BusinessWeek's Ed Wallace thinks U.S. automakers– both indigenous and transplanted– better watch out for the UAW. While GM and Chrysler are dancing a jig over unloading retiree health care and cutting wages, he foresees aftershocks in a few years. Wallace points out that retired members of the United Auto Workers (UAW) don't get to vote on contracts. As active members (who voted for the two-tier wage structure) retire, as they're replaced with lower-tier workers, a "younger worker might well feel cheated and resentful, doing the same job for maybe half what someone else was paid to do it just five years earlier." Wallace thinks this seething resentment wage and benefit disparity will combine with a backlash from transplant workers facing lowered wages to stimulate a UAW "comeback." In other words, the deal Detroit's celebrating today could bite them in the ass tomorrow– in, say, four years. Should they be around to experience the backlash, The Big 2.8 will claim they never saw it coming.
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Save your Confederate Money, the South’s gonna rise again.
If the UAW goes after the transplants then the transplants factories will close…end of story.
The days of extortion and wildly overinflated wages are done for. The UAW will never again be able to dictate terms like they have in the past.
Unions will probably never rise again. The higher ups are all corrupt and those that become higher ups will be co-opted. Frankly, it is not like GM and Ford would not rather have non-union plants, and that is far more likely.
I dunno. In the software/IT world many of us are making less money than we did 5-8 years ago (during the tech boom) for the same job. Don’t see any riots on the horizon around here….
” … a “younger worker might well feel cheated and resentful, doing the same job for maybe half what someone else was paid to do it just five years earlier.” “
Ed Wallace hasn’t studied the parallel developments in other industries, has he?
Remember the once mighty steel workers union? How about textiles and rubber?
Ed Wallace hasn’t studied the parallel developments in other industries, has he?
That was my reaction exactly. This two-tiered wage and benefits phenomenon has been ongoing for at least 25-30 years in other industries. Most of the younger workers will be happy just to earn something that will put food on the table.
Unions outlived their primary purpose (ensure safe working environments that adhered to the law) years ago. Comical iterations outside of manufacturing include teachers’ unions and grocery store workers.
It’s high time these folks get used to not living off the government or some corporate teet. Their greed has helped accelerate the demise of the American car manufacturer, as well as damage the teaching profession and make my oranges more expensive than otherwise.
Save your Confederate Money, the South’s gonna rise again.
Robert. Bring it on. Briggs and Stratton did it. Their southern plants now produce some of the best engines in the company.
Knuckles:
The joke compares the nostalgia for unions to the nostalgia for the CSA. Romantic and delusional. If you have to explain a joke, you lose the humor.
I got that, but your comment works on two levels, apparently inadvertantly. Typically, companies move manufacturing southward to break the power of the unions. In economically depressed areas, this is a godsend. Many of the transplants have invested in the Midwest/South, which could be a good course of action for the domestics should the UAW make a comeback.
Save your Confederate Money, the South’s gonna rise again.
Yep. We’ve seen companies over the last couple of decades begin to move operations south because employees here are willing to work, glad to have a job and proud of the products they produce. Another added benefit is the beautiful scenery and wonderful weather. Ya’ll come, ya hear!
The new guys will be so happy they have a job at all that they won’t complain much about the pay/benefits. Again, you’re in an industry where Honda received 30k applications for a job that paid $11/hour with few benefits. Economics is a brilliant thing.
Part of the reason for accepting cuts in health care benefits may be the expectation that that there’ll be a taxpayer-funded system in place by the time VEBAs run out of money. And of course, more UAW retirees become covered by Medicare every year.
I’m a bit sceptical that Detroit may have angered old David “UAW” Banner.
I remember this time last year, I was expected a bloodbath over the negoiations. But what happened? The UAW buckled and showed themselves to be a huge paper tiger.
The UAW’s best chance of survival is to install a real militant leader (I’m thinking someone like “Red Robbo”*) to really dig his heels in against management. If the UAW aren’t careful, they could end up being a COMPLETE non-entity, as opposed to a partial non-entity.
But you know what? It’s a 2 way street. Let’s hope Detroit management bring themselves back to full strength and create a better symbiotic relationship with the UAW. If Detroit’s management takes advantage of the UAW, then, it could be a costly mistake…..
* = Google him. He was the scourge of British Leyland!
I keep hearing that the Big 3 are doing better and better and if they manage to survive the next few years, they’ll be swimming in gold. Then they can increase wages again and they’ll be happy shiny people holding hands.
Right?
Robert:
The Greensburg Daily News reports that Honda Manufacturing of Indiana will employ a progressive pay system. New production associates will join the team earning $14.84 an hour. From there, pay automatically increases, over a 24-month period, to $18.55 hourly.
That is fairly competitive for any rural area.
“The UAW’s best chance of survival is to install a real militant leader … to really dig his heels in against management.”
Good idea. Then the companies can be liquidated and the jobs sent to the third world where they belong.
So what’s the alternative? Have a weak leader and be chopped and changed by Detroit management, which in invariably lead to their jobs being exported abroad?
Their only hope is to achieve a symobiotic relationship with Detroit’s management. Trouble is, I wouldn’t trust management as far as I could throw them. Which means we’ll still have a stare out competition between the two and neither wants to blink!
The UAW is in the fast lane of the Irrelevancy Superhighway. At this point, it can strut or acquiesce, it just won’t matter much.
The union is just living on borrowed time. The best thing that it can do for itself is to try to preserve what it can for the older members so that they get to retire with a decent benefits package. When you look at the deals being cut, that’s effectively what it is doing.
The leadership probably sees the writing on the wall. There just isn’t much that they can do about it. Its only long-term hopes for survival are to either attempt to unionize the transplants and/or to diversify out of the auto industry. Currently, it’s endeavoring to do both, and is having only minimal success with the former.
“So what’s the alternative?”
There are no alternatives that involve an oligopolistic automobile industry headquartered in the United States with a 99% domestic market share, and a confrontational union controlling 100% of the workforce, i.e. a return to 1957.
The domestic US automobile industry is doomed by uncompetitive products, fragmented marketing, clueless management, and greedy crooked union union bosses to eventual liquidation and closure.
In a dream world somewhere it is possible that visionary executives would partner with unions to rebuild an industry on the point of collapse.
In the real world, flawed human beings will see the industry’s doom and grab for all they can get before the ax comes down. Management will fatten their purses and unionists will grab their VEBAs to loot. Their actions will only hasten the end.
British Leyland is a good model. The last little pieces — Jaguar and Land Rover will be sold to Tata in some kind of colonial turnabout and be gone forever.
Unfortunately, Shwartz is correct from my experience watching the death of IT companies.
If you want to save any of the traditional American manufacturers, you need to figure out how to get from where we are now to where we need to be faster than anyone else.
In the long run, robots will be building all our cars. Productivity will meet an extreme where the only “manufacturing jobs” involved are those fixing and supervising the robots (service jobs).
Once again, while our automotive leaders are all spending their careers on ridiculous labor issues, the japanese are getting ahead. We have shown an ability to win competitions involving innovation and hard work. Unfortunately, as I have opined in the past, the 2.x lack the leaders able to take the companies forward because those people are being weeded out rather than home grown.
My apologies, Ryan, but, in my defense, it still does not match the $28/hour getting dished out to the UAW top-tier. And under the two-tier plan, that Honda number is right in line with the lower tier systems being set up at GM, Cerberus and Ford (and Honda’s benefits will still trail the Big 2.5). So, I think my original point – even if it was exaggerated – still stands.
Who needs humans? Bender (from Futurama) sounds perfect for bending the frames of Dodge Caliber’s. Don’t like it, “kiss my shiny metal ass!”.
Seriously though, doesn’t Hyundai build 250,000 cars annually in Alabama with under 1,000 workers in that plant? I read somewhere that the only actual manufacturing humans do is installing the dashboards; apparently the robots are quite dextrous enough for that. Otherwise, from metal framing to final assembly drive off, it’s all automated. The future is now, and as a shock to someone who remembers the 1991 Excel, it’s at Hyundai.
Now, so long as the robots don’t unionize…
Morbo: Have you got the source of those figures.Maybe they are assembling a lot of pre assembled components.
1000 people building over a 1000 cars a day?
Iv’e seen some of the most advanced robots in the world operate.There is no way robots are gonna build a car from scratch.
Auto workers and unions are gonna be around for a while yet.
Honda and Toyota have treated thier people with respect and dignity.If they can continue doing what thier doing they won’t have to worry about the unions.
Make no mistake folks,the UAW has given the big 2.8 a new lease on life.
Management has the ball now run with it,and they might stay in the game.Drop it, and its game over.
If they lose,mangement has only thier own incompetant asses to blame.
Ron Gettlefinger might just be the guy that saves the American auto industry.