A weakened union plays its only trump card
Let's take UAW President Ron Gettelfinger at his word when he says, as
he did Monday after striking General Motors Corp., "There's not one
person on this stage ... that wanted to see these negotiations end in a
strike. Who wins in a strike?"
Gettelfinger, of course, blamed GM for being unreasonable.
But wasn't he also conceding, in a way, that the UAW is in a
predicament? It's an institution with declining influence, fewer and
fewer friends and one big weapon it can ill afford to use without
destroying itself in the process.
"I hope that cool heads are still in the game here," David Cole,
chairman of the Center for Automotive Research, told me mid-afternoon
Monday as UAW members took to the picket lines for what he hoped would
be a brief walkout.
Let's all hope the same thing, because, as Cole added: "Things can get
pretty sticky once a strike starts. This could be the death of the union."
Gettelfinger's problem is that he had few cards to play except the big
one, a strike.
Apparently GM and the UAW have worked through the thorny, complicated
issue of shifting responsibility for retiree health care into a
union-run trust fund. And in return, the union was hoping for some
strong assurances that future new products would be made -- and jobs
preserved -- in American plants.
But GM has resolved not to submit to slow death by a thousand cuts.
Rather than take a few more baby steps toward closing the competitive
cost gap with Asian automakers Toyota, Honda, Nissan and Hyundai, GM is
insisting that it take a big bite -- now -- out of that gap.
GM will agree to build products in U.S. plants, but not if that means
preserving a higher fixed-cost structure than its key competitors.
The problem for Gettelfinger is that some of those high fixed costs come
from job security provisions included in past contracts, such as the
much-ridiculed jobs bank that has paid idled workers for extended
periods of not working.
How much ground can Gettelfinger give in terms of concessions and still
get the rank-and-file to ratify a new contract?
There is surely a limit. But UAW leaders no longer have any persuasive
arguments to marshal in favor of preserving job security provisions that
don't make economic sense.
"There was a time," Cole noted, "that the union label on American-made
products was a reason to buy something. Now I'm afraid it's becoming a
reason not to buy. There's a real concern that there's a negative sales
reaction out there to union-made American brands."
Michigan's economy labors under the dual burden of its reliance on the
Detroit Three and the long-standing reputation of Detroit and Michigan
as a stronghold of truculent, overpaid and inflexible labor unions.
Forget about all the gains in productivity and recent cooperative deals
between labor and management to cut health care costs and simplify work
rules. The old antibusiness, pro-labor image is a hard one to shake --
and any nationwide automotive strike, no matter how brief, sends the
wrong message to growing companies looking for the best place to invest.
GM, while making good progress on its turnaround the past two years, is
still burning through cash in its North America automotive operations
and could suffer enormous damage from a walkout of any length.
And what of the UAW itself, which has been touting its efforts to
organize the nonunion U.S. plants of Toyota Motor Corp., other Asian
automakers and growing suppliers such as Denso?
By striking GM, the union provides fodder for the antiunion campaigns at
those companies, which play upon workers' fears that strike-happy labor
unions will scare companies into closing U.S. plants and cutting jobs en
Gettelfinger and his fellow UAW leaders will rightfully scrap for every
job and every penny they can on behalf of their members.
But by going nuclear and playing the strike card -- and potentially
destroying GM, the UAW and possibly Ford Motor Co. and Chrysler LLC in
the process -- the union has crossed a dangerous line.
How long before a strike cripples the Michigan economy, destroys the
Detroit automakers and the UAW?
Three days? Two weeks? A month?
Let's not try to find out.