Maybe if the UAW had acted before this, we wouldn’t have the Big Three automakers panhandling on Capitol Hill. Of course, if the executives had curtailed their bonuses, sold off their private jets, and streamlined their production, that could have done it as well. At least it looks like the people at risk have finally begun to act like they give a damn about it:
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 with the cost structure of nonunion plants operated by foreign automakers in the United States.
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 to keep the two most troubled car companies of the Big Three, General Motors and Chrysler, out of bankruptcy.
“Concessions, I used to cringe at that word,” Mr. Gettelfinger said. “But now, why hide it? That’s what we did.”
When analyses showed that compensation at the Big Three for non-management personnel amounted to 50% over that of other automakers in the US, many wondered when the UAW would take action to help the companies to become more competitive. Auto workers complained that the 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.