The December 21, Sunday NY Times piece, “Downturn Will Test Obama’s Vision for an Energy-Efficient Auto Industry,” noted that the president-elect’s “writings and speeches on the auto industry suggest a keen interest in finding ways, including new technology, to improve the fuel efficiency of the cars and trucks that Americans drive.” These views, going back well over two years, have their roots in concerns over both climate change and competitiveness. The challenge faced by the auto industry, the government, and the unions alike, as the article points out, is how to fix decades of bad business decisions during a severe economic downturn and stimuli for the broader economy.
What happens next depends in large part on the judgment and resolve of the new president and the UAW. UAW workers average around $30 an hour plus generous benefits that bring the fully burdened number above $70 an hour, according to most accounts. Folks, that’s north of $140,000 a year.
At the same time, the UAW is resisting wage and benefit concessions. I’m not clear why the union feels so entitled, other than the fact that they’ve gotten away with it for a long time. Yes, their jobs are considered “skilled.” But, as one Harvard economist (a liberal Democrat, by the way) pointed out to me recently, it’s true that most of us could not do their jobs if we walked into an auto plant tomorrow. But, we could certainly learn to do those jobs pretty fast.
At the same time, the UAW – which stood by as GM, Ford and Chrysler management continued to design and offer less and less competitive products – is a major reason that these three manufacturers are uncompetitive. Their bloated compensation and lack of vision threatens the whole US auto sector. That sector, by the way, includes most major “foreign” car makers (your Honda was likely produced in Marysville, Ohio), as well as hundreds of second and third tier suppliers. Yet, the UAW seems unwilling to make the concessions needed to help their big three employers become competitive.
The powerful union backed the Obama election bid and feels they should have a friend in the next White House. So, I have two questions:
• Will President Obama hold the UAW’s feet to the fire, regardless of union campaign contributions?
• Does the UAW prefer to make 100% of nothing (if GM, Ford and Chrysler fold) or will they help themselves and the country by accepting 75% of something?
This country needs a viable US auto industry for both economic and environmental reasons.
– Posted by Tom Witkin