This is not an indictment of workers, but it is an indictment of their leadership.
Remember when the union workers gave up a whole lot of nothing during their imminent collapse except they agreed that new workers would get paid much less according to a two-tier system? They sold out the new workers so the current workers and retirees could continue to bask in their salary and benefit packages despite the companies failures? They undoubtedly believe they’ll bring the new employees up to the high wage and benefit package eventually. Isn’t that what got us into this mess?
Well, they now want to also get rid of the two-tier system and they are going “to the mat.” Sound familiar?
According to Detroit Bureau: ...”The union, for one, is taking an increasing tough tone on the two-tier wage system the Big Three insist they need to stay competitive. And, the manufacturers warn, that without a sense they can remain on a cost par with their foreign competitors they will need to consider exporting more jobs…On the other hand, the makers are also dangling a carrot, suggesting that labor peace could lead to significant job creation in a domestic industry that has seen its job base shrivel over the last several decades…The two-tier wage debate has spurred angry talk – and some local demonstrations – in recent weeks, though UAW president Bob King continues to insist he is “upbeat” about the prospects for reaching a peaceful resolution…”
The two-tier system isn’t a good idea, but that’s on the unions, not on the companies. The unions are the ones who sold out the “yet to be hired employees.” They needed to take cuts and make them across the board.
The union can’t strike at GM (the union-taxpayer company) or Chrysler (the Italian-union company), because of the terms of the bailout, so what do you think they are going to do? Why, they are going to target Ford, “the non-bailout U.S. private company,” of course.
Normally, the UAW draws up identical contracts for each of the Big Three, but they can bully Ford with strikes so of course they will. If they go after Ford, Ford will in turn send more jobs overseas.
From the Detroit Bureau: “…The union’s demand for higher wages for the second-tier workers has become the union’s top demand ahead of even increases in profit sharing and fresh payments to the Voluntary Employee Benefit Association, which pays for the health care of thousands of retirees.
Second tier workers now make $14 per hour to $16 per hour and King reiterated the second tier wage is insufficient to put workers in the middle class. The union has long been proud of the fact it was once able to provide workers with essentially a middle class wage of more than $60 per hour plus benefits.
GM, Ford and Chrysler may be willing to raise the wage some but they have indicated they are not prepared to put new hires on a path that would eventually boost wages to the current level of $29 per hour. The old wage model no longer works, they contend, in the face of non-union competition from transplants.
The UAW leadership has known for more than a decade the day of reckoning was coming but the union’s executive board has never managed to come up with an adequate response. Instead they have preferred to defer action, hoping the automakers would regain some of their economic power…”
There is a third possibility you know. The top tier employees do what they should have done in the first place, come down to private sector wages and benefits so the lower tier employees can go up. Instead, they are looking for the power and justice that requires the taking of other peoples’ money unfairly by bullying.
I wish they would regain some of their economic power also; we all want more economic power, but it is the misuse of economic power that caused our current dilemma, and the UAW is no innocent in this.
UAW leader, King, doesn’t believe the U.S. is broke (nice talking point) and blames the Tea Party (spending cuts) and corporations (not taxed enough). Spoken like a true statist – spend and tax.
In addition to all the bailout money that GM did not pay back, there are the benefits of the President’s Early Retirement Reinsurance Program (EERP) which is meant to bridge the gap until the economy-killing Obamacare is fully launched in 2014. It’s already out of money. People who were “entitled” to this program were Fortune 500 companies, unions and state/local governments. However, the biggest handout of $206.8 million went to the UAW’s medical trust. Their employers, including Ford, and parts supplier (Delphi), also received a total of $32.2 million to cover early retirees’ health costs. Read here: The bailout you didn’t know about
Today, GM stock was trading at $21.86. We paid $53 for the stock. What a deal!