UAW May Lose Up to 50,000 Jobs in 4 Years at Big Three Automakers and Suppliers

DETROIT September 24, 2003; John Porretto writing for the AP reported that The United Auto Workers could lose up to 50,000 jobs at Detroit's Big Three automakers and two major suppliers over the next four years, but analysts say the union is likely to make up some of the losses by organizing nonunion suppliers.

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 labor pacts reached last week between the UAW and General Motors Corp., Ford Motor Co., DaimlerChrysler AG's Chrysler Group and suppliers Delphi Corp. and Visteon Corp.

Most workers at plants targeted for sale or closure are expected to find jobs elsewhere in their companies. Ratification votes on the four-year contracts are likely in the next week. 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 Center for Automotive Research in Ann Arbor, Mich., said Tuesday.

Still, the losses are significant because they reflect the steady decline of U.S. market share among Detroit's Big Three automakers and the continuing elimination of some of the most highly paid manufacturing jobs in the country.

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. But he expects the union to add at least 25,000 jobs by organizing workers at nonunion suppliers.

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 organizing 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 said.

Goldman Sachs analyst Gary Lapidus said 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 said in a research report.

Lapidus said UAW President Ron Gettelfinger also would like to grow the union's membership by enlisting nonunion workers at plants owned by foreign automakers primarily in the South, an effort that has languished so far.

"In fact, early in negotiations, the three-way settlement strategy was meant to bolster that initiative by presenting the UAW as cooperative partners with management working for the best interests of the companies," he said.

By most accounts, the talks were far less contentious than in years past as all sides recognized the need to become more competitive against expanding foreign automakers.

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 automakers.

The UAW and the five companies have declined to comment on contract details until the ratification process takes place.

Even with a ban on plant closings, the Big Three automakers were able to trim roughly 50,000 jobs during the last four-year contract, negotiated in 1999, McAlinden said.

Those losses have been part of a steady decline in UAW membership. The union, which saw its ranks peak at 1.5 million in 1979, ended 2002 with 638,722 members, a 10 percent drop from 2001.

The union says a more accurate account of membership is the monthly average over a 12-month period, which totaled 675,898 in 2002.