Union Bailout Upsets Other Auto Workers
For some, the most galling aspect of the bailout is that federal money could go to union workers and retirees — people, mostly in the North, who at least historically have enjoyed higher pay and better benefits than Southern auto workers.
“Over here, we’re taking days off without pay to keep the company going, but the unions for the Big Three aren’t willing to do that,” said Kathy Ward, 54, who has worked 27 years at the sprawling plant here. This year her pay has been cut $5,000 because of days off. “Everyone has to give a little in times like these.”
The bailout efforts for Detroit’s Big Three are laying bare long-held resentments between union and non-union workers, echoing North-South divisions as old as the Civil War.
Those would be good points if a) Kathy’s compensation wasn’t inflated because her foreign auto maker wanted to keep out the UAW (making Kathy a “free rider”) and if b) the UAW hadn’t already given significant concessions to the Big Three in the past several years (actually longer than that).
Since a and b are true, Kathy’s points aren’t really “good.”
The Senate Republicans’ demand that UAW accept massive wage concessions in 09 was more about sticking it to labor—and inserting a poison pill—than meaningfully improving the long-term health of the Big Three.Posted by .(JavaScript must be enabled to view this email address) on December 14, 2008 at 1445 hrs
So BCB, you’re saying that the UAW isn’t an issue in even the short term health of the Big 3? Unless you’re a government worker, when the company is in trouble the employees usually get hit with layoffs, benefits cuts, and usually a salary freeze or pay cut.
That the UAW wasn’t even willing to go to the level of the competition, much less below the competition as it should be since what their companies are selling are crap compared to the imports, means that the UAW isn’t serious about the health of their companies.
The UAW hamstrings the Big 3 in many ways: wages, pensions, benefits, and work rules. Get rid of those, and get rid of the management of the Big 3 and they might stand a chance. But there’s no chance they’ll be profitable short or long term without the workers taking some stake and responsibility for the long term survival of their employers.
Posted by .(JavaScript must be enabled to view this email address) on December 14, 2008 at 1607 hrs
I was all for the bailout until late last week when I heard the UAW feels they should share no pain until 2011. Total idiocy. At this point much of the shareholder wealth is wiped out. The big-shot execs have been emasculated. This is precisely the time the UAW step forward. Let’s turn the whole midwest into Detroit. Brilliant.
Posted by .(JavaScript must be enabled to view this email address) on December 14, 2008 at 1652 hrs
Unless the Big Three are willing to change their business model (if they even have one), they are doomed. They are no longer the invincible ones. This has been coming for 30 years and neither side saw the light at the end of the tunnel as an oncoming train.
Posted by Steve on December 14, 2008 at 1812 hrs
b) the UAW hadn’t already given significant concessions to the Big Three in the past several years (actually longer than that).
What concessions are those?Posted by .(JavaScript must be enabled to view this email address) on December 14, 2008 at 1931 hrs
Hello:
The 2007 contract created a two-tier wage structure, increased the auto makers’ flexibility on a number of fronts and also created a VEBA, helping out the Big Three on the health care front. The 2003 contract sanctioned mass layoffs and plant closures/sales and included concessions on health care. And of course they opened up the contract in 2005 to cut worker and retiree health care benefits. I’m surprised Kathy didn’t mention that.Nerdbert:
I expect in a few years time we’ll see tens of thousands of auto workers laid off and reworked contracts. But Kathy’s contention that the unions haven’t made concessions is bunk and the notion that bringing wages down right now would improve the lot of the Big Three is bunk as well. As this LA Times story points out, if wages were cut 20% at GM,that would only save GM $1.1 billion annually—a pittance. Cutting a worker’s wage by $3 or $5 would of course be a major blow to him/her and their communities. (I would suspect the multiplier effect of such a move would be in the billions.) The wage concession issue was a red herring cooked up by Southern Republican senators who wanted to take a shot at organized labor and showed no interest in pushing through a bailout bill. It wasn’t about helping prop up the Big Three.Posted by .(JavaScript must be enabled to view this email address) on December 14, 2008 at 2300 hrs
There are a number of structural problems both in the union contract AND in management of the Companies. The UAW has made a few concessions, but overall, the concessions are not useful for the Companies.
At the same time, the Big3 are extremely mis-managed; while most companies in the manufacturing sector have gone ‘lean,’ the Big3 has not, by and large; and they are carrying horrific indirect-labor burdens as a result.
Recall, too, that most of the Union bennies are ALSO paid to the white-collar retirees and active employees. (Not all, but most.)
They are dinosaurs, period, top to bottom.
Posted by dad29 on December 15, 2008 at 0856 hrs
i think this anti uaw rant is really just folks who hate unions or more likely are jealous of them.
the bottom line is that auto’s labor cost are only 10% of the cost of the car!
they pointed out the workers could work free and it wouldn’t save enough!
folks aren’t buying cars…or houses.
fix the economy, get folks back to work with decent jobs and they’ll buy cars and houses again.Posted by .(JavaScript must be enabled to view this email address) on December 15, 2008 at 0910 hrs
Autos and housing are for most people consumer goods. They do not generate income for most people. They have in all likelihood been overconsumed over the last 30 years or so and the idea that the level of consumption of such goods is going to return to previous levels even when the economy improves ought to be considered rather dubious.
Posted by .(JavaScript must be enabled to view this email address) on December 15, 2008 at 1031 hrs
..the idea that the level of consumption of such goods is going to return to previous levels even when the economy improves ought to be considered rather dubious.
Autos in particular have gotten so much better than when I was younger its not funny. Who caused that? Certainly not the Big 3, who had to dragged kicking and screaming to provide a modicum of quality to their vehicles.
As this LA Times story points out, if wages were cut 20% at GM,that would only save GM $1.1 billion annually—a pittance. Cutting a worker’s wage by $3 or $5 would of course be a major blow to him/her and their communities.
Yep. By all accounts the cost differential (not pay, cost) is closer to 100% since the UAW has imposed work rules, pension and health benefits for retirees, as well as general pay.
But the UAW isn’t willing to give up anything to support GM. Not even a symbolic amount. They’re rather force the company under.
That’s short sighted: even what they’re offered now is far better than what they’ll get down the road. A best-case Chapter 11 of GM with the government offering debtor in possession financing would will be a replay of Big Steel going under: there will be nothing left of the UAW pensions, contracts, or benefits by the time the judge is done. If you’re too young to remember that or just weren’t paying attention I suggest you go and look at what happened when the USW didn’t deal with their companies and forced them into bankruptcy. And if the government won’t do debtor in possession financing, it’ll be a freaking train wreck for the workers at GM.
Posted by .(JavaScript must be enabled to view this email address) on December 15, 2008 at 1159 hrs
Unions are such a bunch of parasites, they sicken me. EVERY notable experience I have had with them has had something to do with people being retained who should have been fired, people taking obscenely long holidays or sick leaves and getting paid for it, and (of course) people being paid five times what their actual intelligence and abilities would otherwise dictate.
A friend’s wife once worked at GM. When she started, she looked at the way her office was laid out. (Her position was managerial.) She started working on some kind of a spreadsheet as a way to organize her tasks to be performed, etc. Some secretary saw her doing that and complained, saying her union rules allowed no one to create spreadsheets or whatever except secretaries. So the whole process had to grind to a halt while friend’s wife had to patiently explain in great detail what she wanted done, and how, and what the results were she was hoping for. Took much longer and tied up two people instead of one.
Then there was the time she tried to move the furniture around inside her new office. Yes, you guessed it - there was a complaint about THAT because apparently it’s someone’s guaranteed job to be the ONLY furniture-mover in the complex. Violation of union rules again. Had to page someone out, wait around, etc. so the union-approved guy could slide the desk across the floor.
Total idiocy.
Posted by .(JavaScript must be enabled to view this email address) on December 15, 2008 at 1410 hrs
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