Membership has dropped from a peak of 1.5 million in 1979 to 382,000 at the end of 2012, although it's been rising slightly since 2009. Annual dues, the union's main income source, are down 40 percent since 2006.
Dennis Williams, now secretary-treasurer for the union, concedes that it has been selling off stocks and other assets to balance the budget for the past seven years. But he says it also has cut spending, and more cuts are coming.
Delegates to the union's four-year convention in June will be asked to increase dues to help with the problem, and Williams says rising membership has started to reverse the trend of declining dues.
Williams, who led the union's successful effort to organize an Illinois Mitsubishi plant in the late 1980s, says he's confident the UAW will someday organize another foreign-owned auto plant in the South, even though it narrowly lost an election earlier this month at a Volkswagen factory in Chattanooga, Tenn.
Like other UAW officials, he blamed the loss on statements by Tennessee Republican politicians who said VW would add an SUV to the plant if it remained nonunion. Some threatened to cut off state incentives for a plant expansion if the union was approved.
Williams, who joined the union in 1977 as a welder, recently spoke with The Associated Press at his office in Detroit. Here are excerpts, edited for clarity and style:
Q: We've been told that Detroit automakers are scared, in light of the Tennessee vote, that the UAW's finances are weak and it might have to merge into another union that doesn't understand the business. Is that a valid concern?
A: It isn't a valid concern. The UAW is very strong when you look at it both membership-wise and financially. It's because of our history that we have strength.
Q: You still have over $1 billion in assets, but you've been selling them off to pay operating expenses. Can you keep that up?
A: Over the past four years, we've taken that number down considerably and will continue to do so. We plan on balancing our budget within this term (the next four years) I'm not concerned about that. I was concerned four years ago because we didn't really have a long-term plan. Today we do. We're at 400,000 members. We have a strong strike fund. So we're stable. Anytime there's a huge recession, you're going to go through a period of adjustment to get your finances back in order. That's what happened to us. We're back on pace.
Q: Can you bring the deficit spending down even without organizing another auto plant in the South?
A: We've been increasing our membership in two ways. Growth in agricultural, auto and other industries. We've been growing by organizing, mainly in the gaming industry and the truck industry. There's growth. And we've bargained growth (with Detroit automakers). We reopened a General Motors plant in Spring Hill, Tenn. We did about $20 billion in negotiations of products coming back that they had taken out of the United States.
Q: But according to Labor Department reports, revenue from dues has dropped from 2006 to 2012.
A: It actually went up last year. When I look at the trend both on (membership) growth and dues, I see that trend will continue upward.
Q: New hires with the Detroit automakers, and new recruits in casinos, are paid less than older workers at auto plants. How do you make up for the loss of higher-wage workers? Do you have to raise the wage for new hires who are paid "second-tier" wages?
A: Naturally it has to go up. When we did the second tier, we were coming out of a recession, and we tried to bring the industry up to sell vehicles at a rapid pace, and give the companies an opportunity to recover. Our goal is to bridge that gap and start from there, and the companies know that.
Q: Won't that increase their costs?
A: It does. We know that our goal is the same. We want to make sure the companies stay competitive. We think a transparent, fair profit-sharing is part of it. We think also that we have to make sure the companies have enough money to do their research and development, to make sure they stay focused on quality.
Q: Have you had discussions about merging with other unions?
A: I have not had any discussions. Certainly President Bob King hasn't told me he had any discussions. There has not been.
Q: How have you cut spending?
A: We've cut about $16 million in the past four years. We've taken our time now to look at the way we operate. We're using technology a lot more than we used to. We consolidated a region. We plan on consolidating another region this year. We plan on eliminating a vice president this year. As our membership shifts we will sell off the offices or buildings and move to the locations where our membership is, and where the potential growth is.
Q: At the Volkswagen plant, some of the workers said they voted against you because your representative gave a presentation and didn't take questions. They felt like they were being kept in the dark. Is that true?
A: Our agreement with Volkswagen was we would come in and make a presentation. Then we would have staff and UAW members there to answer questions. They thought one-on-one would be better for the associates. The only reason that happened was because of the format. The company certainly wanted us to answer all the questions for associates. So we were available.
Q: Is the political situation now such that it's not possible for you to organize in the South?
A: I started organizing in 1988. I organized the Mitsubishi plant. Every time we organize we find something different. Today for the government officials to come out and attack like that, they caught us a little off-guard. I think the people inside (the plant) were definitely shocked, scared, didn't know what to do.
Q: Does the union's future depend on organizing "transplant" foreign car company plants in the South?
A: It's imperative that we organize within these sectors. Because it gives you the density (of members) you need to have, the strength to have good collective bargaining agreements. Don't confuse survival and density. The UAW can survive a long time. They'll be here far after you and I pass away. We'll get a transplant. It's a matter of time. It took seven years to organize Ford. We tried two or three times to organize the Navistar truck plant in Tulsa, Okla. Last year we organized them. You can organize in the South.
Q: In Chattanooga, opponents argued that the union drove two Detroit automakers into bankruptcy and caused widespread decay in and bankruptcy in the city of Detroit. Can you overcome the image of Detroit?
A: We have to find a way to overcome that. I think it's real. I think when we quit listening to UAW membership or to the general public, then we're making a huge mistake, because we can learn from it and self-evaluate. We had little or nothing to do with Detroit, most people know that. But if it's an image, perception, we've got to deal with it. I think we have to re-examine, seek some outside advice on it.