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ANALYSIS
March 2, 2009
Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
March 2, 2009
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
March 2, 2009
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
March 2, 2009
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
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June 9, 2008 12:01 AM ET
JOE WILSSENS
CONTRACT ENGINEER
Diana Tremblay knew she needed significant changes to win a deal with the UAW.
It was also key to rank-and-file approval of GM's groundbreaking 2007 contract with the UAW. The story of how that came together centers on one player: GM's vice president of labor relations, Diana Tremblay. Union leaders say Ms. Tremblay, who led GM's negotiating team, was pivotal to the agreement. She gave the union more access to financial data than anyone had before, said Cal Rapson, a UAW vice president. In particular, Ms. Tremblay pushed top GM executives to release product plans to the UAW. Union officials say the detailed plans, which specified vehicles assigned to assembly plants, were needed to persuade rank-and-file union members to rewrite GM's wage and benefits structure. Still, the move riled some top executives. When the product plans became public, one GM executive was described by an aide as being “apoplectic.” Ms. Tremblay admits her openness cost GM some proprietary information but says it won the company critical concessions. Ms. Tremblay's negotiating strategy came into focus in 2004, when she returned to GM's Detroit headquarters as executive director of North American labor relations. She had been manager of GM's Antwerp, Belgium, assembly plant and hadn't participated in labor talks since 2000, so she took GM's course on labor relations. While playing a union leader in a simulation exercise, she had an epiphany. “One of the things we asked the company for was the data to show how much trouble the company is in,” Ms. Tremblay said. “They wouldn't give it to us. We're just playing, and they wouldn't share the data with us! I remember how annoyed I was that they'd do that. Just show me where your problems are.” That experience inspired her approach: Give the union lots of GM data. The resulting contract is “as historic as the original organizing of the Big Three by the UAW,” said Sean McAlinden, chief economist at the Center for Automotive Research. The pact is noteworthy because of an agreement for a voluntary employees' beneficiary association to pay for retiree health care. In addition, the UAW agreed to a two-tier wage system. “This agreement across the Big Three will save 39,000 jobs in the next three years,” Mr. McAlinden said. So who is this 48-year-old wife and mother who helped GM strike such a deal with the UAW? Ms. Tremblay has strong GM roots. She grew up in Lordstown, Ohio, a GM factory town, and her father was a GM manufacturing engineer. She met her husband, Daniel, while they were attending General Motors Institute (now Kettering University). After graduation, she went to work at GM's Danville, Ill., foundry. Over the next 13 years, she held manufacturing and engineering jobs in plants in Ohio and Michigan, before GM summoned her to its corporate offices in 1996. The automaker, on the cusp of its 1996 UAW negotiations, wanted employees with plant experience to join its labor staff. It tapped Ms. Tremblay to develop a labor strategy. That's when she met one of her mentors: Ralph Handley, whom she describes as an “old-school labor guy.” “Ralph was viewed as one of the people who would possibly be the hardest for me to work with because he would reject me,” Ms. Tremblay said. Her boss at the time, Rick Curd, assigned Mr. Handley to mentor her—a move that she said was clever because it made Mr. Handley responsible for integrating her into the staff. Mr. Handley said his first impression of Ms. Tremblay was of a bright, focused person who wanted to learn. He saw personality traits that would make a good leader, such as predictable reactions and stable moods. Others in GM management noticed Ms. Tremblay's talents too. “When we went through the 1999 negotiations, I got to see her in action. She just struck me,” said Gary Cowger, GM's group vice president of manufacturing and labor relations. “She has excellent judgment.” In 1999, GM began a shift in how it would handle labor relations, deciding to be more open with union leaders. “We put into place "no surprises,'” Ms. Tremblay recalled. Once that groundwork was laid, Ms. Tremblay longed to return to manufacturing. She left the labor staff in 2000 to run two assembly plants in Europe. But in 2004, GM called her back to the labor front. By 2005, the company was bleeding cash and headed for financial trouble. Almost as soon as she returned to Detroit, Ms. Tremblay jumped on health-care issues to help ease GM's costs. Under her direction, the automaker struck a health-care deal with the UAW in 2005 that will save it $1 billion annually. That year GM also said it would close eight plants and cut 30,000 jobs to further trim costs. Ms. Tremblay carried out all of that and worked on a complex deal with GM's largest supplier, Delphi, as it tried to emerge from Chapter 11 bankruptcy protection. But by 2007, with GM's red ink flowing, Ms. Tremblay knew she needed to win the mother of all deals. “I really felt that if we didn't make some significant changes, it was just a question of how long we would last,” she said. “Three years? Five years? I really believed we needed to make significant changes.” The bargaining began July 23, with Ms. Tremblay and the UAW's Mr. Rapson at the table. Both understood the importance of the talks. Mr. Rapson recalls long hours but open dialogue. By Sept. 24, the union still did not have a product plan from GM that would ensure jobs, Mr. Rapson said, so it went on strike. “When we came back a couple of days later, the company was there working on a commitment to product with us,” Mr. Rapson said. The two sides quickly agreed on a deal. On the morning of Sept. 27, Mr. Rapson met with local plant presidents and chairmen and passed out copies of the tentative deal. He recalls silence as a heavy mood set in. “They looked at that page and saw the commitment to product, and that changed the meeting,'' he said. “It was a real positive and productive meeting. You could see the immediate relief.” Ms. Tremblay called the subsequent release of the detailed product plan “the downside of being really transparent.” It is her only real regret, but she said that to get the agreement ratified, UAW leaders needed specifics about the future work going to plants. “If I could do that one over again, I probably would have encouraged a little less detail—not in the agreement as such but a little less detail in the communications that went out,” she said. “But those were the documents we signed, so it is what it is"—Automotive News
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