United Automobile Workers of America (UAW)

berri

I think the UAW impact was more labor shop work rules and their "Stockholm Syndrome" effect on the workforce, than just wages. Give a sh.. work and resulting high overhead costs from union rules and featherbedding were part of the driver behind uncompetitive cost and product. But I think another issue and disadvantage for Detroit is the Wall Street focus on today and short term financial results for stockholders. Corner cutting, cheap parts and mediocre engineering are all ways to enhance the profit margin "short term". Unfortunately, longer term it can ruin a brand. But many Wall Streeter's are frequent, short term traders and they are out of the stock before it all catches up, just like the turnaround shops and vulture capitalists.

Mr_Shiftright

A company with bad management and good workers will die a lot faster than a company with good management and bad workers. Why? Because the second scenario can be corrected but the first cannot.

If the argument is that the UAW was draining the life blood out of GM, then why did GM cave to anything?

If one says "they had to", then what one is actually saying is "They knew the unions were killing them, so they gave them more money with no demands for more production"---

If THAT'S not bad management, I don't know what is.

If the UAW knew that GM was dying, why would they kill the golden goose?

In reality, it's Thelma and Louise going off the cliff together. One cannot even UTTER a complaint against the UAW without the qualifier that GM management was at least equally, or MORE, to blame for the mess.

GM management designed and priced the cars they made---all the UAW does is assemble them. If they don't want their hands chopped off, or their lungs corroded, or to be worked to death, they have a right to pipe up, don't you think?

fintail

And the gini coefficient in Germany (or any other gap measure one wishes to use) is still far less than in Murica, which is moving from three class to two class. Capitalism?

Germany might end up being the last example of what was once an evolved economy.

And if we want to know why, look at those execs.

fintail

It'd be interesting to see those costs vs the costs of the competition. It's not like Europe has low labor costs, nor Japan. Although they do tend to have superior human development conditions, and better manager/worker relations.

And if one wants to whine about labor costs, let's examine the costs of the one trick pony cookie cutter MBA set vs the costs of actual workers - compensation rates for the former have exploded over the past generation vs the latter - yet they are never blamed.

gagrice

And the gini coefficient in Germany (or any other gap measure one wishes to use) is still far less than in Murica, which is moving from three class to two class. Capitalism?

That may have some merit. It is NOT capitalism to blame. It is corporatism and the Elitist oligarchy that our Federal Government has become. There is NOTHING capitalistic about TARP giving money to corporations that are going bankrupt. Capitalism would let the weak fail and the strong survive.

Germany is falling into the same trap we are in. It ain't all rosy over there.

imidazol97

>It is corporatism and the Elitist oligarchy that our Federal Government has become.

Exemplified by how the Congress has exempted themselves from obamaCare and given them and theirs subsidies to maintain their current gold-plated plans for healthcare.

The unions, including the UAW I'm sure, at first blush were turned down for assistance form tax monies to help their poor workers pay for healthcare plans, but will eventually, under cover of night or a late Friday executive order, be given the subsidy for their plans so their workers won't suffer the reality of obamaCare. Much in the same way the UAW hasn't suffered the reality of what they did to GMFC.

Mr_Shiftright

Congress gets the same health care plan as any other federal employee. There's nothing "gold plated" about it but it is a very good plan. The only perk they get is quick access to medical help while they are in session.

fintail

But it is capitalism, as has it evolved to over the past generation or two, that has created what we have now. The Feds are just a symptom of the oligarchy who pays for them. Those who are born lucky/"strong"/stole their way up and then buy laws that benefit them, like the past 30 or so years of self-destructive trickle down nonsense. There's nothing capitalistic about aiding a few in hopes that it will filter down/a rising tide will lift all yachts/"creators" will spring to action, either. Dumb fiscal policy and the ever more megalomaniacal Praetorian class cost a lot more than TARP or the private sector unions some whine about.

Murica is still winning one race, and it is shameful. It ain't all rosy anywhere, but some places have nicer gardens than others. At this rate, the nation will devolve into a divided Florida or California second world style reality with massive socio-economic divisions, which in world history, seldom end well.

Mr_Shiftright

The classic "Banana Republic".

gagrice

There's nothing "gold plated" about it but it is a very good plan.

I guess that would be relative to the silver plated or the tin plated plan most of US will end up with. When I first became a Teamster in 1971 we had a GOLD plated HC plan. 100% medical, dental and eye care. My take is people abused it and by 1980 we were paying 10% on Medical and dental had a $2000 per year cap. When I retired the plan was 30% paid by me on medical, 50% on dental and $200 every other year for eyes. And it cost my employer $1200 per month. My understanding is TriCare that military and some civil service get for life if they retire is a very good plan. We should know before long if the Unions get what was promised them.

gagrice

It ain't all rosy anywhere, but some places have nicer gardens than others. At this rate, the nation will devolve into a divided Florida or California second world style reality with massive socio-economic divisions, which in world history, seldom end well.

You can thank Obama and his Federal Reserve for pumping $85 billion a month into the Wall Street Banksters pockets. That is Trickle down on steroids. Problem is the few dollars that do flutter down are worth a lot less than they were a few years ago.

And I blame it all on the UAW ;-)

Mr_Shiftright

Why did unions like the UAW even start up? What was the point of them? They already had a job, they got paid. Why did they get into a literal bloodbath with Ford, for instance.

tlong

It'd be interesting to see those costs vs the costs of the competition. It's not like Europe has low labor costs, nor Japan. Although they do tend to have superior human development conditions, and better manager/worker relations.

The differences is not only the costs but the militancy of the US vs. EU workers. The harshly adversarial UAW-Management relationship caused big problems. I don't think there are jobs banks in Germany; perhaps I'm wrong.

And if one wants to whine about labor costs, let's examine the costs of the one trick pony cookie cutter MBA set vs the costs of actual workers - compensation rates for the former have exploded over the past generation vs the latter - yet they are never blamed.

Well when the bean counters take over, watch out. Like our creative banking and other financial friends. You know they saying "In the US, we used to MAKE things. Now we MAKE THINGS UP".

tlong

Congress gets the same health care plan as any other federal employee. There's nothing "gold plated" about it but it is a very good plan. The only perk they get is quick access to medical help while they are in session.

Aren't they also exempt from SS, instead getting fat pensions? Funny, they are supposed to be OUR servants. I think it is reversed.

gagrice

Why did unions like the UAW even start up? What was the point of them? They already had a job, they got paid. Why did they get into a literal bloodbath with Ford, for instance.

That is a very good question. I would say a few greedy people like Reuther was top of the list. Reuther was a Communist sympathizer hoping to form America like the USSR. I don't think the Unions prior to that were as bloody. Most were tied to organized crime. It was not uncommon for Teamster leaders to accept bribes to keep the goods flowing through various cities.

While early Unions may have helped a few to have a nice middle class income. I don't think it was beneficial to the working class in general

Mr_Shiftright

Nope, they pay into SS and they do not "retire for life". There are many misconceptions about this due to numerous Internet e-mails disseminating false information to fuel an anti-government atmosphere.

Not that it isn't a pretty cushy "men's club" and all that, but congress, like the UAW, is subjected to many false rumors.

dieselone

I know some of the state employees in Illinois don't pay into SS. I don't know if that's for all state employees, but I do know it is for teachers in our school district.

gagrice

I don't think very many states Public employees pay into SS or MC. The old Railroad workers also had a defined pension plan and were exempt from SS. It seems Federal employees are some how in the SS mix. May have to do with when they were hired. A very mixed bag. My SIL worked just long enough in the private sector to get a very small SS check. They take all of it for Medicare and she has to send them a check each month. The real kicker is she is a retired CA teacher that gets HC for life. So she is paying for MC that she does not need or use. She is also covered for HC from her husbands CA pension. Nothing simple about our governments.

andre1969

I think if they were employed by the federal government prior to around 1983-84, they would fall into the earlier system where they don't pay into SS, but instead pay into their own retirement plan. I think that old plan would let you retire with up to 80% of your best three year average, once you got 40 years of service in.

For those who went into service after that 1983-ish threshold, I think the plan is something like 1/2 of a percent of your salary for every year you work. So if you put in 40 years, you'll get 20% of your best three or whatever. They also pay into social security. And also pay into some 401k equivalent, called a Thrift plan or something like that?

Mr_Shiftright

different system.

fintail

The government kind of provides a jobs bank in other first world areas, as there, taxpayers receive something for their taxes.

Haven't the beancounters already taken over? The monster of globalization is the beancounter ideal in its purest form - lowest price no matter the cost.

fintail

Pretty much the road we are on now. Some parts of the nation already resemble it. And some use labor as a distraction.

fintail

Oh, it started long before Obummer and you know it . And had dirty old man or daddy's wallet won, nothing would be different.

Bailing out FIRE criminals doesn't even pretend to be trickle down job creator nonsense. The regime today has no shame and doesn't even try to hide that they won't bite the hand that feeds them. Not much different from those who came before.

fintail

The early ones are responsible for many of the benefits (40 hour weeks, vacation, etc) that we enjoy today. Of course they too often now lag behind other developed economies, but that's something else.

Would we be better off today had they not existed? I don't see it.

gagrice

Would we be better off today had they not existed? I don't see it.

WE is a big word. I would not be better off. Most of the old timers in the UAW are better off. How about the millions that did not get into a cushy Union job? They may have gotten a bit more per hour on their pay checks. Did they have the defined pension plan most Union workers got. I think if I have read it correctly the peak Union membership in the private sector amounted to 12% of the workforce. This from 2011:

The percentage of private sector workers in unions fell to 6.9 percent, down from 7.2 percent, the lowest rate for private sector workers in more than a century, labor historians said.

http://www.nytimes.com/2011/01/22/business/22union.html?_r=0

So what about the rest of the worker bees? Did they reap the benefits or were they forced to try and keep up with the inflation caused by higher labor costs from Union workers?

I am looking at it from a Union person's perspective. I was on top of the heap. While those doing the same job I was doing had non union packages sometimes less than half. So how did my being in the Union help them?

tlong

More on the cushy Congress retirements here:

http://abcnews.go.com/Business/retirement-plan-compare-members-congress/story?id- =19734379

(sorry the link doesn't look good - the link tool is currently on hiatus along with the emotorcons on my system....)

tlong

Would we be better off today had they not existed? I don't see it.

If unions were truly that important today you'd see union membership climbing. That's not happening.

gagrice

I would further add that the Union workers created a wage bubble. It was not as radical as the Dot.com bubble or the recent housing bubble. A bubble all the same. When we came out of our isolation and into the Global community that bubble burst. And it was not just in the USA. Germany is not building cars in the USA just for our market. BMW is the largest exporter of vehicles in the USA. I would guess it is cheaper for BMW to build cars here than with the over inflated wage packages they have in Germany. I would bet my new VW Touareg built in Slovakia was using lower paid workers than in Germany.

Even in post housing bubble CA the workers building homes at a rapid rate, were already using lower priced labor. I remember when family in the Carpenters Union were making $28 per hour during the 1980-90s. Try finding a Union contractor today. They were mostly using subs with illegals when the bubble burst. $12 per hour was the going rate.

Some of the work rules like OT and vacations were pushed through by Unions. The real problem I see is the HUGE disparity between Union and non union today. A Verizon technician makes about $40 per hour using all company vehicles and tools. A contract technician working with his own truck and tools is lucky to get $20 per hour.

fintail

Wrong context.

Because those in the past worked for the amenities of today. You can't seriously think we would have what we do now (which in some ways still pales to more developed economies) withiout efforts in the past - some in the past united and fought for higher standards. Now things are slowly but steadily decaying again. We can only hope it's a pendulum and not a sinking ship.

fintail

Or it is cheaper to ship those German branded vehicles (usually fat SUVs) to markets where they are in demand than build them in one place. There's an entire half of the planet where USA is closer than Germany. MB in particular has had factories elsewhere for decades, I'm talking 50+ years - easier to build cars in South Africa, for example, then ship them from Germany. If it was really just to escape high cost locations, it would have been fought hard.

I don't buy the wage bubble bit, as overall, private sector actual worker (as opposed to exec) wages have been stagnant or declining for decades. We didn't come out of isolation - the US was a huge trader before the pandora's box of globalization was forced by corporate criminals an their political puppets. We sold out much of the populace so a few could consolidate even more.

fintail

PTO, OT laws, numerous other benefits - they didn't come out of thin air, and were not granted for altruistic reasons. You wouldn't have got them on your own.

gagrice

PTO, OT laws, numerous other benefits - they didn't come out of thin air, and were not granted for altruistic reasons. You wouldn't have got them on your own.

Didn't I say those laws were a result of Union efforts???

I am not buying the Germans strictly built factories in 3rd world countries like the USA for logistical reasons. If so why aren't they paying German wages and benefits? Cheap labor is part of the equation. The German auto makers are no more altruistic than any other corporation. Making money is still the motivation behind all business ventures. Not providing jobs in a workers paradise.

And there was a wage bubble that did not take into consideration what the rest of the World was paying for labor. Especially unskilled labor. Example was the Domestics building factories in Mexico to get CHEAPER labor. I am not one of the people that think US workers are superior to all others. And are worth more. That sort of ignorance cost the UAW 2/3rds of their members. Anyone that thinks they are indispensable are in for a rude awakening. That includes me. Even if they did hire 4 more people when I retired. ;-)

tlong

Even in post housing bubble CA the workers building homes at a rapid rate, were already using lower priced labor. I remember when family in the Carpenters Union were making $28 per hour during the 1980-90s. Try finding a Union contractor today. They were mostly using subs with illegals when the bubble burst. $12 per hour was the going rate.

The lesson learned here is that when something unsustainable is created in the market, it is temporary. Markets will adjust. The effects can be bankruptcies, right-to-work states, or offshoring. So the union gains are not really anything permanent. They're just temporary featherbeds for those lucky enough to get them.

tlong

Wrong context.

Because those in the past worked for the amenities of today. You can't seriously think we would have what we do now (which in some ways still pales to more developed economies) withiout efforts in the past - some in the past united and fought for higher standards. Now things are slowly but steadily decaying again. We can only hope it's a pendulum and not a sinking ship.

I agree that the unions were important and valuable in the past. But they are a pendulum, too. They got greedy, sucked it all out of the golden goose, and then the goose collapsed.

gagrice

The lesson learned here is that when something unsustainable is created in the market, it is temporary. Markets will adjust. The effects can be bankruptcies, right-to-work states, or offshoring. So the union gains are not really anything permanent. They're just temporary featherbeds for those lucky enough to get them.

That was perfectly said.

tlong

We sold out much of the populace so a few could consolidate even more.

Become a shareholder and you too can own part of those companies.

Reasonably smart people can still make good decisions and do fairly well in this country.

No argument on the salaries of the CEOs. Then there's the entire corrupt financial industry, but that's another topic...

gagrice

No argument on the salaries of the CEOs. Then there's the entire corrupt financial industry, but that's another topic...

I am not sure why that is the liberal fallback subject. A CEO making $10 million would not make enough difference in the wages of a company like McDonalds to be significant. Pay him $1 a year and share the $9,999,999 with the 1.3 million employees. It would amount to less than a penny an hour raise.

Besides it it totally the Federal government that controls such things. The SEC decides how the boards of these companies operate. I would simply not allow anyone to sit on more than one BOD. That would solve the problem of them padding each others salaries and bonuses. No more I will scratch your back if you scratch mine.

tlong

I am not sure why that is the liberal fallback subject. A CEO making $10 million would not make enough difference in the wages of a company like McDonalds to be significant. Pay him $1 a year and share the $9,999,999 with the 1.3 million employees. It would amount to less than a penny an hour raise.

Exactly. It's annoying and unfair, but it's not material to the overall state of things, financially speaking.

dieselone

"I am not sure why that is the liberal fallback subject. A CEO making $10 million would not make enough difference in the wages of a company like McDonalds to be significant. Pay him $1 a year and share the $9,999,999 with the 1.3 million employees. It would amount to less than a penny an hour raise. "

I tend to agree. When many including the media talk about CEO pay they are using numbers from CEOs of Fortune 500 companies which IMO are basically outliers considering how many CEO/presidents of companies which exist outside of the Fortune 500. Their salaries on average are nowhere near the pay of Fortune 500 CEOs. I know several people that are presidents/CEO of small to midsize companies and they are not raking in millions.

Why just concentrate on CEOs? What about professional athletes? There is a huge disparity between the a guy making league minimum and the top paid players which are part of a union by the way. What about the poor stiff cleaning the toilets during the game? I know that's apples and oranges.

So I really don't put much thought into that issue. I'd be more interested in how such earnings are taxed. But I don't want to open that can or worms either;)

Mr_Shiftright

It's the same old outlier argument. Most members of Congress don't stay in for 20-30 years. If you get just one term, you get practically nothing and even 10 years is no great shakes. This article is featuring 30-year people.

Cherrypicking journalism, once again.

However, I really did like the last line in the article--the second meaning might have been unintentional: ' "If you want to retire like your Congressman, you may need to work a little harder and save a little more."

stever

I agree that the unions were important and valuable in the past.

I think it goes back further, to the guild days. Guilds were set up to "guard" information - if you had the specialized know-how to do a job, you could control the price of the job. They morphed into unions where the price control was human labor (the specialized info leaked out and the guilds lost their clout; think free code pulling at auto parts stores).

The UAW just fell behind the natural cycle of things. They should have morphed into patent trolling and dumped the membership, while they collected dues from the robots.

marsha7

most of the teachers, and others who work in the school system, often do NOT pay into Social Security...their paychecks show a reduction for Medicare, but their retirement is called TRS, Teachers Retirement System, or ERS, Employee Retirement System, if you are not a teacher but work in the school system...their checks are issued by the XXXXX Board of Education...

And with all those comments about the UAW, I think I'll just hold my tongue and say nothing...why would I, a really nice guy, have anything bad to say about the UAW???...who, me???... :P

fintail

Yeah, most wealth is boostrapped, right.

What percentage of stock is owned by what percentage of the population? The "shareholder" rebuttal is weak and irresponsible, more of the sick American obsession with short term profits at the expense of sustainability.

And huge stock-stockpiles don't drop out of the sky. We aren't all born lucky boomers who got started in a much less expensive and competitive reality who now tell the rest to go pound sand now that they got theirs...

Like I said, we sold out much of the populace so a few could consolidate even more.

fintail

No doubt those factories pay wages that are comfortable and in line with comparable jobs - you get what you pay for in that realm, and lowballing it would give respectively low quality. And logistics is a bigger part of it than it was in the great American offshoring. I suspect German automakers treat their workers better than most shops in Murica - as I doubt any developed nation has the toxic worker-management relations like the US.

And the US is not a 3rd world a 2nd world country, thanks to the tireless efforts of the silent generation and spoiled boomers. Banana republic, not a wasteland.

Looking at the less developed world as a direct comparison is more of a race to the bottom. First world standards developed via a century of hard-fought social progress are not a bubble. Time to make offshoring a form of treason, and have paid admission public hangings for those found guilty, those proceeds could cure the national debt

fintail

Is the disparity between a rookie spare pro athlete and a superstar the same as between a new entry level worker and an admittedly (nice to see some here admit it) overpaid CEO?

And indeed, taxes are a more valid issue. Trickle down has turned out to be a failure, "job creators" a lie. Reform is needed.

fintail

Especially when markets are bought and paid for by a top few who some clueless think worked their way up. Then adjustments can be as unethical and amoral as possible.

Talk about lucky...

gagrice

And indeed, taxes are a more valid issue. Trickle down has turned out to be a failure, "job creators" a lie. Reform is needed.

I think Bill Maher said it pretty well. The liberals could lose him over paying higher taxes. He considers the 52% he pays in CA enough already.

As far as offshoring, I don't see that as the biggest drain on the economy. It is all the products we are buying today that were NEVER manufactured here. I don't remember us building little transistor radios in the 1950s when they first started coming in from Japan. Same now with smartphones, iPads, video games. The consumer electronics market is much bigger than the automotive industry. And will continue to grow. And we don't have a chance in heck of gaining any of it.

Samsung sold twice as many electronic gadgets in cold hard cash than GM sold vehicles. They are far richer than Walmart. We missed the boat on the next boom.

tlong

It's the same old outlier argument. Most members of Congress don't stay in for 20-30 years. If you get just one term, you get practically nothing and even 10 years is no great shakes. This article is featuring 30-year people.

Those outliers are just as relevant as the outlier CEOs

Speaking of outliers, I wonder how the UAW retirement health plan is doing since it was funded and then taken over by them?

tlong

And huge stock-stockpiles don't drop out of the sky. We aren't all born lucky boomers who got started in a much less expensive and competitive reality who now tell the rest to go pound sand now that they got theirs...

Not all boomers were lucky.... some just made prudent decisions.

I worked two jobs while getting my Bachelor's degree.My first car was bought used with money I earned, and I went 18 years and 180K miles on that car. I never had a union or a pension, and I always expected that I was at work to help my employer be successful. I wasn't entitled like many lazy workers of today.

I didn't have a passport until I was 42 years old, so never went on glorious trips to other continents until I needed to travel for work in my 40's. I didn't drive a new luxury make until I was about the same age. I also never bought tobacco or alcohol, and don't eat in expensive restaurants.

Think of how much money people would have if they spent differently.

For the people who can't see a future and instead live for today, I hope they are having fun. Just don't complain when things get worse in the future due to foolish lack of planning.

We've all read about UAW workers who were pulling >$100K, buying boats, going on trips, etc. Then when the ax came it was boo hoo that they were left destitute.

tlong

Looking at the less developed world as a direct comparison is more of a race to the bottom. First world standards developed via a century of hard-fought social progress are not a bubble.

Funny, I remember one post I saw around here where China was blamed for not having all their pollution cleaned up immediately, since the "knowledge is already there". Social progress takes time. The UAW, or whatever it turns into, will adapt one way or the other, or die out.