Buffalo News (New York), January 28, 2007, Sunday

Copyright 2007 The Buffalo News

All Rights Reserved

Buffalo News (New York)

January 28, 2007 Sunday

FINAL EDITION

SECTION: PROSPECTUS; Pg. P18

LENGTH: 831 words

HEADLINE: Unions face another trying year

BYLINE: By David Robinson - NEWS BUSINESS REPORTER

BODY:

Big Labor is feeling the heat in the Buffalo Niagara region.

With intense global competition already squeezing the labor movement's traditional base of members among the region's manufacturers, unions now are grappling with the loss of thousands of members as the auto industry slashes jobs.

Growing global competition, a surge in outsourcing and the long-term decline in U.S. union membership have given management the upper hand in negotiations at a time when most unionized companies face nonunion competition at home, as well as from imports from lowwage nations.

As a result, unions generally have been willing to accept a shrinking factory job base in return for lucrative buyouts and early retirement incentives that helped cushion the blow for departing workers. The strategy lets unions avoid a possibly devastating confrontation with struggling companies at the expense of a shrinking membership base.

In all, nearly 3,000 local auto workers accepted buyouts and early retirement incentives last year. At bankrupt auto parts maker Delphi Corp., for i n - stance, 1,333 workers accepted buyouts and were replaced by 900 temporary workers. Those temporary workers were made permanent late last year, which pleased the United Auto Workers union, but those employees are earning only about half of what existing workers earn in comparable jobs.

And while strikes have become increasingly rare as companies have gained leverage to keep operating with replacement workers, a pair of highprofile work stoppages last year showed that walking out still can be a risky move.

About 1,100 workers at the Goodyear-Dunlop plant in the Town of Tonawanda spent more than three months walking a picket line after going on strike Oct. 5 before agreeing to a contract in late December. The strike cost Goodyear between $30 million and $35 million a week, but it also spared the company the burden of paying for retiree benefits in the future after funding a $1 billion health care fund for those former workers.

And the 38 workers who walked off their jobs at Buffalo Wire Works in November 2005 to protest proposed cuts in pay, benefits and vacation time, ended their nine-month strike in August without regaining their jobs.

Still, unions carry a significant amount of clout in the Buffalo Niagara region, with about 24 percent of all workers belonging to a union, according to the U.S. Bureau of Labor Statistics. Union membership here is almost double the 12.5 percent national average.

Union membership nationally is concentrated among the public sector, with 36 percent of all government workers belonging to unions, compared with just 7.8 percent of all private sector workers in the United States. Union membership to day is 38 percent lower than it was in 1983.

"Unions are almost totally irrelevant economically in the 21st century workplace of individualization and technology," said Heritage Foundation researchers Tim Kane and James Sherk in a study last year. "The slow demise of General Motors is visibly intertwined with the inefficient labor contracts that the United Auto Workers secured in decades past," including a jobs bank that allows laidoff workers to collect up to 95 percent of their pay.

Some of the biggest challenges this year for labor will continue to be centered at the local auto plants.

While automakers have been cutting jobs, productivity improvements, especially from the big investments that have been made at the local GM and Ford plants, have kept output from dropping in lock step.

That rising productivity is allowing manufacturers to get by with fewer workers. "We're facing it big time with the restructuring in the auto industry," said John Austin, a Brookings Institution senior fellow and the author of a study that outlines a regional strategy for reviving the struggling Great Lakes economy.

Even a plant like GM's Tonawanda Engine Plant, which ranks high for its productivity, has slashed its work force to just over 1,900 people, just half of what it was five years ago. Even with the new V-8 engine line it will be getting and a recent revamping of two of the plant's other main engine lines, the plant's work force still is expected to shrink in the coming years.

"You don't need as many manufacturing workers as you did in the past," said Gary Keith, the chief economist at M&T Bank Corp. in Buffalo.

To their credit, greater cooperation and worker involvement on the plant floor has helped some local auto plants increase productivity, local labor officials said.

At Ford, for instance, hourly workers are involved in efforts to improve quality at the plant, said Charles Gangarossa, the president of UAW Local 897. "Ford is investing in Buffalo because we're doing the right things in this plant," he said.

At GM's Tonawanda Engine Plant, hourly workers have offered input on how to set up the assembly line for a new engine, said Arthur Wheaton, a labor expert at Cornell University's School of Industrial Relations in Buffalo.

e-mail: drobinson@buffnews.com

GRAPHIC: Bill Wippert/Buffalo News About 1,100 workers at the Goodyear-Dunlop plant in the Town of Tonawanda joined thousands of others across the nation in a three-month strike last year that finally settled with a compromise on provisions for retiree health care.