UAW Contract Paves Way For New Cars, Trucks

By Michelle Krebs September 28, 2011

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The United Auto Workers' (UAW) new contract with General Motors Co., ratified Wednesday, and ones being negotiated between the union with Ford Motor Co. and the Chrysler Group LLC will be wins for the consumer in the form of new vehicle models built in the home market. Already, the new four-year contract that the union negotiated with GM and won approval by a wide margin of the rank-and-file makes it possible for a new line of cars and new line of trucks to be built in the United States. Ford and Chrysler undoubtedly will announce commitments for new models at their U.S. plants as they negotiate a new national agreement with the UAW.

In detailing the tentative GM contract last week, UAW officials said the automaker had committed to building an unspecified compact vehicle at an unspecified plant. On Wednesday, after the new pact was approved, GM confirmed the “unspecified plant” is its now-shuttered facility in Spring Hill, Tenn., once a Saturn-only operation. GM still did not say specifically what models would be built there but said the plant would operate under an innovative local contract that will allow for production of a variety of vehicles and architecture. The plant and workforce will be flexible enough to quickly change from one vehicle to another based on market demand.

Plant Capacity
Experts like Kristen Dziczek, a labor analyst with the Center for Automotive Research (CAR) in Ann Arbor, Mich., said the Spring Hill plant will produce vehicles that use the ND2XX (second-generation Delta) platform, the architecture used for the Opel Astra compact car and its variants. The Astra nameplate, once imported from Germany and sold as a Saturn, is a highly likely candidate for the plant with the performance variant Astra GTC destined to be sold as a new Buick. The Astra’s underpinnings also go under the Chevrolet Volt (that could require added production if sales ever take off) and the Chevrolet Cruze (both of which could use more U.S. capacity if GM decides to sell a hatchback body style); the Chevrolet Orlando that GM revoked from U.S. product plans but goes on sale this fall in neighboring Canada; and the Chevrolet Captiva and Antera crossovers that are sold overseas.

The tentative contract also clears the way for GM to produce a version of its midsize Chevrolet Colorado truck, at its Wentzville, Mo., plant. The plant currently is on a single shift assembling GM’s full-size vans, the Chevrolet Express and the GMC Savana. The Shreveport, La., plant that makes the current Chevrolet Colorado and GMC Canyon still is scheduled to be closed in 2012, but under the new GM-UAW contract, GM has committed to a new midsize truck program in Missouri, union officials confirmed. That truck will be based on a newly developed model now being built in Thailand and being launched in overseas markets.

Could Ford be following the same trek as GM? All the while that GM was denying plans for a smaller truck in the U.S., it was touting the new overseas replacement for the Colorado, most recently displaying it at the recent Frankfurt auto show (top) and releasing a stream of photos of the vehicle at auto shows and on engineering development drives. Ford, likewise, vehemently has denied that it would replace the outgoing Ford Ranger pickup truck, now built at the aged Twin Cities plant in Minnesota that is scheduled for closure. This week Ford launched a new Ranger pickup (below) in Melburne, Australia, one also mainly designed for overseas markets. A Ford spokesman told AutoObserver on Wednesday that “the global Ranger works best in markets outside of North America” where Ford does not sell the F-Series. In North America, Ford is investing in and expanding its F-Series line-up.

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Like GM’s contract with the UAW that did not keep the Shreveport, La., truck assembly plant open, a new model is unlikely to save the Twin Cities plant that now makes the current Ranger. Built in 1925, the plant has the disadvantage of being far from headquarters and the heart of the parts supply base. The plant received one stay of execution when Ford decided to continue producing the current Ranger for a bit longer, and CAR’s Dziczek said Ford’s contract with the UAW could include new language on “standby status,” allowing plants to be mothballed until a new use can be found, as GM did with the Spring Hill plant. However, new models will go into other underutilized Ford plants. Prime candidates are those in either Flat Rock, Mich., or Avon Lake, Ohio.

Close To Home
In providing her analysis last week of the GM-UAW contract to media members of the Automotive Press Association, Dziczek said the two Ford plants will win new products from the new contract. The Avon Lake, Ohio, plant, located less than three hours from Detroit, currently is underutilized assembling the full-size Ford E-Series van. The future of the Auto Alliance International (AAI) plant in Flat Rock, Mich., a 50-50 joint venture between Ford and Mazda, has been in limbo since Mazda announced that it would discontinue production of its Mazda6 midsize sedan in the United States and built its successor in Hofu, Japan. Ford currently builds the Mustang at Flat Rock, which having been constructed in 1987 makes it young by assembly-plant standards

Word leaking out from Ford-UAW talks hint that the Ford Fusion (now built in Mexico) may be built in the United States under the new contract. Already familiar with assembling a midsize sedan, Flat Rock is a prime candidate. “I don’t think that plant is in danger of closing,” insisted Dziczek. “It’s a good plant. It is close to Ford headquarters, and plants getting the newer technology vehicles are going into plants close to headquarters. So it has that advantage.”

At Chrysler, two plants will be awarded new vehicles as a result of a contract expected to be completed in the coming weeks. They are plants in Toledo, Ohio, and Belevidere, Ill. At the moment, the Toledo Supplier Park, which assembles the Jeep Wrangler, operates under a labor agreement separate from the national one. It came about as Chrysler experimented with having suppliers on the plant’s campus (the Jeep Liberty and Dodge Nitro are built at another nearby plant in Toledo). Dziczek predicts that the now under-utilized Toledo factory will be brought under the national agreement in these negotiations, giving the plant more flexibility and opportunity for new models. Could it be the Wrangler pickup truck? Chrysler CEO Sergio Marchionne has said one is planned for 2015 or so. The Belevidere plant is a crown jewel among Chrysler’s manufacturing facilities. It was one of the key lures of Fiat making its investment in Chrysler. The plant currently builds the Dodge Caliber, Jeep Patriot and Jeep Compass. The plant is expected to win Fiat-based models.

For the UAW, the new models represent more jobs (and more dues-paying members). The automakers are using added jobs as a bargaining chip for expanding entry-level pay under the momentous two-tier wage structure the UAW agreed to in 2007 to help the Detroit automakers reduce their overall costs. But car-buying consumers win as well with a wider array of vehicle choices.

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