The Future Of The Big 2.5 Will Be Decided By The Unions

This is The Morning Shift, our one-stop daily roundup of all the auto news that's actually important — all in one place every weekday morning. Or, you could spend all day waiting for other sites to parse it out to you one story at a time. Isn't your time more important?

1st Gear: It's The Bad Years You Gotta Watch Out For

The Future Of The Big 2.5 Will Be Decided By The Unions

The legacy of the last round of UAW deals, mired in impending doom and obvious weakness, is a mixed one. On one hand, Detroit's automakers were able to shed some strangling legacy costs. On the other, we ended up with a two-tier system that left older workers paid extremely well and newer workers trapped with low wages — seemingly countering the entire point of a union (Solidarity, bro)

In the good years we've been having, with sales on the upswing and profits going with them, this isn't a fatal problem. But, as FCA CEO Sergio Marchionne pointed out yesterday, this isn't a great system:http://www.reuters.com/article/2014/0...

"The way you do this is you grandfather the Tier 1s," Marchionne said of the veteran workers. "You make them a dying class and you build a Tier 2 structure that sets the wage mechanism for the next generation.

"When you have a bumper year, you pay them as much as a Tier 1 would make if not more," he added of the lower-tier wage scale. "But if I'm in the toilet because the markets are down or GM is successful, or Ford, and then we go down in earnings, then I think at the end of the day you share the pain with the company."

So both the UAW and the automakers hate the two-tier system. So what's the outcome? Obviously, the UAW would love everyone paid at the Tier 1 wages, but that ain't happening, so we'll see how they blend the two wages while also making them more profit-sensitive.

If the unions and the automakers can work out a positive deal it could be great for both sides as, ideally, the automakers would be shielded from collapse if/when the market turns, and workers would share in the profits when the market is healthy.

2nd Gear: UAW Helping Out Detroit, Maybe?

The Future Of The Big 2.5 Will Be Decided By The Unions

We could argue, forever, about who deserves the most responsibility for Detroit's bankruptcy, but it's easier to just say "everyone fucked up" and move on to fixing the problem.http://www.freep.com/article/201405...

Specifically, federal mediators are working on a "grand bargain" that will simultaneously protect some of the city's fine arts holdings while also reducing (but not obviating) the negative impacts on current and former city workers.

How they're doing this without contributing their own funds is, uh, questionable, but here's the report:

The UAW — the second labor organization this week to agree to contribute to the grand bargain — will not be contributing any of its own funds, mediators said. The union "will help raise material contributions toward the health care costs for Detroit's retirees," mediators said in a statement. Mediators did not provide any further details about the contributions.

I don't know what that means.

The UAW is in a bit of a spot as they spent a ton of money in Tennessee that got them nowhere while, simultaneously, asking for more money in dues from its members.

3rd Gear: The U.S. Treasury Team Had No Idea About Switch Flaw

The Future Of The Big 2.5 Will Be Decided By The Unions

When the United States was in the process of bailing out GM, you'd assume they'd have asked if there were any massive safety defects that could cost people their lives and cost the company millions. Well, if they'd have asked they probably wouldn't have gotten an answer anyways.http://www.businessweek.com/news/2014-05-2...

"We didn't know about anything like this," Wilson, chief executive officer of restructuring adviser Maeva Group LLC, said at a Brookings Institution panel on the auto bailouts yesterday in Washington. "It seems to have been stuck in the mid-level engineering department. These are folks we never even met."
"Given how hard it was to get information out of the company at the time, even if we had asked a point-blank question, I doubt we would have gotten a straight answer," said Wilson.

Hah, awesome!

4th Gear: Speaking Of That GM Culture

The Future Of The Big 2.5 Will Be Decided By The Unions

David Shepardson takes the same information and adds a bit more on that GM culture that was so freaking mixed up at the time (and is now suddenly, magically better).http://www.detroitnews.com/article/201405...

Wilson said the issue "sadly is emblematic of the cultural problems" of GM. "They would do anything to save a penny, including some really bad decisions, both economically and morally. That was a part of the culture that was driven by a company that was living on the brink of disaster for many years prior to 2009."

And.

Wilson said the corporate culture has improved dramatically since then. Wilson called the ignition switch failure "inexcusable." He said GM's "siloed" culture in which departments didn't talk to one another for decades still needs to be fixed. "The company still has a long way to go."

So things are looking up!

5th Gear: Barra Cometh Back To Capitol Hill

The Future Of The Big 2.5 Will Be Decided By The Unions

Lucky for GM CEO Mary Barra, there's no more SNL this season so no one will be able to lampoon her (well, just Colbert, Stewart, Oliver…) performance at Capitol Hill yesterday but… no one seemed to notice it anyways.http://online.wsj.com/news/articles/...

Ms. Barra sought to assure legislators Mr. Valukas's report would allow her to be more forthcoming with answers to their questions than she was in early April, when she several times declined to answer questions, citing the continuing inquiry.

Senator Claire McCaskill mentioned she was going to bring back Barra for another round of TV, because it worked out pretty well for her last time.

Reverse: Paul Newman, What A Man

On this day in 1969, the legendary actor, philanthropist and automobile enthusiast Paul Newman makes his onscreen racing debut in the action-drama film "Winning."

Three years after making the film, Newman launched a racing career of his own, driving a Lotus Elan in his first Sports Car Club of America (SCCA) race in 1972. In the mid-1970s, he joined a racing team, and they finished in fifth place in the 24 Hours of Daytona in 1977. Newman's personal best finish was second place in the 24 Hours of Le Mans in 1979; he drove a Porsche 935. In 1980, Newman talked to Sports Illustrated about his entry into racing after "Winning": "I found I had enjoyed the precision of it, of controlling those cars... I could see it would be a gas to do something like that really well."

Neutral: How Should The UAW And The Big 2.5 Structure Their Deal?

Also, who has the upper hand this time?

Photo Credit: AP Images