Today, Explained - "No contract! No cars!"

Episode Date: September 30, 2019

The United Auto Workers is engaged in the biggest General Motors strike since the 1970s, all while union leaders are having their homes raided by the FBI. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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3-2-1, 3-2-1, 3-2-1, 3-2-1, 3-2-1, 3-2-1. This is the way it is with the city of Detroit. The city that changed the transportation of man around the world. The old gives way to the new, yet all that is good is cherished and contributes to the dream of the future. 70 years ago, Detroit was the heart of the entire planet's auto industry. It was home to almost 300,000 manufacturing jobs. It was Motor City. Just about a decade ago, that heart nearly stopped beating. General Motors, the Detroit stalwart, once the world's largest corporation, died today.

It was 100 years old. GM and Chrysler, both based in Michigan, turned to Congress to save America's auto industry and almost a million jobs. And slowly, things got better. We were talking about the American auto industry on life support, but now in 2012, things are looking up. Chrysler saw sales in the US jump 26% in fairness from a very low base. General Motors was up 13% and Ford gained 11%. A decade later, GM looks nothing like it did

during the recession. Things got good again. GM reported pre-tax earnings of $9 billion over the first three quarters of 2018. And now the people who are actually putting their cars together would like a raise. I'll be ready forever. For a union made so strong. As you may have heard, about 50,000 United Auto Workers walked off the job two weeks ago. Not just in Detroit, but in GM facilities across the United States. There are protests. There are visits from presidential candidates, there's a rap. do this for each other. Do this one for all my sisters, do this for our brothers. Cause they trying to treat us wrong,

but they say they love us. We need to change right now. We ain't going further. We going on strike. We going on strike. There was a look of grim determination, if that's the best way to put it. We're going to be out here.

We're going to stand up for our rights. That look may begin to shake a little bit because things are going to begin to get tight for both the striking workers as well as the pressure they're putting economically on the automaker itself. Quinn Kleinfelter has been covering the strike for WDET Public Radio in Detroit, and today marks week three of the strike, making it the longest GM strike since 1970. Over 1,000 GM workers in the U.S. and Canada were furloughed last week. Things are getting tough.

Human beings who are going to run out of money after a while. There's a strike fund that's supposed to help pay for something as you go along, but it pays about $250 a week to these workers, you know, that were making that in a day, probably. I mean, 250 bucks a week, if you've got, you know, any kind of family or even your own self. I mean, after a while, there's only so much that you can do with, you know, you're going to run out of money pretty shortly. What does this mean for Michigan, where so many of these auto workers are based? The problem is what, kind of a cliche, but is known as the ripple effect, which is there's all sorts of other companies that are not, quote, GM, that are involved with this. And they're going to be getting hurt in a lot of ways. You have parts suppliers, companies that make parts that they give or sell to GM, grocery stores where auto workers would go buy stuff that they're not going to have money to go buy now. And there's been some experts who have said that because there is such a reliance still

on the auto industry, in Michigan in particular, that this strike, if anything, could wind up tipping Michigan into becoming a one-state recession. So there's a lot on the line for the car companies and a lot for the auto workers, but there's a lot for the entire state of Michigan as well. Let's take a step back. How did all this get started? The reason it started is because this is when the union's contract comes up with General Motors and Detroit's so-called Big Three, which is GM, Ford, and now Fiat Chrysler.

They pick one in particular that they want to target, and then they try to set up a contract with them. When that contract is done, they use that as a template for the other two. So this year, they picked General Motors. And they were saying that there's lots of things that General Motors is getting now that they weren't getting back in the day, the day being about a decade ago when the company was going bankrupt and had to be bailed out by the federal government. And unions had taken concessions then and said, you know, we're going to let you grow

and get strong so that we can all grow together. And now they say, well, you guys have been making up until not too long ago where sales have begun to slow. But apart from that, they've been making almost record profits. And they say, well, it's time for us to get our share. And the automaker, for its part, has said that sales are slowing and that they've had problems in particular with cars, which is funny because they're a car maker. But sedans, those type of things, they really aren't selling.

It's still the big ones, SUVs, the gas guzzlers, which weren't selling so much a while back when gas was pretty darn pricey. But they are now. What's the union asking for beyond wage increases and, as we heard from that wrap-up top, full-time work over temporary positions? Well, they want wages. They want a piece of the pie because the automakers have been doing so well, at least up until recently. They want guarantees on health insurance in particular. There had been talk that General Motors was asking them to start paying as much as 15% of their health care benefits. That's really low compared to the

normal average human who out there typically you pay like maybe 25, 28% I think is the average. The UAW had gotten in a really sweet deal where they were only paying like 3% of their health coverage. And so for GM to say, no, we want you to start paying this much is a big drawback to the union. GM and Ford in particular are putting like a billion dollars a year into health coverage. And they say that's not sustainable in the long term.

And one of the other big factors that the unions are trying to fight for is the fact that they are going to close these number of plants, particularly in Michigan and Ohio. They're going to either turn those into some different type of factory or they're just going to close them down, period. And because of that, there's a lot of jobs being lost. Who specifically are you seeing on the picket lines in the strike? The old and the new is maybe the best way to put it.

Today we're fighting a good fight, and it's a reasonable fight. We're fighting for what's fair. The rebirth of solidarity, not only here in Flint, but across America. There's a lot of veteran union workers who have gone through strikes a lot in the past and said that, you know, we've had to tote these things around and have been kind of guarding for this moment since last year when the General Motors had announced that they were going to close like five factories or not allocate product is the way they put it,

which means we're not going to tell you that we're going to build anything there anymore. So a lot of the union already had been saying, you better start saving your pennies. There's a second kind of tier, though, which are a lot of younger workers who have not been able to be full-time workers yet. A lot of them are not going to be union members because they're not full-time. So because of that, the younger ones, they've never, ever been through a strike. And so they have these veteran ones trying to kind of guide them along through the actual picket lines. You know, this is how you hold a picket. This is where you walk. This is why you walk. Those people are looking determined, but they're looking a bit bewildered too.

Surely union leaders have met with GM since this started, what, like just over two weeks ago. Any progress on that front? They've met and it's been really tense the way it sounds like. At one point, they said they had like agreement on maybe 2% of all the issues, meaning 98% was still way out there. GM has come back and did so very rare move, actually. They put out one of their negotiating points to the public, which is they said they were going to make $7 billion worth of new investments in the U.S. and create like 5,400 new jobs. And they said they

were going to, quote, find solutions for these plants that are what they call unallocated, which means they're not going to allocate any product there to be built at the moment. It goes along the lines of them wanting to push more for electric vehicles or autonomous vehicles. They could make some electric trucks, that kind of thing. How is this strike different from past strikes, especially since the car industry right now looks nothing like it did in years past? There's differences now that have really made a change. Several of those include the fact that General Motors was going bankrupt

and the federal government had to bail it out. Because it did so, and because General Motors had to try to continue to get a revenue stream in, they basically were able to figure out that they could get one person to do four jobs that four people used to do back in the day and still make something of a profit. And so that's been one of the real fallacies when you've heard Trump, for example, come into Michigan, where I'm at right here in the Detroit region, and talk about how he's going to return manufacturing jobs to the state, make it the manufacturing hub of the nation again, and stop the companies from outsourcing to Mexico in particular or other countries. But the fact is, is most of these autoworkers are not losing their jobs to people having the stuff outsourced. They're losing them to robots.

Car companies can get a robot in, not pay it a salary, not pay it benefits, and replace a whole bunch of workers and go 24-7. And that's really the automation is what is hurting manufacturing and hurting auto worker jobs in particular. The president obviously cares about these Midwestern manufacturing jobs and states. Has he weighed in on the UAW strike yet? There's been reports that the White House tried to. I think Politico had put out something that they were trying to end the strike and were going to try to broker a deal. Both the White House and General Motors have denied those reports.

But the president does have some things riding on making sure that autoworkers at least think he's trying. Right next to Detroit is Macomb County in Michigan. And in a very real way, that's what put President Trump in office. That area had voted for Obama in the past, barely won in Wisconsin and Pennsylvania and Michigan, but Michigan was the thinnest margin where he won by about 10,000 votes. Much of that came from Macomb County that flipped from Obama. And the president went in there numerous times telling people that he was going to make it the manufacturing hub of the world again, bring all these jobs back. So it is a pretty significant voting block to him. Although,

you know, tariffs and things that have been put in haven't been super great for either autoworkers, particular General Motors and Ford, who have both complained bitterly about how some of the tariffs on steel and things are costing them a lot of money. But by the same token, the president wants to look like he's on the side of the United Auto Workers. He very well may be. In terms of what he's really been able to do or not do, that seems uncertain. There are a lot of interesting contemporary factors at play in this strike. Mexico, automation, electric cars, temporary workers. But here's a curveball.

The UAW's in the middle of a massive corruption scandal. That's after the break. I went to a mall this weekend, a really rare occasion for me, but this mall was like a hefty mall. There was a lot going on, tons of people, and I couldn't help but notice a lot of stores dedicated to Halloween costumes. Even stores that usually have nothing to do with Halloween were trying to get their Halloween spin on for the kids. But I was just reminded that KiwiCo has crates

that let your kids build their own Halloween costumes. And I gotta be honest, when I was a kid, I don't think I made a lot of my own Halloween costumes, but my mom certainly came through and made me a bunch of Halloween costumes and it was a really special thing. And you know, you're guaranteed to stand out if you make your own Halloween costumes,

unless a lot of kids out there are making KiwiCo crate Halloween costumes. But let's just assume that's not the case. KiwiCo's got a lot of fun stuff. They've got a chomping mechanical dinosaur your kids can make, glowing horn unicorns your kids can make, a light-up alien spaceship your kid can make. Come on, people.

They're also offering today, explain listeners the chance to try the KiwiCo experience out for free. To redeem the offer and learn more about the projects for kids of all ages, go to KiwiCo.com slash Explained. So let's talk about the UAW, Quinn. Does the union have a lot of leverage here? How much power does UAW have right now? You know, they can hand out flyers, they can send things, they can give stuff to you and say, hey, you ought to put these signs out here. I mean, it's an already built chain of political organization that a lot of candidates want to tap into. That's why so many times you see some of them trying to kind of cozy up to the UAW or to unions in general. Both Joe Biden and Elizabeth Warren joined striking GM workers on the picket lines today. The former

vice president was in Kansas City, Kansas. Warren was with workers in Detroit. Of course, these are Democrats who typically unions are going to go for, although not always. By the same token, you've had a lot of the politicians, particularly the ones running for president, who will praise the UAW itself, but they will steer away from praising individual people. And that's because some of the top officials in the union are facing a little bit of trouble. Huh. Why is that? There has been investigations into corruption. And especially in recent days, in the UAW in particular. Four years or so ago, Fiat Chrysler had some people that admitted they had made some false tax returns for UAW officials.

They were trying to hide different things that basically amounted to bribes and embezzlement among some mid- to upper-level officials. The Justice Department was investigating. They said that it was a real quid pro quo thing. The car companies were trying to keep the unions happy. They would send them on trips. They UAW has a Camp David of its own that it goes off to and has a retreat. The federal officials waited until the top UA people were going off to this retreat, and then they raided the UAW president's home, Gary Jones. Wow. FBI raids today on the homes of Gary Jones, the current president of the United Auto Workers,

signaled a dramatic escalation of a four-year probe into illegal payments to union officials. And they also went and did the same thing in raids on the current UAW president's immediate predecessor, Dennis Williams. And they went to his house. And there's been some reports that they actually held him at gunpoint while they were trying to gather records and data and things. What's going on?

The allegations are that it's kind of a multi-year conspiracy, that they were taking member dues and that they were spending them on things that would benefit themselves, you know, big vacations in Palm Springs or buying a bunch of rounds of golf, alcohol. At one lavish party, guests were given these wine bottles. Take a close look at the label. It reads, Made Especially for You by UAW Vice President Norwood Jewell in the USA. Tell me a little bit more about the president of the union right now, this guy Gary Jones, was it?

When these allegations have come up against Jones in particular and his predecessor, Dennis Williams, one of the things that's been a little surprising is you haven't heard a whole lot of him during this strike. It's been some of the departmental people, you know, kind of his second or third in command that have been out there actually going off to picket lines and being kind of the front face of General Motors. And you haven't really seen Jones around that much. He made kind of a cameo appearance during the Labor Day parade, which usually brings a lot of people out to be stumping for organized labor. This time it actually had some people coming out who were making catcalls against the union president. UAW President Gary Jones did march, although he avoided our cameras, not anxious to answer questions.

The scene angered Brian Keller, a UAW member who led a protest in the parade today. We feel that we have a right to speak out against the corruption within our union. Gary Jones, Cindy Estrada, and the rest of his caucus just step aside until after negotiations. You can't help but notice the timing of this strike, Quinn. Is a strike a convenient way for the UAW to get union members to forget about a huge corruption scandal? That has played into the strike, I think, in two ways, right? The first is,

do they trust these leaders? Well, the leaders know that. This is not, you know, officially noted or anything, but there's a lot of people who have brought up the notion that one of the reasons they pushed for a strike this time is to show the members, yes, we are fighting for you, even though you don't know if they're swiping your dues and going off to the Palm Springs or not. The second is when this negotiation is all done and they've got some kind of a deal set, what happens next is the union leadership comes out

and says, ta-da, here it is. And we're going to get this, you're going to get this, you're going to get this, and now you get to vote it. And then the rank and file hold these big, giant meetings. They usually are held in, you know, big auditoriums or wherever, and they vote up or down. Now you've got leadership that you have these allegations about, and so you wonder if, at least some of the rank and file I've talked to, will wonder, is this really the best deal they could get?

Or is it just something they want to get to get this out of the way? When people think of big, strong American unions, they think of the auto union, they think of UAW. Do you think other unions, smaller unions are watching and waiting to see how this big controversy with the UAW and how this strike resolve? Just personally, I think some of the driving forces behind the uptick in interest in organized labor are going to continue on well past this, and so it may not affect it. I mean, I've talked to a number of people in millennial or younger age groups who are

worried about their jobs. Is this job going to be here, or are tariffs or something else going to suddenly impact it, and they're just going to wipe it out? And there's a fear of a lack of stability, and that's one of the selling points of a union is that we are stable. You know, I mean, even if the leadership seems unstable. And as we're talking about unions, I should mention I myself actually am a United Auto Workers member. Huh. Is everyone in Detroit just in the auto workers union? The station used to be owned by UAW, and then they sold it to the university, and that was part of the deal.

It's, oh, by the way, your rank and file needs to be UAW members. Wait, so Quinn, do you have a dog in this fight? This is your union. It's a little bit different, you know, because they have so many different divisions. I never deal with any of the actual auto stuff. It just happens because that's where the radio station is that I work at. So I can't really speak to what the actual auto workers are dealing with. And then I got to be careful because I'll say, hey, wait, no, I'm UAW too. Oh, really? Where are you at? It's like, oh, I'm at a radio. What? You know, I got to admit, I feel bad for both sides. You're supposed to make money. And I can see how the car companies are having to try to

save costs. They were really almost ready to go belly up, and all these related companies would have gone belly up with them had not the government bailed them out back when. By the same token, you've got these guys that are out there trying to fight for higher wages or whatever they are, and they know they could be out there for a long time, and they're only getting $250 a week. And if you've got a family of four, you're going to be hurting pretty quick. So if I can put out both sides of those evenly

and let people make up their own minds about it, then at least I've done the best that I can do. Quinn Kleinfelter is the senior news editor at Detroit's public radio station WDET. I'm Sean Ramos-Furham. This is Today Explained from VOX. Thanks for listening to the entire episode. You've made it to the end, and now you get to hear this. KiwiCo is offering you, listener, the chance to try them out for free, to redeem the offer, and to learn more about KiwiCo's projects for kids of all ages. You name an age, they're included. Visit KiwiCo's projects for kids of all ages, you name an age, they're included. Visit KiwiCo.com slash explained. They're trying to make learning about the tough stuff way more fun.