED STATES: 1961-2006. Richard N. Block School of Labor and Industrial Relations Michigan State University For presentation at Una Agenda Legislativa Local para el CSIANN, Toluca, Mexico, 19-21 July 2006.

lluvia
Download Presentation

LABOR RELATIONS IN THE UNIONIZED AUTOMOBILE ASSEMBLY INDUSTRY IN THE UNITED STATES: 1961-2006

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. LABOR RELATIONS IN THE UNIONIZED AUTOMOBILE ASSEMBLY INDUSTRY IN THE UNITED STATES: 1961-2006 Richard N. Block School of Labor and Industrial Relations Michigan State University For presentation at Una Agenda Legislativa Local para el CSIANN, Toluca, Mexico, 19-21 July 2006

  2. Three Time Periods • 1946-79: Market Dominance and Prosperity • 1980-2004: Response to Market Competition • 2005-06: Response to Financial Distress

  3. 1946-79 • UAW had organized the industry • Major components of labor relations in autos established – still exist today • Corporate control over business decisions unrelated to terms and conditions of employment • Negotiated terms and conditions of employment • Pattern Bargaining over wages and benefits at corporate level • Minimized variations in labor costs among competitors • Objective pay standard for union • Plant/Local Level bargaining

  4. 1946-79 (continued) • Wages through a formula • Annual Improvement Factor • COLA • Wage changes highly predictable • Fringe Benefits • 11.1% of hourly compensation in 1948 • 42% of hourly compensation 1982 • Health insurance • Pensions, “30 and Out” • Business cycle-related downturns addressed through Supplemental Unemployment Benefits

  5. 1946-79 (continued) • An era of economic dominance of the automobile industry • All competitors organized • Big Three (GM, Ford, Chrysler) profitable • Wages and benefits of UAW-represented workers growing • Collective bargaining outcomes reflected this prosperity

  6. 1980-2004 • Era marked by continuing loss of market share of Big Three unionized firms to non-union non-U.S. manufacturers • Currently stands at about 58% • Employment drop 1978-1980 • 1978 – 782,000 • 1980 – 575,000

  7. U.S. Vehicle Sales, June, 2006 SOURCE: Automotive News

  8. 1980-2004 (continued) • Shift of UAW bargaining priorities • From wage increases to employment security • Health Insurance • Pensions • During the period 1982-99 UAW and “Big Three” consistently negotiated increasing employment protection for workers while moderating wage increases • Complete employment protection • Employees not working went into a “Jobs Bank” (at GM) and paid from a fund • Interplant transfer rights • Plant-level work practices

  9. 1980-2004 (continued) • Employment Security Evolution • 1982 • income protection and limits on plant closings • 1984 • employment security negotiated • GM and Ford monetary contributions to employment security funds • 1987 • guaranteed employment levels and increased monetary contributions • 1990 – • 36-week limit on time laid off for sales volume • Increased monetary contributions • 1996 – Chrysler covered • 1999 • adjustments in employment levels • Increased monetary contributions • 2003 • No changes

  10. 1980-2004, Wage Moderation • Negotiated Wage Increases • 1961–1980 mean annual increase = 7.2% • 1985-2004 mean annual increase = 3.6% • based on UAW data for GM and Ford • Real Wage Changes – difference between negotiated wage and inflation rate • 1961-1980, mean annual difference = +.018 • 1985-2004, mean annual difference = +.0062 • Employment security contributions to fund added about 4.0% - 4.5% to wages • UAW “purchased” an “employment insurance policy” with about half their pre-1980’s wage increases

  11. 1980-2004, Employment Issue

  12. Motor Vehicle and Manufacturing Employment, Michigan and United States, 1980-2004 (in 1000’s)

  13. 2005-2006 • Bargaining in Financial Distress • Losses for U.S. companies in 2005 • GM - US$10 billion • Ford – US$1.6 billion in North America • Delphi bankruptcy (employees may return to GM) • Health Care – “Legacy Costs” • Active Employees at GM and Ford • Foregoing wage increases • Retirees • Increase cost sharing for retirees with higher pensions • No legacy costs at nonunion firms • Early Retirement at GM • Early retirement incentives of US$35,000 – US$140,000 • Accepted by 35,000 GM workers • Younger workers must sever relationship with GM • No such agreement at Ford

  14. North American Free Trade Agreement (NAFTA) • No evidence that problems of U.S.-based automakers are substantially due to NAFTA • Employment security provisions have likely encouraged GM and Ford to invest in U.S. while creating wage moderation • Non-U.S.-based manufacturers continuing to invest in U.S., but not in (unionized) Michigan

  15. Conclusions • Labor relations strategies and outcomes in unionized sector of U.S. automotive assembly industry have changed as economic circumstances of product market and firms and representation needs of members have changed • Flexible response of labor relations system • No reason to think that UAW and bargaining will be an impediment to recovery of U.S. firms if companies appropriately involve UAW

  16. Lessons for Automotive Unions in Mexico • Company wants right to make business decisions, but does not mean they will make good decisions • Union affected by those decisions • Wisdom of UAW leaving these decisions to company? • Legal issues in U.S. • Be aggressive in influencing government policy • Health care • Industrial policy • Consider a European-style social partnership model

More Related