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Yesterday, the ax fell on 119 Union-represented designers at Chrysler. Excerpts from the Detroit News:

A UAW leader is promising to fight Chrysler LLC’s abrupt layoff of 119 union-represented designers Thursday — many of whom were escorted out of the Auburn Hills headquarters with less than one hour’s notice.

Jeff Hagler, president of United Auto Workers Local 412, who represents the affected workers, said Chrysler failed to follow protocol by not giving union leaders proper notice of the layoffs and by pink-slipping workers selectively, rather than by seniority. Hagler met Thursday with other union leaders at the local in Warren to determine the best approach to filing a grievance.

Management disagrees. Chrysler spokeswoman Michele Tinson said the automaker followed the procedures outlined in its contract with the union.

It’s still possible, she said, that those pink-slipped Thursday could be offered a choice between typical layoff benefits and the $100,000 voluntary separation packages the automaker has offered to other groups of workers. The buyout packages also come with six months of health coverage. Typically, laid-off workers receive nearly full pay for 48 weeks and then can spend up to two years in a job bank.

“We are working closely with the UAW and are having ongoing discussion about special programs,” Tinson said.

She said the layoffs are part of Chrysler’s Nov. 1 plan to eliminate 8,500 to 10,000 union jobs as it pares down its work force in response to lower production levels.

UAW officials, however, suspect the layoffs will allow more work to flow to non-union contract workers and possibly to the overseas engineering centers Chrysler announced it would open in four developing countries last week.

“Chrysler seems to be taking a very anti-union attitude,” Hagler said. “I sent a letter to senior management two weeks ago very sincerely saying we want to work with them to have the best engineering work force in the world. But they don’t seem interested in that.”

Hagler said if the cuts were truly related to declining sales, the union would not protest. These, he said, are an attempt to shift work to non-union contract workers. “They have 250 contractors working in the same department as those who were laid off,” he said.

Yes, I’m represented by the UAW, and I’m worried. Not about being laid off – I can find employment elsewhere (just maybe not in Michigan), but where the automotive industry is headed. Cuts are happening everywhere – Ford, GM, and Chrysler are offering buyouts to multiple employees. Cut too much, and valuable experience will be lost. I hate to say it, but I have serious doubts that the automotive companies, as a whole, will survive this hack & slash way of doing business.

Recovery is not just around the corner…

Excerpts from the Associated Press as reported by MSNBC:

Chrysler LLC is offering buyouts of up to $100,000 to hourly workers at 11 of its U.S. facilities as part of its goal to cut up to 21,000 manufacturing jobs, or nearly half its U.S. hourly work force, a company spokeswoman said Monday.

Chrysler has approximately 45,000 UAW-represented hourly workers.
Chrysler is in the midst of a restructuring after a majority stake in the automaker was sold last summer to private equity firm Cerberus Capital Management LP. The auto company announced in November it planned to cut up to 12,000 jobs, including 8,000 to 10,000 hourly and 2,000 salaried jobs.
The cuts came in addition to 13,000 layoffs Chrysler announced last February, including 11,000 hourly and 2,000 salaried workers. Around 6,400 hourly workers had left the company under than program as of June, Tinson said, but additional retirement packages could be rolled out under that program, which was scheduled to run through 2009.

Ford Motor Co. and General Motors Corp. are offering similar buyouts and early retirement packages to cut costs and reduce production capacity to match sagging U.S. demand.
On Thursday, Ford announced it will offer buyouts to all of its 54,000 UAW-represented employees.

GM has offered early retirement packages and buyouts to 5,200 UAW hourly workers at service and parts operations but has yet to make similar offers to workers in assembly and parts plants. GM is close to agreeing with the UAW on the second round of buyouts and hopes to announce details next month, GM spokesman Dan Flores said. Once the second round is announced, the buyouts are expected to cover 46,000 workers.

Not what the state of Michigan really needed to hear. More cuts, more people out of work looking for jobs in an economy that is the worst in the nation. On top of that, the housing market is so bad that people can’t afford to leave the state to find jobs.

Just a really, really bad situation.

On the way to work this morning, I heard this on the radio. Excerpts from the Detroit News:

General Motors Corp. will roll out retirement incentives to nearly two-thirds of its 72,000 hourly workers and may have to further cut U.S. production in 2008, which could mean eliminating shifts or closing plants, the company announced Thursday.

It was unclear how many workers GM hopes to clear out, but CEO Rick Wagoner said 46,000 blue-collar workers will get incentives to retire, setting the stage for another dramatic reduction to GM’s work force. More than 5,000 workers received offers earlier this month. The second phase of the buyouts will be rolled out in February.

Wagoner told Wall Street analysts gathered at a Dearborn conference that even after those workers are gone, anemic U.S. auto sales may force cuts at assembly, powertrain and stamping plants throughout the country.

U.S. industry sales are 1 million lower than when GM crafted its 2005 turnaround plan that called for closing 12 factories. GM later added another plant, in Massena, N.Y., to the closing list. With all but a few of those plants now closed, GM still has too much factory capacity given the demand for its cars and trucks.

Gettelfinger said plant closings are not under discussion. “We’ve gotten the strongest plant commitments we ever had and we intend to enforce those,” he said.

GM, as part of the UAW contract, promised to keep products flowing to dozens of U.S. factories for years to come, but the job guarantees are contingent upon having enough consumer demand for cars and trucks. The deal also doesn’t restrict GM from cutting shifts or reducing the line speed at factories.

By the end of 2012, Wagoner said he wants to cut structural costs as a percentage of revenue to 23 percent from 34 percent in 2005.

Of course, the UAW is crying “FOUL!!” But you know, read the contract that was signed and ratified by the membership, and you had to know that this had to be coming.

Cutting costs is necessary, but cutting too deep is dangerous.  What seems to be the short term solution to a cash crunch and bad decisions is to sharpen and swing the ax, but it seems that the worker and not the managers making the bad decisions are the ones typically bearing the brunt of the cuts.

Yes, I know that deadwood would need to be cut from the corporate tree for the tree to continue growing. But cut too much, and the tree will die.  Cut in the wrong place, and the result is the same.  Is this going to be too much? Only time will tell.

I know that there are rumors that there is going to be another round of retirement packages at my work even before the above announcement was made by “that” company down the road. But nothing has been confirmed nor denied by my management.

What this does do is land another blow on the already shaky Michigan economy. Michigan (and the auto companies) certainly didn’t need this news, especially on the week right before the North American International Auto Show. All this just makes you think that GM is all show but no substance. If anything, the timing couldn’t be worse for GM for an announcement of this nature.

Passing by the Union board this afternoon, I briefly read a notice on how the UAW Leadership would like us to vote in the Michigan Primary coming up in about 12 days. What I read was disgusting, but not surprising.

The Leadership basically wants us to cast our votes for the top three Democratic candidates – HRC, Obama, and Edwards. Rather than voting for any of the other candidates, the instructions were to vote uncommitted, which means that any of the delegates could nominate anyone that they want, even though we didn’t cast our vote for them.

No Republican (or other) Party candidates were listed.

I think that this whole process is insulting, especially coming from the Union Leadership. Not only do they wish to dictate who to vote for, but give them the liberty to nominate someone that you didn’t want in the first place! Have we no minds of our own, or do they think that we are sheep that need leading? And what about even considering a candidate from another political party?

Union membership is declining, probably for good reasons, and this is one of them. Considering the terms of the last contract that our “leaders” signed, it’s no wonder. And then there are the reasons from a prior post titled Unions for Democrats? Why?

Now understand that the next statement is not an endorsement, but it shows that the Union in Michigan is not paying attention to what the times are, but falling in lockstep with the same old BS as before.

Listening to the Sean Hannity show, Mitt Romney was talking about how he is from Michigan, his father was a past governor, that the state is in a one-state recession, that the Big Three must survive, and that he would do what is possible to get this state back on its feet again.

I ask our Leadership: What other candidate for President has publicly made these statements, and has strong ties to Michigan? None. And even though the Democratic Party has shafted the Union on more than one occasion, they refuse to consider alternative parties and candidates.

If the Union refuses to change with the times, they will go the way of the dinosaur. And you know what happened to them…

Chrysler is going to cut 12,000 jobs.  So much for job security, especially if the extra jobs don’t fit the business model.

I told you in a previous post that the contract didn’t guarantee anything…

Nobody listens to me – ever!!

Came home this evening from the match (see previous post) and saw that the contract has been settled. Per the Detroit News:

A new four-year national labor contract between Chrysler LLC and the United Auto Workers has been ratified by rank-and-file workers, overcoming significant opposition.

The agreement was approved by 56 percent of production workers and 51 percent of skilled trades workers, the UAW said in a statement Saturday. Ninety-four percent of office and clerical workers approved the pact and 79 percent of UAW-represented Chrysler engineers voted for the contract.

At least that’s settled. We’ll see what happen to Ford now…

Voting is almost done.  I goofed – there’s one more plant over in Illinois that will be voting tomorrow.

But the votes are close.  However, it does look like the contract will be ratified.  And I have mixed thoughts on that as well.

The contract isn’t the best one that I think could have been agreed to, but given the economy and a new company, maybe it was the best one.  At the same time, I really didn’t want to head back out to the picket line either.

We’ll know how the voting numbers turned out soon enough.

As I write this, the last Locals of the UAW will be voting, and 24-hours from now, we will know if the contract that was negotiated was ratified or not.

At this point in time, the voting has been very close.  Quite frankly, it can go either way.

If the contract is not ratified, then there are several scenarios that can happen:

  1. We will continue to work while the negotiation committees work out another agreement.
  2. We would immediately go on strike.
  3. We would go on strike if negotiations break down after a couple of weeks.

I personally hope that it is number 1 and not 2 or 3…

Coming into work this morning, I heard on the radio that Chrysler’s St. Louis Plant “overwhelmingly” voted down the national contract by an 81% vote while the Kenosha Wisconsin plant approved it with an 82% margin. Our voting will take place tomorrow afternoon, and it will be interesting to say the least.

I received a copy of the summary of the contract (salaried summary and hourly summary) a couple of days ago, and from what I read, I wasn’t impressed. In fact, I was alarmed. Of course there are numerous items that I read that didn’t strike me as being favorable to the Union Membership, and there just didn’t seem to be much that the Company was giving up.

One of the items that I noticed was a change in COLA. COLA is very important to me – no one likes to see their paycheck lose it’s purchasing power. The new formulation could actually reduce what I take home.

The next item I noticed is the wording of job security concerning life cycles of products. Who determines life-cycles of products? Management does. While there is a moratorium on idling or closing plants, that doesn’t mean that the plants cannot be cut back to a minimal production and staffing level. While this can happen underneath the auspices of a revised business climate, and the company is certainly entitled to take these actions, what bothers me is that the Union Leadership is touting an increased job security level for its members through this agreement. Last, the summary does not state any commitments by Chrysler to the plants beyond the terms of agreement, which is true job security.

And it goes on…

I understand that one of the Union’s chief negotiators is speaking out and wanting a return to the bargaining table, and a website (www.soldiersofsolidarity.com) has posted his letter to the rest of the Union leaders advocating this action. Additionally, the website has posted the following objections to the proposed contract agreement:

UAW-Chrysler 2007 Lowlights

Rather than compare what we got to what we had, the UAW-Chrysler “NEWSGRAM” makes bread crumbs look like meat and potatoes by comparing what bargainers gave away to what the company wished to take away.

“Chrysler had an agenda that was nothing but cutbacks.”

“Your bargaining team successfully resisted the company’s demand to cut your pay.”

Ignore the sales pitch and study the numbers. Not only will .10 cents per quarter be deducted from COLA raises but an additional $1.01 will also be deducted. As a result “your bargaining team successfully” cut $2.51 per hour over the life of the agreement. That is $100 per 40 hour week.

Lump sum payments are here today, gone tomorrow. Raises and cost of living adjustments are here today, and grow tomorrow. COLA and annual raises compound quarterly and pay dividends, week after week after week. COLA diversions compound deductions, month after month after month.

On top of that, new hires will start at $14 per hour, a standard well below the nonunion manufacturing average of $19.62 as cited by the UAW Research Department [www.uaw.org/facts/index.cfm]. Wages will be frozen for the next four years, but in 2011 everyone will be degraded.

Are you “core” or “non-core”? First class or second class? And what is the value of seniority if you can never transfer to a better job? The parties agreed “to consolidate classifications” [pg 121].

There will be two classifications among “core” workers: Team Member or Team Leader. “Every employee is a Team Member; there are no specialty job classifications.” [pgs 227-228]

Core workers will not be allowed to transfer to the better “non-core” jobs. If a worker is currently in a non-core job, they will be “red circled”. Management will have a powerful motivation to remove you and replace you with someone who will earn half as much.

“The parties have identified Non-Core product and process work totaling 8,000 jobs represented by the UAW that will be retained through a moratorium on outsourcing” [pg 159]. BUT in an “UNPUBLISHED LETTER” the parties agree “to meet and establish initial guidelines and parameters within 120 days of ratification that will be used to determine the application of the MOU” [pg 308]

In other words, we haven’t heard the last word. There’s more to come, including, “The parties will also determine appropriate application of core/non-core provisions to future Temporary Part Time (TPT) employees” [pg 308]. The future is increasingly temporary [see pg143].

Three facilities— Toledo Machining, Detroit Axle, and Marysville Axle — will be designated entirely non-core [pgs 154-155]. Nineteen Parts depots will be designated entirely non-core [pg 168]. All transport workers will be designated non-core [pg 151].

Despite the job security brouhaha in the “Newsgram”, all insourcing is “dependent upon a favorable business case” [pgs 159-160]. And despite the so called moratorium on outsourcing, the parties have “agreed to exit” janitorial, cardboard disposal, trash handling, ground, lawn care, snow removal, line sweepers, booth cleaning, machine cleaning, and chip handlers [pg 302]. But that’s just the beginning.

Skilled trades will be systematically reduced [pgs. 274-280]. “…any given classification may perform work normally belonging to another classification” [pg 275]

Forty-eight skilled classifications “will be incorporated into the Work Group Model based upon plant needs” [pgs 276-277].

“Implementation of the basic trade classifications into the Natural Work Groups is expected to occur no later than the end of the 2nd quarter, 2008” [pg 279].

Retirees were not spared. The VEBA is less than 50% funded. “In reality, the $11 billion you paid to get the health-benefit liabilities off your books will soon look outrageously cheap” [www.portfolio.com/executives/features/2007/10/11/Rescue-Memo]. But in reality, it’s $7.1 billion cash for $19 billion in liability. What’s a “debenture” to a private equity company? They can print stock at Kinkos. A seventeen year old prom queen wouldn’t buy that line from a quarterback in a tux.

According to Newsgram: “The company will pay an additional $1.5 billion to pay for retiree benefits from now until 2010 when the VEBA becomes operational.”

The company was already legally obligated to pay for retiree health care as a result of previous contracts. There was nothing “additional” about it.

If $1.5 billion is needed to cover retiree health care for the next two years, $8.8 billion will not last more than twelve years. Hence, the repeated phrases, “provide benefits at modified levels,” and “trustees will have the authority to make benefit adjustments” predict further rollbacks.

Stand your ground. There’s nowhere to run.

Labor Donated by Soldiers of Solidarity [www.soldiersofsolidarity.com ]

During our brief strike, many of us mused on the picket line what was going on at the bargaining table. After finding ourselves back at work the next day, it seemed that the strike was only for show. A comment in this article seemed to echo this sentiment:

The short strikes may have been more for show than an actual inability of the parties to agree on a new labor contract said David Cole, chairman of Center for Automotive Research in Ann Arbor, Mich.

“It’s hard to know what the real rationale was for the strikes, but it seems they were something designed to show that what the automakers and the union had agreed on was really important,” Cole said. “Now they can go to their members and say we have made concessions on wages and on health care costs, but we have fought for an agreement on job security.”

Did the Union negotiate a good agreement? I personally don’t think so. Did they negotiate in good faith to the Membership? I think they did, but I also think that they gave up too much in wages and COLA for the sake of VEBA.

Whether or not we will ratify this agreement will depend on the voting this week, or if it’s back to the table. In either case, it will be interesting.

Against all my fears, we walked out of the building shortly after 11:00 this morning and headed for the picket line. Not a good feeling, I assure you.

I would much rather have been at my desk earning a living. But that’s not the case.

My first taste on carrying a sign this afternoon was mixed. Yeah, there were those idiots that screamed and hollered at foreign cars as they turned in, and those that behaved like children on recess, but for the most part, things were well behaved. That could change if this lasts more than a week.

Second time around is tomorrow morning at 6:00 am. Not looking forward to it – it promises to be a cold morning with rain. Yuck…

UPDATE!!!

It appears that the strike against Chrysler is over. Details are pending, but at least I’ll be back at work tomorrow.