The greatest hurdle to the recovery of the auto industry may not be the credit crisis or high gas prices. It may be the UAW. If it decides not to play ball as part of a federal government bailout, the $25 billion being proposed in an aid package may not be enough, and Congress may decide to abandon the plan completely,
According to the FT, "The US United Auto Workers (UAW) union has ruled out concessions – at least for the time being – to help rescue the ailing Detroit-based car industry." Of course, the argument is deeply flawed and is the kind of logic that has helped bring the industry to its knees. Management blames labor. Labor blames management. Both blame the credit crisis. It is a neat circle which leads nowhere and does not do any of the parties any good.
Imagine being a member of Congress handing out billion of dollars that many taxpayers think should not go to an industry that has wounded itself and many economists say will not ultimately save the US car companies. If the parties who will get the benefit are fighting among themselves, the chance that a rescue can be successful is almost certain to be destroyed.
Detroit has shot itself in the foot. Now, it can move the gun to its head.
Douglas A. McIntyre is an editor at 24/7 Wall St.



Reader Comments (Page 1 of 1)
11-17-2008 @ 12:41PM
Jimgstef said...
Both the Union and the management should share the pain. They both had a hand in creating the problems. The mgmt. that was responsible for the low mileage SUV'S and trucks should be fired.
11-17-2008 @ 1:53PM
Marc said...
Would you knock it off already with your stupid stories on how the financial crisis we are in is all the fault of those least responsible. The auto industry was run into the ground by retarded executives, feeding on their own excrement and congratulating themselves on the railroad to doom. The blame for their failure lies in only two factors: 1. Nobody likes crappy cars and 2. Oil is a finite resource.
Detroit; don't try to blame this problem on anyone else but yourselves. You are and have been incompetent for the last 20 years. You would do this country a favor if you locked yourself into your garage with the engine running on one of those crappy vehicles you put out.
How is it that workers for all the luxury brands and all the Asian companies making vehicles in the US can manage with comparable wages, but you can't? Granted, maybe the UAW regulations need to be reconsidered, but don't blame others for your own incompetence; this is no longer college or middle school where you faked it. How about you be a man / woman, you incompetent dribble, and give back all the earnings and compensation you got; all along knowing how much of a failure you are and don't deserve it, in order to make room for some intelligent and competent human beings to recover the mess you made so well.
11-17-2008 @ 12:46PM
mongo said...
Of course the UAW will be a problem when it comes to this bail out. They would rather lose jobs than give concessions. We need to realize that there are holes in the boat. If we dont all help bail, it will sink.
The reason that low mileage SUVs sold so well is that the market wanted them! I work for a manufacturing company, and if the consumer wants rubber vomit and woopie cushions, we will make those.
11-17-2008 @ 1:17PM
Rick said...
The people who are forever condemning the UAW or other unions are the same bunch of people who have never punched a time card in a union shop in their entire lives. As such, they are not in a position to know what they are talking about.
11-17-2008 @ 1:31PM
aaazinc said...
This for Rick, you don't need tobe in the out-house
to know shi&*^, when you smell it. Unions have, and still are the number one killer of the American dream. Learn to stand on your on feet, growup. Don't stay like your daddy, be bigger than that example.
11-17-2008 @ 1:36PM
Brian said...
The sooner the worker realize the unions are the ones destroying thier lives and jobs, the sooner they will begin to heal. Let the unions kill the auto makers, it will help the rest of us to survive.
11-17-2008 @ 1:47PM
UAWTinknocker said...
UAW has owned 2 hrs of my paycheck for 30+ years. Other than that, they suck.They have never helped me with a problem all the time they have been my union. I am not alone in this. Go pound salt, UAW !!!
11-17-2008 @ 1:53PM
Rick said...
This for aaazinc: If it were not for the emergence of unions in America, all of us would be working long hours under horrible conditions and management for poverty or slave wages with little or no benefits.
11-17-2008 @ 2:15PM
John said...
Give Detroit all the money you want. Nobody who wants a fuel-efficient, good handling, attractive sedan will buy from them. They picked one segment of a national marketplace, and they can't make a living at it. The sedan marketplace is owned by the Asians. 20 years of producing crap has lead to that. There cannot be a recovery for Detroit. Union, or no union - Detroit is selling buggy whips.
11-17-2008 @ 2:18PM
Terry said...
Read the last contract negotiated by the UAW it was all one BIG concession. 10.00+ cut in hourly wages, No more retirement, and major cuts in health benefits. How much do the workers need to give back. Any more and they might as well flip burgers at McDonalds.
11-17-2008 @ 2:48PM
vinn boom bah said...
Apparently many of the anti-union comments contained herein are being made based on little to no knowledge of unions and the benefits they enjoy. These are hard earned benefits that are well deserved, and anyone that says otherwise has not put in 15 to 30 years of hard back breaking work on an assembly line. These union benefits have impacted other industries as well, and as many workers who are not a part of any union(s). Advances in worker healthcare, safety and environment and fair pay that many employees enjoy today are all the result of union activity. The recent advances in cost and quality that have placed us on par with the foreign transplants are also a result of the unions, not the manufacturers. With all of these things being equal, ask yourself if you pay more for a union made vehicle versus a non-union made vehicle. The answer is no. The fact that they enjoy a larger portion of the manufacturer's profits is of little or no consequence to the consumers pocketbook. When AIG and others were "bailed out" there was little asked and less concern for hundreds of billions to the banking industry. The Auto companies are not asking for a bailout, they are asking for a bridge loan. Why everyone keeps using the term bailout is beyond me, and only muddies the waters further.
11-18-2008 @ 1:31AM
Gflash said...
As long as the Industry is failing anyway... Why on't you pull a Henry Ford? Produce a car with no luxury , that is simple , spartan and affordable . with a small engine under 50 hp that is so lightweight it still flies. Make it repairable and sustainable . The car market will crash . BUT you will own what is left worldwide. There is a whole generation of Americans that are growing up and will never be able to afford the JUNK that you are making now. With all your supposed skill learned in the last 100 years you should be able to mass produce a single model for about $7000. Look to the model T Ford , V W Beetle & strive for basic utility.NO need to advertise let the price do it. If they are cheap enough parents can afford to get one for each kid . Also - QUIT the old mantra of luxury at any price it and fire the designers who come up with those freekish designs. Let the Engineers design the car. Quit believing your own Bullshit and experiment to find out what is needed. Now go !
11-18-2008 @ 12:21PM
Kevin Gray said...
BUY American.....the Japs have had caps on ALL of our imports for years when we do not.......it's being unequally yoked and gives favor to foreign manufacturers that now have factories here. Support America or the other guys?
11-18-2008 @ 8:44AM
Lee said...
If the UAW members don't give in they will lose jobs they can never get back, go into a job market with specialized skill that are not in demand, and the government cannot bail them out with welfare , because the government will not have the money after already rescueing the wealthiest of Americans at the expense of our middle class. Let the big 3 cut the size of their companies, hire new workers at a reduced wage-but still fair, and reduce prices on cars so they can be affordable. The new cars based on a 72 month payout are at "0" value once paid off. Is it any wonder no one wants a new vehicle?
11-19-2008 @ 1:49PM
Jim said...
I have been employed for 24 years at the Grand Rapids Metal Plant that is now slated to close by the end of next year. When I started in my apprenticeship I made a comment to an older journeyman that I didn't need the union because I was a hard worker, (contrary to the saying that we are all lazy). My mentor only said one thing to me: I have been here a long time and this company has treated me very well, but I am not sure if they treated me well because they wanted to or because they had to. I never forgot these words. Over the years I have worked as a diemaker and have watched us improve to become competitive hour for hour with any dieshop in the world. The problem comes from the cost of foreign labor. When China can produce a die for less than what we can purchase the raw materials for without even starting to build it, the problem becomes apparent. As far as this Government Loan that the Big Three are asking for, that is between them and the Government. They never asked me how to run their company over the years. You can't blame the rank and file for the problems at hand. There is nothing in the contract that protects a worker who doesn't want to perform their job. Management runs the company, not the union. If you worked at one of these companies and they agreed to give you a rate of pay and benefits I am sure you would accept it. I never told GM years ago that creating a pension program would be costly later on. They did it to keep workers from switch jobs every few years. Training new employees was costly. I am not on the bargaining committee for the contracts but can tell you that the workers at the plant that I work at donate over $200,000/yearly to the local United Way as well as other charities. As a final note I would like to comment that the Grand Rapids Metal Plant is the most efficient ($1100/ton of parts produced) with an unprecedented quality (9 defects/million parts produced) and this does not happen on the backs of lazy, uneducated workers. I consider everyone in this plant whether it be a material handler, press operator, quality inspector, etc. to be highly skilled at what they do. Once the autoworkers have been beaten down, someone else's job will be next: teachers, nurses, doctors, etc. Maybe even yours. Take care and God Bless America, heaven knows this Country needs it.
11-22-2008 @ 11:21PM
yzhenry said...
Here is the way it is, unions have ruined this country and now the price is being paid. If the people who need to be protected so they want be fired had not been lazy, then they would not be in this mess, American auto industry has built junk and they cannot compete. Why should someone with only a high school education make as much as GM, et all pays. Fire the whole bunch, get some people who really want to work and then they would be ok.
11-27-2008 @ 11:49PM
Gflash said...
WRONG!!!! Unions have not ruined the country- only the people in charge can do that. The Anti -union atmosphere of the last 30 years has cut off the corrective voice coming from the workplace Union workers kick ass and put up with situations that the highly educated run away from . The Idea that workers are not worth their pay is a falacy of management. That somehow sombody else can do it cheeper is just wishfull thinking . Someone with a "Only" a high school education that works at GM is more valuable and productive than most degreed workers anywhere and should be paid more. To look down on them is pure ignorance.Their work makes the dollar valuable. Today only 8% of workers are in a Union . When in the 1950's almost 50% were -The US was the world leader . If the people who are working at a job are given a voice in what is to be done it will be done better. Workers frequently punish managers by doing exacly what they are told to do - when their protests are not listened to beforehand. . The Companies need the Union to help them so they can survive together. They should quit trying to suppress the workers who can and ultimatly will save them . The last 18 years of SUV's in a world controlled by middle eastern oilmongers cannot be blamed on the Unions. The decision to be half- assed is reserved for management alone.
12-01-2008 @ 10:14PM
GOHEMI said...
I believe UAW was also one of the reasons why Daimler-Benz pulled out from Chrysler Corp. so soon, although it was a good idea for the Chrysler-Dodge line of automobiles.