Labor June 2010

Who’s the Boss?

The UAW’s stock holdings in the Big Three carmakers have caused some members to wonder whose side it’s on.
Bill Pugliano/Getty Images

Outside the big auto show in Detroit this January, a dozen or so protesters marched in a loose circle, waving homemade placards like semaphores. The signs had slogans such as INVEST IN JOBS NOT WALL STREET and GREEN JOBS NOT PLANT CLOSINGS. As the next wave of hybrid and fully electric vehicles was being unveiled inside, these current and retired autoworkers were urging visitors to the downtown Cobo Center to join them on a “devastation tour” of Greater Detroit, where by some estimates unemployment was nearing 50 percent. Several of the protesters reminded me that auto plants had been retrofitted almost overnight in the 1940s to serve the war effort; couldn’t they now be repurposed as part of a new “green” economy? “Why don’t the auto companies open empty plants to build buses, light rail, and windmills?” asked Randy Sandusky, a member of the United Auto Workers union and a former employee at General Motors’ Detroit-Hamtramck assembly facility. But his frustration wasn’t directed only at the automakers. “With its so-called increased role in the car companies, why isn’t the UAW out here fighting for this?” Sandusky asked.

The rally had been organized not by the United Auto Workers but by a couple of small labor-advocacy groups. In the months since the auto industry’s near-collapse, the UAW has taken a far more companionable approach, even becoming a partner of sorts, to the Big Three—GM, Ford, and Chrysler. To help save the businesses that employ the largest share of its members, the UAW agreed last year to deep concessions, including the exchange of its retirees’ health funds for stock in the shaky companies. Those deals gave the union—through its Voluntary Employee Beneficiary Association, or VEBA—a 55 percent ownership share in Chrysler, an 18 percent stake in GM, and 11 percent in Ford. The union has tried to avoid any real or perceived conflict raised by this unusual relationship with management. At the end of March, it sold off its entire stake in Ford, generating a projected $1.8 billion for its retiree accounts from the company stock warrants, and it promises to shed its holdings in GM and Chrysler as soon as share prices allow.

But rank-and-file members are wondering at what point the UAW’s promotion of the car companies will mean the neglect of their own concerns. The union received a seat on the boards of GM and Chrysler as part of the VEBA arrangement, and the person who holds that seat at GM was recently named a vice chairman at the company. Gregg Shotwell, a retired GM worker and a co-founder of Soldiers of Solidarity, the largest of the UAW’s many splinter groups, sent me this news in an e-mail with the header “Can you say, ‘CONFLICT OF INTEREST!!!’” Shotwell believes the problems with the union’s ownership stakes are self-evident. As he told me, “What’s best for VEBA, what’s best for company stock, isn’t always best for the average worker.”

When I spoke to UAW President Ron Gettelfinger inside the Cobo Center, he sounded as boosterish about the car companies as did the industry executives who were pitching their new models in the adjoining showrooms. He had just finished addressing foreign press in a conference hall overlooking the Detroit River and the casinos on the opposite bank. He urged me to see an “inspiring” infomercial that Ford had aired on ABC the night before, and he predicted great things from a Fiat-led Chrysler. “Sergio has a way of building off his strengths,” he said of Fiat CEO Sergio Marchionne. Gettelfinger is retiring in June, after navigating the union through one of its most tumultuous periods. At the auto show, he summed up his attitude with a simple mantra: “If you’re not an optimist, you’re a pessimist.”

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Ben Austen is a contributing editor at Harper’s.

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