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UAW's Legacy at GM

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I have two words for anyone who doesn't believe that union so pre-occupied with its own self-interest can't bring down an automobile manufacturer: British Leyland. This editorial today points directly at how the UAW is bringing down the big three.

Bottom line: the UAW is the biggest impediment the Big Three have to fiscal survival.

UAW's 'Legacy' at GM
By Ralph R. Reiland, Pittsburgh Tribune-Review
Monday, January 12, 2009
[LINK]


General Motors lost $10.6 billion in 2006. GM lost another $38.7 billion in 2007, the largest annual loss in automotive history. Through the third quarter of 2008, GM lost another $21.2 billion.

On Sept. 24, 2007, a year during which GM lost an average of $3.2 billion per month, the United Auto Workers launched a national strike against the company, ordering the shutdown of 80 GM plants in the United States. More than 73,000 UAW-represented factory workers walked off the job and hit the picket lines.

The UAW said that GM had failed to address job security issues during negotiations.

"No one wants to see GM go down the tubes," said picketing Jim Brown. "But we have to keep our standard of living, and GM is going to have to cooperate."

[Edit: Newsflash for Mr. Brown: We're in a flippin' recession! How dare you presume your standard of living is what the economy lives and dies on, you selfish moron! ;squint:]

GM's labor cost for a factory worker at the time was $71 per hour, with $27 per hour going to current workers and the remainder made up of costs for pensions and health care for retirees. If archaic work rules and other contract mandates reduced productivity at GM's plants by half, the company's real labor costs were $142 per hour of work counting retiree costs and $54 per hour for current labor.

On Feb. 26, 2008, a UAW strike at five American Axle plants, a key GM supplier and the sole axle supplier for the Chevrolet Tahoe and GMC Yukon, stopped or slowed production at 30 of GM's North American factories and crippled GM's pickup truck and SUV production throughout the United States.

"The American Axle strike cost GM $800 million in the first three months of the year and 100,000 vehicles of lost production, which GM said was mostly felt in fleet sales to commercial customers," reported the Detroit News on May 12, 2008. "The automaker on Thursday pledged up to $200 million to American Axle to help end the dispute. The money would be used to pay for buyouts, early retirement and cash incentives to get workers who stay to accept lower wages."

That's a billion dollars, extracted out of GM to buy labor peace at a plant they didn't own.

Seven weeks later, on April 17, a UAW-ordered work stoppage over a work rule dispute at GM's Lansing Delta plant in Michigan halted production of the Saturn Outlook, GMC Acadia and Buick Enclave.

Less than three weeks later, on May 5, 2008, workers walked off the job at GM's Kansas City plant over work rules and seniority disputes. "The United Auto Workers union struck -- literally -- General Motors where it hurt the most, at the automaker's Kansas City factory that builds the fast-selling Chevrolet Malibu, already in tight supply," reported Edmunds AutoObserver.

With the Kansas City plant handling the bulk of Malibu production, the UAW strike was called four months after Malibu won the North American Car of the Year award at the North American International Auto Show.

As one of GM's few success stories in recent decades, the 2008 sales of Malibu in January, February and March were 110 percent greater than in the same quarter in 2007, with Malibu cutting into the market shares of Honda Accord and Toyota Camry.

General Motors, in short, had finally produced a car that the public really wanted and the guys walked out.

Stopping production of a hot-selling, profitable model at a time of declining auto sales and rising levels of red ink is "stupidity of the highest order" on the part of the UAW, said David Cole, chairman of the Center for Automotive Research.

On July 16, 2008, the UAW called a strike against a Johnson Controls plant in Tennessee that supplies GM with consoles and seats for the Chevrolet Traverse crossover vehicle. "The strike has the potential to disrupt production of the Traverse, one of the new vehicles GM is counting on to offset declining sales of its full-size trucks and SUVs," explained Reuters reporter Kevin Krolicki.

"We want a flawless launch for this vehicle," UAW Local 1853 President Mike O'Rourke told Reuters, "but it's going to be with union seats and union consoles."

And so, at last count, GM has lost $70 billion since 2004, the number of UAW members has been cut in half since 2004 at GM, Chrysler and Ford, from 300,000 to 150,000, and the rest of us are now stuck with the tab for the rescue.

Ralph R. Reiland is an associate professor of economics at Robert Morris University and a local restaurateur. He can be reached at via e-mail.
 

Remo

Gone but not forgotten
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Earth To UAW

Patrick - is the UAW National Headquarters still located on this planet?
Remo:cool
 
C

Craig -1965

Guest
UAW and reality

some food for though unions are the problem read these letters. I have also attached the links to verify the correctness and reality of these letters.



checked and Knox & his company are real and he did write it.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:eek:ffice:eek:ffice" /><o:p></o:p>
http://www.snopes.com/politics/soapbox/knox.asp<o:p></o:p>
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A note from GM North America President Troy Clarke to his employees & suppliers followed by a response from Gregory Knox, President of Knox machinery Company. I think Knox lays it on the line about the situation we're in and the reality of the challenges to be faced by those and the government that caused the problem in the first place. What a mess we are collectively in.<o:p></o:p>
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Response from:
Gregory Knox, Pres.
Knox Machinery Company
Franklin , Ohio

Gentlemen:

In response to your request to contact legislators and ask for a bailout for the Big Three automakers please consider the following, and please pass my thoughts on to Troy Clark, President of General Motors North America.

Politicians and Management of the Big 3 are both infected with the same entitlement mentality that has spread like cancerous germs in UAW halls for the last countless decades, and whose plague is now sweeping this nation, awaiting our new "messiah", Pres-elect Obama, to wave his magic wand and make all our problems go away, while at the same time allowing our once great nation to keep "living the dream"… Believe me folks, The dream is over!

This dream where we can ignore the consumer for years while management myopically focuses on its personal rewards packages at the same time that our factories have been filled with the worlds most overpaid, arrogant, ignorant and laziest entitlement minded "laborers" without paying the price for these atrocities…this dream where you still think the masses will line up to buy our products for ever and ever.

Don't even think about telling me I'm wrong. Don't accuse me of not knowing of what I speak. I have called on Ford, GM, Chrysler, TRW, Delphi, Kelsey Hayes, American Axle and countless other automotive OEM's throughout the Midwest during the past 30 years and what I've seen over those years in these union shops can only be described as disgusting.

Troy Clarke, President of General Motors North America, states: "There is widespread sentiment throughout this country, and our government, and especially via the news media, that the current crisis is completely the result of bad management which it certainly is not."

You're right Mr. Clarke, it's not JUST management…how about the electricians who walk around the plants like lords in feudal times, making people wait on them for countless hours while they drag ass…so they can come in on the weekend and make double and triple time…for a job they easily could have done within their normal 40 hour work week. How about the line workers who threaten newbies with all kinds of scare tactics…for putting out too many parts on a shift…and for being too productive

(We certainly must not expose those lazy bums who have been getting overpaid for decades for their horrific underproduction, must we?!?)

Do you folks really not know about this stuff?!? How about this great sentiment abridged from Mr. Clarke's sad plea: "over the last few years …we have closed the quality and efficiency gaps with our competitors. " What the hell has Detroit been doing for the last 40 years?!? Did we really JUST wake up to the gaps in quality and efficiency between us and them? The K car vs. the Accord? The Pinto vs. the Civic?!? Do I need to go on? What a joke!

We are living through the inevitable outcome of the actions of the United States auto industry for decades. It's time to pay for your sins, Detroit .

I attended an economic summit last week where brilliant economist, Alan Beaulieu, from the Institute of Trend Research , surprised the crowd when he said he would not have given the banks a penny of "bailout money". "Yes, he said, this would cause short term problems," but despite what people like politicians and corporate magnates would have us believe, the sun would in fact rise the next day… and the following very important thing would happen…where there had been greedy and sloppy banks, new efficient ones would pop up…that is how a free market system works…it does work…if we would only let it work…"

But for some nondescript reason we are now deciding that the rest of the world is right and that capitalism doesn't work - that we need the government to step in and "save us"…Save us my ass, Hell - we're nationalizing… and unfortunately too many of our once fine nation's citizens don't even have a clue that this is what is really happening…But, they sure can tell you the stats on their favorite sports teams…yeah - THAT'S really important, isn't it…

Does it ever occur to ANYONE that the "competition" has been producing vehicles, EXTREMELY PROFITABLY, for decades in this country?... How can that be??? Let's see… Fuel efficient… Listening to customers… Investing in the proper tooling and automation for the long haul…

Not being too complacent or arrogant to listen to Dr. W. Edwards Deming four decades ago when he taught that by adopting appropriate principles of management, organizations could increase quality and simultaneously reduce costs. Ever increased productivity through quality and intelligent planning… Treating vendors like strategic partners, rather than like "the enemy"… Efficient front and back offices… Non union environment…

Again, I could go on and on, but I really wouldn't be telling anyone anything they really don't already know down deep in their hearts.

I have six children, so I am not unfamiliar with the concept of wanting someone to bail you out of a mess that you have gotten yourself into - my children do this on a weekly, if not daily basis, as I did when I was their age. I do for them what my parents did for me (one of their greatest gifts, by the way) - I make them stand on their own two feet and accept the consequences of their actions and work through it. Radical concept, huh… Am I there for them in the wings? Of course - but only until such time as they need to be fully on their own as adults.

I don't want to oversimplify a complex situation, but there certainly are unmistakable parallels here between the proper role of parenting and government. Detroit and the United States need to pay for their sins. Bad news people - it's coming whether we like it or not. The newly elected Messiah really doesn't have a magic wand big enough to "make it all go away." I laughed as I heard Obama "reeling it back in" almost immediately after the final vote count was tallied…"we really might not do it in a year…or in four…" Where the Hell was that kind of talk when he was RUNNING for office.

Stop trying to put off the inevitable folks … That house in Florida really isn't worth $750,000… People who jump across a border really don't deserve free health care benefits… That job driving that forklift for the Big 3 really isn't worth $85,000 a year… We really shouldn't allow Wal-Mart to stock their shelves with products acquired from a country that unfairly manipulates their currency and has the most atrocious human rights infractions on the face of the globe…

That couple whose combined income is less than $50,000 really shouldn't be living in that $485,000 home… Let the market correct itself folks - it will. Yes it will be painful, but it's gonna' be painful either way, and the bright side of my proposal is that on the other side of it all, is a nation that appreciates what it has…and doesn't live beyond its means
and gets back to basics…and redevelops the patriotic work ethic that made it the greatest nation in the history of the world…and probably turns back to God.

Sorry - don't cut my head off, I'm just the messenger sharing with you the "bad news". I hope you take it to heart.

Gregory J. Knox, President
Knox Machinery, Inc.
Franklin , Ohio 45005
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