As the United Auto Workers and Detroit automakers head into the final week of contract negotiations, don’t underestimate the impact the auto industry has on the Lima region.
Proof of that is in the numbers.
Employment at the Lima Ford Engine Plant has quietly grown to 1,700 people today, up 500 from just three years ago, according to the Allen Economic Development Group.
More than 2,800 jobs around Allen County are also held by seven auto suppliers who each employ more than 100 workers. These are places like SumiRiko and Diamond Manufacturing in Bluffton and Randall Bearings and Dana Corp. in Lima.
That’s 4,500 jobs, and we haven’t even included the smaller companies who feed off the auto industry or the local workers who drive to General Motors in Defiance, Chrysler in Toledo or any number of the Honda plants in the region.
Given that, it is important to this area that there is a quick and fair resolution between the UAW and the Detroit Three when their current contract expires at 11:59 p.m. Saturday.
A lengthy strike could have dire consequences.
Auto production involves a complex process of assembling tens of thousands of parts that are produced by a large chain of suppliers. Stoppages in any part of that chain can result in a ripple effect that not only would reach into the pocketbooks of those directly involved in the auto industry, but also would snatch dollars away from area retailers and those in the service sector who benefit from their business.
Tensions have been high throughout contract talks, which isn’t unusual when the two sides sit down to talk dollars and cents. But heading into the final hours of negotiations this year, a strike is becoming more of a possibility.
Nearly 96 percent of the 152,000 UAW workers at Ford, General Motors and Fiat Chrysler have authorized the union to strike. The UAW has also raised strike pay for workers and said it will use all tools in its toolbox during contract talks, according to the Detroit Free Press.
Union workers contend they sacrificed for the companies during the darkest days of the 2009 bankruptcies. Now the rank and file looks at the billions in profits being made by the automakers and has made it clear it wants the UAW to protect wages and health benefits, to address job security and to establish a path for temporary employees to go permanent.
The automakers point to the need to control costs in order to to beat back foreign competition and produce the affordable-priced vehicles that consumers want. New American-made pickup trucks are currently listed anywhere from $50,000 to $60,000 while new SUVs carry a price tag of $25,000 to $40,000.
This comes as GM pays about $63 per hour in wages and benefits to UAW workers, while it’s $61 at Ford and $55 at Fiat Chrysler. That compares with an average of $50 per hour at plants owned by foreign-based automakers, according to the Center for Automotive Research, an industry think tank.
General Motors has been picked as the UAW’s target company, which is no surprise given it is the most profitable of the three companies and it closed three factories last year, including one in Lordstown, Ohio. Any deal made between the UAW and GM will set the pattern for talks with Ford and Fiat Chrysler. It also means that if the union decides to go on strike, it will happen at GM. Workers there could then strike immediately or agree to a temporary extension as talks continue.
What’s needed this week is a constructive discussion. The UAW cannot expect General Motors to be “Over-Generous Motors,” nor can the Detroit Three shut the UAW out of the profits it helped make for the company.