By on May 11, 2008

gettelfinger.jpgThe Associate Press reports [via Yahoo] that UAW leader Gettelfinger was "insulted" to learn that American Axle's plant closure plans include the shut-down of the Cheektowaga, N.Y factory– in addition to the two plants (Detroit and Tonawanda) already sacrificed at the altar of, dare I say it, profit. And get this: King Ron says "he hadn't wanted GM involved." Say what? Big Ron didn't want GM to kick in $200m in extra wages for the guys? "Many of its U.S. competitors won deals from the United Auto Workers to pay newly hired workers about $14 per hour. But American Axle workers say they won't take that big of a pay cut from a company that made $37m last year." So let me get this straight. As long as the company is making any profits the UAW isn't willing to negotiate competitive deals? By my count, American Axle has six US factories (including the three on the chopping block), two in Mexico plus one each in Brazil, China, England, Scotland and Poland. The longer the strike oontinues, the more likely it is that American Axle will ship tooling from its US factories to the others around the world– if it hasn't done so already. Sure there would be disruption, but strikes are plenty disruptive. Seen any Mexican or Chinese auto parts factories go on strike lately?

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25 Comments on “Gettelfinger: UAW “Insulted” by AA/GM Offer...”


  • avatar
    quasimondo

    I think if the Chinese or Mexican factories went on strike, the workers would be executed.

  • avatar
    LoserBoy

    quasimondo:

    You thinking that doesn’t make it true.

  • avatar
    timd38

    He will find out how hard it is to run a business when the UAW starts running out of health care money…..

  • avatar
    MikeInCanada

    What’s a union to do when a company has “options”. It’s an interesting twist.

    The UAW (not to pick on the UAW as I think that the observation is applicable to most North American unions) they just can’t bring themselves to ‘value sell’ their labor to the businesses that they work with. Simply put, the UAW is a supplier, just like all the other suppliers a company buys from – albeit a pretty important one.

    In todays market, it is normal to for a supplier/producer to try and sell themselves as providing a service that makes the customer better off then if they went with a competitor. In the UAW’s case it would be Mexico/China/etc……

    Granted, it’s a sea change in perspective, but it offers a long term strategy (not a tactic – which is what we are seeing today) that a union can thrive in.

  • avatar
    mel23

    The inescapable problem is that no matter how large the pay cut, the services the UAW, and anyone else living in the US, has to sell will necessarily cost more than what Mexican, Chinese, etc. labor has to offer. So it’s a losing proposition. Given that, what’s the point of playing the game? Might as well kick over the table now and pass on some of the pain as a means of delaying the inevitable.

    There seems to be a dearth of empathy in this country for people whose jobs and lives are essentially wiped out by what’s going on. Attitudes might change when it’s their turn. An article in the Washington Post today points out that outsourcing of legal work to India is growing 60% annually. They can do the work at a savings of about 80%. This is not paralegal work either; it’s law school grad type stuff. So what’s safe?

  • avatar
    rocket88

    I agree with MikeinCanada. Im in Canada too, and it strikes me as a real tragedy the CAW cant think long term either. if only they would show some initiative and lower their rate just a bit i think they would all have much more secure jobs in the future. the way it is now however, they are about to price themselves out of a job, and will drag Windsor and other cities down with them. its already happened to the tool and die sector. If GM and Chrysler somehow once again settle on the terms the CAW extorted from Ford who cant afford glitch in the launch of oakvilles vehicles then i would expect them to significantly wind down operations during the contract period. Or maybe they will do it now, and we’ll have American Axle Part Two. Somebody has to say no to these unions, and im glad AA is for once standing up. Trouble is, its a day late and a dollar short.

  • avatar

    The problem mel23 is not the Chinese or Mexican wages. No one is asking American Axle workers to compete against Chinese or Mexican wages. The problem is other American non union wages or even other American UAW supplier wages. You don’t have to have a 2 dollar a day workforce but if their other American competitors are paying 14 dollars an hour then that is the wage you must meet. Pattern negotiations work both ways.

  • avatar
    Airhen

    The best thing that can happen to the big 2.7 is to break the UAW.

  • avatar
    MikeInCanada

    mel23 –

    Experience is already showing us that paying domestic labor rates are not necessarily a “losing proposition’.

    Go to Google and enter “Caterpillar Case Study” for starters. Heavy industry, unionized workforce, besieged by foreign, low cost competitors…. sound familiar? The result, not only are they still in the US, but they are in fact a world leader in the products that they make – union made at that.

    My world (aerospace) our unions and high cost structures make Detroit look like Delhi. Making airplanes in Pugot Sound or Toulouse now that’s high cost! So it’s not all about labor costs – rather labor productivity and the ability to deliver a product (labor) that a competitor can’t do.

    Unions in North America, have been typically ‘unproductive’ in their supply of labor. Just think of all the arcane work rules that are really only backhanded ways to force the company to hire more workers…..

    I’ve worked in India and China and I can say first hand the only thing that these counties can offer is a lower hourly rate – that’s it. Everything else (and I mean EVERYTHING else) is in fact equal or more expense.

    If you look at an event horizon of 5 – 10 years, yes, it is going to be tough for unions and blue collar labor in general, however it you look farther out, say 10-25 years – then things don’t look as bleak.

  • avatar
    rtz

    The problem with the union has always been the astronomical pay for the type of work being done. It just doesn’t equal out. Making an insane wage for a simple task.

    I suppose though, if the company was profitable enough, the payroll would be a non issue. And it’s only an issue because of the companies involved financial situations.

    If the payroll is reduced or cut back, does that save the company or make the company profitable? Reminds me of the hack and slash their way to profit. It may reduce the bleeding, but it’s not enough to stop the bleeding. The money from a one time sale gets spent.

    The products should be the main concern. Continuing to build items that don’t sell doesn’t make any sense. At the least, revise, refresh, and revitalized these items and make them attractive, appealing, and desirable.

    Some of the restyled `08 models I’ve seen on the streets look very nice compared to years past. But under the hood it’s the same old story and at the same old price. They shined it all up, but it’s still the same old car. Just not enough to make a difference.

    Can they turn a profit if they sold or leased their vehicles at $99/month? No set amount of months, no deposit, no closing cost. You want it; take it, don’t want it; fine. No strings attached. That’s how it needs to be.

    No one would be scared to drive a Cobalt or Focus if they didn’t have any investment in it. Affordability is what’s needed in today’s economy.

    Can a business case be made at having such low monthly prices? That would be playing hardball with the Asian makes. Could they hang with those numbers? That’s what they should just to push their buttons and make things interesting and exciting. Aveo’s at $99/month, no strings attached. Or offer the entire GM lineup(sans Corvette) at that price. Their dealer lots would empty in one day. They could never build enough vehicles to meet demand.

    Who in their right mind would buy a Honda at three or four hundred a month when they could have a Chevy at ninety nine?

  • avatar
    HEATHROI

    Who in their right mind would buy a Honda at three or four hundred a month when they could have a Chevy at ninety nine?

    Have you actually been in Aveo or a Cobalt ? those loopholes are not worth $99 a month? everything about them screams decontenting. a chevy at $99 a month would be trabant.

    If this actually happened I would want to know how many toilets GM owns because it would be cheaper to flush their money down them.

  • avatar
    jurisb

    here we see the real decline of purchasing power of the nation. if former Det3 workers could earn 30$ an hour and now hope for 14$, yet prices of house have at least trippled from the times when they were making these 30 bucks an hour, so how does it affect the wealth of the people? How does the 14$ pay affect their purchasing power of new vehicles, whose prices have increased as well? How does it affect the sons and daughters of those men who work for 14$, yet want to send their children to College? has college become cheaper, more affordable? nope.The vicious circle.
    Detroit has to understand that United States middle class is being wiped out, so is the money that could be spend on buicks or V8 G8s. There is mass exodus to economy class, but what a tragedy there is not a single US built econo- class car platform, that could transfer profits directly back to the mothership. that money goes to korean companies and their governments, or funnily enough, Detroit builds cars on Mazda6 platforms, then the profits go to japanese government through taxes, then US borrows the same money for 4% interest rate and spends it on R&D.., sorry missprint, spends it on war in Iraq. isn`t japan clever? not a single soldier killed, not a single orphan child, not a single widow, no bleeding trade surpluses, all they enjoy is one big party of interests harvested on American shortsightedness. Sorry!

  • avatar
    nudave

    Q: Who in their right mind would buy a Honda at three or four hundred a month when they could have a Chevy at ninety nine?

    A: The same person who would eat steak instead of dog food.

  • avatar
    ihatetrees

    MikeInCanada:
    I’ve worked in India and China and I can say first hand the only thing that these counties can offer is a lower hourly rate – that’s it. Everything else (and I mean EVERYTHING else) is in fact equal or more expense.

    Mexico is no panacea either. Labor laws make letting workers go costly. Large, mandatory severance for laid off workers (that’s brutally taxed) makes flexible production costly.

    The electric grid has reliability problems too – although it’s getting better (and the USA’s is getting worse).

  • avatar
    Dynamic88

    There seems to be a dearth of empathy in this country for people whose jobs and lives are essentially wiped out by what’s going on. Attitudes might change when it’s their turn. An article in the Washington Post today points out that outsourcing of legal work to India is growing 60% annually. They can do the work at a savings of about 80%. This is not paralegal work either; it’s law school grad type stuff. So what’s safe?

    There sure isn’t much empathy. Mostly envy and shadenfreude.

  • avatar
    DearS

    The situation for the middle class may perhaps motivate further study of economics to understand how the income classes are positioned relative to each other. How we are all linked in the economy. Which may prompt new principles about dealing with money and its distribution. Perhaps limits on the wealth of individuals to around one billion.

  • avatar
    geeber

    Envy? Glee? No, more like it’s difficult to feel sorry for someone whose wounds are largely self-inflicted. That goes for both management and labor…at the end of the day, one can’t shake the feeling that they deserve each other.

  • avatar
    schinbone

    The people saying these guys get paid too much really do not have much of a clue. Im not defending unions, or how much these guys make. I for one am in large union and at least in my case, do not think much of mine.
    That being said, how would anyone of you saying break UAW, they make to much, like if you worked for a company MAKING money, went into work one day and they said, you know what we think you make to much we are cutting your pay in HALF! The UAW did it for the others because they were not making money and are in serious trouble. These guys are saying no, your making money we wont take a pay cut of half. They do run the risk of totally losing their jobs but, why should they not take a stand and hope they can work it out? I mean, could anyone maintain what they have with half your current salary? Not many could. Mr. Horner, why don’t you take a 50% pay cut and then come back and talk to us about this.

  • avatar
    tool

    I wish those lazy UAW people would shut up and work for what they’re worth. Profit belongs to the stock holders, they’re the ones who took all the risk. With out their money those lazy UAW people wouldn’t even have a job.
    The very idea that a person could own a home and send their kids to college just by working full time for 30 or 40 years is sickening!

  • avatar
    MikeInCanada

    Re: schinbone –

    Companies go to suppliers all the time and demand cost reductions – it’s routine. Suppliers are free to take it or leave it. Now, companies (not just the auto sector) are treating labor as just another supplier – and they don’t like that and don’t know how to react.

    I agree, if I came to work one day and my (profitable ) company said that we’re cutting wages by 50% it would be a crummy day! However, there is an important point that’s being overlooked – I’d quit, and so would a lot of other people – that’s the leave it part.

    In this case the UAW does not want to ‘leave it’. That makes it their problem – not the company’s.

  • avatar
    Geotpf

    The UAW had no choice but to strike in this case. The company was asking for a 50% pay cut. No union could accept that. Would you like to have your pay cut in half?

    Also, it sounds like they were close to an agreement-and then the company says, “No, no-we aren’t closing two plants, we are closing three!” The UAW felt like they were being jerked around, and I don’t blame them.

  • avatar
    netrun

    Despite my dad working in the UAW for almost 40 years, I’m not a big supporter of theirs. In fact, I think they’ve gotten too fat, dumb, and lazy to be of much good.

    For me, keeping manufacturing in the States is simple: make sure you add more value to the pipeline than you take home. Year after year. It’s much harder for management to buy into a long-term plan requiring investment into their workers, but that’s where the future efficiencies and productivity is going to come from.

    Likewise, the worker has to be interested in working hard to come up with ways to improve how things are done instead of developing a feeling of entitlement to high paying, simple labor jobs. If, instead, you keep making your products better, for less money, with better quality, then no Chinese/Indian worker has a chance at your job.

    For me it’s the same concept as the future value of money: if your future value as an employee includes many additional efficiency improvements then your future worth is going to be much higher than your current pay.

    The UAW (originally) saved the common worker from a hellish workplace that was trying to kill him only to have insulated that same worker from normal market forces so completely that it’s difficult for reality to seep through.

    Reality has gotten really harsh now and it’s costing lots of people their jobs. I say these jobs being lost now should have been naturally shed over the years as manufacturing improvements were made.

  • avatar
    MikeInCanada

    Re: Geotpf
    The UAW had no choice but to strike in this case. The company was asking for a 50% pay cut. No union could accept that. Would you like to have your pay cut in half?

    I would disagree – yes, the union has several ‘options’ or choices. They picked the strike option – by force of habit, or preference, or who knows….

    The bottom line is if the wage being offered is not acceptable – then quit. If a company can hire people at that rate, and you can’t find comparable work at that old rate, then you have to ask yourself if maybe you were overpaid.

    If a company can not fill it’s ranks at the lower rate, or the quality of labor is such that it’s just not worth it, then a company would be well served to increase wages and attract better (skilled) staff.

    As I’ve said previously, if my employer cut my pay by 50% I’d quit! And I’d steal as many office supplies as I could carry on the way out the door (after deleting 5 years of email, of course).

    Regarding AA threat to cut multiple factories perhaps they were giving the Union a choice. Higher wage rates (then first proposed) but, fewer workers. The bottom line is that the cost of labor at AA is going down, just the way it is being reduced is the real variable.

  • avatar
    Lumbergh21

    As MikeInCanada already said, no I wouldn’t take a pay cut of 50%. I would immediately start looking for work elsewhere and quit as soon as I got another job that paid more. The problem for these UAW workers is they probably won’t be able to find a job elsewhere that pays more. Is that AA’s fault? Should AA pay significantly more than the open market says the workers are worth? Why?

  • avatar
    DearS

    Its not my job to come to a conclusion for someone. Its not my job to find out what someone is entitled to. Its not my job to tell someone what they car dare to feel, think, do or see. The UAW and the executives have a right to their own choice, they are not forced to care about anyone’s opinions. Personally I can clearly see why its all logical, what each side is doing. Its not the executives’ job to worry about the UAWs welfare, Its not the UAWs job to keep the executives’ integrity jesus like, and Its not my job to decide anything for them. Lets not be naive, many folks have little use for each others values.

    If I were an executive, I’d do my job according to believes not TTAC or The UAWs. Criticism wont mean scuat, I listen to reasoning. Now why might an executive find it worth his while to make less money? How he can he be forced to take less money? Criticism perhaps, although unlikely. They do not need to be politicians to advance.

    Now the UAWs is in talks with executives and owners who are looking about for their bests interests (making more money?) to the best of their ability. The UAWs is looking out for their best interests to the best of their (not mine) abilities. I think many individual UAW members can possibly make 50% less money or similar without well the UAW. Most I think can be ok without the UAWs. Poorer but happy. If they dont know that, its not anyones job to tell them. So why does anyone want to worry about the UAWs again? because its sad? I’m sure we sad individuals have plenty of others to help. Myanmar for example.

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