Tuesday, September 25, 2007

Event: Why GM should hope for a UAW victory.

The New York Times' Caucus Blog (which I normally enjoy) has posted a blatantly misleading post on the Candidates and the U.A.W. Specifically, it fails to mention Obama's high-profile support for the union, and even worse, it mischaracterizes the reasons for the strike in general. I managed to post a couple comments, and the better of the two sums up my reasons to support this particular strike (besides a general support for the U.A.W.). Unlike the 1998 strike, this strike is unique in that it is looking toward the horizon. That is, a reasonable U.A.W. victory basically mandates that GM take a reasonable approach toward attaining its own solvency. This is a step that GM's leadership has not taken, itself.

I've corrected my own typos below.

So many of these comments are rehashing the same points. If this post is about the political capital cost/gain of endorsing a strike, then the UAW ought to emphasize the following:

- For a decade the UAW has been making concessions, and not in a combative, strike-eager environment.
- In this round, the UAW has also granted GM their chief demand: a HUGE concession in the form of a trust to manage health expenses.
- Given the percentage of GM workers currently employed in the US (as UAW workers), the benefits everyone here is complaining about are no long a decisive issue for GM.
- The demands that have brought about this strike in the first place concern job security, not wages. GM is reluctant to grant these demands, frankly, because the UAW is the only union left with any power to direct the corporation's policy at all. In short, GM wants to downsize the UAW to irrelevancy.
- Company restructuring in the last several decades (ever since Roger Smith) has driven lines to design similar vehicles with a high margin of profitability. *This* is why a Chevy looks like a Pontiac looks like a Buick (looks like a Saturn). This is also why GM sales have foundered.

All of these observations lead to one interesting result: GM will be much better off if the UAW carries this strike. Why? Because most UAW members in GM have a greater stake in the company's long-term viability than your average GM shareholder. The workers' whole futures are at stake. Shareholder loyalty is only measured one quarter at a time.

In the end, GM has to start selling their cars again. They cannot continue to view their workforce as "excess fat," an excuse to avoid improving their product.

I am glad that Edwards and Obama are supporting the strikers... and I’d been leaning toward Hillary until now. Really, though, I see this as an issue of UAW self-promotion. They have to go public with their real priorities in a big way, and not let unlikely adversaries (like the New York Times) erroniously spin the story that this strike is about wages.

It isn’t.

— Posted by Connor

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