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  • A Union Divided Against Itself: The UAW’s Conflict of Interest

    In the wake of the General Motors and Chrysler’s bankruptcies, United Auto Workers finds itself in a complicated position.

    In some sense it has achieved a Marxist ideal: it has gained (at least some) control of its means of production. The UAW owns 55 percent of Chrysler and 17.5 percent of GM. Consequently, however, the UAW is placed in a strange situation when negotiating with Ford.

    Currently, the UAW has partial ownership of Ford’s competitors and varied obligations to its current workers and retirees. In short, the UAW has conflicting interests. The union is now more than a representative for labor workers. It is both the employer and the employee of Chrysler and GM; and is both the competitor and the employee of Ford. The UAW is, to say the least, conflicted.

    Does the UAW intend to drive a hard bargain with itself? The labor union can give up a key bargaining chip: its threat to strike. However, will it hurt itself as an employer or help itself as an owner? In the past, it was in the interest of the UAW to create equality of labor conditions across the industry, but today the incentives have changed.

    As a part of the resurrection of GM and Chrysler, the UAW agreed not to strike against those companies until 2015. Ford now wants the same concession. Rather than enter into the embrace of the government, Ford made necessary cuts which helped it weather the current economic storm. Now, as Ford deals with the UAW, it must question where the union’s intentions lie.

    The UAW’s agreement not to strike against GM and Chrysler gives those companies an advantage in negotiations that Ford did not receive. As a result of its foresight, and refusal to accept bankruptcy, Ford is now at a disadvantage, while GM, Chrysler, and the UAW continue their cozy relationship. Politics really does make strange bedfellows.

    Posted in Economics [slideshow_deploy]

    33 Responses to A Union Divided Against Itself: The UAW’s Conflict of Interest

    1. Tom Utley, Charlesto says:

      My Prediction:

      The Government will drive Ford into bankruptcy with new regulations on the types of cars they can make, etc, and force Ford into the same position of UAW ownership.

      Once all American companies are owned by the government and the UAW, they will begin a process of driving away foreign competition, either with VAT taxes or some other protectionist nonsense.

      End the end, the American people will pay even more for cars that are even poorer quality, all to protect the Democrat's best voting block.

    2. Andrew Chalfant, Mic says:

      Ford can make cars that people actually want, Hallelujah!

    3. Andrew Chalfant, Mic says:

      If the UAW uses the strike in attempts to disable Ford. In the current times there are many people ready to replace those workers in a non-unionized Ford. A simple paycheck wo benifits would make them more than happy :>) It buys food and pays mortgages etc…

      • uaw 686 says:

        I don't know how they would get a paycheck .laid up in the hospital with a busted head for trying to cross the picket line . people really do forget don't they …..

    4. Larry- in the REPUBL says:

      Ford indeed holds its own diamond in the rough. However, if forced to cut back even further by OBAMAMotors LLC, Ford MAY have to clean their house completely of ALL Union employees, and replace them with people who WANT to build the vehicles that the majority of Americans choose to own! I double dog DARE the UAW to strike against Ford!!! Double DOG DOOKIE dare 'em! Talk about a MASSIVE switch in labor cost to productivity standards! All said, the workers would then have the option to receive Ford "self insurance" plans and OTHER "non-union" benefits that include Employee Ownership of a thriving company, not being controlled by inadequate intelligence in the Congress!!! WOW, what a day THAT would be!

    5. Pingback: » Financial News Update - 07/01/09 NoisyRoom.net: “Extremism in the defense of liberty is no vice. Moderation in the face of tyranny is no virtue.” Barry Goldwater

    6. Spiritof76 says:

      It is time to bring anti-trust law suit against UAW.

      GM and Chrysler will die as those companies dircted by UAW and the government will never be profitable. The government will force Ford out of business.

      If I were running Ford, I will start shutting down all Ford plants in the US, open a subsidiary outside the US, perhaps in Brazil or caymen Islands, transfer the corporate headquarters there and import cars into the US. Ford will be profiatble outside the US. UAW at Ford will become a non-entity. Ford will become a foreign car company just like Toyota or BMW.

    7. Tom Wickham says:

      Conflict of interest alert! I am a GM salaried employee. There, I got that off my chest.

      Seriously, I think the issue here is not what was outlined above. The issue relates to one of perception. As a GM employee who has worked in manufacturing and labor relations I know union leaders and members are generally not interested in running a company.

      Rather, they desire fair treatment, good wages, a safe working environment and a secure retirement. That's the American Dream in my book.

      The perception issue comes from the lack of knowledge people have about labor history in America and an unwillingness to look at how far labor has progressed in the last two decades.

      Walk into a UAW-represented GM plant and you are walking into the safest auto factories in the world. As for quality, UAW members are active in ensuring quality standards are met, even exceeded. On the cost front, UAW members are finding ways to save the company money. One recent case involved workers at our Weld Tool Center in Grand Blanc, Michigan, devising a way to break down robotic weld tool cells for shipment to assembly plants, saving the company millions of dollars.

      It's been easy to vilify the UAW and its members in recent months and make assumptions about their ability as part owners of a New GM. Frankly, I would rather have them in that position than many uneducated owners who think they know what is best for GM.

      Give the UAW a chance. Talk to the union's members and leaders. You may be surprised to find people who have a lot in common with you and your friends. After all, I'm sure you want fair treatment, good wages, a safe work environment and a secure retirement.


      Tom Wickham

      Manager, Communications

      General Motors

      • uaw 686 says:

        Good wages , no not over here in uaw 686 where traditional gm employees ,make less than half of what we use to make ., now u call it gmch, where we have been thrown under the bus collectively bargaining with other uaw GM facilities and let their vote count against us . I have been GM , Delphi back to hush hush GM . the whole time my paychecks keep coming from the same place . so please do not boast about a couple of plants. labor relations is the most manipulative meanest nice guy ever devised at GM a smiling face looking to devour .

    8. Dave Chelsea, MI says:

      It's very simple – buy American Capitalism, buy FORD —- SHUN Socialism Motors (GM/Chrysler)

    9. Bob, Colorado Spring says:

      Better buy your Fords, Pick-ups, and SUVs while you can. Under this socialist regime they will all be outlawed in the next three years in order to "level the playing field" for Socialist Motors of Obama!

    10. Gary, OH says:

      The current arrangement is a protectionist one. Just as the government stepped in to protect (high cost) jobs recently they will do the same in the future. The market can not support the current GM cost structure…therefore, they have been subsidized (in exchange for votes). Ford has done a better job of right sizing and leadership did the right thing in refusing subsidies. The American people are smart and should buy Ford and boycott GM. This will send a message to Obama…leave the free markets alone. The American consumer must stand up!!!

    11. Don R Lynch, Merrill says:

      Reference Tom Wickham's posting – It's not the majority of Union workers that are the problem; it's Union management thuggery, theft and self enrichment that is the problem. Ford will do just fine; they have good products and good management and I'll continue to drive my Ford for years to come.

    12. Niki - Florida says:

      The UAW traded freedom for some special considerations. However, those considerations I fear will be temporary until O positions himself with total power.

      Tom – The UAW are no angels. They can get pretty violent when they do not get their way with employers and fellow employees by bullying them. Have you forgotton that they are the ones that helped put GM in the financial hardship that it is in by becoming a healthcare insurer? I have owned many GM cars and love them. But I have bought my last one. When GM gets the government out of its business, the I will return as a customer.

      Kudos to Ford for their wisdom and courage that they have shown by refusing to let the government run their company. We all need to use them as an example with this adminstration.

    13. Tim AZ says:

      I wrote about this delicious irony when the UAW became the enemy of the union laborers. Who's interests will be served? The laborers or the leaches {UAW} who once only served the laborers. These laborers know exactly how to engage in civil disobedience. I have witnessed it. The UAW's chickens will be coming home to rooossst. As for Tom Wickhan he's just a bullfrog in the pot of water where the temperature is ever so slowly climbing. Soups on! How's that hope and change working out for you laborers?

    14. Ben Franklin says:

      Ford will be OK. Their Brazilian plant is a model of efficiency and modernity. All they have to do is move their headquarters to Sao Paolo, close all their North American plants, and tell the US government to kiss off, and start selling cars in the rest of the world, since the American market is about to die anyways.

    15. M. Andrews, Florida says:

      To Tom Wickham, Manager, Communications, General Motors:

      Do you really think 'mom & pop' investors like me — greedy "speculators," according to Obama — who lost their investments in GM will ever again buy its cars, new or used? Why on earth would we be stupid enought to invest more in GM, or any other company getting taxpayer bailouts? An informal survey of over five thousand people, done through family and friends in 27 states so far, indicates that NONE of them will ever again buy GM cars. Mr. Wickham, you arrogantly call those who disagree with you "uneducated". Perhaps some are, but the majority of my respondents are professionals with university degrees; many have advanced degrees. They range in age from early 20s to early 80s. Today I will email the URL containing your insulting post to all of them, and suggest they forward it to everyone they know. I'm sure even the "uneducated" will be able to envision GM's UAW workers enjoying their "fair treatment, good wages, a safe work environment and a secure retirement" at the expense of millions of your former investors.

    16. J Jensen/Sealcwo4, M says:

      I was a Auto employee Contract Engineer for 30 years. Worked at Ford,Chrysler and GM. We the people of the auto industry put ourselves in this position. Unions always wanted more and produced low quality cars.We taught the transplants how to build the quality in a car. Now the Obama God has come in and the FALSE GREEN POWER by the lier Gore has started a American down fall right now.

      Union or not we as Americans must revolt and be heard. The lies comming out of Washington must stop. I think our whole country is ready to STRIKE and call for a recall in Washington. The upper management all needs to be fired. they do not listen to what they preach. Greed is killing us.

      Thanks form a real Vet Sealcwo4 AMERICAN and GOD Bless the USA.

    17. Mike KY says:

      This is a respose to Tom of GM Sir i will not ever buy a car from any company thats in bed with the goverment. And i am sure there are alot of others that feel this way? Sorry

    18. Tom McKinney, Dunwoo says:

      How will GM and Chrysler pay for the current UAW retiree pensions? There are about 400,000 UAW retirees at GM and 150,000 at Chrysler.

      Tom McKinney

      Dunwoody, Georgia

    19. Barb mn says:

      It's hard enough to look at a GM or Chrysler. They accepted government thievery! Obama was happy to give it to them.

      GM and Chrysler are DEPENDENT AND WEAK!


    20. Jeanne White says:

      Over 40 years ago my husband's father who was a negotiator for the UAW sat at my table and said that the Union had pretty much served its purpose and that as long as they kept demanding more and more they (the unions) would eventually destroy the manufacturing business in the United States. He died shortly after Jack Kennedy. I hate to say it, but what he said was true, and it has come to pass.

    21. Becky, Michigan says:

      I want nothing to do with any Union involved in any ownership or manufacturing of anything! I really don't like Unions-can ya tell? After watching the Unions demand more and more $$'s from us and getting some pretty crappy workmanship back, I could see the bottom line. Then, the hourly wages received by unionized workers, are so out of synch with the rest of us. What do you think caused the failure of GM and Chrysler? The union big-wigs won't fes-up. Has anyone seen the mansions of the Union Bosses?

    22. Victor Gonzales, Ari says:

      To Tom,

      Are you telling me that the Non Union workers in this country work in an unsafe and unfair environment? What's fair here buddy? Sure you may work hard putting cars together and I work hard painting cars here in Arizona. Your version of the American dream seems to be perfectly attainable with the NON union wages earned at other companies.

      My household income for my family is only 45 thousand dollars a year between me and my wife. Somehow we managed to pay off our first house in fife years and we are now saving well over twenty thousand a year for retirement. We also have health coverage that WE PAY FOR OURSELVES.

      You want to know how we did this on a salary less than what a union member makes individually? It's called personal responsibility my friend. We know our goals and what we need to sacrifice to achieve them. I am only 29 and I will easily be able to retire on my own.

      I have not EARNED a higher wage than what I get and neither does the average laborer at your car plants. People like us CHOOSE a job that is semi skilled to unskilled labor and we deserve whatever wage the company wants to pay us for it. Nothing more. It is not the companies obligation to give you what you want in life. It is YOUR responsibility to invest in yourself to get things. If I wanted to make 70 thousand dollars a year I would have to improve myself rather than threaten my employer.

      Unions are a bunch of thugs that destroy companies. They had their purpose back in the days BEFORE we had laws to protect labor. In today's america they are thieves. The UAW is a dinosaur that refuses to die and our president subsidizing them is criminal theft from the taxpayer.

    23. Sue, Ohio says:

      I don't care if the workers have unions and make a high wage but don't expect people who don't make that kind of money to buy your expensive cars. We work hard too and should be able to buy whatever we want at a decent price. Let the UAW workers buy a new vehicle every year.

    24. Barb -mn says:

      Good one, Victor. Thank you for your truthful words.

    25. David, Colorado says:

      I for one purchased a Ford in late June; not under the clunkers program (although I could have waited), because I am opposed to purchasing vehicles made by a Government-run company, controlled by thugs who have fed at the breast of the union for decades, and who now will which to feed off the paps of the taxpayer.

    26. Ben C, Ann Arbor says:

      The two absolutes in life are death and taxes – not a "secure retirement." Death is something we all face. Taxes are a given, but the amount and how it is spent is not a given. When citizens begin to sense that their earned money is removed from their possession by government to be spent unwisely the same citizens revolt. History is very clear. Apparently our elected officials skipped this class in school.

    27. Al Arnzen, Meridian, says:

      To Tom:

      I am 68 years old and I have always bought a GM car. I have not owned anything, but a GM car. This year I bought a Toyota. I will not help the UAW anymore. Unions were important at one time, but they are no longer viable. I do not believe the UAW and I have much in common. Especially when they make $70.00 an hour.

    28. Sean, Charlotte NC says:

      Tom, UAW employee..

      Your position is easy to maintain when you enjoy all of the luxuries the union provides. However, Like you said, the UAW leaders are NOT interested in running a company..

      So I ask, why is it they are interested in telling a company what it can afford to pay its employees? After all, that's an aspect of running a business and they obviously don't realize the astronomical costs of labor, insurance, and pensions that unions create, and the burdens placed upon the company as a result.

      Sorry Tom, but the UAW and other unions bleed companies dry, yet they don't care. After all, if one company goes out of business, there's plenty more out there to infest, right?

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    31. Michelle says:

      So much hate. Its heartbreaking.

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