The UAW-GM Deal Reveals Labor’s Condition

By October 2, 2007Labor Unions

Two worthwhile op-eds on the state of organized labor in the wake of the UAW-GM agreement last week. (Although we could do without the cancer metaphor, which is distasteful and overused.)

  • James Sherk, Heritage Foundation, “Towing Unions into the Future.”

    In fact, competition, not corporate greed, is the real problem facing labor unions. When unions negotiate raises for their members, companies pass those higher costs on to consumers. But companies can only pass those costs on if they do not have significant competition. For a long time, that was the case in America. Until the mid-1970s, regulations and trade barriers helped protect the union monopoly.

    Those days are gone with polyester and disco. Deregulation and free trade allow Americans to choose from whom they will buy. And Americans choose value for their money. Nonunion companies now dominate the auto, steel, trucking and construction industries — former union strongholds — because they offer consumers better value.

  • Kevin Hassett, American Enterprise Institute, “GM, UAW Find a Cure at Last for ‘Union Cancer‘:

    By making these concessions, the UAW has finally acknowledged something that big labor has always been reluctant to: Past practices were driving employers into bankruptcy. Labor cannot simply demand higher wages without providing greater productivity and expect the firm to survive.

    One could envision a future of the labor movement that builds off this agreement and fundamentally alters the relationship between workers and companies. In their landmark book “What Do Unions Do?” first published in 1984, Harvard economists Richard Freeman and James Medoff envisioned a union that could be a net positive for a firm if it worked to maximize what the authors called the “union voice” effect.

    If workers get together and figure out changes that can be made to improve operating practices, and then voice these observations to employers, then the union could in theory help the employer become more competitive.

  • Join the discussion 3 Comments

    • Angel says:

      According to Automotive News, the deal also stipulates GM agrees to new-vehicle programs at 16 U.S. plants.

      This morning local UAW leaders that represent plants from around the country unanimously voted to approve the contract offered by General Motors that came at the end of a 40-hour strike by union workers this week. Official details of the contract have been revealed, and we now know that GM’s contribution to the Voluntary Employee Beneficiary Association (VEBA) will be $29.9 billion, plus another $5.4 billion in what The Detroit News calls “pre-VEBA costs”. That’s significantly less than the upwards of $50 billion we heard was being offered, but UAW president Ron Gettelfinger insists it should last the union some 80 years.

      It is not only enough to get the quantitative service, but it must also be qualitative one. That means, the service provided by the trucking company must be good and they must be honest to us. We get only few companies like this who provide all these. But one of them I found with all this. So, if you want see how honest and good my service was just log on to “Trucking”. Hope this gives you enough information about trucking and trucking jobs.

    • Hiram Revere says:

      Most of the developing countries labor force consists of forced labor in some way, shape or form.
      The United States already has a law on the books prohibiting goods made by forced labor to be allowed into the country.
      We need to enforce it.

    • Allen Schlicke says:

      “A Better Idea”

      Domestic automakers are not the only manufacturers to have lost market share to the cheaper, foreign alternatives.
      It is not the strained relationships between suppliers and buyers you see reflected on the window stickers at car lots. What you do see is foreign cars with more options and better warranties at a lower sticker price.
      To determine why domestic producers are faltering, you can go back and look at what they were doing right when they were successful and see what has changed since then.
      When you begin to look at the relationships between domestic manufacturers and their suppliers you will find that large companies have certain criteria they must follow when selecting suppliers for purchased commodities.
      Being forced to purchase from companies with ISO, Lean, QS, TS, etc, typically eliminates the less expensive suppliers, right from the start.
      The foreign competition is not forced into using the highest priced suppliers for their purchased commodities.
      Having worked in defense and aerospace manufacturing for many years and being old enough to remember producing commodities for projects that required total quality each and every time, I know this can be achieved without ISO, Six Sigma, and the other costly programs the pricey suppliers are running in their companies today.
      Years ago quality policies were set in stone by iron fisted corporate leaders.
      Today’s quality policies are written by marketing departments and hang in corporate lobbies as mission statements.
      We need to untie the hands of buyers and let them find the lower priced domestic suppliers capable of meeting their needs. There are many good companies out there being run by honest, capable individuals.
      A few years back I put together a group of companies known as “The Schlicke Group”.
      These companies are typically machine shops and fabricators, each with specific core competencies. They are located and marketed in WI and IL and have better than the norm pricing in their areas of specialization.
      Since its inception, there are many new customers buying from this group. All are now saving money on their domestically purchased commodities, thus lowering their costs and making them more competitive in today’s global marketplace.
      This can be done. I know because it’s already working.
      Allen Schlicke

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