Striking auto workers want fairer pay – and a cleaner union

On this warm September afternoon the passing cars and trucks honk their horns in solidarity. The knot of union workers cheer and wave their blue-and-white picket signs. It’s the first strike by the United Auto Workers in 12 years and spirits are high.

“We’ve had a lot of support,” says John Paul, a machinist at General Motors’ powertrain plant here in Romulus, Michigan, outside Detroit.

But a cloud hangs over this strike that makes it difficult to discern its ultimate resolution. For the first time in its history, the UAW is negotiating a major contract while its leadership battles corruption charges. It’s possible the scandal will lengthen the strike, emboldening both sides to take a harder line than they otherwise would at a time when the industry is flush with profits. It’s certainly distracting attention away from the pivotal nature of the talks, as the industry begins to focus on far-reaching technological changes that will transform car production in ways not seen since the rise of the internal combustion engine.

“This is a mystery strike to me,” says Gary Chaison, professor emeritus of industrial relations at Clark University in Worcester, Massachusetts. “It has elements of … the usual issues: health-care, wages, part-time workers, and so on. [But] the corruption charges introduce a new element to this strike – an unpredictable element, to some degree.”

The details emerging from the ever-widening federal probe, which so far has netted nine convictions and charges against two others for millions of dollars in bribes and kickbacks, have hurt the union’s reputation. First the investigation unearthed bribes from Fiat Chrysler America officials to UAW leaders. The focus this year has broadened to include leaders’ misuse of union funds.

Union corruption declining

“It is a black eye,” says James Martin, a labor-relations expert at Wayne State University in Detroit. “The UAW had a squeaky clean image.”

The charges come at a time when, by virtually all accounts, union corruption is on the wane after federal investigators have taken aim at mafia infiltration of the Teamsters and other unions. 

“The FBI and a lot of agencies have delivered a knockout punch to organized crime in labor,” says Carl Horowitz, a senior fellow who tracks union corruption for the National Legal and Policy Center in Falls Church, Virginia. But “it’s not dead. ... Believe me, I’m fully employed.”

One indication of the declining corruption comes from the Labor Department’s Office of Labor-Management Standards. Through August of this year, 21 union officials and employees were sentenced for stealing union funds and other crimes. In the same period in 2009, 53 were sentenced.    

Mixed views among workers

How much has the scandal affected the UAW’s contract talks with General Motors? On the picket line, views are mixed.

“What’s happening nationally [with investigations] has nothing to do with us” and the contract, says Keith Thompson, a team leader at the plant’s transmission division.

Tim Whalen, a 43-year union member and team leader at the machining department, says union leaders may have chosen to strike because they felt they needed to regain the rank and file’s confidence by showing they were being tough on General Motors.

A strike can help rally members, even disaffected ones, says Dr. Chaison of Clark University. “Essentially, they’re telling the reformers: ‘Be quiet while we are taking care of business.’”

The scandal may have emboldened GM to take a harder line at the talks, judging that it had weakened the union’s leadership, labor experts say. When the union rejected GM’s final offer just before the strike deadline, the automaker took the unprecedented step of publishing that offer. The offer looked good – 5,400 jobs added or retained and $7 billion in U.S. investment over four years, but “it is filled with loopholes,” says Harley Shaiken, a professor specializing in labor issues at the University of California, Berkeley. 

And it didn’t address a key issue: temporary workers, who make up about 7% of GM’s workforce, whose ranks the automaker wants to boost to increase flexibility and drive down costs.

On the picket line, the topic is popular, because union members feel uncomfortable when workers doing the same job get different pay.

“C’mon, man,” says one striker, motioning Tom Lademann over to talk to a reporter. “It’s all about you.”

Mr. Lademann, working security at a nearby mall for $10 an hour, welcomed the bump up in pay to $15.87 an hour when he joined GM in 2017. But that’s roughly half what full-timers pull in and he wants a path toward permanent status at GM.

While union workers are looking back at the record profits of 2016 and 2017 and near-record $8.1 billion in after-tax profits last year, the company is looking ahead to how a trade war and potential recession could dent demand for cars, which is already softening slightly. GM also worries about how to pay for the needed investment to prepare to make electric and autonomous cars in the future.  

“GM is seeking to squeeze the workers at a moment of high profitability,” says Mr. Shaiken. “They know they need billions for the transformation of the industry. They see a slowdown on the horizon and they think doing this now will both ensure the company’s future competitiveness and impress Wall Street.”

He believes that’s a strategic mistake. 

Or maybe it’s just reality.

“What they’re signaling to the workers is that the nature of the industry has changed,” says Dr. Chaison. “The cars will be autonomous and electric and the industry will involve more part-time workers. Get used to it.”

Retorts Mr. Whalen on strike in Romulus: “I am not backing down for anything.”