UAW: No Concessions, Thank You Very Much

Well, this was completely predictable.

The White House joined the ranks of socialism in bailout out GM and Chrysler with taxpayer dollars provided the companies change their business model into something resembling a profitable company.  One of the biggest — if not THE biggest — causes of GM and Chrysler failing is their obligations to the unions.  As Mark Steyn observed:

General Motors now has a market valuation about a third of Bed, Bath & Beyond, and no one says your Swash 700 Elongated Biscuit Toilet Seat Bidet is too big to fail. GM has a market capitalization of about $2.4 billion. For purposes of comparison, Toyota's market cap is $100 billion and change (the change being bigger than the whole of GM). General Motors, like the other two geezers of the Old Three, is a vast retirement home with a small money-losing auto subsidiary. The UAW is AARP in an Edsel: It has three times as many retirees and widows as “workers” (I use the term loosely). GM has 96,000 employees but provides health benefits to a million people.

How do you make that math add up? Not by selling cars: Honda and Nissan make a pretax operating profit per vehicle of around $1,600; Ford, Chrysler and GM make a loss of $500 to $1,500. That's to say, they lose money on every vehicle they sell.

The only thing that can possibly save these car companies is to completely overhaul their deals with the UAW.  Of course, the predictable part of this is the inherent logic involved in understanding the relationship between the Big 3 and the UAW.  Since the UAW has shown absolutely no sign of significant concessions in the past, one might logically conclude that there is absolutely no reason to think they'd show any sign of significant concession in the future.  Amazingly, logic prevails once again:

The nation's automakers are preparing to ask for wage and benefits concessions from their workers in early January to meet the conditions of a $17.4 billion federal aid package, but labor officials say they will seek to renegotiate the terms of the bailout rather than make those sacrifices.

The remarks by union leaders have set up yet another contentious battle in the auto industry.

In agreeing to provide federal assistance to General Motors and Chrysler, the White House demanded the firms cut worker compensation to the levels paid at the U.S. divisions of Toyota, Nissan and Honda. But Ron Gettelfinger, president of the United Auto Workers, said earlier this week that he would seek to remove the wage-reduction provision of the loan, calling it “an undue tax on the workers” who have already made “major” sacrifices for the benefit of the auto industry.

Gettelfinger said that what is being asked of the autoworkers — who agreed to concessions in 2003, 2005 and 2007 — is “unrealistic.” He has said he wants to work with President-elect Barack Obama to remove the wage provision.

…Critics of U.S. automakers say that they pay their workers, who are unionized, far higher wages than those of nonunionized workers at foreign-owned automobile plants. But union leaders say many of their members actually make less. In many cases, the truth depends on how the compensation is calculated — whether it includes bonus pay and benefits, for instance.

The stakes in the talks between the unions and the automakers are high. If GM and Chrysler are unsuccessful in convincing labor officials, as well as bondholders and other stakeholders, to go along with a broad restructuring plan, the government could call off the loans and let the companies declare bankruptcy or fail.

Good!  That would be the best possible outcome from all this!

For more background information on just how awful those poor, poor union workers have it, check my previous posts here, here, and here.  The thing to remember here is that the UAW is a parasite, literally sucking the life out of the Big 3.  By refusing to make meaningful concessions (like getting rid of the jobs bank and bringing wages into line with the rest of the industry), the parasite is signaling its readiness to ride the host organism into the throes of death.  Gettelfinger and his cronies are essentially saying that they're happy to kill the goose, as long as they get one last golden egg out of it.

A question for UAW workers: which is better, a $45/hr. job without the jobs bank, or no job at all?

That's the potential decision you face.  Your union bosses have chosen no job at all on your behalf, but I suppose that makes sense when they're pulling down 7-figure salaries and will receive a substantial golden parachute while you go to the unemployment office.  I'm also struck by the irony of how the UAW is totally escaping the blame for threatening to allow the entire auto industry to go under, thus eliminating 3 million jobs (if the pro-bailout folks are to be believed).  Go figure.

Gee whiz whillikers, aren't unions great?

There's my two cents.


I'm a gun-owning, Bible-thumping, bitter clinger conservative in the heartland. You can disagree with me if you want (you do, after all, have a right to be wrong)...just don't be rude or stupid and we'll get along just fine! :)

Posted in Liberal Hypocrisy

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