Rich Galen

  • The Washington Post had a front pager by reporter Dale Russakoff yesterday which marked the official end of an era: The era of the steel-cage death-match between labor unions and American corporations.

  • First, an Armstrong Williams warning: The Public Relations firm, Manning Selvage & Lee, pays me to work on a number of its accounts, one of which is General Motors.

  • “Last week,” as the NY Times put it, “General Motors, in a cost-cutting move, offered to pay 113,000 hourly workers and 13,000 workers at the Delphi Corporation to quit their jobs.”

  • Since the 1930’s the UAW has negotiated contracts which included some of the highest hourly wages in America, lifetime health benefits, a pension program which would make Members of Congress jealous and, even, contracts which included provisions that workers would receive full pay and benefits even if they were laid off.

  • It has been calculated that if you consolidate all the costs involved – wages, benefits, and pensions – a typical GM vehicle is assembled by UAW workers making an average of $74 per hour.

  • A labor contract only becomes a labor contract if the union and the company both sign on the bottom line, so GM has been complicit in this situation. GM agreed to the terms because it needed the workers to build its vehicles which represented, at one point, one out of every two new cars sold in America.

  • But you know all that. And you know that Toyota and the other foreign automakers are largely non-union. According to the Washington Post piece by Dale Russakoff,

      The foreign automakers pay comparable wages and benefits for active workers, in part to ward off unions, but they do not have the staggering retiree benefits of the Big Three.

  • In what may be a preview of American society as a whole, Russakoff writes, “GM has 2.5 retirees for every active worker” whose pensions and health benefits are called “legacy costs.”

  • Think about that as we baby boomers continue to age, looking wistfully toward a long retirement in the warmer climes.

  • Unlike the days of yore, when this buyout offer might have made for great theater, the current UAW members are “philosophical.” Michael Moore, who made his name playing on the fears and anger of UAW workers in Flint, Michigan, would have a tough time getting good footage today.

  • Russakoff quotes the official of a union Local as saying that the union has brought the current situation on itself, saying:

      "When TV and stereos went overseas, did we say: 'Don't let them go?' I tell people to buy American cars and they say, 'Where are your clothes made? When my job went overseas, where were you?' "

  • Indeed, Russakoff writes that in the Detroit News’ chat room [how long until every chat room is routinely known as a “blogatorium”] the UAW is not being showered with a great deal of love. One blogger wrote:

      "Where were all of you 'loyal' Michiganders when Kmart was struggling and I was losing my job?" asked [one] chatter. "You were shopping at Wal-mart, cause [its] prices are cheaper."

  • If the UAW is being philosophical about the loss of life-time job guarantees, how much help do you think they are going to be when the Teachers Unions are faced with similar issues? It may be called “tenure” but it’s the same thing.

  • And when public employees at the local, state and federal levels, are faced with renegotiating work rules or having their jobs completely cut, they needn’t hop into their Hondas to run over and ask for help from the UAW.

  • The great pendulum has well and fully swung against the labor movement in the United States, but it may not last long.

  • According to the Bureau of Labor Statistics the February unemployment rate was down to 4.8% which compares with a rate of 5.4% a year earlier.

  • That means companies in growth industries will have to begin to offer incentives – higher wages, better benefits, pensions – to attract the necessary workers.

  • We can only hope that both sides have learned their lesson.

  • On the Secret Decoder Ring page today: Links to the Washington Post piece, a bio of Walter Reuther, and an explanation of an “Armstrong Williams warning.” The Mullfoto show another example of a deserved comeuppance of the Mullmeister; and a pretty good Catchy Caption of the Day.


  • Rich Galen

    Rich Galen has been a press secretary to Dan Quayle and Newt Gingrich. Rich Galen currently works as a journalist and writes at Mullings.com.