UAW Vision for 21st Century Auto Industry Jobs

President Ron Gettelfinger calls for industry retooling build hybrids, flexible-fuel and clean diesel vehicles. Excerpted comments.

Published: 20-Jan-2006

Thank you, Keith [Crain], for that generous introduction … and for inviting the UAW back to the Automotive News World Congress. I would like to compliment Automotive News for bringing together people from the auto industry who have a wide range of views. The UAW is proud to represent what we believe to be one of the most important voices in this industry: the workers who build the cars, trucks and auto parts.

Let me state in the beginning, the UAW will defend the interests of UAW members at Delphi. I am proud to stand with our Executive Board, especially Vice President Richard Shoemaker, our local union leadership and membership, and the five other international unions as we continue our efforts to work toward an equitable solution.

Over the years, jobs in the auto industry have enabled millions of hard-working men and women to move into the middle class and give their children not just more things, but more opportunities.

It is safe to say that many people in this room are where they’re at today because their parents or grandparents were members of our union.

There are some who say those days are over – that the very idea of decent wages, health care and retirement security for workers has been rendered obsolete by the harsh realities of globalization.

They argue that the only way to keep manufacturing jobs in the United States is to slash the wages of American workers to near poverty level.

In other words, take the low road. The UAW rejects that strategy because no matter how low you go, some other country will go lower – not only in wages but in safety conditions, human rights and environmental standards.

Harley Shaiken of the University of California at Berkeley tells of meeting two young women who worked at an automotive parts plant.

Their plant was relatively new with up-to-date technology and equipment. Productivity and quality were high. Labor-management relations were good.

One morning the workers were brought together and were told they had priced themselves out of the market, and their jobs were moving to China. This plant was in Tijuana and these workers were making $1 an hour.

As Professor Shaiken noted, globalization is creating a new reality for workers: instead of high productivity prosperity, the race to the bottom is creating high productivity poverty.

The question becomes: Is globalization an irresistible force of nature beyond our power to shape and control? It isn’t. It is the result of conscious choices by government and corporate policymakers around the world. And, in our view, U.S. policymakers have made a number of wrong choices.


A third area where we urgently need new national policies is energy and the environment.

Although the vast majority of Americans agree that as a nation we need to do more to reduce our dependence on oil for both national security and environmental reasons, the public debate on this critical issue has generated more heat than light.

We’ve got to address this issue and soon because global demand for oil is growing rapidly as China, India and other developing countries increase their consumption. According to the International Energy Agency, global demand for oil – now about 85 million barrels a day – will increase by more than 50 percent to 130 million barrels day between now and 2030 if nothing is done. As some U.S. senators have pointed out, the United States dependence on oil means dependence on foreign oil, because U.S. oil reserves are less than one percent of the world’s oil reserves.

We need to reduce our consumption of oil and that obviously poses a tremendous challenge for the auto industry.

It also presents a tremendous opportunity to develop bold new national policies that promote greater energy independence, improve our environment and create tens of thousands of good jobs in the auto industry.

This will make it possible for all automakers and automotive parts suppliers to move forward aggressively with investment in the domestic production of alternative fuel and advanced technology vehicles.

Is this a political non-starter? Well, several members of Congress – Republicans and Democrats; conservatives, moderates and progressives – are already working on legislation aimed at these goals.

A bipartisan group of 10 senators has introduced the "Vehicle and Fuel Choices for American Security Act" and Senator Obama and Representative Inslee have introduced the "Health Care for Hybrid Act."

While, the UAW doesn’t endorse all the specifics in these bills; we do wholeheartedly support the central thrust of these proposals: that the government can and should promote greater energy independence by providing incentives for auto companies to manufacture alternative fuel and advanced technology vehicles and components in the United States.

We are not advocating a "bail out for Detroit’s Big Three." We firmly believe that any incentives must be designed to establish a truly level playing field among all the automakers and automotive parts suppliers. We believe that, in the near term, the most important thing the federal government can do to reduce our nation’s dependence on foreign oil would be to aggressively promote the production, sale and use of alternative fuel vehicles.

Several automakers are already producing vehicles that can run on a blend of 85 percent ethanol, 15 percent gas. This technology is relatively inexpensive – about $150 per vehicle.

The problem is that production and sales of alternative fuel vehicles represent only a small fraction of the market. And the actual use of alternative fuels has been hampered by the bottlenecks in processing and, more importantly, the lack of a distribution network.

The following are some possible ideas for consideration:

1. Mandating that a certain percentage of all vehicles sold in the U.S. be flex-fuel capable by a specified date. Indeed, there’s no reason why automakers can’t make 100 percent of their vehicles flex-fuel capable within a reasonable timeframe.

2. Providing incentives to encourage the creation of more processing plants to increase the supply of alternative fuels.

3. Increasing and extending the tax credit that was included in the 2005 Energy Bill to encourage the conversion of existing filling stations so they have the capability to distribute alternative fuels.

As we know, Brazil has been successful with a similar strategy that requires all vehicles sold there to run on a blend of sugar cane, alcohol and gas, and automakers have had no problem meeting Brazil’s requirements.

The UAW also believes that the federal government should take steps to accelerate the introduction of energy-saving advanced technology vehicles such as hybrids, clean diesels and hydrogen fuel cells. The government already offers a tax credit, based on a complicated formula, to consumers who purchase these vehicles. That helps demand somewhat, but because the consumer tax credit applies regardless of where the vehicles and their key components are built, it has the effect of subsidizing overseas production at the expense of jobs in the U.S.

A study by the University of Michigan indicates automotive job loss will intensify by tens of thousands of U.S. jobs as gas-electric hybrids and clean diesels gain a larger share of the U.S. market because all the key components for these advanced technology vehicles are currently manufactured overseas.

We believe that accelerating the production and sales of hybrids, clean diesel and other advanced technology vehicles is in our national interest from the standpoint of greater energy independence and a cleaner environment.

Isn’t it also in our nation’s economic interest for advanced technology vehicles and components to be manufactured here, creating good jobs for American workers and generating increased tax revenues for federal, state and local governments?

The UAW believes the federal government should provide incentives to encourage the production of these advanced vehicles and their key components.


In addition, we are proposing that assistance provided to the auto companies – whether through the existing corporate tax rate reduction or the alternative of health care relief – be expressly tied to the company’s investment in the domestic production of flex-fuel and advanced technology vehicles and their key components. In closing, there are many issues that are important that I have not touched on tonight: issues like currency manipulation by China and Japan that has a dramatic effect on the U.S. auto industry; the fact that executive pay in the U.S. is 400 times greater than workers’ pay; and the fact that U.S. trade agreements include no provisions for labor rights or environmental protections.

Now, the UAW does not pretend that we have all the answers or that the proposals we’ve outlined tonight are perfect. But I strongly believe that they are at the very least a sound, sensible, fair and balanced starting point for bold new national policies to reduce our dangerous dependence on foreign oil, protect our environment, and create good manufacturing jobs in the United States.

By retooling auto assembly and parts plants, we can help America win the battle for energy independence and a cleaner environment. And, in the process, we can keep experienced, skilled American workers working – and create the auto jobs of the future.

The UAW believes that the American Dream is about the hopes and aspirations that we all share for future generations. It is a dream that we will not give up on – not for our members and not for the American people.

Thank you very much.


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