UAW prepares to set strategy for contract talks

For the UAW, 2015 will be a year of managing great expectations borne out of a recovering economy after years of sacrifices during tougher times.

And negotiations will occur against a backdrop that includes the restoration of the right to strike by two automakers and right-to-work legislation in states including Michigan.

This year, the union built by Walter Reuther is renegotiating contracts with all three Detroit automakers along with the state of Michigan and John Deere. Those employers alone account for about 43% of the UAW's roughly 400,0000 members.

This week, about 900 delegates from more than 800 local unions representing workers at about 1,500 employers will meet in Detroit to tell UAW leadership their top priorities during contract talks.

The UAW Special Convention on Collective Bargaining, which occurs every four years, is a forum for rank-and-file members to provide input into the union's negotiating agenda.

The two-day convention, which starts Tuesday morning at Cobo Center, also provides union factions an opportunity to vent and try to push their leadership into taking aggressive positions. The tougher stance comes at a time when General Motors and FCA US (previously Chrysler), have their right to strike restored, ending a concession made during bankruptcy restructuring.

"Eliminating two-tier and multi-tier pay structures is our number one priority," a newsletter distributed by Autoworkers Caravan, an activist group within the UAW, said in in advance of the convention. "Equal pay for equal work" is a basic civil and human right....Two-tier fosters an "us and them" mentality on the plant floor."

Conversely, executives from Detroit's automakers will argue against any raises that make their U.S. labor costs uncompetitive against Asian and German automakers with local plants and lower-paid workers.

Auto sales have increased steadily since 2009 and the growth made job creation promises possible in the 2011 contract. Ford created so many new jobs -- more than 14,000 -- during the current contract that the company hit its ceiling of allowable entry-level workers and started bumping the most senior second-tier workers to the top-tier wage.

But analysts expect U.S. auto sales to slow down or level off next year which will make future job promises harder to make.

"Nobody is projecting the growth trends to continue," said Kristin Dziczek, director of the labor and industry group for the Center for Automotive Research. During contract talks, "I think we will be seeing the automakers paying close attention to what happens if there is a downturn."

All the promise and pratfalls will be discussed this week as part of the preparations.

Arthur Wheaton, professor of labor at Cornell University, said the bargaining convention is similar to the conventions that the Democratic and Republican parties hold when they nominate presidential candidates.

Just as political parties sit in sections by state, UAW delegates sit in sections arranged by region and by their local units. And, just as political parties develop party platforms delegates at the UAW convention will vote on resolutions and a set of collective bargaining principles.

The convention also provides UAW President Dennis Williams and his leadership team an opportunity to lay out their vision of the union's future and its bargaining strategy.

Williams is expected to lead a more business-like, toned down convention than his predecessor, Bob King, led in 2011.

Four years ago the convention included speeches by actor and activist Danny Glover, American Federation of Teachers President Randi Weingarten and political commentator and MSNBC host Ed Schultz. It ended with a protest in front of a Bank of America branch that shut down the bank for a half-hour.

This year, NAACP President and CEO Cornell William Brooks and U.S. Secretary of Labor Thomas Perez will both speak Tuesday. There will be fewer guest speakers, in part because the convention is two days compared with a 3-day event in 2011.

Williams must manage expectations of auto workers headed into contract talks with General Motors, Ford and FCA US at a time when the three companies are more prosperous and profitable than at any time since the 1999 contract talks.

The challenge is crafting an aggressive but realistic national agreement with companies determined to avoid costly mistakes from generous contracts that hurt their competitiveness and contributed to their downfall. GM and Chrysler filed for bankruptcy in 2009 and Ford came close. All three made major cuts as part of their restructuring plans.

Over the past four years, rank-and-file union members have watched automakers report billions in profits, award lucrative executive compensation packages and cave to Wall Street demands.

General Motors announced earlier this month that it will buy back $5 billion in stock by the end of 2016 and return "all available" free cash flow to shareholders in its effort to avert a shareholder battle led by Harry Wilson, former Obama Administration auto task force advisor, and four private equity funds.

Meanwhile, Fiat Chrysler Automobiles disclosed on March 5 that CEO Sergio Marchionne earned earned more than $38 million in 2014. A day later, Marchionne sold 1.4 million shares of stock and hauled in another $21.6 million.

"Union members read financial news -- especially financial news about the company they work for," said Dziczek. "Pushing restraint and frugality is going to be difficult."

To be sure, a new profit sharing formula adopted in 2011 has clearly benefited the UAW's auto workers.

Hourly workers at GM received record pre-tax profit sharing checks of as much as $9,000 this year while workers at Ford were eligible for $6,900 and Chrysler workers received about $2,750.

In 2011, the UAW won raises for entry level or second-tier workers. Starting pay went from $14.50 to $15.78 per hour with a top wage of $19.28 an hour. But autoworkers hired before 2007, who earn about $28 per hour on average, haven't received a base wage increase for 10 years and are urging UAW leaders to demand raises this year.

"Their expectations in bargaining are no higher than mine," Williams said in December. "I think it is time for our membership to have rewards."

This year, the UAW can authorize a strike at General Motors and Chrysler for the first time since 2007. The union agreed to a "no-strike" clause as part of contract modifications adopted during the 2009 bankruptcies of GM and Chrysler.

Williams, who declined to comment for this story, has said that a strike is an absolute last resort.

"If you look at our track record, 98% of all of our contracts are settled without a dispute," Williams said. "Striking is a failure on both parties' part and we don't plan on failing, but we will be prepared."

At the same time, labor unions in the U.S. are weaker than ever. In 2014, there were just 11 major work stoppages involving 1,000 or more workers -- the second-lowest annual total since 1947, according to the U.S. Bureau of Labor Statistics.

Last week Wisconsin became the 25th state in the nation to adopt right-to-work legislation that allows employees to opt out of paying union dues even if the union bargains on behalf of the employer's workers.

Since 2011, the number of autoworkers represented by the UAW at GM, Ford and Chrysler has increased from about 111,000 to about 140,000 as industry sales have recovered.

Contact Brent Snavely: 313-222-6512 or bsnavely@freepress.com. Follow him on Twitter @BrentSnavely.

A closer look at: The UAW Special Convention on Collective Bargaining

What is it? A two-day convention to formulate a common collective bargaining program for UAW leaders to follow in contract talks with employers in the automotive, aerospace, agricultural implement, public service, health care, higher education and other sectors of the economy.

A two-day convention to formulate a common collective bargaining program for UAW leaders to follow in contract talks with employers in the automotive, aerospace, agricultural implement, public service, health care, higher education and other sectors of the economy. What happens: UAW President Dennis Williams and the top elected officers will deliver reports.

UAW President Dennis Williams and the top elected officers will deliver reports. Who attends: Delegates from more than 800 local unions representing workers at about 1,500 employers.

Delegates from more than 800 local unions representing workers at about 1,500 employers. Is it open to the public? No.

No. Where does it occur: Cobo Center, Detroit

Cobo Center, Detroit For news and updates, follow on www.freep.com, Brent Snavely on Twitter @brentsnavely and Alisa Priddle @alisapriddle.

2015 will be an extremely busy year for the UAW. Here are some key dates: