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Auto Bailout Failure Sets Up Union Battle

The hourly compensation cost for labor, including benefits and retirees' costs, at the Big Three is has been reported to cost the automakers $73 per hour, compared with $44 per hour at a Toyota factory with American workers in the U.S. The outdated union expectations are another factor why the Big 3 auto companies are losing billions of dollars. The UAW has held fast and hard not to give the needed concessions that might save the very companies that help them support their families from going bankrupt.

Ricardo Torres President & CEO - PSLC

12/5/2008

The hourly compensation cost for labor, including benefits and retirees' costs, at the Big Three is has been reported to cost the automakers $73 per hour, compared with $44 per hour at a Toyota factory with American workers in the U.S. The outdated union expectations are another factor why the Big 3 auto companies are losing billions of dollars. The UAW has held fast and hard not to give the needed concessions that might save the very companies that help them support their families from going bankrupt.

The Big Three automakers have been forced to pay 85 to 95 percent of union wages and benefits to members of the United Auto Workers union who aren ’t working (even if their plants have been closed). Economists estimate that this alone adds another $2,000 onto each vehicle.

There are other work rules that hurt the auto companies such as limited cross-training for its workforce, The steel industry was facing extinction years ago and decided that cross training was the only course of action that was going to save them, they went from 35 job categories down to just 5. They have built a system where it is difficult to discipline workers for missing work, being late or insubordination.

Delusional unions have shown “suicidal tendencies” in the past by driving companies out of business while refusing to adjust to reality. It seems that every three years the UAW picks an auto company to target and to strike if the company tries to bring some sanity back to the contract. This is a legal extortion tactic (give in or die! We will win even if it means we all suffer!).

No one should be surprised, this is the same tactics used by all unions. AFL-CIO Secretary Treasurer, Richard Trumka’s strategy for Corporate Campaigns are to “swarm the target employer from every angle, great and small, with an eye toward inflicting upon the employer the death of a thousand cuts rather than a single blow.’”

A Corporate Campaign employs at least a few, and often all, of the following methods: strikes, lawsuits, blackmail, boycotts, shareholder resolutions, negative newspaper ads, pressure on outside investors and complaints of violations (real or imagined) to regulatory agencies.

When I was a union official, our motto was “victory by any means necessary!”. We were at war with corporate America and we were determined to win. When driving a companies workforce to strike (like the Detroit Newspaper Agency), our goal was to destroy the company. We estimated that they lost $500,000,000.00 during that strike and more if you count their projected profit margin. The union had a “to Hell with the company” mindset and did not really care how it affected the workers and community. Our goal was to show the company that they could not mess with the union!

The newspapers never made the same profits as before the strike (if any at all) and has just announced they were cutting back on home delivery to only three days a week.

Another example is when a union strikes a company for recognition. Their goal is to bring the company to its knees so they will give in and accept the union and bargain a contract without an NLRB election.

The unions want to go back to pattern bargaining and/o r industrial agreements. They are always looking to expand their union density and are gartering support for the millions of dollars of membership dues money to fight for the Employee Free Choice Act (Chard Check Bill).

Upon enactment of this Bill, they will first take all of their core industries and secure a strong union density within them. For instance, they will use the EFCA law to target healthcare systems like HCA, CHP or Tenet Healthcare. They will organize a strong majority of the system and use the new found organized density to extract more than the system can stand. Industries like meatpacking, trucking, warehousing, tier one auto suppliers use this unfair leverage to force companies and entire industries into contracts that have common expiration dates which is the exact tactic that got us into this mess with Big Three auto companies.

The UAW’s neutrality agreement with Ford, as an example, not only requires neutrality at Ford facilitie s, affiliates, and subsidiaries, card check recognition, and access to premises for organizers, but requires that Ford send letters to its suppliers and future suppliers stating “inter alia”, that it does not object to unionization of the suppliers’ employees, that Ford has a positive relationship with the UAW, and that Ford does not discourage suppliers from entering in to a neutrality agreement with the UAW.

As long as a company, like Ford, stops just shy of requiring firms it does business with to unionize (which would violate § 8(e) of the National Labor Relations Act), by using carefully phrased, subtle “encouragement” (which is lawful with a veiled threat message behind it) we will continue to see headlines like this:

  1. Chrysler Closing Sll 30 Plants For One Month
  2. Ford Will Shut Down 10 of Its North American Assembly Plants For an Extra Week in January
  3. General Motors Corp. Said Last Week It Will Temporarily Close 2 0 Factories Across North America

The UAW is saying they want a seat on General Motors Corp.’s board and expects the automaker to offer another round of hourly buyout and retirement incentives next year, in the event the union grants concessions to help the automaker win federal loans. I am sure that Ford and Chrysler will be next. A seat on the board of any National or International Executive Board is where every union official wants be. This is the power they want to achieve.

When I participated in organizing an alliance between the United Steelworkers and the California Nurses Association, the president of the CNA, Rose Ann DeMoro, told me she wants to sit on the executive board of every major health care system in the country. “This is the power I want... The power I need”

Start protecting your company now from the changes that are sure to come in the next year, the legal tide is changing and you need to act now to build a firewall aro und your company. At Permanent Solutions Labor Consultants we are uniquely qualified, able and always ready to assist you with your labor needs.