GM and Ford: A UAW Ultimatum

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The UAW is being threatened by Ford (F) and GM (GM). Agree to cost cuts, or we move production overseas.

The sight of the gallows focuses the mind.The UAW is being asked to gut the livelihood of its own members.  According to The Observer, "Ford and GM have made it clear that they expect to reduce the hourly cost from $71 to about $50 – a cut of about 30 per cent."  Both of th large car companies are wiling to put billion of dollars into a pension and health-care pool run by the union. The would take the worker liabilities off of their balance sheets.

What the report does not tell is what the UAW has on its side of the ball.

The answer is, a strike. The negotiations appear to be turning more ugly than most observers said they would. The UAW management will not have the support of the rank-and-file if it appears that this set of bargaining will be the one to determine their future.

A strike may help the UAW, but it also may send the industry that pays its workers into a tailspin. Detroit cannot have its capacity off-line for any period that would allow the Japanese to pick up more market share.

And, so, it has come to this.

Douglas A. McIntyre