Howes: Impeachment chaos, economic churn loom over UAW-GM talks
The United Auto Workers' strike against General Motors Co. isn't happening in a vacuum — and neither are talks to end the walkout now in its 18th day.
They’re facing a whirlwind that Detroit mostly can't control, even if the automakers and the union will be forced to contend with the consequences. Any deal they reach to end the strike and cover the next four years is likely to be tested more than at any time since GM emerged from its federally induced bankruptcy a decade ago.
Impeachment fervor in Washington already is grinding governing to a halt, making clarity next to impossible on President Donald Trump's tariffs, trade and emissions policy gyrations for who knows how long. That's not good for arguably the nation's most regulated consumer industry operating with high fixed costs and comparatively narrow margins.
American manufacturing is slowing, posting its worst reading in a decade thanks to uncertainty freezing investment decisions. Investors moved this week to dump stocks on worries the global economic slowdown is creeping into the United States — the Dow Jones Industrial Average plunged more than 450 points Wednesday, or 1.7% — just in time for a presidential election next year.
Note to union and GM bargainers at the so-called "main table": this is the new normal, for at least the next year, anyway. It's a federal government at war with itself, a presidential administration flailing between chaos and vindictiveness, a divided Congress unable to do much of anything beyond clearly discernible partisan lines.
You want to know why GM bargainers are pushing so hard to reduce fixed costs? For the same reason UAW bargainers want more certainty and strengthened job-security provisions: both sides intuitively understand the next four years — heck, the next four weeks — threaten the relative stability the industry has enjoyed since 2010.
This is a problem. That's because these contracts historically are not built to cope with rapid change in the economy, in politics, in environmental priorities — you know, standard operating procedure in the era of Trump, Brexit, the rise of China and political instability in western democracies.
No, these contracts are built to deliver guarantees to a workforce culturally accustomed to the iterative Detroit way. They're built to reflect an automotive world that no longer exists, a space shared now with non-union, foreign-owned rivals operating in the Midwest and South, as well as tech heavyweights angling for competitive positions in next-generation electric and self-driving vehicles.
These bargaining seasons are an industry tradition dating back to the 1930s, when Detroit's automakers recognized the UAW following the bloody Battle of the Overpass in Dearborn and the Sit-Down Strikes in Flint. Successive agreements, especially after World War II, produced company-paid health care, pensions, cost-of-living adjustments and other totems of the post-war American middle class.
Back then, the UAW's legendary president, Walter Reuther, was managing post-war prosperity, securing more benefits from automakers with near-total control of the vast American market. That hasn't been true for close to a generation, forcing Reuther's successors to manage the comparative decline of the Detroit Three.
The downward UAW-GM spiral culminated in the automaker's 2008 bailout and its bankruptcy a year later. Brands were killed, plants were closed and jobs were cut, but a decade on the UAW and GM still are arguing about the fundamental tension between restraining costs and rewarding workers for jobs well done.
The tension is untenable. And a new UAW-GM Master Agreement to end the strike and cover the next four years probably won't get much closer to solving the problem — again, a disadvantage only likely to grow more costly in the years ahead.
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.