UAW-GM
NATIONAL
Educational
Outline
October 3 Through October 6, 1994
UAW-GM
NATIONAL AGREEMENT
(EFFECTIVE November 15, 1993)
SOURCING
Issued by
GENERAL MOTORS DEPARTMENT, UAW
STEPHEN P. YOKICH
VICE PRESIDENT AND DIRECTOR
|
|
WARNING: This document is presented in its original form,
minus blank pages. Consequently, page numbering as it appears in the table
of contents may not coincide with actual pages. Therfore, all page numbers
have been omitted.
|
|
VICE PRES;DENTS. CAROLYN FORREST .
ERNEST LOFTON . STAN MARSHALL . STEPHEN P YOKICH
Greetings:
This Educational Outline represents a continuation of a
program of providing information with the objective of assisting the Local
Unions in applying the provisions of the National Agreement.
The Agreement on Sourcing covers a subject
dealt with on a formal contract basis for the first time in negotiations in
1982. Consequently, there is no body of umpire precedent to provide guidelines
in the implementation of the Sourcing Agreement.
In 1990 negotiations, we were successful in
making the sourcing provisions part of the main body of the National Agreement
rather than an attached Document. We also made it an arbitrable issue and
drastically modified the rights of management in regards to sourcing. These
changes allowed us to preserve and create thousands of UAW/GM jobs during the
life of the 1990 Agreement.
In 1993 bargaining, we made several changes
to the language placing tighter restrictions on management and further expanding
our rights and our role in sourcing issues. Appendix
L and the new changes are explained in this Educational Outline.
The information, interpretations and
recommendations in this Educational Outline represent the best opinions of the
International Union's General Motors Department as to what the agreement means
and how it can best be applied to enhance the job security of the workers we
are privileged to represent.
Fraternally,
Stephen
P. Yokich
Vice
President and Director
UAW
General Motors Department
Opeiu494
1993
GM/UAW NATIONAL AGREEMENT
APPENDIX L
SOURCING
During the 1993 negotiations, the Union raised numerous
concerns about the Corporation's sourcing actions and their impact on
employment opportunities. To that end, the Corporation will work with and assist the Union
at both the Local and International levels to preserve jobs, replace jobs which
may be lost by outsourcing action, and to create jobs for Protected
employees and laid off employees. It is an objective of the Corporation to
grow the business and to continue to rely upon its employees and facilities as
the source of its products. During the life of the current Agreement, the
Corporation will advise, in writing,
the Union members of the Sourcing Committee of the NAO Labor
Relations Policy Board meeting results relative to sourcing recommendations,
including the number of potential jobs affected. Additionally, data regarding incoming and
outgoing work will be given to the International Union in a quarterly
meeting. (The Corporation will provide inquiry access to the International
Union through the use of a computer terminal.) In this manner, the parties
can judge the success of mutual efforts toward improved job security. The
Corporation agrees to incorporate the procedures and structure outlined
herein when making sourcing determinations during the current Agreement.
The rationale for sourcing actions will consider the
criteria of quality, technology, cost, timing, statutory requirements, occupational
and related environmental health and safety issues, the impact on long‑term
job stability, the degree to which the Corporation's resources ran be allocated
to further capital expenditures, the overall financial stability of affected
facilities, and the impact on related facilities. Other factors considered
by the Corporation before a final sourcing decision is made will include the
effect on employment, and job and income security costs, on both a short and
long‑term basis. Such criteria shall give equal weight to the full impact
of a sourcing action on General Motors‑UAW represented employment levels
and the job and income security of General Motors‑UAW represented
employees. The National parties will jointly further develop the above
criteria
to be used to address sourcing issues. In developing this
criteria transfer pricing profits will not be considered in making sourcing
decisions. Only appropriate return on investment and burden will be considered.
Following the development of the sourcing criteria, the
National Sourcing‑ Committee may form Joint Task Forces to ensure full
implementation of such criteria throughout the Corporation and, on an as needed
basis, to address any specific sourcing areas of concern identified by the
Union. Pertinent criteria will be applied consistently in comparisons of
internal and external supply capability. The International Union and where appropriate the
local union will be provided full and timely access to all appropriate data,
including financial information, that is pertinent to evaluate product
competitiveness and contemplated sourcing.
If the Local Committee cannot resolve a sourcing issue, it
may file a grievance at the second step of the grievance procedure.
In addition, the following specific commitments have been
made to address sourcing -related job security concerns of UAW members:
1.
Insourcing
The Local JOBS Committee will discuss the practicality of
insourcing, in whole or in part, work previously outsourced or new work which
the Committee identifies as that which might be performed competitively within
the location based on the criteria outlined above. To assist in this process,
the International Union will be furnished a complete list of work similar to
that currently performed at the local that has been (1) outsourced from that
location or (2) is currently performed by non‑GM/UAW suppliers for
General Motors. These lists will be updated and expanded to include supplier
expiration dates and will be furnished within 90 days following the
effective date of the Agreement. Thereafter, the parties will initiate efforts
to insource particular work consistent with the aforementioned criteria to
create prospects for growth and to provide jobs for Protected employees and
employees on layoff.
If it is established that certain work can be performed
competitively judged by the above criteria, management will adopt the
Committee's proposal and barring unique or unforeseen circumstances, bring the
work in‑house. The Union shall thereafter obtain any necessary approval
or ratification within 30 days of the decision to bring the work in‑house.
2. Outsourcing
Outsourcing as used herein means the Corporation's sourcing
of work from GM/UAW locations, including work connected with current, new or
redesigned vehicles, fabricated parts, powertrain, and component products.
When a request for a quote is initiated, the
International Union and the local Union at the affected location(s) will be
advised in writing by the Corporation. At such time as the quotes have been
received and an outsourcing decision is contemplated the International
Union and the local union will be given 150 days' written notice, or
longer advance notice, when possible. The notice will include the reason for
the outsourcing, a description of the work involved, the number of jobs
affected on both a short‑term and long‑term basis, if known, at
both the affected facility and any other General Motors‑UAW represented
facility, the identification of the sourcing authority, and all financial
information. Proposals to keep the work in‑house will be made by the
Union within 90 days of the receipt of the written notice.
a. When such an outsourcing
decision is contemplated and within the control of the Local Management, the
written notice will be given to the Chairperson of the Shop Committee. A
copy of such notice will be sent to the Director of the General Motors
Department of the International Union and the Vice President, Personnel,
North American Operations, for the Corporation.
b. When such a contemplated
outsourcing decision is initiated by any other sourcing authority of the
Corporation at a level external to the affected location(s), that sourcing
authority will provide sufficient advance written notice to allow the designated
management representative at the impacted location to comply with the
notification procedure. The written notice will be given to the Chairperson of
the Local Union Shop Committee. Also, a copy of such notice will be given
to the Director of the General Motors Department of the International Union and
to the Vice President, Personnel, North American Operations.
Additionally, International Union and local union input will
be sought by the corporation and its Groups and Divisions as early as possible
in the outsourcing decision‑making process. The intent of the evaluation
period and Union input being sought as early as possible is to allow for more
thorough discussion
and to permit the parties to better assess the impact of
outsourcing on the long term job stability of employees and the financial
viability of given Corporate locations.
c. The sourcing authority will
not enter into a contractual relationship with a non‑GM-UAW supplier
until such time as the designated management representative of the impacted
location provides written verification that the above notification procedure
and discussion by the JOBS Committee, has taken place.
If it is established that the work can be performed competitively,
judged by the criteria listed earlier in this Appendix, Management will,
barring unique and unforeseen circumstances, keep the work in‑house. The
Union shall thereafter obtain any necessary approvals or ratification within 30
days of the decision to keep the work in‑house.
d. The Corporation agrees to a
full disclosure to the International Union of the procedures utilized in
sourcing activities.
3. Future Product Sourcing
International Union input to early sourcing decisions will
be sought by the Corporation's Groups and Divisions. In that regard, the International Union will be
notified in writing by
the appropriate Group or Division upon "Group Concept
Initiation Approval" to proceed with a new or redesigned vehicle,
subsystem or component part.
Following the notification, the members of the National
Committee shall have responsibility for overseeing the interface with
individual vehicle platforms and the powertrain division. The union
representative for each car and truck division, powertrain, and the ACG will
work with members of their respective organizations so as to gain
information and knowledge and to provide input into sourcing discussions and
sourcing determinations for those organizations.
When there is a need for a Union platform representative to
interface with a component division relative to sourcing discussions at their
platform, the contact should be made through the divisional industrial
relations contact for that component division.
The Corporation agrees not to use the results of such
discussions to obtain more attractive contract terms from outside supplier's in
lieu of keeping the work in‑house.
If requested, higher level meetings or discussions on these
matters will be scheduled.
The implementation of this process should provide the
parties with the mechanism to take advantage of every opportunity to use
internal resources and to create jobs for Protected employees.
The
commitments expressed in this Appendix are intended to contribute significantly
to our cooperatively working together to provide General Motor's employees in
the United States improved job security by growing the business.
POWERS
OF THE UMPIRE
(46)(1)
In making a decision on a case alleging a violation of Paragraphs (183a),
(183b),
(183c),
(183e),
Appendix
F‑1, or Appendix
L, the Umpire can only provide a remedy where the Umpire finds that
(1) a violation of the express commitments set forth in the above paragraphs, Appendix
F‑1, or Appendix L has been established, (2) the established
violation resulted from the exercise of improper judgment by Management, (3) an
E.I.T.S. or Journeyman/woman employee, who customarily would perform the
work in question has been laid off or was allowed to remain on layoff as a
direct and immediate result of work being subcontracted, or (4) in the case
of Appendix
L, an employee has been laid off or was allowed to remain on layoff as
a result of work being outsourced, or not being brought in‑house. The
Umpire's remedy shall be limited to back wages for the affected
employees as defined in (3) and (4) of this paragraph, and in the
case of Appendix
L, the Umpire may rule that the affected employees will be
recalled and/or placed on regular productive work.
HISTORY
I.
Prior to the
March 21, 1982 National Agreement there were no provisions in the contract that
restricted the Company's right to determine the source of the components used
in the building of its products.
A. Its right to determine the source of vehicle
components flowed from Paragraph
(8).
II.
When the
1979 National Agreement was negotiated, General Motors built ‑ in the U.S. and Canada ‑
approximately 95% of the components used in the vehicles it produced and
assembled in these two countries.
A. While there had previously been sourcing of
parts to companies outside GM, both domestic and foreign, there also was
insourcing of components to GM plants in the U.S. and Canada.
III.
Beginning in
early 1981 there were increased reports of loss of jobs from GM plants due to
the outsourcing of work, while at the same time there were only limited reports
of jobs being returned to GM plants.
A. Investigation over a period of time
disclosed that jobs were being
sent to both domestic and foreign manufacturers ‑ many
of which
were non‑union.
(1) The Corporation contended
that some components
could be acquired cheaper by outsourcing the work
rather than by producing it in‑house.
(2) The International Union
determined that the problem
had to be attacked through negotiations.
1982
NATIONAL AGREEMENT
I. The March 21, 1982 National Agreement
contained provisions covering both outsourcing and insourcing of work. (Document
93)
A. The Corporation committed to a "shared
desire" with the Union to
preserve jobs, reestablish the need for lost jobs and to
create new jobs. The Corporation further committed to an "earnest effort
to maintain employment opportunities".
B. Insourcing Provisions
(1) The Corporation agreed to discuss
the feasibility of insourcing components outsourced during the term of the 1979
National Agreement.
(2) The burden of identifying
these opportunities rested with the Union.
(3) Management retained the
right to determine whether or not
they would accept the Union's proposal(s) to insource work.
C. Outsourcing Provisions
(1) The Union now received at
least 60 day advance written notice of contemplated major outsourcing.
(2) Major outsourcing was
defined as actions resulting in the
permanent layoff of more than 10% of a plant's population or
100 employees, whichever is less.
(3) The movement of work to GM
plants in Canada was not
considered outsourcing.
(4) The Union had 30 days from
the notification to propose changes to reduce labor costs and retain the work.
(5) Management retained the
right to determine whether or not
they would accept the Union's proposal(s) and retain the
work.
D. Initial Administration and implementation of
these provisions were the responsibility of the local union bargaining
committee.
1984
NATIONAL AGREEMENT
I. The September 21, 1984 National Agreement
contained revisions designed to increase the awareness of local union personnel
when sourcing decisions were being contemplated.
A. A JOB Opportunity Bank‑Security
Program was created to protect
eligible employees against layoff caused by a number of
factors
including outsourcing.
(1) The JOBS Program provided a
forum (the Local JOBS Committee) to regularly address mutual concerns
pertaining to sourcing decisions.
B. Insourcing Provisions
(1) The Corporation agreed to
discuss the practicality of insourcing
work outsourced since 1979. This was an expansion on the
language of the 1982 Agreement which utilized the term
"components".
(2) The identification of potential
insourcing opportunities became
the joint responsibility of the Local JOBS Committee.
(3) Management retained the
right to determine whether or not
they would accept the Committee's proposal(s) to insource
work.
C. Outsourcing Provisions
(1) The number of affected jobs
which required a 60 day
written notice was substantially changed to decisions
which affect 25 or more existing jobs.
(2) A detailed procedure for the
60 day written notice was
negotiated that included a clear outline of management's
procedural obligations.
(3) Management retained the
right to determine whether or not
they would accept the Committee's proposal(s) and retain the
work.
D. The
Local JOBS Committee was empowered to discuss sourcing issues.
However, the initial responsibility for administration and
any necessary
implementation continued to reside with the local bargaining
committee.
E. In 1984 negotiations the Sourcing Letter was
renumbered as Document 89.
1987
NATIONAL AGREEMENT
I. The October 8, 1987 National Agreement
expanded the relationship between sourcing and the JOBS program and
substantially increased the involvement of the joint Local JOBS Committee in
discussions and decisions regarding sourcing.
A. The Corporation agreed to modify its
historical sourcing practices in
accordance with the goals and guidelines contained in the
Agreement.
B. Sourcing criteria appeared for the first time
in 1987, however, except for the requirement to give "equal weight"
to long term job security, there were no provisions to jointly define these
criteria.
C. The Agreement provided for an
"appeal" to the National parties in the event the Local Committee(s)
were unable to resolve a sourcing issue. The Corporation's position was that
the Union had no further recourse beyond this appeal procedure.
D. Insourcing Provisions
1. The language regarding work to be evaluated
for insourcing was
expanded to include new/replacement components and vehicles.
2. The restriction in the language on
management considering
proposals where labor costs could make a difference was
removed.
This was a recognition by the Corporation that the issue of
to competitiveness" is far broader than just labor
costs. (The same
changes are found in the outsourcing provisions.)
3. Management retained the right to determine
whether or not they
would accept the Committee's proposal(s) to insource work.
E. Outsourcing Provisions
1. The 1987 Agreement, for the first time,
considered work sourced
from UAW/GM locations to GM plants in Canada as
"outsourcing".
2. The 25 or more employee restriction on
management's obligation to
provide written notice was removed and the 60 day
requirement was
expanded to 90 days.
3. The 30 day provision for Union proposals to
retain the work was
expanded to 45 days.
4. The Corporation committed to full and timely
access, following the 90 day notice, to all appropriate data including
financial information to evaluate contemplated sourcing.
5. New language was introduced giving
recognition to the National
parties' responsibility to assist in finding replacement
work when the local parties were unsuccessful.
6. Management retained the right to determine
whether or not they
would accept the Committee's proposal(s) and retain the
work.
F. Future Product Sourcing
1. This issue was first
addressed in the 1987 Agreement.
2. The Corporation agreed to seek early
International Union input as alternate sources were being discussed in
connection with future product programs.
G. Unpublished Letter
1. The Corporation and the International Union
agreed to determine
which of the previously approved sourcing decisions (which
impacted 25 or more jobs) would be appropriate for restudy.
2. This letter stemmed from the parties renewed
commitment to create
and preserve jobs.
3. These studies were to be completed within
six months of the
effective date of the Agreement.
1990
NATIONAL AGREEMENT
I. The October 1, 1990 National Agreement
Sourcing language was drastically modified and was made part of the main body
of the Agreement (Appendix
L. The language of Paragraph
46 (1) was also modified to accommodate the specific arbitration details.
A. The Corporation expanded their commitments
to job security, agreeing to
work with the International and Local Unions to:
v
Preserve jobs
v
Replace jobs
lost by outsourcing actions
v
Create jobs for
Bank and laid off employees
v
Grow the
business
v
Continue to rely
upon UAW/GM employees and facilities as the source of the Corporation's
products
B. The Corporation agreed, for the first time,
to work with the International Union to jointly define the criteria to be used
in making sourcing decisions.
1. Transfer pricing profits were specifically
excluded in making sourcing decisions and only appropriate return on
investments and burden can be considered.
C. All appropriate data to evaluate product
competitiveness and contemplated sourcing must now be furnished to the
International Union.
D. Violations of management's sourcing
commitments and obligations contained in the Agreement are subject to the
grievance procedure and are arbitrable.
1. Grievances should be filed at the second
step of the grievance procedure.
E. Insourcing Provisions
1. The language was expanded to include work
previously outsourced, new work and work similar to in‑house work that is
currently being performed by non‑GM/UAW suppliers for General Motors.
2. The Corporation agreed to provide the
International Union with a list of work (defined in (1) above) within 90 days
of the effective date of the Agreement. This list was to be used to assist the
parties in the insourcing of work.
3. If the potential insourcing opportunity
could be performed
competitively, judged by the jointly developed
criteria,
management is obligated to adopt the Committee's proposal
and
bring the work in‑house.
v
Exceptions to
this requirement could only occur in "unique or unforeseen
circumstances".
v
This change
removed management's unilateral (Paragraph 8) right to determine whether or not
they would adopt the Committee's proposal(s).
4. The time limits for the Union obtaining
necessary approvals or
ratification was expanded to 30 days.
F. Outsourcing Provisions
1. The focus of these provisions was
substantially changed by
removing the following provisions: "........... to keep
the Union informed of outsourcing decisions".
v
Management's
contractual requirement is to notify the Union when they are CONTEMPLATING
outsourcing.
2. The definition of outsourcing was changed to
include not only current work, but new or redesigned vehicles, fabricated
parts, powertrain and component products.
3. The written notice requirement was expanded
to 120 days. The
notice requirements were changed to include all pertinent
information at the time the notice was issued.
4. The 45 day provision for Union proposals to
retain the work was
expanded to 60 days.
5. If the potential outsourcing could be
performed competitively, judged by the jointly developed criteria,
management is obligated to adopt the Committee's proposal and keep the work
in‑house.
v
Exceptions to
this requirement could only occur in "unique or unforeseen
circumstances".
v
This change
removed management's unilateral (Paragraph
8) rights to determine whether or not they would adopt the Committee's
proposal(s).
6. The time limits for the Union obtaining
necessary approvals or
ratification was expanded to 30 days.
G. Future Product Sourcing Provisions
1. This section is new to the Sourcing language
and provided greater
opportunity to place new product work into UAW/GM plants.
2. The Agreement required that the
International Union be notified in
writing at the point that "Group Concept
Initiation" approval is given by the Group or Division.
v
This notice is
required in all instances involving new or redesigned vehicles, subsystems or
component parts.
v
This notice gave
the Union opportunity to have input in future product sourcing discussions for
the purpose of advantaging every opportunity to use internal resources.
3. The language required that the Union and
Corporation develop one
generic process to implement these commitments.
v
The generic
process was to be in writing and be completed within 90 days of the effective
date of the Agreement.
v
The agreed upon
process was to be forwarded to the Director of the GM Department of the UAW and
the Vice President of Industrial Relations for the Corporation.
4. Priority consideration will be given to
design and processing systems since they have such a major impact on cost and
quality.
H. The last paragraph of Appendix
L was a re‑affirmation of the commitments
found in the first paragraph.
v
Job security
will be provided to UAW/GM employees by "growing the business".
1993
NATIONAL AGREEMENT
PURPOSE
I.
The purpose
of Appendix
L is to provide a procedure and structure for the Corporation and the Union
at all levels to be used when making sourcing determinations during the current
Agreement. The procedure and structure contained in the language are designed
specifically to protect UAW/GM employees job security through proper evaluation
and consideration of all factors involved in the sourcing of work before such
decisions are made.
A. Keeping the purpose of the Sourcing
Agreement in the forefront is vital when considering the propriety of any
sourcing action (insourcing, outsourcing or future product sourcing).
SCOPE OF
APPLICATION
I.
The
commitments, procedures, structure, etc. contained in Appendix
L apply to all sourcing actions and determinations regarding GM/UAW
facilities. (Insourcing, Outsourcing and Future Product Sourcing.)
A. This would include any sourcing action or
decision on work connected with current, new or redesigned vehicles,
subsystems, fabricated parts, powertrains and component products.
APPENDIX
L CHRONOLOGY
I.
Appendix
L has five (5) basic sections which address the contractual relationship
between the parties with regard to sourcing. These sections are listed below
in the order in which they appear in the Agreement. (Note: This Educational
Outline will cover these sections in the same order.)
v
The opening
paragraphs containing the Corporation's commitments, the criteria to be used in
making sourcing decisions and the reference to the proper processing of
grievances.
v
Insourcing
v
Outsourcing
v
Future Product
Sourcing
v
Closing
paragraph re‑affirming the commitments and the purpose of the Appendix.
CORPORATION
COMMITMENTS
I.
General
Motors made a number of commitments to the Union during national bargaining and
these are reflected in the Agreement.
A. In response to the Union's concerns about
the Corporation's sourcing
actions and their impact on employment opportunities, the
Corporation
committed to work with the Union at both the Local and
International levels to:
v
Preserve jobs
v &