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Our Editorial: UAW traded jobs for short-term gain

The Detroit News

UAW President Dennis Williams called the recent announcement that Ford Motor Co. is investing $1.6 billion and 2,800 jobs in a new Mexico plant a “disappointment” and “very troubling.” But it’s disingenuous for him to complain the jobs are moving south rather than growing in Detroit.

Williams and the union knew they were sacrificing jobs and future investments from Detroit’s Big Three in the United States when they pushed for a fatter contract with the automotive companies last fall. They sacrificed long-term growth, which could have included expanding small car production here, for immediate gains.

Even the union’s relative current stability, rooted in confidence they’ll continue to make high-profit, popular trucks and SUVs in the United States, could be threatened in the near future.

But Ford’s announcement is no surprise; it’s reality setting in. The company has made it perfectly clear it can’t make money on small cars if they’re built in the U.S. It would cost Ford about five times as much to have UAW workers make the cars rather than use labor in Mexico.

The union knows that because it actually worked with the auto companies during 2008 and 2009 to retain some small car production here. UAW members accepted the two-tier wage structure to lower labor costs and keep those jobs in the country.

General Motors, for example, started making small cars at its Lake Orion plant, and Ford expanded production of the popular Focus in Wayne. Those agreements were crucial to the auto industry’s booming recovery.

Without the tiered wage structure, Ford doesn’t have much of a choice where it manufactures small cars, despite Williams’ belief that they should be made in the U.S.

It doesn’t hurt that Mexico has created a relatively inviting atmosphere for business by improving its workforce, manufacturing quality levels, and signing free trade agreements over the past several decades.

But Williams has threatened the longevity and health of his union in other ways, notably by abandoning the noble idea he touted to solve the union’s growing healthcare problem. Costs continue to increase, and will more so with Obamacare’s coming so-called Cadillac taxes. Williams claimed it was a priority to create a structure to manage the healthcare issue, but abandoned it at the bargaining table.

These choices the union made knowingly will likely backfire should gas prices rise again and large vehicle production — sales of which have been record-setting over the past year — slows.

Then those jobs the UAW now relies on will be at risk.

It’s a long bet the UAW has made, and Ford’s announcement indicates the union will suffer more job loss in the future. But it shouldn’t feign surprise and disappointment when realities of the global market once again become more powerful than its ballooning contract demands.