UAW: Greed is Good
The Detroit News reports that a "substantial signing bonus" could seal the deal on the new UAW contract with GM. The [s]bribe[/s] bonus would be "something they could sell to members without making a long-term commitment that locks GM into something it can't afford down the road." The amount of the bonus hasn't been stipulated, but it's bound to be quite a chunk of change– especially piled on top of the billions GM will have to cough-up for the union-administered VEBA health care superfund that everyone but the retirees it'll cover seems to want. If the negotiating pattern follows past behavior, Ford and Chrysler will be expected to fork-out the same [s]bribe[/s] pay out. Cerberus may be able to pull some cash for bonuses out of its deep pockets, but Ford isn't exactly flush. The UAW better finesse this one, lest they kill that proverbial goose.
Re mickey... The rank and file do not see G.M. as being in financial dificulties.I mean its buisness as usual on the floor.The same daily waste of money.The same incompetant people with zero accountability.There is not a sense of urgency.A line worker has real hard time believing that GM is sqweezed for cash. Yup. I've said it here before - the model to note is the airlines. You'd THINK that airline pilots' unions would have the technical/math/financial skills to evaluate whether their own costs/compensation would hurt the company. Nope. United Pilots in the '90s were especially noted for their slowdowns and militancy. I often wondered how the union's [s]extortionists[/s] leaders answered rank and file questions when Chapter 11 double tapped the life out of their pensions. Then again, maybe there's questions you don't ask unless you want to meet Paulie Walnuts on an early Saturday morning...
the bonus is nothing new. every contract year the companys dangle some cash out there knowing the short-sightedness of the majority of the workers. you may be suprised at how many of the workers live paycheck to paycheck, so offer up a few thousand and watch your fingers. they, the workers take the bonus and fore-go a 2-3% or more during the course of the contract, a payraise that in the long run would be better.
Just about everyone understands these contract negotiation are important. But increasingly the average person on the street simply doesn’t care. Indeed I would say its worse than that, increasing numbers of people I hear saying that they don’t want and wont buy a union made car. And this is in the Detroit area! (but not in union families) The reason is simply the unions attitude. And the feeling that as long as other competitive car choices exist (more than enough) why buy a car made by disgruntled persons? And ones whose greed may sink their employer, and the warranty of the vehicle? I think we are rapidly reaching the tipping point, and I believe the unions greed and sense of business as usual entitlement will keep them from doing what it takes to make meaningful long term changes that could turn the ship around. Why cant they put forth a positive plan and admit to some short term reductions in return for stock, or future profits or something related to actual value produced? Not one word is mentioned. To them not getting a big raise, is a reduction. All this talk of signing bonuses and stuff is madness. Deck chairs on the Titanic comes to mind.
GM will look at the signing bonus as a cost to ensure that VEBA gets accepted. The fact is that VEBA is the "out" the Big 3 have been looking for in changing the status quo from a defined benefit health care program to a defined contribution program. (In the case of Cerebus, it is a way to move capital out of Chrysler to fund other private equity deals. E.g., Cerebus offers Chrysler stock or investments in other Cerebus offerings and used the Chrysler cash flow to pay the VEBA liability off; at the same time funding the Cerebus offerings.) Union members have had the privilege to consume health care without consideration to cost. A VEBA, when established will change the dynamic to one where a union member needs to consider the impact of the health care choice to viability of the VEBA. Once the VEBA is funded the employer only needs to supply a fixed amount to the VEBA. I think the conflict will now move employer-union member to union-union member; and will split the unions on generational grounds. The union retirees who will die off in the next 15 years will receive the maximum value of the VEBA. The union members in their mid-40s or younger will be required to sacrifice with some question about what they can expect in their retirement. The union members being hired today in their mid-20s will likely not see a dollar of VEBA when then will need it 50 to 60 years from now.