I can remember a time, back in the 70s, when General Motors was worried about having too much market share and stirring the Justice Department for divestiture. They had close to 50% of the market. Alfred P. Sloan’s plan from the 1920s of having a model for every budget and keeping a family in GM products for a lifetime built GM into an industry juggernaut.
In the interim, because of a bloated management – too many layers of bureaucracy – and a union that was ever more demanding with rigid work rules and some of the highest labor costs in the world, the once-mighty company was brought to its knees on June 1, 2009 declaring bankruptcy.
So you’d think that the UAW – United Auto Workers – would do every thing it could to help nurture the company and protect the jobs of its members.
It isn’t as if GM’s workers are being exploited.
GM last year made $11 billion in profit and paid workers $10,750 each in profit-sharing payments. The average hourly employee earns $90,000 annually and pays a mere 3% of health costs compared to an average of 30% in private industry.
So why is the union really calling for a strike?
The WSJ editorial staff thinks it is to deflect worker attention from a Justice Dept corruption probe into the UAW.
The Justice Department has charged several former UAW officials for conspiring to embezzle worker dues and training funds to spend on lavish personal expenses including private villas, designer clothes, golf clubs, spa visits and sports cars. Last week the feds indicted Region 5 Director Vance Pearson, who has advised the union’s negotiations with GM.
The Detroit Free Press has identified UAW President Gary Jones as “UAW Official A” in the latest complaint, and agents recently searched his home. Messrs. Jones and Pearson say they have done nothing wrong, though other union officials have been found guilty, including the union’s former negotiator with Fiat Chrysler. These are the union “stakeholders” that Elizabeth Warren wants on corporate boards.
The UAW lost 35,000 members last year amid media reports of the corruption probe even as auto employment increased by 20,000—much of which occurred at non-unionized manufacturers with pay comparable to nearby UAW plants. Michigan, Wisconsin and Kentucky have also enacted right-to-work laws that allow workers to opt out of unions.
So now UAW leaders are trying to justify the 2011 dues increase they claimed was to support a worker strike fund. Workers will still lose between 60% and 80% of their pay while on strike, though GM has time to negotiate as it sits on 11 weeks of car inventory.
Whose interest is really being served in this strike?