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Does the tight UAW-Ford vote reflect cracks in solidarity with the national union?

With a slim margin separating the United Auto Workers union from passing a new 4-year contract with Ford, it’s obvious the rank and file are not unanimously happy with how the national union has handled the Ford negotiations. Question is: Is there a deeper wound festering deep within the UAW?

Another question is: Has anyone considered that a tight vote may be indicative of internal strife on major issues of concern to locals, that many members think the national union doesn't seem to care about? If that is the case, then the national union may be out of touch and acting insulated from the locals that they are supposed to serve.

According to the United Auto Workers union, as of Friday the “yes” votes had the lead but only by a slim margin of 51% to 49%. I liken it to the stock market where the bulls are in a major battle with the bears as to who will control the field.

In this case, one cannot blame Ford Motor Company (NYSE: F) for the problems. It negotiated for its own interests as it should, in order to protect itself from any increases that might make it non-competitive.

In particular, Ford needs to protect the negotiated two tier pay system. Problem is, the rank and file know the limit is supposed to be no more than 20 percent of the total UAW population at Ford (according to UAW member conversations); but the national union seems to be allowing settlements and agreements with GM and Chrysler at key plants that are testing the UAW’s own agreed upon criteria; and Ford employees are seeing some handwriting on the wall with that one.

After an extensive search using social media links of links of links compounded by emails and tweets, I found many of the comments and entries might be quite disturbing to UAW leadership, and that some of the shenanigans of the national union is ticking off many in the rank and file. Frankly, I’m not surprised.

On one hand, you have the loyalist union types who prefer confrontation and demands on all fronts, even to the point of favoring a strike with Ford; damn the torpedoes! These are the people that have given Detroit and the UAW such a bad reputation that potential customers still prefer to buy Hondas, Hyundais and Toyotas.

On the other hand, you have the moderate UAW members who realize Ford has to be competitive, and have responded in the last 7 years with agreeing to cutbacks, reductions in pay, reductions and even elimination of COLA, not mention increases in medical fees. Yet, they are now becoming aware they may be getting setup for a future filled with lower and lower wages, not to mention a decrease in benefits at the next contract.

On the third hand (yes, there are three in this case), you have the union leadership which has become more like white collar management with respect to their benefits, pay and insulation.

As one who has lost his dental and eye-care, and has nothing but major medical with an extravagant deductible, like $5K per year, along with the rest of society, I think it’s safe to say Ford UAW should be happy they have income and benefits period.

Nonetheless, I fully understand the locals' attitude if their national union is not fully addressing their local concerns. After all, that is what they get paid extra to do.

One major issue is the the two-tier pay system. If the lower paid tier is allowed to grow in numbers beyond the upper-paid tier, the auto industry corporations may attempt next time to negotiate a mid-pay option; raising the lower tier and lowering the upper tier wages. And since it would be an increase for the lower tier, the upper tier would likely be outvoted due to the increase in level-2 membership. Then again, isn’t that democracy at its best?

Well, not in the minds of long-term, tier-1 UAW members. They are used to stacking the deck, playing hard ball and playing their own style of internal politics, which is not much different than when the rank and file is told to vote only for the Democratic Party by their union leaders. So much for freedom of choice and American values.

Be apprised when I wrote “Perfecting Corporate Character” in 1997, I stated that the union leadership in general was showing signs of acting and dictating like the company management they oftentimes despised. Based on what I read and hear now, I still find that to be true.

For the record, I have never been a member of the UAW, although my father was in his day at Chrysler Tool Design; so I grew up in a union home. I did vote for the union at Holley Carburetor around 1970, but the employees changed their minds when the company, which was owned by Colt Industries, offered employees $120 per month increase in salary and a turkey. The union vote failed. And that’s when I realized I had to depend on myself, which forced me to think and negotiate on my own and based on my own value and merits.

Point is, I have learned about unionism and corporatism first hand, even working hand in hand with the UAW members at Saturn. As I recall, it was the national union which decried the unique contract at Saturn that included profit sharing with 20% of pay at risk. It was by far the best relationship between a company and a union I have ever seen; that is, until the national union killed it, and eventually GM went bankrupt and then killed Saturn as well as Pontiac.

So, it seems at times the national union, as well as some locals, have a history of getting in the way of what’s good for its own members. It certainly strove for increases over the many decades which helped bankrupt the industry and made U.S. automakers non-competitive. Only now do we see the effects. Then again the CEOs failed in their fiduciary duties to protect the stock holders, many of which are UAW.

Fact is, voting on the new Ford labor deal ends on Tuesday with the final tally expected to be announced on Wednesday, October 19th. As of today, based on what I read and hear on the street and in the bars around town, I have my doubts this will pass; and I understand why.

It has nothing to do with Ford itself, and everything to do with the lack of quality of representation at the bargaining table by the national union over issues the locals want to address before they say, yes. So, a no vote at Ford is more of a referendum on the union leadership than a slap at Ford the company.

Question: If the national union gets a piece of the negotiated pie as far as I understand it, could they be blinding themselves toward a masterful negotiation (read - long term manipulation) by Ford management?

As Patrick Rall wrote here at TN, should the majority of Ford’s union workers vote in favor of the new contract, the next step to institute the changes outlined under the new contract.

If, however, the workers vote this tentative contract down, the UAW heads will be forced to go back into negotiations with Ford; and, from all that I hear and read, the heads would not be happy. In that case, I have to ask, why? After all, they are there to serve the UAW membership, not the other way around.

I was shocked when I heard one UAW member say that he wished at times another national union represented their members. With rhetoric like that, the factions may grow and one day come to blows.

Perhaps that person said those words as a direct result of the rumors about some kind of strong arming by the national upon the locals into accepting the deal, even saying they may not go back in to negotiate if the vote fails. I do not know for sure if that is totally true, but I’ll let UAW members comment below; that is, if they have the freedom to express their opinions openly without reprisal.

And that’s a major problem with unions. They have become political machines with their own management agendas in more ways than one.

When one lady asked me during my latest book seminar about whether I thought the UAW will strike Ford, I replied that I did not know; and I still don’t. But what I do know for sure is this: a close spread betweens the yeas and nays indicates, like the market, that a major battle is going on between the UAW bulls and the UAW bears right now as to who will control the agenda.

Full Disclosure: At time of publication, Sherosky, creator of the auto sector charts for TN, is neither long or short with the mentioned stocks or futures, though positions can change at any time. None of the information in this article constitutes a recommendation, but an assessment or opinion.

About the Reporter: After 39 years in the auto industry as a design engineer, Frank Sherosky now trades stocks, futures and writes articles, books and ebooks like, "Perfecting Corporate Character," "Awaken Your Speculator Mind", and "Millennial World Order" via He may be contacted here by email: [email protected] and followed in Twitter under @Authorfranks

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