UAW Pays For Fun, Perks

June 23, 2006

UAW Pays For Fun, Perks by Jennifer Dixon/The Detroit Free Press

While their union membership shrank by 15% last year, United Auto Workers officials spent hundreds of thousands of dollars on meetings at splashy resorts from Palm Springs to Cape Cod, and paid tens of thousands more for bowling and shooting tournaments, baseball and golf.

More than $22,000 alone went for souvenir key chains.

The spending is outlined in U.S. Labor Department forms that, for the first time, require unions to provide greater details about how they spend members’ money.

But the filings still require only bare-bones summaries — leaving some union critics to wonder what, exactly, was purchased and who got what.

“They’re too vague,” said engineer Allen Nielsen, a UAW member from Norwalk, Ohio. “They’re big numbers, but it doesn’t tell me what I need to know.”

UAW spokesman Paul Krell said the Detroit-based union’s spending was appropriate and reasonable for such a large organization, which represents workers nationally in trades beyond the auto industry.

“These dollar amounts are large dollar amounts, but this is a large organization,” he said. “It does cost money to represent the members.”

Last year, the UAW held meetings at resort or casino hotels in Palm Springs, Las Vegas, Reno and Atlantic City, Cape May on the New Jersey shore and Hyannis on Cape Cod. They spent $318,000, funded through dues, on briefcases and pens passed out at conferences. They spent tens of thousands of dollars on such mementos as embroidered polo shirts, luggage tags and trinkets.

They dropped another $5,150 on a retirement video for Detroit-area official Ken Terry.

The expenses comprise but a sliver of the union’s $307-million budget in 2005. And despite its dwindling ranks, the UAW appears to remain financially robust. But critics say the UAW’s insistence on holding gatherings at golf and spa resorts, while so many members face job uncertainty, sends the wrong message to the rank and file.

William Hanline, who works at a Delphi plant in Athens, Ala., said he’s disgusted that some UAW leaders are living large in lean times.

“They have no concern for anyone but themselves,” said Hanline, a frequent critic of UAW leadership. “They’ve been hanging around the auto executives too much. They sure have picked up their habits.”

Krell said the union must travel to meet with locals from around the nation and often relies on resort towns because they have the facilities to handle large groups.

Las Vegas, he said, is well known as a convention center.

The meeting in Cape May, he said, drew 120 officials from New Jersey, New York and Pennsylvania, while the conference in Hyannis, the seaside resort that’s home to the Kennedy family compound, drew more than 100 local leaders from New England and the New York City area.

Krell, who declined to furnish union invoices, said the UAW shops for the best deals.

Still, Krell acknowledged that the union would hold most of its national meetings in Michigan in the future.

Industry experts say the UAW is only now beginning to grasp that rounds of golf, casino and beachfront resorts and other long-standing travel perks no longer make sense.

“The UAW has been around for decades and certain practices get institutionalized,” said Nelson Lichtenstein, a biographer of former UAW leader Walter Reuther and director of the Center for the Study of Work, Labor and Democracy at the University of California, Santa Barbara.

“And when there is a crisis, it’s difficult to change the direction of the ocean liner overnight,” he said. “UAW spending on the usual perks seems especially unseemly today and indicates they aren’t being sufficiently attentive” to the economic times.

David Cole, chairman of the Center for Automotive Research in Ann Arbor, a nonprofit that studies the auto industry, said the UAW’s national leadership has traditionally managed resources well while also enjoying a good time. And splashy conventions are one of the grandest perks that leaders get.

“Those days are just about over,” Cole said.

“It’s kind of typical for organizations — fiddling while Rome is burning. But they don’t realize it till they’re down to the eleventh hour, and that’s what I think is happening with the UAW. With the decline in membership and the tremendous stress on the industry, they really have the message they are in a different world than what they thought they were in a year ago.”

Another industry observer was more forgiving.

Gerald Meyers, a professor of management at the University of Michigan and former chief executive at American Motors Corp., said unions sometimes have to spend money to spread goodwill. So “there is a lot of schmoozing and gallivanting around, holding constituencies together and keeping their people happy,” he said.

Meyers also noted that, despite hard times, the UAW remains financially strong.

“Were they in financial difficulty this would be highly inappropriate,” Meyers said. “But they’re not. They’re collecting dues continuously, they have a large income, they’ve been able to salt away almost $1 billion.”

Meyers conceded, however, that the union’s war chest could be decimated if strikes occur at Delphi Corp. and spread to General Motors Corp. or other automakers and suppliers.

Union assets remain robust

Without a doubt, the UAW remains flush. In 2005, the union reported $1.2 billion in assets and only $3.9 million in debts. But it took in $307 million last year, down from $326 million in 2004. The drop is largely a result of the UAW’s loss of more than 97,000 members from 2004 to 2005, to a total of 557,099, because of plant closings, buyouts and the union’s inability to organize at plants opened by foreign automakers.

The 2005 expenses mark the first year the UAW and many other unions were required to report spending in such detail, the result of the U.S. Department of Labor’s requirements for fuller disclosure. These unions are now required to itemize expenditures above $5,000.

Even so, the UAW’s reporting offers only sporadic insight into what it purchased at conferences and how many union officials benefited.

For example, the union lists $64,986 spent on “lodging” at the Lodge of Four Seasons Golf Resort & Spa Shiki in Lake Ozark, Mo., with no mention of how many officials attended and what they received. A staff meeting for union leaders in western and southwestern states at a golf resort in Branson, Mo., cost the union $63,473 — of which $6,324 paid for golf.

Krell said the union has been cutting expenses for years. Over the past four years, it reduced its professional and clerical staff by 20% through attrition and closed 14 subregional offices. He said the union now holds its national policy and legislative conference in Washington, D.C., every two years, rather than annually.

Other spending, such as $40,000-plus for bowling tournaments and towels, was offset by registration fees, Krell said — and the pull of history.

“Bowling tournaments,” Krell explained, “have a long tradition in the UAW. In fact, in the 1940s and 1950s, Walter Reuther used the economic leverage of UAW bowling tournaments to push for the desegregation of bowling alleys.”

Nielsen, the Ohio UAW engineer, said union leaders should be more frugal when they spend members’ money.

Instead, he said, “it’s going to the casinos and golf courses. It’s eat, drink and party.