This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Detroit's Big Three May Gain as UAW Sets Sights on VW in Tennessee

Stocks in this article: F GM

"That's one reason that there might be more interest in a union,'' McAlinden said. "It's very rare to see layoffs at the transplants. We really hadn't ever seen them at the transplants until the crisis of 2009."

Yet wages are not the only issue defining the organizing drive at Chattanooga. In fact, the Chattanooga effort may reflect more about Volkswagen than about worker compensation, says Shaiken.

VW, as opposed to other automakers, has been successful at working with labor unions in ways that might seem unusual for U.S. manufacturers, especially those in the South. VW, the world's second-largest automaker to Toyota, posted $248 billion in global sales in 2012 with 13% profits.

"Volkswagen's whole approach globally to building cars relies on certain ways of organizing work and involving workers," Shaiken said in a phone interview from Berkeley. "VW feels very comfortable dealing with unions. It has turned that into a competitive advantage, and achieved stellar results with 'work councils' in many places."

UAW referred questions to a Sept. 6 statement on talks with Volkswagen management in Germany, which said that "the UAW is committed to engaging with VW in open, fair and respectful dialogue to create an environment where Tennessee workers can participate in VW's global work council system."

Further north, the Detroit Three are doing better than they have in decades thanks to the federally-led reorganization that eliminated excess capacity at its factories, allowing the domestic automakers to match the tight production controls long employed by the transplants.

GM's shares have surged 58% over the past 12 months, bolstered by redesigned full-size pick-ups and success at lowering employee health care costs. Ford's shares have jumped 70% in the past year. As for Chrysler, its majority owner Fiat Spa may agree to an initial public offering for the smallest of the three Detroit automakers though that will likely depend on ongoing negotiation with the UAW's retiree trust, which owns 41.5% of the company not owned by Fiat.

For the UAW, the stakes are huge. The UAW's membership among auto workers and parts manufacturers is about 165,000, far below its membership in 1985 when the union counted 465,000 members at General Motors alone, another 170,000 at Ford and Chrysler and still 200,000 more at suppliers, according to the Center for Automotive Research in Ann Arbor.

What goes on at Chattanooga may influence not only the future survival of the UAW, but the prospects for GM, Ford and Chrysler.

"We are now at a point where instead of the negotiations in Detroit setting the standard for the transplants, the transplants are going to set the standard for Detroit," Shaiken said. "That's why Chattanooga is so very important."

>Contact by Email.

>News stories and columns by Leon Lazaroff LeonLazaroff.

4 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs