UAW, The Automakers and the Bailout

This post will have a little different flavor, but it is something important I think, and I really hope to get our readers perspective on this. 

Now that the democratic vote on bailing out the Big 3 automakers has failed, and we have successfully set aside the democratic process to enact the bailout anyway, the dust and discussion has settled a bit on the debate (at least for the time being) I wanted to weigh in on what I would argue to be an unfair amount of blame and criticism that has been laid at the feet of the UAW.

Before we begin, I think we need to be clear about the role of the union. From its website and the preamble to the UAW constitution

“Essential to the UAW's purpose is to afford the opportunity for workers to master their work environment; to achieve not only improvement in their economic status but, of equal importance, to gain from their labors a greater measure of dignity, of self- fulfillment and self-worth. “

The UAW's mission is to represent it's workers. It is not the job of the UAW to keep GM fiscally solvent. It is not the mission of the UAW to protect bond/shareholders. It is not the UAW's job to serve the interest of the US taxpayer. Its constituency is the workers that form the union, and it's only accountable to them, and the laws of the United States.

It is management's job to protect bondholders, and it is management's job to return value to equity holders. While the interests of management and the union can and often do intersect, and of course the long term survival of the industry is very very relevant to the health of the union, to blame the union for many of the problems that face the US automakers is not only unfair, but it shifts blame away from where the collapse of this critical domestic industry truly lies.

Things that are not the UAWs fault

1. A manic obsession with producing Trucks and SUVs

2. A manufacturing model that is dependent on $2.50/gal gas

3. A narrow, narrow political lobbying focus that is dedicated to preserving the status quo vs. preparing for the future

4. Existing in one of the few developed economies where the cost of healthcare falls squarely on industry and workers.

5. Having headquarters and manufacturing facilities in established northern states, where they pay taxes and play a key role in the tax base v. being built in southern states and benefit from incredible costly tax breaks where the tax base is reliant more on federal aid than a true tax upon the economic producers in the economy,

6. Existing in a poltico-economic system that values and protects the equity owning capital-class more than the labor supplying working class.

Now there is a lot wrong with the UAW and unions in general. Too much rent seeeking, unreasonable perks such as a the jobs bank, but these are all things that can, should and will be resolved though the established collective bargaining process. The UAW has its cosmetic flaws, but the fundamental flaws in the system lie well outside it's sphere of influence and its mission statement.

Finally they hypocrisy of our elected officials is angering. Throughout election season, everyone, left, right, center and upside down, pays homage to “the working man,” to the need to provide security, healthcare, a decent wage and a chance to “get ahead,” but when the vote casting is done, how quickly we throw an organization who is work for just those goals under the bus. 

I am not saying that the UAW is blameless, nor am I saying that unions are always a good thing, or always the answer. And of course concessions and structural changes need to be made to all parties involved (including congress) but the truth is that the blame cannot and should not be squarely laid at the feet of our workers.

I know this topic can be a bit controversial, and a lot of people have a lot of strong and smart opinions.  Please share in the comments.