National Strikes, Local Ramifications-UPDATED
UPDATE: UAW/GM REACH TENTATIVE AGREEMENT. This came out after I wrote my post, but I’ll leave it up anyway.
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With the UAW on strike, I’m reminded of Goodyear being on strike last fall which I covered as a reporter.
Our local economy, despite what people might say, took a hit. And, it was divisive in regards to people’s personal philosophies. That issue came down to health care for retirees in Goodyear’s situation as much as anything.
Here’s what the New York Times is saying about the UAW strike:
The stalemate apparently arose over the union’s demand for job protection for its work force at G.M., which is one-fifth its size in 1990. G.M., in return, had pushed for the creation of a trust that would assume responsibility for its $55 billion liability for health care benefits for workers, retirees and their families.
So, we have another strike and the impact, if this should go on, could impact thousands of businesses.
This strike is of great significance. Strikes usually are. People get into mindsets and forget certain things. For whatever reason, unions tend to be a black or white issue. There is no gray in some people’s opinions on this.
Let’s not forget strikes impact families. Not just one person, but entire families. The lack of regular income impacts businesses. Last year, the financial blast to the head in Union City impacted small business first and restaurants took a beating. In some respects, they are still in recovery mode on this one.
From the Detroit Free Press:
Large suppliers including Delphi Corp., Lear Corp. and Tenneco Inc. temporarily laid off workers. The strike was expected to further strain companies, moving down the supply chain, in an industry where a quarter of auto suppliers already are in financial distress.
The trickle-down effect in less than two days. And Canadian industry might be laying off roughly 100,00 workers by week’s end.
Now, I know some of you are going to say UNIONS aren’t needed anymore. I disagree.
Don Jones is a Martin man who worked for Goodyear for two decades. He was interviewed by Newsweek last week. He also has a blog. That’s where the reporters from Newsweek found him and decided to interview him.
From Newsweek:
When Don Jones went to work on the tire line at Goodyear in 1970, he says the company promised him free health-care coverage for life. Those generous medical benefits came in handy when Jones suffered a series of heart attacks that led to a transplant after he retired in 1993. But as health-care costs soared, the company began charging him for coverage. He now pays about $215 a month in premiums and prescription co-pays, more than half his monthly pension of $385. Last year, though, Jones’s union, the United Steelworkers, agreed to take over running the retiree medical plan from Goodyear. “I actually believe my benefits will get better” when the deal is completed in the next few months, says Jones, 68. Goodyear should be optimistic, too. By funding a special health-care trust run by the union, it gets out from under an estimated $1.2 billion in future retiree medical obligations.
Read the rest of the story. Workers in large manufacturing environments are in transition. Don talks about what’s it’s like to be a retiree on his blog. Newsweek found Don through his blog.
But here’s the rub, the Goodyear workers I’ve spoken too are very worried, as usual, that Goodyear will be relocated off-shore. Goodyear reps deny this will happen but then again, it’s always a possibility. Of course everyone says they won’t, but then again, they might because anything is possible.
One of my friends said this last night: “There are no blue collar workers anymore. The middle-class is diminishing. No one seems to notice and no one seems to care.”
Goodyear has gone to 24/7 operations.
Now, The UAW and GM have been in marathon negotiations to end this quickly. And I hope they do. I hope they come to a managable and reasonable compromise.
Because, I’ve seen what a strike that lasts three months can do to a small community.
And, campers, it’s not good.
Thanks for writing this – you’ve said everything I’ve wanted to say but couldn’t without feeling sick. My dad’s an alternate rep at Local 1853 in Spring Hill, and he’s been saying the same thing your friend has all my life.
To infiltrate and hopefully redirect corporate greed into a force for good is precisely why I got my MBA. I’m finding that I’m not the only one out here doing that, which gives me hope, but it’s going to be slow and take time … time I’m not sure we all have.
I’m kind of conflicted on this issue. My dad’s a union guy, and I’m in the union myself, but… well, to put it bluntly, the union doesn’t always pick smart battles, either when it comes to sticking up for workers or for deciding what to strike over, and I don’t like that they use my dues to support political candidates when they should be hoarding up money to float the workers during strike times (or just buy the candidates once they win their election, which is much easier).
For as much money as they take in, strike pay is entirely too low (which is why I can understand when a guy has to scab to feed his family). Sometimes I think they order strikes only because it is in their best interests, rather than the interests of the workers (who never benefit from a work stoppage, especially in the short term, because the increase may not make up for lost wages). Keep in mind that unions are multi-milllion dollar businesses in their own right, and in a clash between big businesses, the only person truly hurt is the little guy/consumer.
Too many times I’ve seen unions defend someone who the workplace would be better off without. The stereotypical lazy union worker, for example, will get defended all day if they kiss enough ass. Management may want him gone, the other union workers may want him gone, but the union will defend him (wasting money on lawyers and courtrooms if necessary). The unions are greedy, too. When it comes down to it, I’d rather see my union keep 10,000 jobs for a 2% raise than negotiate a 5% raise that costs 10,000 jobs, but that doesn’t happen (often).
It costs a hell of a lot of money to maintain a work force in America, and if a company wants to close up shop and move overseas, there’s nothing a union can really do to stop them. It happens all the time.
The key issue in both of these settings are the enormous retiree healthcare costs. I cannot believe that the unions are willing to take on these trusts from the companies. I have seen some pretty detailed economic studies on the costs and fesability of GM’s healthcosts and they are unbelievable. Larger than many nationalized costs in individual European countries. The money is not there and much like the publicized Social Security potential breakdown it won’t ever be. 72,000 active workers pay into a trust for 339,000 retirees at GM and that’s how it floats so far. Nevermind any comments about the qualification of any union to manage a pension or healthcare fund for its members, the retirees will lose in the end and GM gets out from under a crippling debt load that they can’t afford. This type of debt shifting will produce the next big corporate scandal a la Enron and the S&L debacle from the 80’s.