An Associated Press (AP) report on Wednesday said the United Auto Workers could lose up to 50,000 jobs at Detroit’s ‘Big Three’ car makers and two major suppliers over the next four years, though analysts say the union is likely to make up some of the losses by organising (‘unionising’) non-union suppliers.
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According to AP, analysts also note that the bulk of job losses will occur through attrition and early retirement, not from layoffs at plants that will be closed or sold as part of tentative labour pacts reached last week between the UAW and General Motors, Ford, DaimlerChrysler’s Chrysler Group and suppliers Delphi and Visteon.
Most workers at plants targeted for sale or closure are expected to find jobs elsewhere in their companies and ratification votes on the four-year contracts are likely in the next week, AP said, noting that the union currently represents about 300,000 workers.
“No one voting on this agreement is threatened at all with more than, let’s say, an uncomfortable transfer,” Sean McAlinden, chief economist at the Centre for Automotive Research in Ann Arbor, Michigan, told Associated Press on Tuesday.
Still, AP added, the losses are significant because they reflect the steady decline of US market share among Detroit’s Big Three car makers and the continuing elimination of some of the most highly paid manufacturing jobs in the country.
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By GlobalData
According to AP, McAlinden estimates the UAW will lose 49,000 jobs at the Big Three, Delphi and Visteon over the four-year life of the new contracts though he expects the union to add at least 25,000 jobs by organising workers at non-union suppliers.
Associated Press noted that McAlinden and other analysts have said the UAW likely agreed to some plant closings or divestitures in exchange for help from the Big Three in organising certain suppliers.
“They know to get a Big Three contract for new product they’re probably going to have to play ball with the UAW,” McAlinden told AP.
Goldman Sachs analyst Gary Lapidus told Associated Press the UAW headcount could decline by 50,000 over the next four years.
“The UAW is resigned to declining Big Three membership as the cost of Big Three viability in the face of intense import-brand competition,” Lapidus reportedly said in a research report cited by the news agency.
Lapidus also reportedly said that UAW president Ron Gettelfinger also would like to grow the union’s membership by enlisting non-union workers at plants owned by foreign car makers primarily in the South, an effort that has languished so far, AP added.
“In fact, early in negotiations, the three-way settlement strategy was meant to bolster that initiative by presenting the UAW as co-operative partners with management working for the best interests of the companies,” he said, according to Associated Press.
AP said that, by most accounts, the talks were far less contentious than in years past as all sides recognised the need to become more competitive against expanding foreign car makers.
The tentative contracts allow the companies to close or sell about a dozen plants in an attempt to cut costs and close the productivity gap with Asian and European car makers, AP noted.
Associated Press said the UAW and the five companies have declined to comment on contract details until the ratification process takes place.
McAlinden told AP that, even with a ban on plant closings, the Big Three car makers were able to trim roughly 50,000 jobs during the last four-year contract, negotiated in 1999.
AP noted that those losses have been part of a steady decline in UAW membership as the union, which saw its ranks peak at 1.5 million in 1979, ended 2002 with 638,722 members, a 10% drop from 2001.
According to Associated Press, the union says a more accurate account of membership is the monthly average over a 12-month period, which totalled 675,898 in 2002.
