The UAW: Help Or Hindrance?

January 22, 2009

In the past 24 hours, UAW president Ron Gettelfinger has been on a media offensive, and man, does he have a lot to get off his chest. Via articles in Detroit News, the Detroit Free Press, the Detroit Bureau, and Automotive News [sub. required], he's said, among other things:

  1. No, the UAW will not make wage concessions. UAW wages aren't any higher than those at Japanese factories based in the US, once you figure in bonuses and such. (Well, they're probably not. He'd be willing to take a look at the other companies "books" to verify it, though.)
  2. No, the UAW will not accept the contribution of company stock to its healthcare plan in lieu of cash. "Just because we're a union doesn't mean we're stupid."
  3. No, that clause in the bailout agreement that says loans would immediately go into default if the UAW strikes doesn't have any effect on UAW policy. "Our contracts are not a part of this agreement."
  4. Yes, the federal government should look into the incentives that some states have offered to foreign manufacturers, because those subsidies are hurting competition and causing job loss at American companies.

In Ron's defense, at least one of those arguments has merit: the union would, in fact, be very stupid to gamble its healthcare plan on company stock. His other points...well, they're up for debate.

Number 1 and number 3 seem like a bit of posturing. Yes, technically the bailout agreement is between the Big 3 and the feds, but to imply that the UAW doesn't take that agreement into account or that the UAW won't be affected by the bailout's outcome (or worse, bankruptcy filings)? That's just chest-beating. Item number 4 is weak at best, and might result in some unpleasant litigation.

Here's the question, though: has the UAW outlived its usefulness? When it was founded in the 1930s, America was deep in its Great Depression. Jobs were scarce, and companies had the upper hand in the workplace. Drawing on the socialist ideology popular at the time (remember the WPA?), unions gave workers leverage and did some other nifty things along the way, like promoting civil rights.

Over 70 years later, though, labor laws have become much more stringent, with workplace oversight enshrined at the federal, state, and local levels. Healthcare plans have become commonplace, as have 401ks and other retirement plans.

So  today, in 2009, what does the UAW do that's special and necessary? Is the UAW still useful for workers and the free market economy? Or is it just getting in the way? Your thoughts are, as always, greatly appreciated.

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