Limiting Union benefits As Well
Much is being said these days about various bailout packages for the Big Three automakers, but a lot less is appearing regarding the UAW's obligations in resolving this current crisis. One news article noted recently that, "Even if lawmakers return to vote, they are likely to insist on numerous conditions on any loans. One possibility is to seek a partial ownership of the companies. Another is to limit salaries of top executives. A third is to prohibit use of the funds for any lobbying." Not a single mention about what we should expect of the unions and their members, past and present. One of the many stipulations being talked about is that the Big Three should present a detailed plan for turning around their respective companies before receiving a loan. What about a stipulation for the unions as well? Did we forget their role in all of this?
The one thing conspicuously absent in almost all of the discussions these days in is an equally stringent call for rollbacks or significant changes in union contracts. At the heart of this entire mess are the high costs of production, and the single largest cost facing Detroit are its labor costs, direct and indirect, as well as short and long-term obligations. The fancy word for the latter is "Legacy Costs." Regardless of what you call it, no company can survive indefinitely if must constantly bank more and more of its meager earnings or profits to fund future obligations.
Sure, management is clearly at fault for giving in to what in hindsight were unreasonable demands, and now it's time for Peter to pay Paul, and that means reexamining the logic and soundness of every single "Legacy" benefit promised to workers in the past 20-25 years. If we don't do that, then indeed it is quite possible that this country could collapse into something most of us dare not even mention.
P.S. So that no one misunderstands my motivation in writing the above, let me make it perfectly clear that I am not anti-union. In fact, in my early days as a newspaper reporter I actually saw the need for a union where I worked and I proceeded to establish the very first Newspaper Guild established in Northern Virginia. Nonetheless, abuse of power can indeed be a dangerous thing and there has been an abundance of abuse within the UAW!
The one thing conspicuously absent in almost all of the discussions these days in is an equally stringent call for rollbacks or significant changes in union contracts. At the heart of this entire mess are the high costs of production, and the single largest cost facing Detroit are its labor costs, direct and indirect, as well as short and long-term obligations. The fancy word for the latter is "Legacy Costs." Regardless of what you call it, no company can survive indefinitely if must constantly bank more and more of its meager earnings or profits to fund future obligations.
Sure, management is clearly at fault for giving in to what in hindsight were unreasonable demands, and now it's time for Peter to pay Paul, and that means reexamining the logic and soundness of every single "Legacy" benefit promised to workers in the past 20-25 years. If we don't do that, then indeed it is quite possible that this country could collapse into something most of us dare not even mention.
P.S. So that no one misunderstands my motivation in writing the above, let me make it perfectly clear that I am not anti-union. In fact, in my early days as a newspaper reporter I actually saw the need for a union where I worked and I proceeded to establish the very first Newspaper Guild established in Northern Virginia. Nonetheless, abuse of power can indeed be a dangerous thing and there has been an abundance of abuse within the UAW!
Labels: anti-union, labor costs, labor unions, legacy costs
posted by The Quick Consultant at
4:00 PM
1 Comments:
As someone who grew up in Detroit I saw first hand the need for unions to protect workers and help them achieve a fair wage. But at some point the tables turned. The unions insisted that they had the "right" to participate in management decisions and once that happened the slippery slope started and has never stopped. And it's not just the auto industry. Airlines, steel companies, etc., etc. have seen the same results. It would be a shame if the Federal Government bailed out these ill managed, arrogant companies that even today have said they have no contingency plan for bankruptcy.
I wonder if any of the thousands of printers who are facing imminent failure can fly to Washington in their personal airplanes (maybe a 1952 single engine Cessna) and ask for a bailout.
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