Paul Lidbeck's recent rant against the UAW (12/27/08) gives the impression that the autoworkers' union is the obstacle to saving the Big 3 automakers, and Chapter 11 is the way to restructure the industry.
Regardless what the union member (a union "thug" according to Mr. Lidbeck) said about wages & benefits in the news report referenced by Mr. Lidbeck, there were many other news reports last month about the UAW's awareness of needing to work with the Big 3 to restructure the industry. The business desk of the Associated Press reported that "worried about their jobs, hundreds of leaders of the UAW voted to make concessions to the Big 3."
The leaders of the union voted overwhelming to begin renegotiating terms of their contracts that they signed last year, including a reduction in wages, healthcare, and other benefits. Multiple news sources reported that the UAW president said the union will also suspend the job-bank, and delay the multibillion dollar payments to a healthcare fund for retirees that the Big 3 were scheduled to start making this year.
GM confirmed that the UAW "has shown a clear willingness to work with the Big 3 to make contract modifications to help the automakers survive its current crisis and restructure the industry in order to match Toyota's labor costs by 2012."
None of this is the picture presented by Mr. Lidbeck.
Mr. Lidbeck, though, is correct about the problem of the Big 3's hourly costs. The New York Times, NPR, & the AP, among others, all reported last month that the hourly wage for veteran UAW members averages $28/hour, and the average hourly wage for Toyota workers at Toyota's plant in Georgetown, KY (Toyota's highest paying plant) is $25/hour. It's doubtful that a $3/hour reduction in UAW wages is going to save the Big 3, but add in healthcare and future benefits, such as pension, and there is a problem. The total average UAW cost is $74/hour compared to Toyota's $45/hour.
If I were a UAW worker I think I would be concerned about absorbing this $29/hour difference because it may mean the end to the American dream of better wages, being able to afford the mortgage, being able to afford sending their children to college, having enough for retirement. But, renegotiating this with the Big 3 is better than losing one's job, and this is likely why the leaders of the UAW agreed to renegotiate the terms of their contracts.
Maybe Chapter 11 should be the way to restructure the Big 3, but as President Bush said in defending coming to the industry's aid, given the current state of the economy, this may not be the best time for Chapter 11.
Why not save the ranting against the union until the renegotiations are done and we know then whether or not the autoworkers' union was an obstacle to restructuring? Mr. Lidbeck's rants against the autoworkers' union seems, hopefully unintentionally, to celebrate the end of the American Dream for these workers, but I have the feeling that he would not be satisfied until the union disappeared.