'Stakes are unusually high' as UAW-GM talks near 11th hour

Contract talks between the Detroit Three and the United Auto Workers are never easy, but experts say they've seldom been this challenging —  or more likely to lead to a strike.

Costs are rising as the torrid sales pace slows. Record profits, reflected in record profit-sharing payouts, raise expectations for richer wage increases. Global uncertainty and challenges from Silicon Valley heavyweights require flexibility even as union members demand certainty.

The UAW wants to demonstrate strength as a widening federal corruption probe into its top leaders, including President Gary Jones, divides its membership. Contract negotiations are riddled with new sticking points that could stall negotiations and push union leaders to order a walkout.

"A strike is more likely, but by no means inevitable," said Harley Shaiken, a professor at the University of California-Berkeley who specializes in labor and the global economy. "The UAW has to show that it is preparing to walk out, but neither side wants to walk out."

Added Art Wheaton, an automotive industry specialist at Cornell University's Industrial and Labor Relations School: "It's kind of a high-stakes game of chicken. It's just difficult."

The current UAW contracts with all three automakers expire after 11:59 p.m. Saturday. After two months of negotiating that intensified after the Labor Day holiday, the UAW will either present membership with a tentative agreement, extend the current contract to continue bargaining, or strike some or all of the U.S. plants operated by General Motors Co., the union's target company.

A multitude of uncertainties, many of them new, loom. Trade tensions and an escalating battle over emissions standards cloud the future of the industry; a federal criminal investigation into union corruption is reaching the highest levels of union leadership; and, for the first time, bargainers don't know whether the president of the United States might take to Twitter to bash UAW leaders, the automakers or GM's move last November toward closing four U.S. plants, adding new pinch points to an already prickly quadrennial ordeal.

"The stakes are unusually high this year," said Shaiken. "The industry could be on the verge of a turning point, and the role of workers in that future industry is in very real ways on the table. The issues on the table are tough and contentious, no question. There's no silver bullet."

The UAW wants higher wages, wants to keep its members' generous health care plans, and wants product allocation assurances that will guarantee job security for its membership as the economy slows and automakers push to generate more profit while selling fewer vehicles. UAW bargainers want to rally their membership around an embattled leadership by some show of strength — and that could come by way of a strike.

Automakers are contending with market pressures around the globe, especially in China. North American sales are slowing as consumers simultaneously turn away from more affordable sedans and balk at rising prices. GM, Ford Motor Co. and Fiat Chrysler Automobiles NV all want to rein in costs as they plan for a slowing economy and potential escalation in the trade war waged by President Donald Trump.

Those automakers also have to simultaneously fund expensive ventures in the Auto 2.0 spaces of mobility, electrified powertrains and self-driving vehicles. And Ford, considered a laggard in restructuring, needs to generate additional cash to finance its transformation. 

Meantime, UAW membership wants to get paid. But some UAW members feel stuck. They don't fully trust leaders to bargain for them given developments in a federal investigation that has led to nine convictions, including former union officials and executives from Fiat Chrysler. But they also don't trust profit-driven automakers to allocate product in the U.S. and keep strong benefits for plant workers without a union to hold the automakers accountable.

"If there's a feeling of mistrust, it's not just one side or the other," said Wheaton. "There's that seed of doubt because of the investigations. But then the 'unallocating' has created concerns about are (GM) living up to their end of the bargain. Then you throw in the Trump issue, it seems to be a little more heightened."

Some in the plants are ambivalent. UAW employees at GM, Ford or Fiat Chrysler said they either haven't been following the national discussions closely, were preparing to live on a $250 per week paycheck in event of a strike, or were torn between wanting assurances for the next four years and struggling to trust leadership to negotiate a strong contract.

"I wouldn't say there's a great deal of trust in the leadership," said Chris Vitale, 46, a 25-year veteran UAW member who tests vehicles at Fiat Chrysler's Auburn Hills headquarters. "But I believe in the ideals of the union. It doesn't weaken my resolve. You need to deal with strength in numbers. They have a lot of power, and we need to have power, too."

After years of record profits from the automakers, people like Vitale want in on the spoils. Shaiken noted employees at GM and Fiat Chrysler feel they, especially, contributed to the companies' rescue from bankruptcy through some of the sacrifices they made a decade ago — and now they want their cut.

The automakers have argued that big profit-sharing payouts and premier health care agreements have been lucrative for UAW membership in recent years. And experts said the 2019 contract talks will be more difficult for automakers to give guarantees as they try to plan five years ahead for an economy and trade atmosphere that could change direction quickly.

President Trump's trade wars are "messing absolutely everything up," Wheaton said. "There's a distinct possibility that anything they sell in China could be hit with tariffs from China or from the U.S. or from both. The auto industry needs to have a five-year plan for anything."

UAW leadership will also look to avoid pitfalls of administrations past. Former UAW President Dennis Williams hugged the late FCA CEO Sergio Marchionne instead of shaking hands to begin negotiations in 2015. That cozy relationship irked members, and persuaded the current UAW leadership to seek opportunities to demonstrate they're not friends with auto executives.

ithibodeau@detroitnews.com

Twitter: @Ian_Thibodeau