GM & The State of Union Understanding
By Denise Best | Related entries in Blogging, In The NewsThe only thing surprising about the job cuts announced by GM is that they have been very long in coming.
General Motors said today that it would cut up to 30,000 jobs and close a dozen automobile and parts factories and distribution centers in the next three years in an effort to stem the company’s billion-dollar losses.
“These actions are necessary for G.M. to get its costs in line with our major global competitors,” Rick Wagoner, G.M.’s chief, said today.
Rick Wagoner, G.M.’s embattled chief executive, announced the cuts this morning at the company’s headquarters here in a televised address that was broadcast to the company’s employees, many of whom will be offered early retirement packages.
Fact is, there’s a global marketplace that demands efficiency and penalizes waste.
Hopefully this recognition, and more importantly, action, is not too little, too late for GM and the rest of the member companies within the U.S. Auto Industry, who will no doubt be following suit.
What should be regarded as somewhat amazing is the lack of accountability and ownership demonstrated by union leadership in its response to the news.
The U.A.W. decried the company’s announcement and said it would make coming contract negotiations “much more difficult.”
“Today’s action by General Motors is not only extremely disappointing, unfair and unfortunate, it is devastating to many thousands of workers, their families and their communities,” Ron Gettelfinger, the union’s president, said in a statement. “While G.M.’s continuing decline in market share is not the fault of workers or our communities, it is these groups that will suffer because of the actions announced today.”
Note the statement that translates into an attitude …
“G.M.’s continuing decline in market share is not the fault of workers …” This type of entitlement mentality and lack of ownership is part of the reason why GM, and the rest of the U.S. Auto Industry, is in the state that it is in today. What accountability has, and is, demonstrated by the unions and its membership in maintaining the financial health and competitiveness of these companies?
Given the reliability ratings assigned to U.S. auto manufactured products, relative to it’s foreign counterparts, consumers can’t help but follow their wallets when it comes to getting the best value for their purchasing dollars and thus buy foreign.
If these workers were geared as much toward producing a quality product at a lower cost, as they are to protecting their benefits, then the marketplace would reward company and employee by greater revenue opportunity. Ironically enough, the more workers and their union representatives try to hold on to benefits (without offering viable solutions to declining sales), the more benefits (and jobs) they will stand to lose.
Without a change in mindset by our union workforce, U.S. companies will be continue to be placed in a competitive disadvantage in the global marketplace.
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November 21st, 2005 at 3:31 pm
It seems like you don’t know what a union is.
It isn’t the job of the union to offer “viable solutions to declining sales” or to be accountable for the “financial health and competitiveness” of the company. If they were to make such suggestions, I am sure that GM would be offended by the idea that the union thinks that it has a right to tell GM how to run its company.
The union’s only job is to try to get the best benefits and job security possible for its members. The union only tries to use its pressure to convince the company to cut costs elsewhere. However, neither the union or the company would want the union to play any other role in deciding where those cuts in expenses should be made.
November 21st, 2005 at 4:07 pm
Well, I read one GM union boss (in Ontario, I think) blame it on unfair competition from Japan and Korea. If he’s right, that’s not the union’s fault or management’s. But I think GM’s management has to take the brunt of the blame for things as they are now. As I understand it, they stuck with big, gas-guzzling products far too long. Ford was a little smarter and is doing a little better in the short run.
November 21st, 2005 at 9:34 pm
Socks Clinton,
Unions have positioned themselves, especially over the past thirty or so years, as being in partnership with the auto manufacturers through quality circle and other cooperative approaches to insure greater success for both parties.
Unfortunately, there’s been more rhetoric than substantive action that’s occurred to offset practices such as “overproduction,” relative to demand, to keep union employees on the payroll.
Unions need to evolve and adapt themselves to the current global marketplace conditions to insure survival of U.S. industry.
November 21st, 2005 at 10:54 pm
Without a change in mindset by our union workforce, U.S. companies will be continue to be placed in a competitive disdavantage in the global marketplace.
This is totally stupid. Of course unionized
American workers are at a competetive disadvantage. That’s because they aren’t willing to work for $.35 and hour like workers in the Third World or China.
Quit blaming union workers. Two thirds of America’s blue collar jobs are already gone, unionized or not, and the rest are on their way out. Springsteen: “These jobs are goin’ boys, and they ain’t comin’ back”. For Christ’s sake will you quit blaming the people who have lost their jobs.
November 22nd, 2005 at 12:49 am
Harsh words, Pug. The mindset of unions do need to change from that of collectivism to that of free-market success. There is more than one way to skin a cat. If Unions have no other function than to beg for more money with the impotent threat of strike — then unions are truly dead. If on the other hand, unions want to change their mindset and embrace collective bargaining that encompasses profit sharing arrangements, or other incentives for corporate health — then maybe they can keep themselves from complete marginalization. I’m not blaming the people who lost their jobs, so much as their union bosses for lack of creativity.
November 22nd, 2005 at 11:10 am
Denise,
“Unions have positioned themselves, especially over the past thirty or so years, as being in partnership with the auto manufacturers through quality circle and other cooperative approaches to insure greater success for both parties.”
Quality circles are a drop in the bucket when it comes to the amount of influence that general employees have over managerial decisions. Allowing lower level employees to offer “micro-level” suggestions regarding how the day to day operations can be streamlined does not constitute a partnership between management and the union. Also, if a company has committees like these, it is up to the management to decide if they are being effective, and if they should even exist.
The management runs the company and makes all the decisions. Blaming unions for not offering ideas on how to make GM have better sales numbers makes about as much sense as blaming your local Post Office for Bush and Congress’ decision to go to war.
November 22nd, 2005 at 12:09 pm
DosPeros- do you realize that the amount the union workers make along with compensation for retirement and health care is less than it was 20 years ago in dollar for dollar levels? I’d say they are making compensations for the industry. Now compare that level to that of corporate heads, and you’ll find that corporate leaders make more on average for total compensation packages. So why is it that the union is being made the sacrificial lamb here? You never hear that the heads of these large commercial operations ship their high and mid level management positions off to china in order to save money.
November 22nd, 2005 at 12:40 pm
Socks Clinton,
I’m not absolving GM’s management from bad decision-making, rather there needs to be accountability for financial performance on both sides, labor as well as management.
Workers (like it or not) are making decisions that involve, as well as have an impact, upon company resources and results.
Issues ranging from absenteeism, to job-related accidents, to whether a generic or brand name drug is filled for prescriptions are all examples of areas where the working force makes a huge difference and does have the decision-making power.
As long as the mindset of union leadership is to entrench and try to “get all they can get,” instead of figuring out a way to be responsive to market conditions then we will continue to see these jobs go the way of the dinosaur.
November 22nd, 2005 at 1:39 pm
Denise-
“As long as the mindset of union leadership is to entrench and try to “get all they can get,â€Â? instead of figuring out a way to be responsive to market conditions then we will continue to see these jobs go the way of the dinosaur. ”
and what about management. Don’t they have a “get all they can get” mentality as well? This is Bull. Blame the workers because they can have their jobs shipped off and excuse the greed of the the management because they would never outsource their own jobs? Common. There is no stewardship in American corporations and as a result they have undercut and sold out America in the name of competition, its really sad that people think that is acceptable.
November 22nd, 2005 at 2:48 pm
To answer you question: “So why is it that the union is being made the sacrificial lamb here?” Because of stockholders, John. Ultimately, these demonic CEO’s are given huge salaries, because that is the labor market for “successful” CEO’s (defined as “CEO’s credited with maximizing corporate profits to the benefit of the stockholders.”) Unions are “sacrifical lambs” when a corporation feels hard times because the labor market it represents is internationally fungible. Yes, Mexico provide cheaper labor than U.S. union jobs. End of story.
John, you are correct. Unions have made concessions, to the detriment of the workers. This is exactly why a new mindset and some creative union think is needed.
November 22nd, 2005 at 3:42 pm
Dos-
The problem with that is that they keep on making concessions, and rethinking things, and they will continue to lose. Eventually the jobs will go. We saw this in the 80′s with the Buy American campaign. I was in detroit at the time and it was really strong there. Perhaps the Union members should use what seems to matter to those that are controlling this corporations, purchasing power. Force the CEO’s to keep job in America by threatening loss of market share. Ex: GM is laying off 30,000 people. All the members of the UAW (regardless of employment affiliation) refuse to buy GM products until they replace those jobs. If GM has to make tough decisions like cutting upper and middle management salaries and positions to accomplish that, then so be it. If they go out of business, they would have eventually shipped off those jobs in the future regardless. Another company will come along. Isn’t that how the Free Market Economy works. We owe nothing to the Big3, because they have not met their obligations to America.