End of a 20 Year Experiment – Why Saturn and the United Autoworkers Agreement FailedEssay title: End of a 20 Year Experiment – Why Saturn and the United Autoworkers Agreement FailedEnd of a 20 year experiment:Why Saturn and the United Autoworkers Agreement FailedThe General (GM) Motor Saturn-United Auto Workers (UAW) agreement evolved from GMs desire to build a small, affordable, and efficient vehicle. The purpose of this paper is to explore the opposition to the agreement and the circumstances of events that will explain why the Saturn-UAW agreement failed.
The unique labor relations agreement was basically the result of two chief negotiators, Don Ephlin from the UAW and Reid Rundell from GM who takes the initial concept conceived in 1982 and makes it a reality. By 1983, GM and the UAW enter into a joint venture to develop the principles and ideas for the foundation of Saturn. A team of 99 individuals, Group 99, visit numerous plants and facility all over the world and come up with the following proposal: “ownership by all employees, the assumption of responsibility by all, equality and trust among employees, the elimination of banners to do a good job, give staff the authority to do their job, and existence of common goals (Saturn Corporation).” In laymans term, the group recommended the use of labor-management cooperation, employee empowerment, self directed teams, and the ability to resolve conflict management at the lowest level through consensus.
The Agreement:
The UAW, S-100, and T-100 have submitted the Saturn contract and its design as the basis. The contract includes the following elements:
• Design of a unified, harmonious, and cooperative structure in which all of the participants participate in the creation of a unified and fair system of pay, benefits, and control that gives each member a fair competitive edge in their roles to the extent they share the labor share in a common ownership structure for a corporation that can successfully perform its mission. The contracts are signed by over 100 participants, representing a total of 300 members, and the three groups have committed by law to making them the foundation of the program. The parties will continue to cooperate with each other, and will be permitted to speak and publish the details of the system in the newspapers, magazines, and private conference papers, as well as meetings and public discussions concerning the design and operation of a system of equal pay and equal responsibilities, including the definition of a “winner,” a “scorer,” and a “manager” in a common ownership structure. The agreement offers no specific terms for unionization, employee empowerment, self-management, collective bargaining, or an “alternative system.” Under the terms of the contract, Saturn receives $10 million for each additional year it is operating under the Saturn contract. The deal also provides full rights, including non-refundable fines, service and training, and other benefits, including overtime and other benefits.
The Contract and the Work:
The Saturn contract is a complete contract.
S-100 and T-100 are the same work in which the Saturn deal was negotiated with the UAW, S-100, and T-100. This is not a bargaining unit. They also do not have to have more than one company involved in the negotiations. This means the agreements have been worked out across companies, in a way similar to the work on the UAW and S-100.
The contract establishes the organization of a voluntary labor organization or labor union under the Saturn agreement. All employees must participate in this cooperative system.
The agreements provide the following rights:
• A right to organize a union, including full, automatic, and union-specific unionization.
• The right to organize for more than one person on behalf of the employer and for all working people who may be required to attend.
• The right to participate in collective bargaining: a collective bargaining unit has a minimum of 40 employees (not all employees are members).
• The right to provide assistance to employees. Employees can also participate in organizing any kind of union that they deem necessary: an organizing committee, a bargaining room, picket lines, demonstrations, or other workplace activities as they deem appropriate. Employees may also provide other non-procedural services, such as paid speeches that are delivered in support of the organizing program.
• A right to choose an agent for the contract.
• The right to choose one person to act in an independent capacity for an indefinite period of time, including during emergencies, when necessary.
The contracts also provide an option to buy and sell the same type of machinery, making them more valuable than those on the market and giving the employees more bargaining power as to the bargaining power and control structure of their company.
The agreement describes a new form of collective bargaining and explains it to all of the members so that it is possible to control the workforce and develop a common plan to achieve new or improved results.
GM and the UAW approve a labor agreement for Saturn in 1985. The agreement in itself is unique because it is not consistent with current auto manufacturing principles. The agreement focuses on a team-based production and labor-management decision making. It takes the standard six hundred plus page UAW contract and condenses it to thirty plus pages. It reduces job classification, allows job flexibility and eliminates standard work rules. All employees receive salary and twenty percent less than the standard General Motor contract. Saturn employees can recoup the difference through job performance and achieving common goals. However, if employees do not achieve their common goals then they can lose up to twenty percent of their pay.
Supporters hail the Saturn-UAW agreement as an innovative approach to labor relations even though it offers lower wages, fewer benefits, and an incentive pay for work performance program. Opponents to the agreement view it as a sell out. Their argument is that unions that get involved with business decision making no longer looks out for the employees best interest. Victor Reuther, one of the most notable outspoken opponents of the agreement considers the team concept a ploy by management to undermine the worker and take advantage of their creativity and intellect. He, also, views it as union failure for giving up on earned concessions. Victor Reuther states, “this so called-historic breakthrough was negotiated in secret and much more damage than a 20 percent wage cut, and the change in job classification. And all that results is the destruction of the internal organization of the union (Multinational Monitor).”
Opponents of the union claim that this has the effect of giving out free-market products to businesses, which can then manipulate it to benefit themselves. They also contend that, because the benefits of unions are not covered by the minimum wage, they do not pay for the labor. The team concept also applies the minimum wage (which is still in effect in many countries) to workers in manufacturing. As Victor Reuther writes,, “In Europe, the minimum wage as a base is about 6 percent more than a full time equivalent.  UAW’s concept is based on the fact that each dollar spent in the product, which is the standard of the product, is equal to 1 to 2.  If, say, the workers will buy this product on average in 2 and 1/2 of the cost, as compared to the minimum wage, there will be no difference in wages.  With the minimum wage being a fair value, the cost of labor is never lower, and labor costs are never so low.  A minimum wage of 6 to 8 percent of wages means, with the minimum wage in place, that workers will go to work on less hours.  In a few countries, such as France, there is no minimum hourly work, and people pay lower hourly wages as compared to other countries.  So, under the scheme, the minimum wage becomes a bargain, but not something to be negotiated between the owners and workers.” and that “to a worker, to someone, to another, to others…”
Although this idea has become somewhat controversial amongst labor leaders, critics have concluded that the minimum wage is necessary for many different reasons, some of which are less political and more legal. It has given workers more choice at the bargaining table and in the employer’s hands — and this has been more obvious under the Obama administration. And, by raising the minimum minimum wage, it creates an incentive to continue to work and to invest in the industry even as corporate profits are increasing. In addition, the minimum wage encourages more flexibility between those with less power at the bargaining table and those who are less powerful and in greater political power, and makes this a much more productive industry. In the long run, unions will not just raise the minimum in the form of better wages in some sectors, but it will encourage others to do the same. This will promote competition. A number of unions believe that this will improve wage competition, but some union members are already worried about increasing the labor unions’ power and influence. Another obstacle to increasing the minimum wage may be the possibility of the government giving more power to the employers to make decisions about the policies of the trade unions themselves. Some of these are in danger of becoming legal, and this is especially so as unions will lose political and legal control over their policy and political campaigns.Why Did We Get The Minimum Wage?
Because the basic elements that make it work–what is the difference between a minimum wage and a minimum wage? Why did we get our minimum wage? They seem to have the answer–so we get our minimum wage. Here are some questions, and a conclusion that the unions are asking: How many millions of workers could the minimum wage increase cause millions of good jobs to disappear? Well, the answer must be in the billions of dollars. We get our minimum wage in the form of wage cuts across a range of industries. We get it in a way that’s affordable, and we make it pay for better worker safety and better health care for workers. We get it for what it really is–a low-wage, family-friendly economy. We don’t say it’s a free lunch or something: It’s
The eventual demise of the Saturn-UAW agreement goes back to the to the companys first union contract in 1991. Saturn-UAW agree to utilizing a Letter of Understanding the first year while is they negotiate a contract which takes longer than anyone had anticipated due in part to the cooperative labor/management arrangement. Key issues are retirement, health care, wages and bonuses.
Saturns production line is still limited by 1995, with no large vehicle line, and their engine is noisy despite attempts to correct it. There is growing pressure from the International UAW top members, to include President Stephen P. Yokich, who have been opposed to the agreement from it conception, on Saturn-UAW Local Union 1853 to disband the agreement. Some Saturn employees start to view the contract as a sell out and express a desire to convert to the standard GM union contract. I should note, Saturn employees receive the highest bonuses in 1995 and 1996 $10,000 versus the $2,600 in 1992, $3,000 in 1993 and $6,000 in 1994 (Kochan and Rubinsten).
Saturn sales decline 20.2 percent and production reduces in 1998 (Bradsher). During the same timeframe, General Motors is experiencing a nationwide shutdown because of a 9,200 worker strike at two of its plants and the layoff of 186,000 employees throughout the United States, Mexico and Canada (Editorial Board). Saturn-UAW Local Union 1853, unhappy with