According to Forbes.com, the answer is a definite “maybe,” as one important local has already voted to authorize a strike.
The United Auto Workers’ contract with General Motors expires on September 14th and the automaker has made it very clear that it wants major concessions from the union, as do both Ford and Chrysler, who also have contracts expiring that month.
But the president of the UAW faces open rebellion from his members if he gives the automakers what they want.
Now it appears that the local’s leadership is applying pressure to the top brass at the union to make sure they don’t lose the benefits they’ve got under the current contract.
The problem is that GM and the other Detroit automakers pay about $70.00 an hour in wages and benefits to UAW workers, while Japanese brand automakers located in the United States pay a little more than half that, about $40.00 an hour in wages and benefits.
Union workers seem to be sending the message that they’re not giving up what they’ve got.
This is, of course, the problem which is central to the survival of both the Detroit automakers and the UAW.
Members of the UAW may simply not be able to afford to take the cuts that would be required to make their employers competitive. When you’ve got a house and a mortgage and, maybe, a couple of kids in college, you don’t take a pay cut if you can help it. And, when you’re one of a number of similarly situated people in a democratically controlled labor union, you can help it.
By simply saying “no.’
What has apparently escaped the notice of the financial press is that the interests of UAW members and the interests of the automakers are, in fact, not coterminous.
Both want to survive.
But survival means different things for each.
GM can survive by, in essence, abandoning the American market. It can continue, as it has, building cars that can’t sell at a premium price, continue to pay higher labor costs, and postpone the day of reckoning until it has moved much of its asset strength abroad.
Its management has telegraphed that plan to the UAW several times.
But the members of the UAW could easily live with that. Even if it drives the ability of General Motors to compete in the American market into the ground, that would be fine with the UAW’s members.
Because they won’t be around to have to deal with the consequences.
After the buy-outs that GM and other automakers gifted to the UAW over the last two years, they have become dependent on the UAW staff that remains.
And that staff is looking at retiring in about ten years, with full benefits.
The Lansing vote says that they are more than happy to deal with the long-term consequences to GM. They’ll take what the can get, keep what they have. They really don’t care about GM, never did.
They don’t own the company, after all.
Bad news for GM.
But not a surprise.
As Forbes put it, a “reality check.”