Monday, November 02, 2009

A Quick Thank You to the UAW

If you operated a business that has struggled to make a profit for a number of years and had in the interim been hemorrhaging billions, what would you do given the circumstances that have transpired in the past week?

First, you managed to turn a $1 billion profit for the third quarter buoyed in large measure by the Cash for Clunkers program. (This sounds like a ton of money until it is compared to the $30 billion of losses over the past few years.) Secondly, the UAW rank and file members are in the process of defeating a tentative agreement with your company that would allow you to move forward with a labor agreement in the US that is more in line with that of its competitors. Finally, the Canadian Auto Workers ratified a labor agreement that would allow you to compete with the rest of the industry in that country.

Now, if your sales numbers increase and you need to add production, where would you be most likely to increase that production? Would it be in a country where you are less efficient and less likely to be able to turn a profit, or would it be in a more labor friendly market where your per unit costs are more in line with the rest of the industry?

It is easy to blame the demise of the domestic automobile industry on a number of factors, including the management of the Big 3 themselves. However, as long and drawn out as that learning curve has been for management at Ford, it appears as if it has finally started to catch on. American labor unions (primarily the UAW) and overly aggressive government regulators have still experienced no epiphany.

This long term trend, if relationships between the UAW and Ford continue to be icy, will be for more jobs to flee Michigan in favor of venues that are friendlier. This does not bode well for a state already crippled by fleeing jobs and businesses.

The rest of Michigan owes the UAW nothing regardless of how loud Ron Gettelfinger's legions like to champion their advances for all workers. All that the UAW deserves by way of gratitude from me is a hearty 'thank you' for helping to destroy what is left of the state that I grew up in.

I hope that future transfer to Canada works out okay.

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