UAW Walks Out on GM During Bailout Negotiations
-By Warner Todd Huston
When the Auto Bailout was approved by Congress one of the stipulations was that the automakers had to get concessions from the unions.
So, in an attempt to abide by Congress’ demands, GM has been in negotiations with the United Auto Workers to make the requisite deals. Unfortunately, it doesn’t seem as if the UAW is in the mood for making any deals, at least if it involves any cuts for them. Consequently the UAW has decided to walk out on further negotiations.
Sadly, instead of trying to arrive at a fair package with General Motors, the UAW would rather stubbornly fight them at a time when everyone is being asked to trim expectations in this faltering economy.
At issue is the UAW administered retiree health care fund. This fund is one of the biggest reasons that GM workers see a total per-employee labor cost of $69 per hour while its competition, such as Toyota, only is saddled with hourly costs of $53. This higher cost makes the U.S. automakers less competitive.
GM says they have a solution to this exorbitant health-care fund.
GM says it owes $20.4 billion to the fund, and the loan terms set a target of giving the union half of the value in cash and half in GM stock. The trust fund would take over health care payments for GM’s roughly 500,000 blue-collar retirees and spouses starting Jan. 1, 2010.
The trust, called a voluntary employees beneficiary association, would let GM move about $46.7 billion in retiree health care costs off its books, making it more cost-competitive with Asian automakers. It is the key feature of a new four-year contract signed in 2007 with the UAW.
Not good enough say union bosses.
It appears the unions won’t bend even if the whole company goes down the tubes. I expect they imagine that with their guy in the White House they don’t have to make the same sort of sacrifices the rest of the country has to make?
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Posted by Warner Todd Huston on February 16, 2009 8:22 am
» Filed Under Democrats, Economy, News, bailouts, liberalism
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2 Responses to “UAW Walks Out on GM During Bailout Negotiations”
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Good, let them go bankrupt and move to righ-to-work states. GM and Ford will never beat Toyota and Honda and Hyundai with the crap they put out saddled with ridiculous union contracts. I had a friend who consulted to GM on a huge software project in the 1990’s. He was onsite in Detroit for a year and had an office. Well, one day they moved his team down the hall while he was out sick. When he came back, he started to move his things down the hall to the new space. Um, wrong. See, there is a job category at GM called “Porter”, a holdover from 100 years ago when everything had to be carried around the factory floor by hand or on a dolly, and you had people doing this all day. Well, they are part of the union, so their job can never go away and the jobs are handed down from father to son forever. So, back to my friend. He boxes things up and starts carrying them whne he is stopped by security. He is told that he must return the boxes to his office and ring for a “porter” to come move them. He waits 3 hours for a guy to get up there and move his boxes. Um, $40/hour to move your file boxes and pencil cup.
Little wonder that the government and unions get along so well, they both spew inefficiency like a geyser. How can any business be competitive when they can be extorted for tribute like a conquered nation? GM, Ford, and Chrysler are dead, they just don’t know it yet. The government can take them over and run them at even bigger losses, or we can just get it over with now and start rebuilding our auto industry from the ground up. It’s dead, forget it and move on. Sell off the brand names and badges at auction to one of the real car companies. I’m sure Hyundai would love to start making Corvettes down in Texas or Mustangs in Mississippi. Then, if a guy needs to move a pen/pencil set, he can just do it himself and save the company a 70,000/year PORTER! Maybe a ‘Vette would cost less and last longer!
Twenty years ago, when I first interned as an engineer at General Motors,
management and the UAW was inefficient, clueless, and at each others throats. Today, nothing has changed. Some days, I feel like one of the guys playing in the string quartet from the movie Titanic. Playing my violin while watching the management and UAW rip apart the company, as out boat sinks into the ocean.