It’s not difficult to understand why the UAW has never contemplated agreeing to a wage rate tied to the profitability of its employer firms: simply put, it’s been a long time since big profits were the norm among the union-represented Detroit automakers. But now that Motown is back in the black and handing out record profit-sharing checks, it looks like the UAW could finally tie its own fate to that of the automakers… on certain conditions. UAW boss Bob King tells The WSJ [sub]
It would be an advantage if you can guarantee to the [Detroit] companies certain things on fixed costs so that they would remain competitive. When you’re successful, that’s good. But if you’re sharing more of the risk, you need to have more of the upside
In short, tying the union’s wage to the automakers’ financial performance is only an option if there’s something in it for the UAW. And end to two-tier? More US production? Board seats for the union? Who knows, possibly even a pay increase. With GM Vice Chairman Steve Girsky saying things like
there is a big pay-for-performance element going through the company and there is going to be more of it,
one has to assume GM might be willing to play “let’s make a deal” with the union. Girsky’s been on the labor and management side of the equation.. in fact, at the moment he is (apparently) on both sides, as both a Vice Chairman of GM and the UAW VEBA fund’s representative on the Board of Directors. With that kind of connection between labor and management, and with much of the “risk” around Detroit’s performance having been removed by the government bailout, a UAW performance pay deal seems more likely than you might think. Whether it’s a good idea is another, far more complex question that I’ll leave to the comments section.