June 12, 2006
Serf Class
U.A.W. Facing Tough Choices, Leader Warns:
By MICHELINE MAYNARD
LAS VEGAS, June 11 The president of the United Automobile Workers union told his members in a strikingly blunt report released Sunday that they cannot ride out the automobile industry crisis and should be prepared to make tradition-breaking decisions to help rescue the industry.In the report, to be given to members at the union's convention, which opens here on Monday, the union president, Ron Gettelfinger, pointed to many causes of the industry's grave malaise, including "bad management" and declining auto sales.
But Mr. Gettelfinger acknowledged that the union's health care benefits helped create a ballooning health cost crisis that had become "unsustainable" in the face of the auto companies' declining sales. This, he said, was a reason why the U.A.W. agreed to substantial health care concessions last year.
"This isn't a cyclical downturn," Mr. Gettelfinger said in the report. "The kind of challenges we face aren't the kind that can be ridden out. They're structural challenges and they require new and farsighted solutions."
Damn straight this isn't a cyclical downturn. It's a traincrash for working class Americans which is a result of 30 years of right wing labor policy to create a permanent underclass of workers who toil for low wages for the corporate ueber-bosses. At the moment, they are winning.
Posted by Melanie at June 12, 2006 09:09 AM | TrackBack".....It's a traincrash for working class Americans which is a result of 30 years of right wing labor policy to create a permanent underclass of workers who toil for low wages".
Actually. It's the result of nearly 100 years of out-of-control labor unions in the auto industry
(http://www.nationalreview.com/comment/payne200511290819.asp) You can scream "It Ain't FAIR" all you like; the UAW (and others) have priced and work-ruled themselves right out of an industry. In the end market forces and careful management will determine who survives and who doesn't.
The UAW have been slowly strangling the Golden Goose for years....
The Golden Goose shot itself in the head when management decreed that Muscle Cars were in and maintainability was out, at the same time lines were forming at every gasoline pump in America.
At the same time that Toyota, among others, was cranking out an entire line of vehicles that were markedly superior, across the board, to anything Detroit was building in greater than quantity one. In both fuel economy and frequency of repair.
This, by the way, was more than three decades ago. And now we are seeing history repeat itself. Which is usually what the attentive person sees when the ruling elites are arrogant to the point of clinical insanity.
But of course, the auto industry towns of Michigan are already finished. They were dead and buried more than two decades ago, as I had personal opportunity to observe during a job interview with a college based in Flint.
From The Economist:
"Ford and GM have tried to embrace lean production methods, ... but the main way to do that under "life-time employment" union contracts has been to encourage early retirement. This has solved one problem -- too many active workers. But it created a second -- too many retired workers for the active workers to support. It's little wonder that money-losing Ford doesn't have the funds to invest in new technologies and is asking Washington for help. ...
The ... question is how to cope with the pension and health care commitments of U.S. companies on the road to financial ruin. ... One approach would be to stand back and let the auto companies fail. A bankruptcy judge could then explain that the promises made to retirees are much more extravagant than what most other Americans are getting. The judge could then call the deal off and pay out pension benefits at maybe 50 cents on the dollar."
Yep, no doubt the US car companies misjudged their markets in the 60's and 70's. It's also no doubt that the US car companies and the UAW were both guilty of greed...Management, for agreeing to open-ended retirement and employment contracts that made no allowence for the inevitable downturn in business; the UAW for demanding that kind of non-productive employment, where workers who don't have productive work are kept in the paid labor pool.
I don't care what kind of business you are in: it's ALL cyclical, and eventually demand drops, competition comes in, or peoples' tastes change. Anything that stands in the way of adapting to evolving markets is bad management. But that begs the question:
What to do NOW, that the survival of the US auto industry is at stake? Placing blame and pointing fingers is nice, but the won't pay the grocery bill. In the end, the real losers are labor and the shareholders: labor, for having to adapt and find new skills and a market for those skills, and the shareholders (you and me) for watching our savings and retirement evaporate.
It's the obligation of the shareholders to evaluate the quality of management, and act accordingly.
