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September 26, 2007 11:34

Guaranteed job security? What's that?

Posted by Lisa Takeuchi Cullen | Comments (8) | Permalink | Trackbacks (0) | Email This

So the striking workers at General Motors got off the picket line today after their union reps hammered out what some are calling a historic deal with management, says CNNMoney.com. The historic aspect had to do with the agreed-upon creation of a trust fund to be managed by the union and that would assume the costs of retiree health benefits. But that wasn't all, said United Auto Workers president Ron Gettelfinger:

Gettelfinger said Monday the union needed job guarantees for its members before it could agree to the cost savings sought by the company to return its operations to profitability. On Wednesday, he termed the job guarantees won by the union as "outstanding."

A big part of the dispute revolved around guaranteeing job security for GM's unionized workers, which is likely to involve the opening or reopening of auto factories in the U.S. rather than moving those jobs abroad. That's critical for the UAW:

As recently as 1994, it had nearly a quarter-million members working at GM alone. But plant closings and the spinoff of GM's parts unit Delphi have shaved its membership working at the company by 70 percent since then.

Okay, so not to harp on this like the grump I am. But I don't get lifetime retirement health coverage. I don't get guaranteed job security. I wish I could just get over my petty jealousy, be happy for my fellow worker and applaud his historic gains. As Gerry said in a comment to my earlier post on this subject, "If a private company wants to spend gobs of cash on salaries and medical insurance for retired workers they should go ahead. If they can make a profit and still pay people not to work, that's great."

But the point is GM can't do that and make a profit. Back to CNNMoney:

In July, the domestic brands of GM, Ford and Chrysler had less than half of U.S. auto sales for the first time in history, although a good sales month by GM in August got them back over the 50 percent market.

GM itself has seen its share fall from just under a third of the U.S. market as recently as 1995 to just under a quarter of the market so far this year. The automaker fell below 30 percent of U.S. market share in 1998, the year a strike at two UAW locals in Flint, Mich., shutdown most of its North American operations for seven weeks. It has never gotten back above that benchmark. It is unlikely to have lost any sales from this short strike, though.

But GM lost nearly $13 billion on its core North American auto operations in 2005 and 2006 combined, as it paid more than 30,000 UAW members up to $140,000 each to leave the company.

What's Liz Edwards doing there, anyway? Shilling for her hubby, that's what:

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Reader Comments (8)

Gerry:

Sniff sniff. What's that I smell? Wait, it's...federal government bailout! Subsidies to keep the auto makers afloat! Unprofitable companies looking for handouts to save themselves from their own mistakes! After all, it has worked so well for the airlines.

Posted by Gerry | September 26, 2007 12:44 PM

abbistani:

Back in the 50s and 60s when GM was rolling in cash, it made commitments to its workers in lieu of paying them more money. In retrospect, it was a bad decision, but it's one that GM needs to honor, or at least negotiate its way out of.

As for your benefits, maybe you need a better union. :-)

Posted by abbistani | September 26, 2007 1:18 PM

Matt:

Look, GM can promise whatever it wants to. And the union can accept those promises. But reality doesn't give a damn what GM promised and what the union accepted. They're making a product that isn't selling, and as time passes there's no way to guarantee anything in light of what's happening with their products.

Anyone dumb enough to think their job can be guaranteed deserves to end up standing in a bread line.

Posted by Matt | September 26, 2007 1:45 PM

LKW:

Job security? Give me a break. I am a white collar worker with two advanced degrees and I have been laid off three times in ten years. This is the way the world works now. Get used to it and upgrade those skills to stay marketable.

Posted by LKW | September 26, 2007 1:51 PM

Yadgyu:

General Motors should go private then liquidate itself and go out of business. It should spend all of the money it has left on paying retirement packages and give a lump sum to all of the workers who got laid off. Once the money is gone, it's gone. There will be no more headaches.

Posted by Yadgyu | September 26, 2007 3:00 PM

Peter V.:

Hmmm. First, let me say that my own instincts agree with you, Lisa (for a change).

However, there is a substantial difference between being a white collar knowledge worker and one skilled laborer among many. I have a relative who because of an injury can no longer work at his skilled trade. Therefore, in his mind, his working life is over. That's not the mentality of a professional knowledge worker (or at least most of us). The difference is not in smarts, but rather in outlook and perspective. The world demands more of the highly educated.

Second, while we don't know yet, it is likely that the job guarantees no longer entail the embarrassing "jobs bank" where the Detroit Three paid workers full or close to full salary to do nothing. Instead, it probably has something to do with continued investment in facilities in the US that are staffed with union labor, something that management was likely to do anyway. At least, let us hope that's what the job guarantees entail. If it is more jobs bank, then Yadgyu is right, because there is no future for the Detroit auto industry.

Posted by Peter V. | September 26, 2007 4:23 PM

George Lenard:

We need to await further details. Unfortunately, I don't expect any media outlet to print the actual contract language. Hopefully, someone will at least give us a fair summary.

What I gathered was that the job security amounted to plant investment, which means no present plans to close those plants. If down the road those plants prove to be unneeded, unprofitable, and/or burdensome, I bet they can be closed.

Give GM credit for agreeing to "job security" provisions that have some substance but do not financially and operationally hamstring it as it seeks to dig out from its problems.

Posted by George Lenard | September 28, 2007 5:44 PM

oyunlar:

We need to await further details. Unfortunately, I don't expect any media outlet to print the actual contract language. Hopefully, someone will at least give us a fair summary.

Give GM credit for agreeing to "job security" provisions that have some substance but do not financially and operationally hamstring it as it seeks to dig out from its problems.
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We need to await further details. Unfortunately, I don't expect any media outlet to print the actual contract language. Hopefully, someone will at least give us a fair summary.

Give GM credit for agreeing to "job security" provisions that have some substance but do not financially and operationally hamstring it as it seeks to dig out from its problems.

Posted by oyunlar | April 12, 2008 10:53 AM

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Nina Subin

Lisa Takeuchi Cullen is a staff writer for TIME. She blogs about work. Why? Because TV was taken. Think of her as the grumpy colleague ranting by the water cooler.
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