As an inexorable global
economy makes the world a smaller place, America’s unions have made similar
strides: everything about
U.S. labor is smaller in the 21st century! The number of unions, their
dwindling membership -- even the duration of their strikes.
A couple of weeks ago
the United Auto Workers struck against General Motors, the first nationwide
strike against the auto industry since 1976, when America was celebrating the
100th anniversary of its Centennial. But before we could get all misty
for the union heydays of Jimmy Hoffa, Norma Rae, the Battle of Matewan and the
Ludlow Massacre, the strike was settled -- in just two days. Then last week,
the UAW struck against Chysler, a show of solidarity that lasted seven hours.
If this keeps up, Ford can look forward to
work stoppage roughly the duration of a Super Bowl halftime show, although
hopefully more entertaining.
And what was it that had
the UAW in such a labor tizzy -- what untenable issue left the union with
no other recourse but to stage these truncated mini-breaks? Job
security. Yes, after
post-war strides in auto worker benefits that set the gold standard for modern
unionism, the bar has been lowered like a limbo pole so that the best today's
union worker can expect is to keep his job.
So when GM heard the
meager demands of its squeaky-wheel workers, they saw a perfect opportunity for
an even trade of their $50 billion future health coverage “liability” in
exchange for “guaranteed jobs." Not wanting to appear disagreeable
and miss the company picnic, the UAW agreed to accept a one-time payment to
assume that enormous burden, creating the voluntary employee benefit
association, dubbed “VEBA,” apparently because the acronym “SCREWED” was taken.
But let’s not make
GM the bad guy! They have enough troubles, having lost 10 billion dollars
and more than 50% of their stock’s value in 2005 alone, followed by
another 2 billion last year.
After such a dismal performance, General Motors CEO Richard Wagoner (a)
boldly set his sights on a “break even” year in 2007, and (b) stuffed his
pockets to the tune of $19.7 million, up from $10.2 million in 2006. Now that's a
job worth keeping! And he didn't even have to give up his company-paid
health care.
But those historic
losses, and a dwindling taste for giant SUVs in the face of record-high oil
prices, only tell half the story, or two-thirds if you're a stickler for
math. After screwing their workers in a trade as one-sided as Jim Fregosi
for Nolan Ryan, the U.S. auto industry still faces a greater, more insidious
foe: foreign competition.
Let’s look at why that
Axis of Automotive Evil -- Toyota, Nissan, and Honda -- can be so darn
competitive. Is it because of their superior ingenuity and marketing
genius? Do they simply make better cars? Have catchier mottos and
snappier jingles? Maybe... but it also doesn't hurt to eliminate employee
health care costs from their operating expenses; because Japan, like virtually
all industrialized nations and economies, offers national health care to its
citizens, even the lowly worker we
in the U.S. treat like the underground-dwelling laborers in Metropolis (Fritz
Lang’s, not Clark Kent’s). A 50-billion-dollar head start is a pretty
competitive edge in any industry.
But things are looking
up for the American auto industry! Those 270,000 General Motors retirees
can't live forever; and even if they did, GM has laid off that bad debt on the
UAW. Shrewd move: in its first day of trading following the ratification
of the new labor contract, GM stock was up about 5%, it's highest level since
January of 2005. And with no future benefit commitments to a union
workforce that now stands at just one-fifth of 1990 levels, it's only a matter
of time before General Motors regains its rightful place atop U.S business.
It's sort of like "The Return of the King,"
except Sauron won and Frodo got cancer.
