Contracts with Big Three reveal union’s real principles, and what it sees for the future
The UAW is pushing its own demise rather than searching for a lifeboat. It’s a choice that reveals the union’s real principles, and what it sees for its future.
The United Auto Workers union has dragged out negotiations months past the September deadlines with automakers, but it’s making incredibly profitable deals for its employees. New UAW leadership no doubt feels heroic creating pacts with huge signing bonuses and other goodies. But that same leadership also consciously chose to mortgage future union jobs — and certainly any potential job growth — so today’s employees can cash in.
It was a strategic decision, and not a very forward-thinking one, especially considering other factors, including right to work and continuing advancements in plant efficiency and productivity that will eventually eliminate more jobs.
While right to work hasn’t made much of a dent in the union’s membership, the law becomes more powerful if the UAW’s value to individual members dwindles. Perhaps that was an impetus for such huge cash gains in these talks.
There are several ways in which the UAW seems to be selling its soul and its future in exchange for short-term gains its members have clearly demanded. In fact hourly workers at Ford today are demanding more, despite being offered the “richest” deal in the two parties’ relationship.
There is, of course, job security. After the bailouts, the UAW gave itself hope for the future by adopting two-tiered wages, which allowed the Detroit Big Three to produce small cars profitably in the U.S. for the first time.
General Motors, for example, started making small cars at its Lake Orion plant, and Ford Motor Co. expanded production of the popular Focus in Wayne. Several years of high gas prices made the union’s cooperation pay off in bigger sales and helped the Big Three gain in the small-car market, all of which were crucial for the industry’s booming recovery. But now the union seems to be turning its back on what was the promising start of a long-term era of cooperation.
It’s turned a blind eye to Fiat Chrysler Automotive’s plan to outsource small car production to Mexico, and seems unconcerned Ford will be outsourcing all compact or midsize car production by 2019. It also turned down jobs GM was willing to insource before the union strong-armed negotiations.
Unsurprisingly, GM’s Buick has just announced it will be importing a mid-sized sedan from China in a milestone event. There’s also the UAW’s unbridled backing of an Obama administration — and Democratic politicians in general — who have forced automakers to make ambitious, nearly technologically impossible commitments to improve fuel economy and emissions.
“As you improve fuel economy, the value to consumer gets smaller and smaller,” says David Cole, chairman emeritus of the Center for Automotive Research in Ann Arbor. “You have cheaper gas, but have to pay $10,000 more for the car. That’s an issue.”
With these new contracts, the union has essentially staked its future on a continued sales boom in relatively fuel-inefficient pickup trucks, SUVs and large cars, rather than produce the small cars that seem to fit into future regulatory requirements.
But with an almost inevitable future rise in gasoline prices, the UAW’s close relationship with larger vehicles will become a liability as those jobs begin to disappear, along with the small-car jobs the union has already given up.
Notably, Williams didn’t get the grand solution to the growing health care problem he and the automakers face. The important VEBA-like structure he touted before talks has gone nowhere; that admirable goal was also abdicated for immediate financial gratification.
Whatever the motivation, the UAW no longer seems invested for the long haul.
Kaitlyn Buss is an editorial writer at The Detroit News.