Will the UAW at Chrysler do another caterpiller?
Headlines are saying the UAW/Chrysler contract is in trouble, with with six large locals having voted against it, so far. But, don’t bet against ratification of the contract between the UAW and Chrysler. While headline writers are having a field day predicting that members will reject the contract – for example AutoSavant says the “Deal with Chrysler in Serious Trouble” and even Detroit newspapers are saying the same - they’re ignoring history:
In 1991, the UAW struck Caterpiller. The UAW wanted a “pattern” contract, one like that signed at John Deere. But, Caterpiller‘s global market was being hammered by recession, foreign competition, and a depressed the market for construction equipment. It had sustained a huge loss when the UAW went on strike almost a decade earlier. By 1991, however, Caterpiller was losing as much as $1 million per day even though it’s plant modernization had drastically cut the workforce, with UAW membership reduced from 40,500 to 15,100. Caterpiller offered the UAW a contract with a two-tier wage scale, flexible work rules, and no wage increase. The UAW rejected it, and went on strike at two major Caterpiller plants.
Is this beginning to sound familiar?
What followed was a titanic labor battle, which the UAW ultimately lost. Twice they went out on strike against Caterpiller, and twice they called of the strike – the second after 17 months. Caterpiller kept production going with salaried employees and replacement workers, and eventually with many union members who crossed the picket line. Caterpiller also regained profitability.
The union settled in March of 1998, but the members voted down the contract, 59% to 41%. The UAW leaders responded by negotiating a new contract differing from the previously submitted one by rehiring 50 workers. That contract was ratified 54% to 46% one month later.
The Caterpiller strike resulted, in large part, from the refusal of local unions to concede anything. The national union leadership was far more sensitive to the need to maintain Caterpiller’s competitive position globally than the members, who were militant and expected their leaders to be equally militant. The 17 month strike was called by the UAW leaders largely to maintain credibility with its members, because locals had staged numerous wildcat strikes – a tactic that had succeeded with Caterpiller before. But, this time, Caterpiller had new management and that new management was determined to get a contract that allowed them to make money.
Caterpiller workers didn’t trust the company, didn’t believe what it was telling them, and didn’t care, either. The UAW leadership was caught between the reality of the marketplace in which Caterpiller was increasingly uncompetitive and the strident insistence of its members that the union allow no changes in the contract. The members had seen union employment cut by over half and believed that the only way to preserve what they had was to yield nothing.
In the end, the union ended up taking pretty much what it could have had when it started, Caterpiller had rapidly returned to profitability after taking the first strike, and the Caterpilller workers sacrificed a great deal to set a modern record for the length of a labor dispute.
The fracas at Chrysler, like that at Caterpiller, is as much about the differences between union leaders and union members as it is about the UAW vs. Chrysler. The dissidents opposing the Chrysler contract are more angry with their leaders for agreeing to it than they are at the company. They trust neither.
Do not, however, succumb to the notion that rejecting this contract will result in anything different. The UAW and its leadership long ago decided how this contract would be written. The UAW long ago learned the lesson of Caterpiller – they probably understood it even then. They also realize that a “pattern” contract in the auto industry is essential to the long-term survival of the union, critical to preventing individual companies from dividing and conquering it. The deal with GM established that “pattern.”
Moreover, Ron Gettelfinger has the power. He decides when there will be a contract vote. He decides what the next one will be like, and who will vote on it. As the response by UAW leaders to rejection of the Caterpiller contract in 1998 showed, those powers should not be underestimated. Nor is the company powerless. There is no incentive for Chrysler to sign a deal that ensures it will lose money.
Bill Parker and the other dissidents at the UAW can, perhaps, succeed in rejecting this contract. But they cannot negotiate a new one, decide when to vote on it, or change the reality of Chrysler’s position in the market. UAW members will ultimately have to face that reality, because the company is not going to give them what they want and Ron Gettelfinger is, in the last analysis, not going to allow a dissident group to run his union for him.
It’s like a school board bond referendum. Vote it down, and they change a few words and put it on the next ballot. They keep doing that until eventually they get it through. Then they build the new building, just as they intended to do from the start.
This deal was done when it was done at GM, no matter what the headlines say.