Company News

UAW Locals Ride Wave of GM Recovery

LORDSTOWN, Ohio — Boosted by a domestic automobile market that just won’t quit and a product that’s proved to be one of the hottest vehicles in General Motors Co.’s stables, officials of the two unions that represent workers at GM’s Lordstown Complex have plenty of reasons to smile.

That wasn’t the case six years ago when the prospect of liquidation, mass layoffs – perhaps the end of the domestic auto industry – loomed in the wake of the worst financial crisis since the Great Depression.

“History will prove that this may be one of the greatest success stories of our generation,” reflects Glenn Johnson, president of Local 1112, which represents 2,850 autoworkers at GM’s Lordstown Complex’s assembly operations. “To come back and post a little more than $9.4 billion profit in North America – that’s a success story in itself.”

The federal government’s rescue of Chrysler and GM – initiated under President George W. Bush in the waning days of his second term and accelerated under President Barack Obama after he took office in 2009 – established a turning point for the industry on the verge of collapse.

“There was definitely concern,” says Robert Morales, president of UAW Local 1714, which represents 1,400 members at GM’s metal-stamping plant next door. “We knew at that point that the UAW and GM were willing to work together to make it sustainable, that there was the need for change.”

The subsequent prepackaged bankruptcies, backed by the federal government, of both auto companies paved the way for a complete realignment of the business, Johnson says, but not without the full cooperation of the UAW and its tens of thousands of workers.

“We played our part,” Johnson adds. “When GM was going through their struggles, we gave back $1 an hour plus cost of living raises.” Moreover, the union established the UAW Retiree Medical Benefits Trust, which enabled the company to jettison billions of dollars in legacy costs to a trust administered by the UAW.

The givebacks have paid off for both the membership and the company, Johnson says. This year, UAW members will each receive $9,000 in profit-sharing bonuses as GM in 2014 posted a net income of $2.8 billion worldwide. GM has also committed to building its next generation Chevrolet Cruze at the Lordstown plant, and last year invested $250 million in improvements there.

Still, membership at both locals has clearly dwindled over the years, the result of buyouts, retirements, corporate restructuring and product realignment. At its zenith during the early 1990s – when the Lordstown operation included production of the Chevrolet Van – Local 1112 had a roster of 11,000 members, while Local 1714 peaked at 3,700.

Today the Lordstown plant, the largest single-line assembly plant in the world, is devoted to the production of one vehicle, the Chevrolet Cruze. Sales of the small car enjoyed their best year in 2014 with 273,060 sold. The Cruze, launched in 2010, is among GM’s top-selling automobiles.

Johnson says that the plant and its employees are focused on manufacturing a quality vehicle and preparing for the introduction of the next generation Cruze. He wouldn’t comment on any timeline as to when the vehicle would begin production, saying only that his membership is “aggressively pursuing that the launch is flawless.”

As preparation within the Lordstown complex continues, both locals are gearing up for collective bargaining negotiations set to begin this summer. Contracts for both expire in September.

“Entry-level employees are an issue,” 1714’s Morales says. “There’s also concerns about taking care of retirees.” While UAW retirees have no bargaining power through the union, retiree issues are often considered during these talks.

Under the last contract ratified in 2011, Tier Two production workers start out at $15 an hour and would scale up to $19.83 during the life of the agreement. Tier One workers earn $27.50, while skilled tradesmen earn $32 per hour.

“My opinion is that we’re going to sit down and have good, constructive talks,” Local 1112’s Johnson says. “There’s a level of trust that hasn’t been there in the past, and there will be discussions on how to grow the business, manage the business and job security.”

Johnson says the profit-sharing arrangement is evidence of a more productive partnership. “It shows that the UAW and GM found a way to reward workers when the company has a good year.”

Many issues remain where labor and management disagree, Johnson says. “When we disagree, we disagree,” he says, noting that he’d like to see cost-of-living adjustments addressed in the next contract. “We have a bargaining team in place at the international and local levels.”

Johnson, who has worked at GM Lordstown 37 years, says the plant and the company has transitioned from one heavily concerned with production volume to one that focused on quality and consumer demand. “Back then, the plant was more numbers-oriented in terms of productivity,” he recalls. “Now, we’ve transformed to meet our customers’ needs – quality and getting the job done.”

The atmosphere within the complex is upbeat, and workers are very confident about Lordstown’s future, Morales adds.

“It’s very positive coming off last year,” he says. “We’re 4½ years into this build and it keeps getting better each month.”

GM has committed to two Saturday production dates in February and three in March during the first quarter, Morales says. “There should be a few Sundays as well that will be available to our members.”

Morales, a GM Lordstown employee of 20 years, says the atmosphere is a complete turnaround from the dark days of 2009, when the automaker idled many of its plants and reduced Lordstown to a single shift. “This is very exciting to see where we are. There’s a lot of hype about the next generation Cruze, and we’re excited about the transition.”

Johnson is also optimistic about the plant’s prospects and growth at Lordstown. “We’re looking at our 50th anniversary next year. As a local union, that’s quite a benchmark,” he says.

Lordstown is a major component of GM’s operations, Johnson adds. “Being the largest single-line assembly plant doesn’t hurt,” he says. “Having a metal-stamping plant tied to us doesn’t hurt, and having a world-class paint shop doesn’t hurt either.”

The workforce at Lordstown is also “second-to-none,” Johnson emphasizes. “The bottom line is that you have a world-class workforce here. They want to come to work and earn a decent day’s pay, live the American Dream, buy a house, send kids to college and retire with dignity.”

Published by The Business Journal, Youngstown, Ohio.