Local 701 automobile mechanics began a strike at approximately 55 new car dealerships in Chicagoland Monday, August 2, 2021 after the contract with the new car dealerships expired midnight July 31, 2021. Dealerships are unable to service vehicles without union mechanics.
IAM Mechanic’s Local 701 has been negotiating in various forms with 129 Chicagoland new car dealerships while about 55 dealerships belonging to an association failed to meet the requirement of the union. The contract expired at midnight on July 31, 2021. Last week, the union membership ratified an agreement with an association representing approximately 30 dealerships. These negotiations began in March 2021 and continued through July 2021. The union is close to reaching the same, or similar, agreement with a multitude of dealerships who did not join an association.
The New Car Dealer Committee of Chicago for 2021 (“NCDC”) represents the approximately 55 dealerships. The union began reaching out to the NCDC in January to begin the process. The NCDC formally began the process in May and offered a first proposed bargaining date on June 16, 2021. The union provided its proposal in advance and the parties met for the first time on June 17, 2021.
At approximately 11:30 p.m. on July 31, 2021, minutes before the contract expired, the NCDC made its latest counter-proposal. The union held a meeting at 9:00 a.m. on August 1, 2021, in order to let its membership vote on the proposal. Ninety-seven percent of the members present, voted to reject the NCDC’s proposal, and 99% then voted to initiate a strike. As a result, the affected members were on strike as of the start of business Monday, August 2, 2021.
According to Local 701, withholding labor until fair working terms and conditions until there is a fair agreement, is a union member’s last resort, and the decision to reject the NCDC proposal was not made lightly. During the 2017 negotiations, when the NCDC represented these same 129 dealerships, the negotiations resulted in a protracted, seven-and-a-half-week strike. Local 701 hoped to avoid a strike this contract cycle. In fact, since the last strike, the union partnered with its own labor allies (the Chicago Federation of Labor and the State AFL-CIO), its legislative allies, as well as the dealership’s association on supporting a house bill (HB3940).
HB 3940, which was signed into law by Governor Pritzker this past Friday, benefits both the dealership and the union’s members by ensuring that manufacturers are required to fairly pay the dealership and their technicians for warranty work performed. This fair pay requirement was intended to allow dealerships to fairly compensate their technicians, which in turn, will attract more qualified technicians to the field. There has been a lack of qualified technicians affecting the industry for several years, according to Local 701. In fact, David Sloan, the president of a Chicago dealership association, noted in the press release: “A shortage of technicians at franchised dealers has been a problem for many years. This new law will go a long way toward solving it.” Despite the union’s collaborating with the dealerships to achieve this goal, the NCDC’s current contract proposal suggests an unwillingness to collaborate on a fair contract.
STRIKE ISSUES WITH LOCAL 701
There are a number of open issues, including three primary issues, where the parties have not reached a tentative agreement. The issues that the union’s membership voiced as the basis for their rejection and strike vote include the following:
1) The NCDC wants to make it easier to reduce a journeyman’s (top position) weekly guaranteed pay. For example, NCDC wants to be able to lower a weekly salary that is paid to a journeyman because he or she is at the dealership for 40 hours per week) if the journeyman is not meeting the dealership’s work expectations, such as generating enough income for the dealership to cover the journeyman’s pay, even when lower repair demand is not the journeyman’s fault. With COVID-19 shutdowns, weather, economic cycles, and even the dealership’s ability to attract customers being an issue, a journeyman should not have his or her pay docked when he or she is at work for 40 hours per week, but doesn’t have a vehicle to work on for some reason outside his or her control.
2) The NCDC is unwilling to pay health insurance rates determined by the Health & Welfare Fund’s Board of Trustees. These rates are based on the recommendations of the Fund’s professionals. These rates are already being paid by all other employers in the industry and were agreed to by the other dealership association.
3) The NCDC is insisting on language that undermines the bargaining process by allowing it to cherry-pick provisions that it sees as favorable in other contracts with dozens of other car dealerships. Each one of those dealerships, and even the NCDC, has always negotiated and lived with its own agreement. One of the primary purposes of an agreement is to set the terms and conditions for the term of the contract without any changes—this provides piece of mind and labor peace. The NCDC is insistent that it not have to play by these rules.
There are other issues, including an unwillingness to fully support training that will lead to more qualified technicians, and an unwillingness to improve the retirement benefits. The union’s guiding principle for these negotiations has been to improve the working terms and conditions in order to better attract qualified technicians — a goal even the NCDC has repeatedly acknowledged exists. The NCDC’s refusal to agree to these basic, low-cost improvements are counter-productive to this mutually beneficial goal.
Local 701 announced that the union understands strikes can be inconvenient for customers, and that strikes can involve emotions. Our members are professionals, both in the shops as well as on the strike line. Local 701 stated that the members appreciate the public’s understanding, as well as support already received recognizing the members’ goal of keeping vehicles moving safely on roadways.
The NCDC scheduled a meeting of NCDC dealer members at the Chicago Automobile Trade Association (CATA) offices in Oakbrook on Tuesday morning, August 3, 2021. Beyond that, the NCDC put forth the most recent proposal and is awaiting a response from the Local 701 union.
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