TIME: The UAW Fights Its Image as the Villain of Detroit's Woes

[Omaha Steve]

http://www.time.com/time/business/article/0,8599,1882376,00.html

By Bill Saporito Sunday, Mar. 01, 2009


Employees work on the assembly line of the F-150 pickup at the Kansas City Ford Assembly plant.
Larry W. Smith / Getty

It is particularly galling to the United Autoworkers that, in addition to
 numerous rounds of layoffs and givebacks dating back two decades, the union
 is being cast as the enemy in the U.S. auto industry's fight to survive. 
"Our contracts with Chrysler, Ford and GM represent only 10% of the cost of
 assembling of a vehicle. But most days, it seems like we get 110% of the 
attention," said UAW president Ron Gettelfinger in a recent speech. In the 
wake of GM's most recent quarter, in which the company lost $9.6 billion — 
$30.9 billion on the year — the fight is getting more desperate. So the
 union is back at the table again, negotiating more relief for the Detroit 
Three. (Read about UAW's deal with Ford.)

The UAW's image problem stems from the fact that it has been arguably much better at doing its job than the Big Three managements have been at theirs. Over the last 60 years, many of the benefits that both blue and white collar workers hold dear were won, or expanded, by the UAW. That includes pensions, early retirement, overtime, total healthcare coverage and paid holidays. At Congressional hearings in November over a proposed bailout bill, there was palpable contempt for the UAW from Alabama Senator Richard Shelby, whose state is home to several transplant automakers. To him, the UAW seemed to consist of a bunch of overpaid featherbedders who couldn't match hubcaps with workers at transplants like Toyota and Mercedes Benz, who did not enjoy the Big Three's gold-plated benefits.




That criticism has lost its bite with autoworkers, considering that Toyota and other foreign makers are taking it on the chin just as much as Detroit. "This 
attitude, targeting the UAW as the bad guy here or the reason the auto industry 
is in rough shape — they think that's unjustified, not warranted," says David Lipsky, Professor of Dispute Resolution at Cornell's School of Industrial and Labor Relations. And with some reason, says Lipsky, "They were innovative and creative: they built a comfortable lifestyle for middle class Americans. And now it's turned out to be a house of cards."




Faced with giving up benefits, the UAW will conciliate but not placate management, which strikes some Americans as uncooperative. But those so-called legacy costs, won fairly at the bargaining table, have big emotional value for the UAW. It's what behavioral economists call the endowment effect, says Litsky: The UAW values what it fought for — even much maligned work rules — much more so than workers who have never had them. So they are not going to give up anything without a fight. In mid-February, the union actually stormed out of negotiations with GM over reducing the company's retiree health care costs, as GM seeks to restructure costs with bondholders, suppliers, and, of course, labor.

The union has already made big concessions: the 2007 labor contract with GM transferred health care costs from the company to a union-run plan, and set 
up a lower wage structure for new hires. The company is asking for more 
because it has no other choice given the devastating drop in sales.

FULL story at link.

[dkf]

1. I just don't know how much you can get out of a bankrupt company.

I heard them say the reason for keeping them in business is because its too expensive to declare bankruptcy.

I have a feeling the company simply can't pay good wages and keep all the promises they made to their retirees. I bet only the Government is capable of that in the long run.