UAW holds votes to allow strike as part of negotiations

The UAW has scheduled deadlines for strike-authorization votes at its Fiat Chrysler and General Motors locals as part of its national contract talks.

If approved, the union would have permission from its members to call a strike in the future if contract talks stall or hit an impasse. It's an expected development, and a routine part of contract renewal talks.

Even so, it's a significant moment because this is the first year since 2007 that the UAW has the right to call a strike against FCA US or GM. In 2009, when GM and Chrysler declared bankruptcy, the UAW agreed to forgo its right to strike during its 2011 contract talks. That four-year contract is now coming to an end.

The UAW did authorize a strike against Ford in 2011 but did not use that authority.

The UAW hasn't called a national strike since it hit an impasse with Ford in 1976, but the union did conduct a limited two-day strike in 2007 at some GM plants and a limited one-day strike against Chrysler in 2007.

UAW contract talks with the Detroit Three could easily become contentious this year. Longtime UAW workers haven't received a base wage increase in 10 years and many UAW members continue to be unhappy about a two-tier wage system that pays newer workers less money and provides no pathway to the top wage.

Union members know that the Detroit Three are making the biggest profits in years, especially in North America, where industry sales of new cars and trucks are expected to top 17 million for the first time since before the Great Recession.

"Many members are upset about a number of issues....and feel that they did not get their share of the prosperity they they have helped build," said Kristin Dziczek, director of the Industry & Labor Group for the Center for Automotive Research. "If the (UAW leadership) comes back with an agreement at the table that doesn’t fulfill expectations, it either will not be ratified, or the UAW will need to take a strike vote."

But automakers argue that the industry goes in cycles and they cannot afford to slide backwards into the bad habits that led to UAW contracts of the 1990s and early 2000s that increased Detroit Three labor rates far beyond Asian and German automakers with non-unionized plants in the U.S.

Those higher labor rates were among the factors that led to the Detroit Three’s financial troubles. The concessions that the UAW agreed to in 2007 and 2011 have only recently brought labor closer to their non-unionized rivals.

The Detroit Three’s average hourly labor cost for pay and benefits ballooned to $78 per hour in 2007, according to the Center for Automotive Research in Ann Arbor. That compared to Asian and German automakers in the U.S. who were generally in the mid-$40 to low-$50 range, at the time.

Since then, the average for Detroit Three automakers has dropped by at least $20 per hour because of a number of UAW concessions, the creation of a lower tier wage rate for entry level workers and the creation of a voluntary employees' beneficiary association, or VEBA, for retiree health care that is managed by the union rather than the automakers.

Now, according to CAR, Mercedes-Benz's labor costs are highest, at $65 per hour, followed by $57 at Ford, $55 at GM, $49 at Honda, $48 at FCA US, $48 at Toyota, $42 at Nissan, $41 at Hyundai, $39 at BMW and $38 at Volkswagen.

The union formally began negotiations with FCA, GM and Ford in July in advance of the Sept. 14 expiration date of a four-year contract with all three automakers.

The strike authorization votes are scheduled to take place at the UAW's FCA locals across the country by next Monday and at GM locals either on or by Aug. 27. It's unclear whether a strike authorization deadline has been scheduled for Ford workers.

A number of Fiat Chrysler UAW units including those in Belvidere, Ill., Jefferson North Assembly, Toledo and Warren have already completed their votes with an overwhelming majority of members voting in favor of the authorization, according to two UAW officials who declined to be named because of the sensitive nature of contract discussions.

The UAW represents about 141,000 workers at the three automakers including 39,000 at FCA US and 50,300 at General Motors.

"The strike vote is part of the UAW’s democratic process that occurs every contract year," GM spokeswoman Katie McBride said in a statement. "We remain committed to working with our UAW partners on an agreement that benefits employees and strengthens GM’s long-term competitiveness.

UAW Vice President Norwood Jewell sent a letter dated July 22 to all of the FCA locals with instructions on when to take the strike vote just eight days after contract talks formally began. The timing of the instructions to the UAW's Fiat Chrysler units suggests Jewell wanted to obtain strike authority upfront, rather than after hitting actual disagreements during negotiations.

UAW President Dennis Williams has said frequently he views a strike as the union's last option.

"To me a strike is failure," Williams said last month. "I am not afraid of confrontation, but I don't want one, and our members don't want one."

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