The quadrennial contract talks between the International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America (UAW) and the Detroit Three automakers – FCA, Ford, and General Motors – are underway. The UAW is, in essence, the largest auto supplier in the United States – supplying the automakers with nearly 150,000 hourly and salaried workers in the manufacturing plants, engineering centers, and supply depots. The “buy” that the negotiators oversee will represent over USD 65 billion dollars over the next four years. The 2019 talks are expected to be contentious and to have significant ripple effects throughout the North American automotive industry.
The ceremonial handshakes between the UAW and FCA, Ford, and General Motors were held in mid-July 2019, and the current contracts are set to expire on 14 September 2019. Over the summer, company and union negotiators will meet regularly to review language from the previous contract that they can agree to carry-over to the 2019 agreements and to shape the broad contours of the overall economic deal. UAW members will be asked to vote to authorize the bargaining committee to strike during the negotiations; these votes typically pass with greater than a 95 percent margin and do not mean that there will be a strike – just that the UAW bargainers can strike if they cannot reach an agreement by the deadline.
Around Labor Day, International UAW President Gary Jones will announce a lead company. Negotiations will intensify between the lead company and the UAW while the other two companies will necessarily wait for the bargainers at the lead company to reach a tentative agreement. If the bargainers do not reach a tentative agreement by the contract expiration date, the UAW can elect to extend the current contract or initiate a strike with the lead company. In either event, the UAW has customarily extended the terms of the current contract with the other two companies.
A tentative agreement is not a contract until UAW members at that company vote to ratify it – a process that generally takes about two weeks. UAW members vote on the overall agreement, and skilled trades workers take a separate vote on the portion of the agreement that pertains directly to them. If a majority of the UAW membership ratifies the agreement, it becomes a contract, and the UAW will move to negotiate with the next company. The UAW may announce a strike deadline at the subsequent company if the union’s negotiators feel they are not making progress at the bargaining table. Again, the current contract will likely be extended at the third company until negotiations wrap up at the second company.
The UAW relies on a strategy that is termed “pattern bargaining.” Pattern bargaining means the major economic provisions of the contract will mainly stay the same, but the pattern does not mean cookie-cutter agreements. For example, the current 2016 UAW contracts extended the same health care benefits to all workers at Ford and General Motors, but workers hired after 2007 at FCA have a different health care plan that those workers hired before 2007. The goal of pattern bargaining is to not provide a competitive advantage to any one of the three automakers where the union represents the workforce.
In 2015, the contracts expired on 14 September 2015, and negotiations were concluded without a strike. FCA was the lead company that year, but UAW-FCA members rejected the first tentative agreement. UAW-FCA members approved the second tentative agreement with 77 percent vote on 22 October 2015. UAW-GM members ratified their tentative agreement with 55 percent vote on 6 November 2015, and UAW-Ford members ratified the final tentative agreement with 51 percent vote on 20 November 2015. The 2019 UAW negotiators are faced with many challenging issues, and contract talks may take some time to wrap up this year. CAR will address the critical issues negotiators are grappling with in a future feature story and CAR will host a briefing on the meaning of the 2019 UAW-Detroit Three Agreements once the contracts are made public this fall.
Vice President, Industry, Labor, & Economics
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