UAW Killed GM & Ford. Now They’re Going To Kill You.
The members of the UAW may finally realize that Unions don’t work. It’s common knowledge these days that the UAW was the driving force in GM’s stellar $10.6B loss in 2005, $2B loss in 2006. Or Ford’s $6B loss in 2006. The UAW drove wages to $75/hr (base + benefits) for unskilled labor. Of course, the management accepted it, so management is to blame too.
Now that Ford and GM have no money left, the UAW really can’t screw them anymore. With $12B in losses, the management at GM has pretty decent footing when it says, “sorry, can’t give you more”. It’s not the same as the concessions they gave during the auto boom.
Who’s going to get screwed now? Well, you are, of course!
First, the auto workers will get screwed. Too bad they don’t read this blog! The latest contract GM struck last week makes this obvious. The workers will get no pay raises for 4 years, in exchange for some mild promises about not getting laid off. Of course, they are so overpaid now, this isn’t a huge deal, but in 3 years, they’ll feel screwed anyway. But here is the kicker - as part of this deal, a union-run trust fund is now responsible for a huge chunk of retiree health benefits. A $51B liability. Hmmm.. I’ve been unable to find crisp details about how this is funded and how its going to work, but it sounds like the UAW is going to get about $35B from GM to fund a $51B liability. Wall Street is hailing this, of course, because GM just wrote off ~$16B in debt. That’s pretty sweet.
So, last time I checked, the UAW wasn’t exactly the best with managing money. With $35B in their pocket, do you think the Union Leaders aren’t going to be banking several 10’s of millions for themselves? They will. Who will they hire to manage this money? Their friends? For a small fee? Yes. A big fee? Yes.
When the smoke clears, the UAW will have shrunk the $35B to $30B through mismanagement of funds when they should have grown it to over $50B. As a result, auto workers will get pennies-on-the-dollar in retirement/health benefits and start screaming. GM and Ford will be bankrupt, so they won’t be able to help. Aha - this is the part where YOU get screwed. Uncle Sam will come in and save the day with their pension and healthcare bailout for auto workers at the taxpayers expense.
The UAW sucks. Is it clear yet that the UAW has nothing to do with the workers and everything to do with Union Leadership getting rich?
UAW sucked the life-blood out of GM & Ford. Now their sucking the life-blood out of their own members (no pay raises/fewer benefits). And in a few years they’ll suck the life-blood out of you.
October 11th, 2007 at 9:20 am
Yeah, it could be that UAW workers are too expensive, or it could be that Ford can’t produce and market vehicles that people want. Their US market share has slipped from over 25% to barely 20% in 8 years, despite the face that their models are generally lower priced than the direct competitors.
October 11th, 2007 at 12:44 pm
It’s a bit like saying, “I know he’s got cancer, Doc, but maybe the reason he’s dying is because you aren’t giving him the right medicine.”
Ford is having trouble because its reputation and ability to build cars is permanently scarred thanks to UAW. Labor costs for Ford and GM in the 80’s forced these companies to skimp on quality and engineering while their Japanese counterparts invested in technology, processes, and facilities which continue to payoff today.
What happened was the UAW forced labor rates to be artificially inflated. When American cars were the only ones being made, this was not a problem. But management didn’t recognize that prices would drop due to severe international competition. When prices dropped, the American companies couldn’t cut their labor costs due to UAW. In a competitive market, what happens? Quality and technology were compromised. Do that for 20 years and your company can lose $10B in a single year. UAW killed GM and Ford.
Anyway, I think you are observing symptoms of the cancer, not the cause of the cancer.
December 2nd, 2007 at 4:03 pm
It’s very clear that the UAW is only looking out for what they can get into their own pocket. Taking care of your own is not a bad thing but for long term success in a competitive world workers need to help make their employers a profit. I’m not talking about making the UAW a profit either. Should employees be enabled to make an honest and respectable living? Of course. But with the quality of the parts and vehicles the UAW produces I would not call that a respectable living. Do I put the entire blame of quality on the UAW? Well, Yes. When was the last time the UAW called a strike because of poor quality parts and vehicles?
To live the american dream we ALL have to produce high quality products, produce value, and make our employers a profit. The other option is to start and run your own business.
November 23rd, 2008 at 3:54 pm
i have photographed in many uaw plants…from what i have seen, uaw should stand for u aint work’n…they sleep on the job and pitch child like fits when overtime is not given…damn them all.
November 29th, 2008 at 3:40 am
UAW has crippled America. They should be ashamed!!!
December 4th, 2008 at 8:48 pm
Even the Navajos new enough about economics to leave the Spanish settlers and neighboring Indian Tribes that they preyed on with enough horses, cows, sheep and daughters to continue producing, so they could raid them again in a couple of years. The UAW has raided the US car industry to the point where it can no longer survive.
December 9th, 2008 at 9:31 am
I worked in A Dana plant for 32 years and it was also UAW. The Big Three UAW is the reason all the IPS plants have closed and went overseas. They put so much pressure on the Ips companies to lower their prices that they could no longer produce in the USA. Every time the big three got a new contract we had to make concessions to they could get their freebees.. When it came down to the point we could give no more , our companies had no choice but to close down and move if they wanted to remain in business. This all goes back to the contract language years ago that stated the Big Three could only outsource to other Union plants. This today is the end results. The UAW is a big three union always has been, now I hope they go away just like our jobs and benefits did
December 9th, 2008 at 9:33 am
The poster is 100% right on. The UAW has done nothing good for their companies and simply created the laziest workers in the world. This extremely outdated concept is killing our image worldwide and creating frustration here at home. I HATE hate the UAW, may it die painfully.
December 11th, 2008 at 11:09 pm
I was in the UAW obligated with my employment and not chosen. After being in the Army 3 years for the college fund and graduating from a top art college, i found work as a sculptor in one of the big three. i started working with the work ethic instilled into me by the Army and one of the most respected art colleges, Art Center. This quality based, fast paced work ethic is despised by the UAW drunks and couch potatoes. They frequently came over to me saying things like “hey tone it down a bit, if you give them this effort they will expect it every time from you and the rest of us…BACK OFF THE EFFORT!” “Don’t kill yourself on that job, you have 30 years to go! Take it at a nice pace.” “Why do you want to work that hard and make him look bad, he’s been here 40 years and doesn’t appreciate it.” Then i was seen by management for doing a good job and photographed on the job for the hallway exibit, Auto show exhibit, design institute web site, and skilled trades magazine. As a result I was selected for interesting jobs involving overtime. This extra pay and variety of work created envy. The next thing i knew i was the focus of viscious accusatons, lies and a bullying campaign which resulted in investigations and my wrongful termination. My supervisor was nothing short of a modern day Nazi and got away with everything because he was ex-UAW and they covered his ass. That experience cost me everything as a process known as “gangstalking” ensued to get even with me for stealing some insecure a-holes thunder with a huge ego. I love to build things but i do not need to be represented by those who stifle me and hold me down and expect me to picket to support them when on strike. How can you demand so much when enforcing a work environment of half-ass effort? They suck, dissolve these parasites. All they did all day is talk about their houses and state “geet-er-dun.” Like the uneducated hillbillys they are. Let them recieve uneducated lazy hillbilly wages!
December 12th, 2008 at 9:24 am
Every bad situation provides opportunity. In the case of the struggeling US based automakers an opportunity exists to uncover the real burden of operating a public business with union labor. While many business function quite well with a union present, it’s all too evident the majority are severly hindered. Take it a step further and maybe even look to understand the real burden of the teachers unions to the tax payer and the children the teach.
The opportunity i’m speaking of is for the general public to rechognize and understand unions as a whole are a thing of the past. They had a time and place and early on provided a number of positives we all can be thankful for.
December 26th, 2008 at 1:35 pm
The UAW must be broken and GM must go bankrupt.
December 26th, 2008 at 10:08 pm
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December 27th, 2008 at 2:00 am
[...] a year ago, I wrote a blog post about how the UAW was killing Detroit and how the government would ultimately bail them out. The topic I addressed was UAW [...]
December 27th, 2008 at 12:55 pm
The bottom line, unions suck! Market forces should dictate what a fair wage is! Not some thug founded union that produce lazy and unproductive work forces. Unions suck!!!!!