United Auto Workers members and supporters rallied outside the Detroit Auto Show that’s going on this week in protest against lowering their wages, which are higher than non-unionized assembly plant workers that work at foreign automakers such as Toyota.
Workers and supporters who attended the rally carried placards with slogans such as “I’m not a foreign auto worker”. They also claim that they “work damn hard for their money” and that claims that UAW workers make so much more than foreign competitors is a lie. I think these guys are confusing the whole foreign automaker workers thing. The people who work for foreign automakers also consist of Americans, it’s just that their bosses, or even their bosses’ bosses originate from another country.
Besides the point, even if they want to comparing yourselves with foreign auto workers, does being American have any advantages when it comes to a blue collar worker putting together cars? Are foreign auto workers somehow less adept at doing this and thus deserve to be paid less? Do they deserve less, and you deserve more, simply because you are not “foreign”? If you are so valuable, why are you working on a production line?
They say they love GM as much as everyone else but in September 2007, a year where GM lost an average of US$3.2 billion a month, the UAW launched a massive strike which left 80 GM plants having to shut down, just because GM had failed to meet the UAW’s job security demands during a negotiation. “No one wants to see GM go down the tubes. But we have to keep our standard of living, and GM is going to have to cooperate,” said UAW picketer Jim Brown.
As for the wages, let’s look at some figures.
Some claim the average UAW worker earns only US$28.12 an hour on average (GM reported US$39.68 an hour), but plenty of other costs such as healthcare and retirement benefits push this figure all the way up to US$70 an hour! These benefits include hospital and drug benefits, dental and vision benefits, group life insurance, disability benefits, supplemental unemployment benefits, pension payments during retirement, unemployment compensation and payroll taxes. Chrysler reports a massive US$20 an hour in health benefit costs alone! In 2006, GM paid US$4.9 billion to 291,000 retirees, which ends up being US$31.04 an hour when you divide that sum among current active and working UAW workers.
In 2007, the UAW has already agreed to slash wages (not by a margin that’s enough it seems) and benefits for NEW workers, but the retirees continue going on happily with their massive benefits. Frankly when you look at the numbers it appears that everyone but the people working in the factories are sucking Detroit dry, and the current workers are having to pay for it with pay and benefit cuts! But still, the costs have to go down.
“Why should it always be a race to the bottom? The union has been fighting for these things since the ’30s. Now the senators (from the Southern states) want us to make what the workers make for the Japanese companies. Why wouldn’t they want to raise their salaries instead of lowering ours?,” says UAW representative Mike Bartnick.
A union cannot continually go on forcing an artificially high labor rate when the rest of the world works on an open market. The costs and prices of competitors’ products will continue to drop, and to remain competitive, if labor costs cannot go down, the cuts will have to be made elsewhere, such as R&D (technology) and quality. And that’s what brought GM and Chrysler to where they are today.