The UAW & The Detroit 3 – A Dysfunctional Relationship That Bankrupted The American Auto Industry

Just 12 months ago – after record setting losses by the “Detroit 3” ……….

UAW Puts Chrysler on Strike Notice


 UAW Strikes Chrysler!


UAW workers just walked out of Chrysler assembly plants.

UAW On Strike Against GM

DETROIT, Sept. 25, 2007

(CBS/AP) Thousands of United Auto Workers walked off the job at General Motors Corp. plants around the country Monday.

UAW President Ron Gettelfinger said the union launched the strike after “one-sided negotiations” failed to reach an agreement.
If you’re looking to buy a car, you’re not going to notice this strike, reports CBS News correspondent Anthony Mason. GM has a two-month backlog of inventory that will keep it in business for a while.
“The bargaining involves complex, difficult issues that affect the job security of our U.S. work force and the long-term viability of the company,” he said. “We remain fully committed to working with the UAW to develop solutions together to address the competitive challenges facing GM.”

Just weeks after GM announced a $38 Billion Dollar loss in the third quarter of 2007 ………

UAW’s Gettelfinger: General Motors “Pushed Us Into a Strike”


 Indeed, it will hurt GM. It will cost hundreds of millions of dollars at a time when GM’s turnaround is just beginning to take hold, but remains fragile. It will hurt GM sales at a time when GM has had some sales momentum in specific areas, like the Saturn division and the crossover segment. And GM is on the eve of launching some critical new models, specifically the Chevrolet Malibu and Cadillac CTS.

The 1998 strike was debilitating to GM. The automaker lost money and market share — share it never regained.

GM has to stick to its guns for its survival. No way will GM CEO Rick Wagoner sign a deal like the one former GM Chairman Bob Stempel did more than a decade ago. That one still reverberates on GM’s balance sheet.

In those 1990 negotiations, Stempel, so as not to bear a strike, was seen as caving to the union on issues of job security, and the Jobs Bank that pays people in full when they are displaced from their jobs but maintains pay and benefits, like health care coverage and pensions for active workers and retirees.

Subsequently, a boardroom coup led to the ouster of Stempel and GM President Lloyd Reuss, with the union contract at the top of the list of their transgressions.

GM is still paying for that contract today.

Lengthy UAW Strike Could Cost GM Billions, September 25, 2007 · In calling a strike against General Motors Corp., the United Auto Workers took a bold gamble that it could get a stronger contract by shutting down an already weakened company.

Monday saw 73,000 UAW members at about 80 U.S. facilities walk off the job, citing concerns over job security and health care. The dramatic move came after 20 days of negotiations. The talks continue.

If the strike does drag on, it could take a huge toll on both sides.

If the strike lasts longer than a week or two, it could cost GM billions of dollars and stop the momentum the company was building with some of its new models, industry analysts said.

A strike lasting close to a month or more would cause GM to burn up $8.1 billion in the first month and $7.2 billion in the second month. They are losing money every day the strike takes place. Very shortly it will paralyze their Canadian and Mexico operations,” Shaiken said.

“They are losing money every day the strike takes place. Very shortly it will paralyze their Canadian and Mexico operations,” Shaiken said.

But the longer the union stays on the picket lines, the more it could encourage GM to ship more jobs abroad.


Steven Pearlstein                                                                                                                                                                                       Washington Post Columnist
Wednesday, September 26, 2007; 11:00 AM

You raise an interesting question though: suppose a company’s wages and benefits have got way out of line, with serious consequences for the competitiveness and profitability of the company. Its losing lots of money. If you are a worker, you can bitch and moan and say, “Why should I have to take a $12 pay cut?” just to use your hypothetical. Getting your pay cut is a lousy thing to have happen to you. Or you can say, “Look, we obviously got way above market for my set of skills, I had a good run at above market wages, and now I have to decide if I want to work for a market wage, which is less, or try to earn more by looking for a new job. But I understand that if I don’t agree to cut my wage, there won’t be a company left to work for for very long, or it will file for bankruptcy reorganization and I’ll be paid $12 less anyway, only my pension will be seized by the creditors.” So this is the reality. You chose to see it only through the narrow lens of the worker, and come up thinking its unfair. But tell me: was it “fair” that, for all those years when the Big Three owned the US market, that people paid more for their cars (on a quality adjusted basis) than they should have so these workers could earn twice what other American workers did with the same skills, working under the same conditions? The harsh truth is that, in business and economics, fairness in that sense doesn’t have much to do with things.

Strike 2: UAW shuts down Chrysler

More than 32,000 workers start second nationwide auto strike in less than two weeks, this time hitting No. 4 U.S. automaker.

By Chris Isidore, senior writer

NEW YORK ( — More than 32,000 members of the United Auto Workers union struck Chrysler LLC on Wednesday, after marathon labor talks between the union and the money-losing automaker failed to avert the industry’s second strike in two weeks.

The strike affects 18 manufacturing plants and 30 other facilities, spread across 14 states.

The new CEO of Chrysler is Robert Nardelli, who was ousted as the CEO at retailer Home Depot (Charts, Fortune 500) after a dispute over his lucrative pay package, coupled with that company’s poor stock performance.

The union’s members at Chrysler get $28.75 an hour in straight wages, according to Chrysler. That comes to just under $59,000 pay when calculated for a 52-week, 40-hour a week year. Overtime pay and other adjustments generally takes the pay even higher.

But the total labor cost is far above that hourly wage when the cost of health care for both active and retired employees, as well as pension and other benefits, are factored in. Chrysler estimates it pays $75.86 an hour in total hourly labor costs. That’s not only significantly more than the $46 an hour average at the U.S. plants of Asian automakers, but it’s also higher than GM and Ford have been paying.

GM’s labor costs came to $73.26 an hour even before the latest cost-saving labor deal, while Ford was paying $70.51.


UAW strikes American Axle                                                                                                                    March 28th, 2008

The strike sends 3,650 American Axle workers in Michigan and New York to the picket lines and threatens to snarl truck production at General Motors Corp., the parts maker’s largest customer.

UAW on strike at GM crossover plant in Michigan                                        Thu Apr 17, 2008


DETROIT (Reuters) – A local unit of the United Auto Workers went on strike on Thursday at a General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) plant that builds fast-selling crossover vehicles, adding to disruptions caused by the union’s walkout at American Axle & Manufacturing, a major supplier to the automaker.



Members of UAW Local 602 who work at GM’s Lansing Delta Township plant near Lansing, Michigan, walked off the job just after 10 a.m. ET after the automaker and local union leaders failed to agree on work rules and other issues.


shed: Mar 07, 2008 12:30 AM

Modified: Mar 07, 2008 02:41 AM

DETROIT – General Motors shut down another plant Thursday …..

GM temporarily idled its Wentzville, Mo., assembly plant after it ran out of parts from American Axle. The plant employs nearly 2,000 people and makes the GMC Savana and Chevrolet Express vans.

About 3,600 UAW workers at five American Axle plants in Michigan and New York walked off their jobs Feb. 26.

GM said that including the plants that are set to close Monday, about 19,000 manufacturing workers have been affected by the shutdowns, or nearly a quarter of its North American manufacturing work force.

As Talks Drag, American Axle Strike Enters Third Month  

 Although the two-month-old strike at parts-maker American Axle (AAM) has shut down 30 General Motors plants and idled more than 40,000 GM workers, the United Auto Workers appear unable or unwilling to make use of their leverage to reach a settlement.





Wednesday February 27, 2008, 8:43 PM

“What was once the model (GM) spin-off is now the highest-cost supplier in North America,” Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor said Wednesday. “It’s sad to see. It’s not a good signal for Michigan once again.” 

In a statement, American Axle Chairman Richard Dauch said the company isn’t competitive at its current wage-and-benefit level.

The total cost of wages and benefits is more than $70 an hour, Dauch says, while competitors such as Dana Corp. are paying $20 to $30 an hour in total wages and benefits. American Axle did post a profit of $37 million last year, but the earnings were an anemic 1 percent of sales.

In its 2007 annual report filed with the Securities and Exchange Commission Feb. 21, American Axle said it’s working to diversify its products beyond truck axles. But the company said its ability to compete for new business “may be adversely impacted” if it is unsuccessful in cutting labor costs in a new UAW contract.

GM: Strikes will cost it $2B pretax in 2Q




With this dysfunctional history why should the Detroit 3 and UAW be trusted with $34 Billion in taxpayor funds? How can anyone be surprised that these Companies are Bankrupt!
DETROIT — General Motors’ (GM) stock fell almost 5% Friday after the company reported that strikes at some of its own plants and parts supplier American Axle (AXL) will cost the automaker about $2 billion before taxes in the second quarter. GM also expects to produce 230,000 fewer vehicles during the quarter due to the nearly three-month American Axle strike, which crippled its production of large sport-utility vehicles and pickups. The other strikes will cost it 33,000 vehicles. “We anticipate only a portion of this lost production will be recovered, due to the current economic environment in the United States and to the market shift away from the types of vehicles that were impacted by the action at American Axle,” GM said in a filing with the U.S. Securities and Exchange Commission. GM’s shares fell 83 cents to close at $17.60, after touching $17.38 earlier in the session, their lowest level in nearly 26 years. The last time GM traded below $17.46 was Oct. 6, 1982, when it was at $17.32, according to the Center for Research in Security Prices at the University of Chicago.


Strike at American Axle ‘not a good signal’

by Rick Haglund | Press News Service


According to GM’s website, some 3,300 hourly workers were employed at the plant at the end of April 2007.


GM also faces another possible strike by a UAW local unit at 10 a.m. ET Friday if the company and local leaders at a Warren, Michigan, transmission plant cannot reach agreement.

American Axle strike shuts GM truck plant

Posted by Associated Press February 28, 2008 17:44PM

American Axle strike shuts GM truck plant

Posted by Associated Press February 28, 2008 17:44PM

Categories: Breaking News, Business

DETROIT — General Motors Corp. says it has temporarily shut down a Pontiac pickup truck plant because of a strike at a parts supplier.

GM spokesman Tom Wickham says the Pontiac Assembly Center stopped making trucks when the first shift ended Thursday afternoon. He would not speculate on when the factory might reopen.

The plant employs about 2,500 hourly and salaried workers who make the Chevrolet Silverado and GMC Sierra pickup trucks. Other plants that make the trucks are still open.

Hummer H2 plant to shut down because of American Axle strike

Mar 3, 2008 at 5:37 PM EST



ST. JOSEPH CO. — The Hummer H2 plant in St. Joseph County will shut down production sometime Tuesday, meaning 400 local workers will be temporarily off the job.



Employees leaving the plant Monday afternoon were preparing themselves for the long haul.

“We might be laid off a long time,” said Victor Miramontes, who works at the plant. “Some people [are] talking until September.”

“We all get affected by it,” said Clarence Bibbs, a non-union employee. “We’re going to lose production, and we’ll just find other things to do.”

Bibbs blames the American Axle workers for the shutdown.

“There’s an alternative solution, rather than going on strike,” Bibbs said. “Nobody wins when you go on strike.”

American Axle strike causes GM to shut Toledo plant

2nd April 2008
By Staff Writer

General Motors has shut down its Ohio-based Toledo plant, which will be the 30th plant the company has closed following a strike at American Axle & Manufacturing, an automotive parts provider, reported Bloomberg. This is reportedly the second time the company has shut the Toledo plant, which employs around 1,663 people, in a matter of four weeks.

According to General Motors’s (GM’s) website, the 30 plants that have been affected employ a total of 43,911 people, which is almost half of the carmaker’s North American manufacturing workforce.               




GM has already been forced to at least partly idle about 30 North American plants because of parts shortages due to the UAW’s more than seven-week strike at American Axle.

Obama picks Michigan’s Granholm on the Economy – More Smoke & Mirrors

This might be funny, if it were not so sad. It is actually heartbreaking. Michigan will get what it deserves – after 6 years of Granholm – you moved her policies to Washington.

There is nothig to be gained from saying I told you so, but I told you so ……. read


This is simply tragic. Obama hasn’t been sworn in yet, but he is clearly demonstrating his intent to govern from the far left. Woe to Michigan ……….

The economic disaster will certainly worsen as predicted …….. TAX AND SPEND BIG GOVERNMENT HAS NEVER WORKED ANYWHERE AT ANYTIME. The economic turmoil of the Jimmy Carter days may look like “good times” compared to where we appear to be heading …………

Obama to hold meeting with economic advisers today


WASHINGTON — Gov. Jennifer Granholm and former U.S. Rep. David Bonior are to serve on a panel of financial luminaries and corporate experts advising President-elect Barack Obama on the nation’s hard-bitten economy, ensuring Michigan, its troubled auto industry and labor have a seat at the table.                                           


If you think either Michigan or the Michigan Auto Industry will have a seat anywhere you are mistaking ……. If the Democrats were going to offer a seat at their table they could have done so years ago ….. Michigan has been sending two Democratic US Senators and a predominantly Democratic Congressional caucus to Washington for years – nothing has changed in that regard.  Remember it was Nancy Pelosi, Democratic Speaker of The House of Representatives, who demoted the “Big Three” to the “Detroit Three”. For those of you that have not caught on yet, the term “Detroit Three” is not only a derogatory insult and dismissive, but it carries far more sinister tones – As the “Detroit Three” the “Big Three” were no longer a “National” issue but became a local Michigan problem.

Pelosi and the liberal Democrats despise the Auto Industry – they want your vote on election day and spit in your face after the votes have been counted. The votes have been counted – its time to shut your eyes again …………. here comes the spit.

As for your seat at the table, watch out when you go to sit down – they are liable to pull the chair away . The talk about a “bailout”, if one takes place, is smoke and mirrors. Another corporate handout with the right hand while the left hand increases business taxes and implements policies that will inhibit US car sales. They take away more than they give ……..

You think not – then read this ……………..

The Los Angles Times

Power struggle may open rift among House Democrats

Rep. Henry Waxman wants to replace Rep. John Dingell as head of the energy and commerce committee, which will take the lead on Obama’s plans on global warming.

Reporting from Washington — Opening a split among congressional Democrats that could affect President-elect Barack Obama’s efforts to curb global warming, a California environmentalist is trying to wrest control of a crucial House committee from its chairman, who is the automobile industry’s strongest ally in fighting stricter antipollution standards.

Rep. Henry A. Waxman (D-Beverly Hills[CA]) has announced that he wants to replace Rep. John D. Dingell (D-[Detroit]Mich.) as chairman of the House Energy and Commerce Committee, which will take the lead on Obama’s signature issues of energy, global warming and healthcare. [Oh, you didn’t think the auto industry was a signature issue did you? Only “National” issues get signature status.]

Over the years, Dingell has given invaluable support to the auto companies’ fights against pollution and fuel economy standards that they considered unrealistic, and Waxman’s challenge to his leadership is the culmination of a decades-long rivalry between the two powerful lawmakers, the panel’s top two Democrats.

The outcome of the fight could affect whether action on Obama’s energy agenda will be tilted toward the interests of Rust Belt industrial Democrats or more aggressive antipollution efforts that California has spearheaded.

It opens divisions among triumphant Democrats just as they come off a landmark election that put Obama in the White House and expanded the party’s majorities in the House and Senate — and it is a window into how power struggles among Democrats may intensify now that there is so much more power to wield. [It is a window into how Liberal Democrats have thwarted economic growth while blaming the Bush Administration].

Dingell, who in the Democratic primaries endorsed the presidential candidacy of Sen. Hillary Rodham Clinton, represents a district near Detroit, and the loss of his position would be seen as a blow to the auto industry at a particularly trying time. Detroit is being battered by declining car sales, high gas prices and an economy in turmoil. In a sign of the political sensitivity of the fight, several auto industry spokesmen declined to comment on the choice between Dingell and Waxman.

House Speaker Nancy Pelosi (D-San Francisco[CA]) is officially neutral in the dispute, but she is known to be sympathetic to Waxman’s positions on the environment and has repeatedly crossed swords with Dingell over the years:


* In 2002, Pelosi endorsed an unsuccessful primary challenger to Dingell.

* In 2007, she set up a special panel to address global warming, a move that was seen as a way to circumvent Dingell.

* Last year, she and Waxman fought against a Dingell global warming bill that would have prohibited California and other states from taking tougher action than the federal government to reduce greenhouse gas emissions.

[Officially neutral, who are they kidding?].

Dingell supported that provision because, he said, it was easier for auto companies to comply with a uniform national standard than a patchwork of state laws, and Waxman and Pelosi saw it as a direct shot at California’s landmark law to cut tailpipe emissions. The provision was dropped from a global warming draft bill Dingell circulated this fall.

[Question the scientific validity of Global Warming? See:

Waxman’s feud with Dingell is even longer-running. Throughout the 1980s, as they rose in seniority on the energy and commerce committee, the two battled over clean-air laws, toxic waste regulation and other environmental issues.

As chairman of the House Committee on Oversight and Government Reform, Waxman has been a thorn in the Bush administration’s side with frequent hearings and reports critical of its performance. But now that a Democrat will be in the White House, that oversight role may not be as appealing to Waxman as the chairman of the energy and commerce committee, which has jurisdiction over many issues important to the new administration.

“In large measure, our success as a Democratic caucus will depend on how the commerce committee performs,” Waxman said in a letter to Democrats announcing his plans.

Environmentalists are delighted at the prospect of a Waxman chairmanship.

“It is much more likely we will advance a progressive, forward-looking agenda with a progressive, forward-thinking leader like Waxman than with an old bull who defends Detroit like Dingell,” said Dan Becker, director of the Safe Climate Campaign, an environmental advocacy group.,0,7068890.story?track=rss  

They couldn’t demonize Dingell anymore than this, even if he were, say, a Republican. So Dingell is now being protrayed as an anti-environmental zealot.  This is no accident. Do you think any Speaker of The House has previously endorsed a Primary challenger over a Representative with 53 years of party senority in Washington. Dingell is the longest serving US Representative currently in Congress. (1955 to date). In the history of the United States only 1 Congressman has served longer. Wait, just a minute, he supports the right to own guns too …. he has just gotta go. 

As for being anti-environment, consider these comments made on December 20, 2006, “The formidable Democrat from Michigan, now 80, has served 51 years in the House of Representatives — the second-longest of any congressional career in history. During that time, he played a key role in pushing through many of America’s cornerstone environmental laws, including the Wilderness Act, the Endangered Species Act, the Clean Air Act, the Marine Mammal Protection Act, the National Environmental Policy Act, and the original Corporate Average Fuel Economy (CAFE)“.  

Considering this track record on environmental issues, what was the bottom line in this article, “That’s why some environmentalists see Dingell as the single biggest roadblock on the path toward meaningful climate policy in the 110th Congress”. 

What? Wasn’t it all Bush’s fault? This article presents a rare opportunity to read about Democratic double dealing. Promises made only to be broken, again. Michigan’s auto industry isn’t playing “second fiddle” any longer, now it is about to lose its only chair in the band.

This writer is not a Dingell supporter, however, this is a political lynching. Dingell has been a loyal, moderate, center-left, Democrat who has obtained the trust and admiration of his electorate like none before him. Now the “new administration” is painting Dingell as representing some “fringe” element of the Democratic Party.  

If Michigan is lucky, Obama, Granholm, Pelosi and Waxman will send a few of the “windmill factories” your way when they are done. 

Ford announces $129M 3Q loss, burns $7.7B in cash – Ford to cut 2,260 workers after reporting $129 million 3Q loss                                                                                 

By TOM KRISHER and JAMES PRICHARD, AP Business Writers   

General Motors will release its 2008 3rd Quarter results at 10:30 AM this morning.

“Due to deteriorating market conditions and a dire cash crunch, General Motors CEO Rick Wagoner will be announcing “important changes” during his company’s 3rd quarter earnings report on Friday at 11AM EST The Detroit News obtained an executive level email that foretells the bad news ahead but doesn’t go into specifics ……….”         The Friday announcement will likely include a hefty financial loss, too, as evidenced by an earlier announced loss of $2.5 billion by GMAC financial.

GM reports $2.5B 3Q loss, says running out of cash

DETROIT, Mich. – General Motors Corp. says it lost $2.5 billion in the third quarter and warned that it could run out of cash in 2009. GM also said it has suspended talks to acquire Chrysler. While it didn’t specifically name the automaker, GM said it was setting aside considerations for a “strategic acquisition.”

The automaker also said its cash burn for the quarter accelerated to $6.9 billion due to a severe U.S. auto sales slump. The company on Friday reported a net loss of $4.45 per share during the quarter, compared with a record-setting loss of $39 billion, or $68.85 per share, a year ago.  GM shares fell 53 cents, or 11 percent, to $4.27 in morning trading. 

A Chrysler LLC sale to GM seems unlikely -Chrysler LLC is privately held, however, Daimler AG holds a 19.9 % stake in the company –                                                   

Oct 23, 2008 – “Today, Daimler AG reported a net loss of euro 351 million for its 19.9 per cent share of Chrysler Holding LLC’s second quarter 2008 results under International Financial Reporting Standards (IFRS). On a U.S. GAAP basis, Daimler AG’s net loss for Chrysler Holding LLC was euro 88 million, of which a euro 76 million net loss is attributable to the automotive business of Chrysler LLC.” [This report allows us to project that Chrysler LLC’s loss in 2nd quarter 2008 (80.1 % stake) would approximate $352 million euro loss or $447 million dollar loss].                                                                    

Michigan Recession Continues to Deepen Reports Comerica Bank’s Michigan Business Activity Index – “September’s advanced figure is the lowest level in 14 years.” [That would make it the lowest since November 1994 – A Democratic Congress and the Clinton Administration – Wasn’t the Clinton Administration all “milk & honey”?].                     ,+2008

Then there is Toyota – Toyota’s Q1 profit drops 39% – Posted Aug 7th 2008 6:58PM – Toyota is not used to seeing its profit margins drop, as the Japanese auto giant has enjoyed increased profit for nine straight years. Expect that run to end this year …. For the year, Toyota has revised its sales forecast from 9.06 million units to an estimated 8.74 million. For the first quarter of the year that ended in June, Toyota has also announced that its operating profit took a 39% plunge from lower sales in both the United States and Europe …. Still, Toyota sales remain fairly strong in this sinking market and a profit is a profit. We’d imagine that this is a problem any one of the Detroit 3 would love to have on its hands.   


November 19, 2008

Waxman wins Steering Committee vote


California Rep. Henry A. Waxman accomplished a critical first step in his bid to unseat Michigan Rep. John D. Dingell atop the Eneryg and Commerce Committee, beating the chairman, 25-22, in a vote of the Democrats’ Steering and Policy Committee, Connecticut Rep. Rosa DeLauro tells Politico’s Ryan Grim.


November 19, 2008

Waxman wins Steering Committee vote


California Rep. Henry A. Waxman accomplished a critical first step in his bid to unseat Michigan Rep. John D. Dingell atop the Eneryg and Commerce Committee, beating the chairman, 25-22, in a vote of the Democrats’ Steering and Policy Committee, Connecticut Rep. Rosa DeLauro tells Politico’s Ryan Grim.

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