Unions start to get the message

posted at 9:58 am on December 12, 2008 by Ed Morrissey

Maybe the UAW should take note of the SEIU’s belated recognition of the economic situation in California.  After blowing up a potential compromise on the auto bailout last night by refusing to compromise on concessions, the union all but guaranteed that one or more of the Big Three will declare bankruptcy and potentially void their labor agreements.  SEIU California has begun to show more flexibility:

Has California’s growing budget mess pushed public employee unions into retreat?

Take Service Employees International Union Local 1000, which represents 95,000 state workers in a wide variety of jobs. Last week local President Yvonne Walker told The State Worker, “There are going to have to be cuts. We’re going to have to raise taxes” to address the state’s cash crunch.

This was the same union leader who last month, after Gov. Arnold Schwarzenegger proposed furloughs and other measures to trim the budget deficit, said, “We’ll fight back with everything that we have.”

Between Walker’s two quotes, the governor threatened to detonate the labor equivalent of a nuclear bomb: layoffs. It’s one thing a California governor can unleash without negotiating with unions or legislators.

Last night, Bob Corker (R-TN) had $15 billion lined up for the UAW’s employers if only the union would agree to renegotiate their contracts to get pay equity with other autoworkers in the country by a date certain.  The UAW refused to make that commitment, which any lender or creditor would consider a key point for resolution before restructuring or giving additional loans.  The lack of those three words, “by date certain”, showed that the UAW either didn’t understand the stake they had in these negotiations or figured that no one would defy them in the end.

The Big Three won’t compete effectively until they lower their labor costs and produce better management.  As Tom Coburn told the Senate, GM and Toyota sold roughly the same number of vehicles over the last year, but Toyota turned a $1.7 billion profit while GM lost around $9 billion.  That doesn’t happen by accident.  Until these automakers and their unions resolve the structural problems that creates this kind of unprofitability, they are a terrible credit risk and a lousy investment — and neither management nor labor shows much willingness to change for the taxpayer subsidies they now demand.

What happens now to the UAW?  GM at least will have to file for Chapter 11 quickly for protection from its creditors, and that means that they can start from scratch on a labor agreement.  Ford will probably follow suit, and Chrysler may have to entertain thoughts of a lockout to get enough concessions to remain competitive.  The UAW will have almost no choice but to make significant concessions or wind up losing the jobs of two million members in the process.  The UAW may well go out of business otherwise — which was the conclusion the California SEIU seems to have finally reached a little sooner in the process than their UAW brothers.

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The UAW-imposed “work rules” are almost as destructive to the competitiveness of the Big 3 as the ridiculously high wage and benefit costs.

The big three are doomed unless they can do away with the union contracts. That means bankruptcy. Any money in the meantime will be wasted and constitutes noting more than a transfer payment to the UAW members and some vendors/creditors.

forest on December 12, 2008 at 12:33 PM


Look at Boeing – their ENGINEERS are Unionized!

SeniorD on December 12, 2008 at 12:35 PM

Fuck SEIU – the Feds had damn well better be investigating that criminal operation right now, because when the Obama-Mob administration is set, they are going to gut anything that even smells like a union criminal investigation.

Jaibones on December 12, 2008 at 12:37 PM

The auto companies should post want ads;

Wanted: Auto Workers willing to work withoiut contract or Union affiliation. Good wages, benefits, training….

max1 on December 12, 2008 at 12:43 PM

I hope the unions are getting the message that most of the American public DO NOT support them and that there are tens of millions of them who are completely against union labor.

NoDonkey on December 12, 2008 at 12:52 PM

My Father told stories of how the Union helpd the workers attain a 5 day work week, vacations, holidays, safety standards.

He also told stories of the ineptitude, laziness, uncarcaring attitued of the co-workers at the boat yard.

Like anything in life nothings perfect but the unions are out of control. The UAW jobs bank is a perfect example

Burgher on December 12, 2008 at 2:10 PM

I will dance a jig on the UAW’s grave…if I can find parts to the 2 Chevys that I own to drive me there.

Wyznowski on December 12, 2008 at 5:24 PM

The Unions ruined the USA.The Auto companys better find a way to get the Unions out.The Company I work for Fridricks
Air Sent The Company down to Mexico last year.263 people lost there jobs.The union drove the company into the ground.
They had to Move to Mexico to get away from the blood sucking basterds.To Hell with the UAW.

Denniscat on December 13, 2008 at 8:10 AM