Wednesday, December 03, 2008

UAW Pitches In

Yesterday I blogged about GM's marketing failure. Today was some great news in how UAW workers decided to help automakers overcome their cost disadvantage over Toyota, Honda and other US transplants. Nothing motivates folks like a crisis and the specter of complete industry disaster. If the Big Three went down, we would still buy cars from Toyota and others. The biggest problem would be that they employee nonunion labor. While these firms work with unions in Japan, the UAW has been recalcitrant in work rules, job classifications and benefit costs. When you fight against workers taking on multiple functions, defection and productivity enhancements, you run against the notion that everyone is a partner in the success of the firm.

It helped tremendously that executives cut inordinate bonuses, perks and reduced salaries. It was smart and gutsy for Wagoner and Mullaly to take $1 salaries from their previous millions. That made it easier to swallow getting rid of the senseless job bank, delaying paying into the health trust, and helping in the transition to lower cost workers. Unions should mean protection from potential labor abuse, but it should also mean being an active partner in the success of the firm. Automakers didn't help either - paying large bonuses and option grants while slashing the work force and producing poor vehicles. It was not hard to see why unions would take an antagonistic stance.

I still believe they should do a prepackaged bankruptcy with government financing, as it will allow automakers to truly cleanse their liabilities and start afresh. With the unions and management pitching in maybe this crisis can actually turn out positively.

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