Howes: UAW-GM strike signals Detroit 'hasn't learned its lesson'
The United Auto Workers strike against General Motors Co. will end, eventually.
But at what cost — to the 46,000 members walking picket lines, to their employer, to the union and to Michigan? Plenty, I’d wager, in dollars and lost production, in depleted revenue and squandered credibility. The confrontation risks gutting the narrative saying the Motor City and its home state learned from the Great Recession collapse into bailout and bankruptcy.
Based on what? Not on the lengthening strike whose core issue is a battle over whether GM can still lay claim to having the highest fixed labor costs and lowest plant utilization in the North American auto industry — just like it did when GM's brass asked Congress for help more than 10 years ago. Some legacy, that. Sounds more like a path to Chapter 22, a slide into a second bankruptcy.
“What’s going on is serious for the state,” Patrick Anderson, CEO of the East Lansing-based Anderson Economic Group, told The Detroit News earlier this week. “If we look ahead, if this is not solved in a constructive manner soon, you not only risk a one-state recession. You risk telling consumers all across the country Detroit hasn’t learned its lesson.”
Exactly right. Nearly a decade of steadily rising sales, expanding North American profits and record profit-sharing payouts the past three years apparently cloud memory. People forget the spectacle of congressional leaders browbeating former GM CEO Rick Wagoner; the ridiculing of both the UAW and GM for agreeing to pay people not to work; the relief that the Republican Bush administration and the Democratic one of President Barack Obama agreed to extend financial lifelines.
In exchange for what? For GM (and the former Chrysler Group) to get their competitive houses in order. To build cars, trucks and SUVs that people actually want to buy. To cull brands that don't excite consumers and plants that are too costly to run, especially when demand is too weak to run them profitably.
As talks to end the strike between the UAW and GM drag on, remember that GM, Chrysler (and Ford Motor Co.) can only achieve some of that alone. For most of it, they need agreement from the UAW because killing brands, changing product allocations, upping plant utilization and more can't happen without union agreement.
That's because so much of the UAW contract with GM that theoretically could have been changed in Chapter 11 — a process under federal bankruptcy law that enables the debtor (GM) to alter contracts — wasn't changed to close the automaker's competitiveness gap with domestic and foreign rivals. Not wage rates for hourly workers, not health care, not pensions.
Said Arthur Schwartz, a former general director of GM labor relations involved in the bankruptcy negotiation: "Nobody who was working in 2009 took a pay cut, a pension cut or a health care cut."
Doing so would have a) offended the Obama administration's union-friendliness and b) incited a veritable war with the UAW that likely would have mired GM in bankruptcy for years, imperiling the economy of the electorally vital industrial Midwest and the years-long recovery of Michigan.
Instead, Detroit is nearly three weeks into a national strike against GM. And signs are mounting that ending the walkout will prove far more difficult than beginning it, chiefly because the leadership is parrying a mounting federal investigation into union corruption focusing on President Gary Jones and his predecessor, Dennis Williams, among others.
Jones and others implicated in the scandal likely will struggle to persuade members to ratify an agreement that falls short of expectations on, say, base wage increases, a sweetened profit-sharing formula or the treatment of temporary workers. In the age of social media and in the context of the 2015 contract rejection by UAW-Fiat Chrysler Automobiles NV members, nothing can be taken for granted.
How does this look to folks outside the "Detroit bubble" of its automakers, suppliers and the UAW? In a world, terrible, like a dysfunctional mess of institutions rescued a decade ago by American taxpayers, yet still mired in Old Detroit rites that too often fail to account for the world as it is and will be, not as it was.
You think that doesn't send a message to consumers and the outside world? It does, and what it says ain't good.
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.