Security: Big Issue For Auto Workers
Labor union seeks job guarantees, firms look for flexibility
PITTSBURGH — AS negotiators for the United Auto Workers (UAW) begin hammering out a new labor contract with the Big Three automakers, they are wrestling with a longstanding problem: Job security. Not an easy task. Companies and unions have sought buffers against unemployment since the 1930s. Such programs have come up short in hard economic times. Now, the United States is entering an economic period that will surely test business's commitment to job security, especially in unionized industries.
``One of the most important issues as we bargain this year is the question of job security,'' says Reg McGhee, a UAW spokesman. ``We don't think it's a kind of impossible dream.''
``Job security,'' says Thomas F. O'Grady, an auto analyst in Wayne, Pa. ``That has to be No. 1'' in the bargaining this year.
The UAW began the first phase of contract bargaining with Ford, General Motors, and Chrysler in mid-July. Sometime this month or early September, the union will likely announce which company it will target, hammer out an agreement there, and then use it as a pattern contract for the other two companies.
Analysts expect GM, the largest of the three, to be the target. The current three-year contract expires midnight Sept. 14.
The UAW is focusing on job security because, despite wide-ranging guarantees in the existing contract, auto plants have stopped producing and the companies have shifted union work to nonunion firms.
``We are concerned that the company has basically whittled away at the membership,'' Mr. McGhee says.
For example, the current contract doesn't allow the companies to close a plant. So, GM has idled three plants since April 1988 - laying off the plants' workers infinitely - and will idle a fourth one in Lakewood, Ga., starting today.
Another example: The union has threatened to strike GM's A. C. West plant in Flint, Mich., charging that the company has violated contract provisions relating to work rules and the use of subcontractors. GM spokesman John Maciarz would not comment on the charges but acknowledged that accelerated company-union talks began on Wednesday.
Such disputes illustrate the dilemma that US industries and unions face in trying to improve job security, labor analysts say.
US companies are interested in improving job security, because it's a way of forging a partnership with their workers and encouraging them to be more productive. The problem is that companies can't offer job security unless their workers are very flexible - something that unions have a hard time accepting.
``Companies that are trying to improve relations with their work force are taking steps to put in more employment security,'' says Fred K. Foulkes, a management policy professor at Boston University. ``However, a lot of these ... are things that unions cannot agree to.''
Actually, more Japanese firms offer job-security programs in the US than American companies do, Professor Foulkes adds. But the 20 to 30 largest US firms offering such programs are much bigger than their Japanese counterparts. Typically, they set up a series of buffers to minimize layoffs.
For example, companies will have workers change shifts, train for new jobs, or even move to a new location before they consider layoffs. Some companies hire lots of subcontractors and temporaries to do work at peak periods; in slack times, that work is done by regular employees. Other firms, such as Federal Express and Hewlitt-Packard, use work-sharing, where all workers agree to cut back their hours during lean times, Foulkes says.
IBM is probably the US company best known for job-security programs.
``It is not a guarantee,'' says IBM spokeswoman Colette Abissi. But for 50 years, the company has maintained a ``no layoff'' tradition. That was easy during IBM's boom years. When hard times hit in 1985, the company retrained and transferred workers and offered generous incentives to employees who agreed to retire early or leave the company. IBM has cut more than 37,000 employees and retrained a whopping 60,000.
UAW workers can't expect as much, says Harry Katz, a specialist in automobile labor relations at Cornell University. ``The union would like an ironclad guarantee. Realistically, it won't get it.''
Instead, he expects the automakers to make some improvements in the current programs, which don't guarantee jobs but provide income during layoffs. These benefits are generous by US standards. Senior auto workers on layoff can draw virtually their full pay for up to two years, keep medical benefits, and then receive half to three-quarters of their pay until the company offers them a new post. Extensive retraining is also offered.
Industrial unions have made that trade-off - income instead of job guarantees - ever since Ford agreed to pay supplemental unemployment benefits in 1955.
Absolute guarantees don't exist, says Audrey Freedman, labor economist at the Conference Board. Companies lauded in the '30s and '40s for their job-security measures had virtually disappeared by the late '70s, she adds.
``It [job security] can't be real if it claims to provide security in an industry that has to shrink.''