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The UAWs Last Stand

October 26, 2007
Related Topics: Labor Relations, Workforce Planning, Featured Article
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Here’s a question I can’t seem to get out of my head as I ponder the short-lived United Auto Workers strike against General Motors: Just what is it that motivates an American autoworker today to think that going out on strike is a prudent and reasonable option to take?

    Here’s the only answer I can come up with: desperation, because only desperate people with no better option would resort to such a foolhardy action.

    I can’t recall many recent strikes that did the workforce much good. Four years ago, I saw grocery workers here in Southern California strike Kroger, Safeway and Albertsons. In the end, workers returned to their jobs with no management concessions, worse schedules and short five months’ pay. They ended up worse off than they were before the work action.

    In fact, the only strikes I can recall having much success were called by public-worker unions—teachers, transit workers or some other governmental employee, where there was little or no private sector competition to contend with.

    For autoworkers, it had been a long time since they last walked out—some 37 years since the UAW called a national strike. In that time frame, Detroit’s Big Three struggled with rising costs, lousy products and determined, innovative competition from Japan.

    Even when the strike came, many of the striking workers weren’t sure what they were striking about. A columnist for the Detroit Free Press had one striking worker tell him that "This whole thing’s a farce. In the past, we always got updates on contract talks, points of interest from our local union reps. This time, we’re being told nothing."

    And that gets back to the desperation component. Only desperate workers who feel they have nothing else to lose would walk off the job without any real understanding of why.

    There was a time, in my lifetime, when America made great products. You don’t see that much anymore. America can still design and engineer great products, but for the most part, they are made somewhere else.


The only way an American carmaker can compete with a foreign carmaker is to lower the unit production cost. This is only possible if workers at the Big Three agree to take ... less pay, less generous benefits, fewer jobs and less job security.

    Detroit News columnist Daniel Howes made a similar point when he wrote: "As much as Detroit’s beleaguered automakers may be on their knees financially, times for them have changed. They have investment choices and new markets they didn’t have 37 years ago—in China, Russia, India, Vietnam, Eastern Europe and Latin America. They [also] have common manufacturing systems they didn’t have 37 years ago—the ability to build vehicles for different global markets on the same assembly line, or the demonstrated practice of importing Chevy Aveos from South Korea and Saturn Astras from Germany."

    I’d add that Toyotas are now built in Kentucky, Nissans in Tennessee and BMWs in South Carolina, and all are manufactured for foreign automakers by American workers making a lot less than their counterparts at the Big Three U.S. car companies.

    The only way an American carmaker can compete with a foreign carmaker is to lower the unit production cost. This is only possible if workers at the Big Three agree to take less—less pay, less generous benefits, fewer jobs and less job security.

    I hope both sides got what they wanted from this little exercise in labor-management relations. For GM, it looks like a way to help lower the hefty health care bill that has been dragging down profitability. For UAW workers, it looks like a chance to make one last stand and feel like they have some degree of leverage over their
future.

    But the bigger question is this: Will this deal finally make GM more competitive? Only time will tell, of course, because the agreement is taking both labor and management into uncharted territory. And the union rank and file still needs to finish voting and finalize its approval.

    I’m assuming the union membership isn’t foolhardy enough to reject the deal. The contract is probably as good as it gets, for both sides, and coming to grips with that is the first step in putting the desperate time behind.

Workforce Management, October 8, 2007, p. 58 -- Subscribe Now!

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