The Real Problem with the United Auto Workers

Wages aren't the real issue, but the UAW is creating serious problems for the Big Three.  Fixing bad management (and it has been horrific) is only a part of the equation to saving Detroit.

Lately, there has been much ire drawn amongst liberals and progressives as a result of conservatives criticizing the United Auto Workers union.  I think a lot of liberals and progressives-and I am one, at least with respect to most of the key issues of the day-are missing some important facts with regard to the UAW.  I’ve followed the auto industry very closely for the last 20+ years, and had once planned a career there, and I have many friends who work in the industry.  While Republicans have articulated the wrong points, focusing on misleading statistics regarding wages, there are some very real issues with the UAW that liberals and progressive must recognize.

The issue with the UAW is not how much workers are being paid.  There are two main problems. First, the union contracts do not allow the automakers the workforce flexibility that they need to be competitive.  It’s not that the workers are making too much; it’s that the Big Three are forced to keep far more people on the payroll than they need.  When business is booming, the Big Three naturally need to add union jobs.  But when business begins to contract, the UAW makes it much more difficult that it should be to make workforce changes.

The auto industry is one that is highly seasonal, and goes through large up-and-down cycles as the economy moves.  It can also change very fast (look at the difference in what vehicles people want now as opposed to five years ago—or even three years ago).  Auto companies need to have the flexibility to expand and contract their workforces as necessary.  They need to be able to open and close plants, to replace workers who have skill sets that are no longer needed.  The auto industry needs a flexible workforce.  And the UAW has stood as an impediment to the Big Three creating the flexible 21st century workforce that they need, and this has done serious harm to their business.

A good friend of mine is an engineer at GM.  I was shocked when he told me that, because of union rules, he was assigned an “observer” who sat in his cubicle and watched him work.  This is someone with no background in engineering, and no ability to understand the work that my friend does.  But yet, he just sat there, 8 hours a day, to the tune of probably $30 an hour, because the union negotiated and demanded it.  The UAW has negotiated thousands of these unneeded, wasteful jobs.  They’ve focused much of their energy on, rather than taking the best care of the workers possible, trying to make sure there are as many workers as possible.  Why?  It doesn’t take a genius to figure it out: More workers equal more union dues and a larger political power base.

Furthermore, the UAW has continued to resist the Big Three’s efforts to establish strong performance standards.  There is absolutely NO meritocracy in union jobs in Detroit, and that is a HUGE problem.  Of course, we know that executives, given full run over workers, will try to squeeze them dry, but the UAW, rather than trying to work with management to impose REASONABLE standards, has gone fully the opposite direction, and has fought almost ALL reasonable performance standards.  It is difficult, sometimes impossible, for management to get rid of mediocre to poor workers, and excellent workers are not rewarded.  Indeed, sometimes the best workers are even punished.  There is a pervasive atmosphere of apathy in Big Three union jobs because the UAW has cultivated a culture where excellent job performance is simply not important.

So there are some serious problems with the UAW.  Liberals and conservatives are each looking at only one side of the issue.  Now, let’s be clear about one thing, the reason that the Republicans in opposition to the auto bailout are not articulating this is because, (1) they don’t understand it, and (2) they absolutely want to break the union, not for the good of the auto industry , but because of their general anti-labor stance. But let’s be clear about another thing:  Democrats aren’t fighting FOR the UAW out of the goodness of their hearts: they are trying to maintain their political power base as well.  And hence, they won’t criticize or challenge the union at all.

The Big Three have been horribly mismanaged for the better part of the last 30 years, and without a doubt, the executives absolutely need to be held accountable for that.  But only about half of their bad decisions have been their own.  They have been forced into many bad decisions-or handcuffed to the point that they can make no decision-by the UAW and by their national dealer networks, which is another major problem that is a story unto itself.  Even if we get some good executives in place, the U.S. auto industry does need union reform in order to survive.  Recognizing that does not mean being anti-labor, or trying to blame ALL of the struggles of the auto industry on the UAW, but just as the executives must be held accountable, so must the union.  The autoworkers need to understand that much of what the UAW has been doing in recent decades actually is NOT ultimately in the interest of workers, but in the interest of union leaders.

In many ways, unions have failed to embrace the realities of the 21st century.  The labor movement must recognize and adapt to the fact that the workforce of the future will not be “get a job, keep a job forever, retire, collect a pension”.  Unions have focused so much on trying to maintain this paradigm, and it is outdated.  The economy is very fluid.  The American workforce has to become more adaptable, as the modern economy is.  Workers have to understand that a particular job, doing a particular thing, may not be permanent.  Unions need to focus much more on job retraining, and on putting workers were they are needed, instead of simply keeping workers where they are.  One thing I really admired about Bill Clinton was that he tried to make this point (he is one of the ONLY Democratic politicians in recent years to do so rather than just bowing to the agenda of big labor).  Lack of adaptability is a big part of why the Rust Belt went under and a big part of why the Big Three is struggling today.

To survive, and thrive in the 21st century, the American auto industry needs BOTH major management reform AND major union reform.  If it doesn’t get both, it won’t survive.  It is possible to strike a balance what management needs to be able to lead a company to success, and what workers need in order to be able to earn a good living, build strong communities, and care for and provide opportunities to their families.  But in order to strike that balance, we have to challenge and demand strong improvement from both management and the UAW.

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See the problem is that while employees are being asked to bear greater and greater portions of the risk, they are not being rewarded along with it.  For example, you can reasonably argue that in a more flexible work force, it makes sense to move away from defined benefit pensions.  However, the alternative, 401k's are actually an inferior product.  Sure you get flexibility, and the potential to get better returns, but for the average person, they will have less money available for their retirement while living longer. 

If you changed the relationship between the big three and the unionized workers such that you exchanged flexibility for  a bigger stake in the company outcome, then maybe you'd have something.  As it is, when the company does well, the employees get to keep their jobs, and when the company does poorly, they don't.  So the UAW strategy has been mostly focused on mitigating the downsides, trying to make it as stable as possible

 

by sterno on 12/22/2008 06:42:51 PM EST

I wonder if you halved the total compensation package of the General Motors top 5 executives which totals in this year of near bankruptcy and the need for major concessions on the part of the workers a mere $65,684,326 how many of those bullshit jobs could you pay for?

Let's see at $30 and hour that's about $62,400 per year with benefits will round up to $100,000 that comes out to 328 jobs we could pay for and still give the top 5 over $32 million to split up between themselves.

No, what the fuck am I thinking, we wouldn't want to cut executive salaries, after all they might not be inspired to continue doing such a wonderful job.

"Although it is not true that all conservatives are stupid people, it is true that most stupid people are conservative." John Stuart Mill

by Hubble on 12/22/2008 10:28:54 PM EST

[ Parent ]
The get a job , keep a job for life get a pension equation seems to be working just fine for them.

In fact don't they usually have apprentice programs that prepare them to be skilled labor for life?

Japanese companies try to keep their workers for life at least in Japan .

In the high tech industry   Microsoft and Google both try to keep their employees long term  for life if possible.

Its not some antiquated quaint notion. Its something that has been done and can be done again.

The REAL problem is America doesn't even manufacture anything anymore. We are becoming a nation of paper pushers. All we do is shuffle paper around and it looks like its not working out. We went from the biggest exporter to the biggest importer in what 30 yrs? We used to have countries owing us money , now we owe China and other countries god knows how much money.

Our biggest export now is air. Meaning the air in the empty shipping containers going back to China.


by Chinese Democracy on 12/23/2008 01:34:45 AM EST

The people work their butts off and get a good paycheck.  Overtime is $45 bucks an hour big deal, CEO's are getting $100,000 and hour.

If all the automakers problems were pay then foreign automakers with factories in America would be in the same boat, yet they aren't.  Most non union auto makers pay the same.  If Detroit unions win a new contract the non union shops pay the same.

My son-in-law works at a Honda plant and makes the same rate as a union shop.

The Big 3's problem are much higher.  Too many layers to make a decision.  That's why IBM got wiped out in PC's, they couldn't make a decision.  Big 3 execs sit in their cushy offices, rake in the dough and expect us to buy american.

What american car (besides pickup trucks and the Japanese are catching up slowly in that arena) is better than a foreign car, costing the same?  Not many.  If all the hard working people making the cars are paid the same what's the difference?

by northernlightsdemocrat on 12/23/2008 10:53:37 AM EST

The original post here presented very useful information and a very interesting perspective.  It added needed complexity to the current national debate.

David

by yturks on 12/23/2008 12:57:02 PM EST

You completely ignore half the post in favor of your (discredited) world view.

"To survive, and thrive in the 21st century, the American auto industry needs BOTH major management reform AND major union reform.  If it doesn’t get both, it won’t survive." 

You know, if your POV was valid you wouldn't have to constantly distort things.

"No, you are a paid blogger assigned to counter anyone that posts something negative about the government or Obama." by Mcamelyne II on 05/17/2011

by Robrob on 02/24/2009 12:52:02 AM EST

[ Parent ]
To survive, and thrive in the 21st century, the American auto industry needs BOTH major management reform AND major union reform.  If it doesn’t get both, it won’t survive." 

Try addressing the entire subject and not just the parts for which you have memorized Rush Limbaugh quotes.

"No, you are a paid blogger assigned to counter anyone that posts something negative about the government or Obama." by Mcamelyne II on 05/17/2011

by Robrob on 02/25/2009 12:15:25 AM EST

[ Parent ]
Why American workers shouldn't expect and get a living wage.. health benefits and maybe a good pension.

Why conservatives think the answer to everything is making Americans live like they are in a 3rd world country.

The workers don't steer the company

Why the top execs making millions in bonuses seems to slip right by conservatives.

Blaming the worker is total bull shit conservative ploy.

Foreign auto companies are " down south" for the same reason American companies are in China. You can get away with paying the workers nothing. Its that simple.

Conservatives forget that those are foreign companies and the money flows to their respective countries.

The troll can stay "down south" and make half what it takes to live . I prefer people get paid a living wage.


by Chinese Democracy on 02/24/2009 01:49:25 AM EST

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