The UAW is getting an interesting lecture: Ownership of a car manufacturer entails delicate handling of labor relations. As Ed had reminded us so rightly: “Pre-bankruptcy, GM didn’t have to deal with the fact that the UAW is incapable of building fuel-efficient subcompact cars profitably. But now that the General has promised to build the next-gen Aveo in Michigan’s Orion Township plant in exchange for nearly $800m in local tax credits (not to mention the political benefits of “saving or creating” hundreds of union jobs), it’s up to the UAW to square the circle and make the damn thing profitable.”
And now, the UAW gets a taste of how it is when the working masses protest in front of your building: “About 100 General Motors Co workers and retirees picketed outside the United Auto Workers union’s headquarters on Saturday to protest plans to build a new small car with low-wage workers,” reports Reuters. They didn’t picket RenCen. They didn’t picket the Orion plant. They picketed their own union.
As reported previously, the UAW enacted “innovative labor agreement provisions” that would allow GM to make a small car profitably in the United States. The creative part: Slash wages in half. Think back what would have happened before the UAW ended up as a co-owner of GM and a good chunk of the shares that are about to be IPO-ed.
According to Reuters, “details of the concessions granted by the UAW’s national leaders have angered many workers.” The most contentious detail: GM will be able to hire an increasing number of workers at wages of about $14 per hour. That is about half of the nearly $29 per hour veteran UAW-represented GM workers make. Eventually, GM plans to staff the plant entirely with workers at the lower wage level, union officials told Orion workers.
No wonder China’s SAIC is interested in getting in on the ground floor with the GM IPO. If this trend continues, the U.S.A. will be the world’s new low cost producer. Workers protesting their own union? The Chinese are used to it.