The United Automobile Workers union said Wednesday that it would make major concessions in its contracts with the three Detroit auto companies to help them lobby Congress for $34 billion in federal aid.
The surprising move by the U.A.W. could be a critical factor in the automakers’ bid not only to get government assistance, but also to become competitive…
At a news conference in Detroit, the U.A.W.’s president, Ron Gettelfinger, said that his members were willing to sacrifice job security provisions and financing for retiree health care …
“Concessions, I used to cringe at that word,” Mr. Gettelfinger said. “But now, why hide it? That’s what we did.”
Ed has analysis:
…compensation at the Big Three for non-management personnel amounted to 50% over that of other automakers in the US… Auto workers complained that [this] analyses were inaccurate and reflected pension benefits, which amounted to a non-sequitur, since pension benefits are part of compensation. Apparently, the UAW realized that taxpayers bought that rationalization as much as they buy American-made cars these days, and changed its stance.
Since management seems willing to pare down executive compensation and labor appears ready to make significant wage concessions, why not just let them work this out together? Taxpayers don’t need to subsidize dysfunctional private corporations. They can either work together to eliminate the dysfunction or fail. At least the two sides have started acting like they have something at stake in the outcome, which is the first step towards recovery.
