UAW Contract Talks: Separating Fact From Fiction
CNBC Auto and Airline Industry Reporter
Day one of the UAW contract talks kicked off with union leaders shaking hands with Chrysler page90DCXfalsetrue2pricetruefalsefalsefalsefalse0QuotefalsetrueChartfalsetrueNewsfalsetrueProfilefalsetrueAdd to Watchlistfalsetruetruehttp://api-cdn.cnbc.com/api/chart/chart.aspGE4true3 executives at company headquarters in Auburn Hills, Michigan
. Already I'm tiring of the news reports, talk shows, commentators and general public portraying these talks inaccurately. If I had a nickel for every time a talk show host blamed the rank and file guy at GM for all of that automakers problems, I'd be rich.
So with that in mind, let's play fact or fiction.
#1. UAW concessions will be enough to save the big 3: Fiction.If the Big 3 can cut labor costs 25-30% it will be a huge help in making them more competitive. But that alone, is not enough. The U.S. Automakers also need to stop losing market share to foreign rivals. In fact, that's perhaps a bigger issue that needs to be addressed.
#2 The UAW is stubborn and won't help the big 3 cut costs: Fiction.UAW president Ron Gettelfinger is pragmatic and smart. He and is union leaders all realize they have to change to help the Big 3 stay competitive. In fact, under Gettelfinger, the UAW made sweeping mid-contract healthcare concessions with GM and Ford . The UAW is tough and will fight for everything it can get it's members, but it's wrong to portray these guys as "anti-big 3."
#3 There could be a strike come September 15th: Fact. The UAW doesn't want a work stoppage, and the Big 3 certainly want to avoid one. But everyone I've talked with at the automakers and with the UAW believes the talks will go down to the wire and there could be a strike. It all depends on how hard the Big 3 push for healthcare concessions. If they dig in and want the union members and retirees to give back 30% of benefits, then we could see an impasse in the talks.
#4 We will hear plenty of "doomsday" rhetoric from the Big 3 between now and Sept. 14th: Fact. I've already heard it from several people since flying in to Detroit last night. "The Big 3 want to break the UAW and go bankrupt". This is ridiculous. While it's true GM was close to filing for bankruptcy in 2005 before it got healthcare concessions from the UAW, it would be foolish to try and push the company into bankruptcy just to break the union. In bankruptcy, GM leaders would risk losing control of the company, plus bankruptcy court judges don't look kindly on companies, sitting on billions in cash who try to use bankruptcy to break contracts.
There you have it. It should be interesting to see what happens between now and September 14th.
Questions? Comments? BehindTheWheel@cnbc.com