The US auto industry is not the only auto industry in the world to be in trouble, however, many who are in trouble have direct tie-ins with the US auto industry, like Volvo, Saab, Opel. With that in mind, do you believe that the blame purely lies with the automakers themselves (GM, Ford, Chrysler) or is the UAW also (on a small or big part) to blame? It is easy for an outsider looking in to blame manufacturers for their short-sighted negotiations for labor, among other things.

An article I read mentioned that the effective rate of compensation for an average auto worker in the US is around $83 per hour (monetary compensation around $40, benefits pension etc make up the rest)*.

Keep in mind most industry experts say labor makes up for approximately 10% of the cost of a car.

My question is, how big of a blame should get the UAW in this Big 3 mess, and going forward what kind of concessions/realistic deals should they expect?

* I don’t remember the exact rate but it is easy to see that the rate is too high because the business cannot support the rate. It honestly doesn't matter what employees are being paid elsewhere. A business must be able to support its own cost structure.

 

I hold the UAW personally responsible for bankrupting the US auto industry, and I apologize for my semi-cruel ruthlessness, but I HOPE it fails, just like I hope every regular guy just looking to make a living who got suckered and pressured into the union business can find another job.

The UAW:

1) Does not allow secret ballot, and therefore, can pressure its members into doing anything it wants. Therefore, the upper echelon controls what the subordinates "vote" for.

2) Can directly impact your wages as a union member, or non-member (who get paid less), in order to financially force you to join. There's also some sort of mandatory joining after a certain period of time.

3) Have forced unreasonable demands on the Company, insofar as to directly hurt the product by economically mandating the use of inferior materials to cut costs. They've done this with the lifelong healthcare (HUNDREDS of THOUSANDS of dollars PER PERSON), the absorbent wages for the promotion of mediocrity, and their effective insertion into every aspect of the company's operations.

4) Have directly cultured a people absolutely DEPENDENT on the union for the maintenance of the status quo. They don't care about the company or the product, they care about getting their check and not screwing things up.

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Forgive my anger about this issue, but I would prefer to see UAW burn in hell. They represent EVERYTHING wrong about the society we grew up in.

 

For fun, I will debate the other side.

Without question, the primary fault rests with management. Management of any organization is supposed to provide leadership. There has been no leadership demonstrated by Detroit executives to address the long-term problems of the US auto industry. For example, check out the financials on www.sec.gov and you'll realize, GM for example, hasn't turned a profit in 10 years -- DEEP in the red.

For over 30 years, foreign auto companies have been have been consistently eroding the US auto industry market share. Hello? Detroit has been on a self-destruct mission for years. Sure, over the years, Detroit has made business changes (i.e., closed plants, etc.); however, considering the enormous size of each company and their declining market shares, in retrospect, those so-called changes were really "tweaks" to an old business model.

Isn't it an indication of mental illness when a person keeps doing the same thing, but expects a different result? That's the broad brush history of Detroit -- irresponsible and irrational.

 

To argue against this:

How can a management plan a successful business plan around employees that are essentially untouchable?

You can't fire someone without tons of paper work and expenses because they are union protected. The workers know this and with mandatory raises/promotions, there is no incentive to go above and beyond. Why try try harder when doing the bare minimum yields the same results? Not to mention, why try harder when you're pulling in more money and have better benefits doing unskilled labor when compared to a high percentage of people holding advanced degrees.

Add in thousands upon thousands of retired employees that receive a full pension and benefits, it's a losing battle.

How can you compete against the new guy on the block that doesn't have these crippling expenses? The industry and this country was founded on competition. Take that away at the heart of the company and how can you stay alive?

 

At one point and time unions were necessary mainly because of the working conditions at the time. But now I believe they have lost focus of what there purpose was intended for. We really have no major use for them since we have OSHA now. I also wouldn't go as far as to say it's all there fault but it's mainly there fault (I'd say ~60%). I'd say the other 40% is split between the manufacturers and the consumer them selves (ie. a hybrid Escalade gets 20mpg city and 21mpg highway).

 

I'll play.

I have to disagree with you. The unions provide a sort of regulation. If they weren't there, regardless of OSHA (which is more safety related), the companies would use people up and spit them out. And I work at a non-union shop... I see the bs all the time. The lifetime health care is a good thing, IMHO, and I won't fault the union for fighting for it. In most cases, the workers have literally spent their good years working for the company. It's only right they get to retire with some dignity. When you have a parent or relative of retirement age trying to fight with the government for basic health care, you'll realize why the union wanted this. How many non-union exempt employees suddenly 'don't perform up to expectations' right before they are elegible for all the goodies, and are let go? Lots. At the end of the day, the union is just fighting for the rights of it's members. At the end of the same day, the corporation is just trying to give them less compensation and charge us more money.

 

I was in the UAW. I will be speaking (writing) from my own personal experience here. About 19 years ago I was employed as a welder for a company that manufactured semi-trailers. I was only about 23 at the time and newly married. I knew absolutely nothing about unions. When I applied for the job and was told about the union, I thought, "Great! Better wage and more job security!" That part was true to a point, but it didn't take me long to see the negative side of the union. For starters, seniority is EVERYTHING. If business slowed down and there had to be a temporary lay-off, it didn't matter if the guy next to you was a total screw off and you were a really hard worker. If he had been there longer, he was staying and you were getting laid off. It was the same thing for promotions or pay raises. In short, there was absolutely no incentive whatsoever to do a good job. All you had to do was the bare minimum to keep from getting fired. That brings up the next problem. It is damn-near impossible to get fired from a union shop. I saw guys miss tons of work, come in late all the time, come to work drunk (I'm not kidding), and none of it mattered. As soon as the company tried to discipline or fire a bad employee, the union reps would be all over it. The lousy employee was almost always saved. The final straw came when it was time to renegotiate our contract. We kept pushing for higher and higher wages and more benefits. Keep in mind, we were already making way more than any other industry in that area. But the union would not back off. Guess what happened. The company closed its doors, laid off every single one of us and moved the plant down south where there is cheaper non-union labor and lower taxes. Way to go UAW...you negotiated 300 people right out of a job...you greedy bastards.

So knowing what I know about unions from personal experience, it's no wonder to me that US automakers can't compete.

 

From my experience before I joined the Navy with unions (400 union not UAW) I'd have to agree with matt a. I saw people come in to work drunk, leave early, come in late, or just not show up at all and nothing would be done to them simply because of the union. The sad thing is was that the pay raises were based on time and not performance or a combination of the two. So it didn't really matter what you did you got your raise and your vacation time. There was really nothing motivating them to work other than the person working next to them. And yes there were many of times were pieces of ____ magically got a black eye or broken nose. Because they were just screwing off while others were trying to get everything that needed to get done done.