Task force exec Ron Bloom can see all sides in auto fight

Bloom represented the Steelworkers during a restructuring of Algoma Steel in Canada, and Gerard says his passion for labor and manufacturing issues was clear.

"I said, why don't you come work at what you really believe in?" Gerard says. "He could play a lead role in bargaining, play a role in a number of different sectors in the economy and shape policy."

Gerard says he never asked Bloom what he made on Wall Street, but when he went to work for the Steelworkers, he got scale for the job, which in 2000 was $86,990, according to a filing with the Department of Labor. By 2007, it was $107,000.

Bloom's frankness isn't a problem for Gerard, who is pretty straightforward himself.

"He is very direct and can dismantle a lousy business plan in minutes," Gerard says. "He can explain that to a CEO as well as a brand new (union) member."

While he was with the Steelworkers, they worked through dozens of restructuring plans, Gerard says, using a three-pronged strategy:

•The union won't give up anything without something in return.

•The companies need new leadership. ("You don't leave the people there who caused the problem to fix the problem," Gerard says.)

•And the companies must invest more in the U.S. rather than shipping jobs overseas, he says.

A good understanding

Bloom helped the Steelworkers and Goodyear Tire & Rubber craft a $1 billion, union-run fund to take over retiree health care. Goodyear got to move a $1.2 billion liability off its balance sheet, while retiree benefits were secured in a fund creditors could not touch in a company bankruptcy.

The automakers and United Auto Workers used the Goodyear plan as a model for the retiree health fund negotiated in 2007.

"Unlike what a lot of people think about labor leaders, (Bloom) has an extremely good understanding of the economics of business," says Wilbur Ross, investor and owner of International Auto Components Group.

Ross met Bloom while investing in steel companies in Pennsylvania. Ross bought bankrupt companies and restructured them into going concerns with the support of the union. Bloom and other union leaders helped convince workers of the need to change quickly to make the business work, Ross says.

One big change, he says, was to cut the job descriptions in the union contract to five from 32. Narrow job descriptions limit company flexibility in using workers where they are needed and can inflate the workforce. The result, says Ross: "We gradually became not only the largest steel company in America, but we also were the lowest-cost integrated mill, and we paid our workers more than any other company. The pragmatic attitude of the Steelworkers union probably saved 100,000 jobs."

A bigger job

Fixing the auto industry will be a much bigger job, Ross admits.

"The car industry has huge problems, and it's a much more complicated industry than steel," Ross says.

Steelmakers process a raw material and sell it to another company, while automakers deal with thousands of outside suppliers for parts, assemble them into a product and then hand over control of selling the product to independent dealers.

But Harley Shaiken, a labor expert at the University of California-Berkeley, says Bloom should be able to handle the competing demands.

"Sure, the auto industry is a unique industry," he says. "It is among the most central of consumer products, and you're blending the issues of marketing with the challenges of manufacturing in a highly competitive setting. ... But Ron Bloom is a very capable person who's highly regarded by both industry and union people he's worked with."

"He's smart, he's tough, he's quick," Shaiken says. "And he'll need all three of those characteristics in this position."

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