Vincent Vernuccio

Talk about chutzpah. In what only can be described as pure stubborn selfishness, a United Auto Workers (UAW) local in Indiana voted this week to close a General Motors (GM) parts supplier employing 650 workers. The closure is a harsh blow for a state with 10.2-percent unemployment and a unionized auto industry that has been in free fall for decades -- UAW membership has fallen from 1.5 million in 1979 to only 300,000 in 2009.

Motors Liquidation Co., which was created to sell surplus GM property during the automaker’s bankruptcy, owns the facility. Without a buyer, the plant will be forced to close in October 2011. JD Norman Industries, of Addison, Ill., planned to purchase the Indianapolis Metal Center and have it continue producing fenders, hoods and other metal parts for GM. Norman also planned to bring in new orders from other automakers.

Indiana Gov. Mitch Daniels and other local elected officials have been scrambling to save the plant. Blair West, representative for Indiana Secretary of Commerce Mitch Roob, pointed out in the Detroit News , “It does not just keep open that plant for the current workers, but keeps it open for future workers.”

Norman agreed to save the supplier from closure under the condition that UAW workers bring their pay closer to the industry average. The result would be a 50-percent pay reduction. That would amount to $15.50 an hour down from $29 for unskilled workers, and $24 an hour, down from $33 for skilled trade workers Employees who continued working at the plant and agreed to the reduced salary would retain GM seniority and receive a cash bonus up to $35,000. Employees who did not want to accept the pay cut would be free to transfer to other GM plants for up to two years.

Yet rather than agreeing to a pay cut and receive a cash bonus or transferring to other plants, union members of UAW Local 23 balked. On Monday they voted 457 to 96 against the giving into concessions, which will likely result in the shuttering of the factory. Chicago Business.com reported Norman announced after the vote, “We are withdrawing from pursuing the plant any further.”

After the vote, Secretary Roob reprimanded the workers reminding them of the $50 billion in taxpayer dollars GM received last year. “We're exasperated by this …. The taxpayers of this country bailed out General Motors and their workers. Now, those workers here turned their backs on future generations of people who might have had their jobs in Indiana,” he was quoted in Forbes.


Vincent Vernuccio

F. Vincent Vernuccio is Labor Policy Counsel at the Competitive Enterprise Institute.