The auto industry and the unions: the untold story

July 5 2011

by Steve Lindauer, TAUC CEO and NMAPC Impartial Secretary/CEO

IMGXYZ748IMGZYXThe slow but steady recovery of the major U.S. auto
manufacturers after several years of disastrous financial results has launched a
feeding frenzy in Washington. In recent weeks both Democrats and Republicans
have scrambled to take credit for what is shaping up to be, in the words of
Treasury Secretary Timothy Geithner, “one of the most improbable turnarounds in
recent history.”

However, as someone who has spent more than 30 years in the labor relations
field, my interest lies not in the politics of the auto recovery, but in the
profoundly important and largely unheralded role the international building
trades unions played in ensuring that Chrysler, General Motors and Ford were
able to pull back from the brink of ruin. Indeed, I find it more than a
little ironic that shortly after Secretary Geithner made the above statement in
The Washington Post, the House of Representatives very nearly approved
an amendment to an appropriations bill that would have prohibited federal
agencies from considering the use of project labor agreements, or PLAs, often
(but not exclusively) used by unions and their employing contractors. In the
end, the amendment, which would have applied to large-scale federal construction
projects, was defeated by a mere six votes.

Why the irony? Because had it not been for a PLA, the Big Three would have
faced a much more difficult and uncertain return path to prosperity, and the
jobs of thousands of workers would have been placed in jeopardy. In other words,
the amendment set out to deny the federal government access to the very tool
that helped save a large chunk of the U.S. economy.

For decades, one PLA in particular — the National Maintenance
Agreements, or NMA — has been heavily utilized by the auto industry for a
variety of projects at auto plants, from routine maintenance to large-scale
retooling and equipment installations. As most TAUC members already know, the
NMA is a comprehensive agreement, but one that is also flexible and easy to
implement, a formula that has proven extremely successful since its creation in
1971. Unlike other PLAs, the NMA is administered by the National Maintenance
Agreements Policy Committee, Inc., made up of an equal number of representatives
from labor and management. In turn, the companies that ultimately hire the
contractors — end clients such as the Big Three — are also
frequently consulted by the NMAPC for their input on how the agreement is
working out in the real world where the boots hit the factory floor each
morning. The result is a unique three-way or “tripartite” spirit of
cooperation and open dialogue.

This tripartite philosophy was never more evident than during the financial
crisis that began in the fall of 2008. When the scope of the automakers’
economic dilemma became clear, the NMAPC asked how it could help ensure the
viability of the industry. The unions recognized early on that short-term
sacrifices would be necessary in order to guarantee their legions of skilled
workers would still have jobs five or ten years down the road. Their mature and
sober reaction is something that went virtually ignored by the mainstream media;
it directly contradicts the clichéd, outdated notion that unions are naturally
antagonistic towards big business and are always looking for an excuse to halt
the sometimes painful changes necessary to maintain a competitive advantage in
the marketplace. Moreover, it demonstrates that these unions are highly
trustworthy, highly ethical organizations with whom you can enter into a
business relationship. In today’s rhetorical climate surrounding unions in
general, such a fact may be considered heresy by some.

At the unions’ urging, the NMAPC embarked on a series of discussions with the
automakers that resulted in the creation of two important addendums to the NMA.
These addendums — one covering both Ford and Chrysler, the other General
Motors — gave the companies more flexibility in regards to setting work
schedules and allowed two of them to institute temporary wage modifications
whereby the unions agreed to take a ten percent across-the-board reduction in
pay. These changes allowed the manufacturers to essentially “reset” their
operations and embark on the long road back to financial stability.

By any measure, the addendums have been a resounding success for all three
automakers, so much so that the labor side of the committee recently extended
their sunset dates by one year, which will take them into 2012. The temporary
adjustments have freed up the manufacturers to aggressively pursue new growth
opportunities, including both the expansion of existing assembly lines and the
creation of brand-new product lines, which will help them compete against
aggressive European and Asian companies. Also, the concessions granted by our
participating unions mean that more skilled craftspeople are still on the job
and collecting paychecks. Millions of hours have been worked that might not have
been available at all without the addendums — and we have our unions to
thank for it.

I hope that the press will soon realize they are missing out on one of the
great American business stories of the last ten years and begin to shine a
spotlight on this astonishing tale of cooperation. By taking the first
bold step and offering to help the automotive industry retool, rebuild and
ultimately thrive once again, the NMAPC’s participating unions have proven that
a lot has changed since the old days of endless strife between labor and
management.

Carpenters, Iron Workers, Electrical Workers, Pipefitters. The names remain
the same, but these are most certainly not your father’s unions.