UAW Pricing Itself Out of the Auto Market

When the $14 billion bailout for the auto industry fell through Thursday night, Senate Majority leader Harry Reid said, "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight."

Stocks opened lower as Reid predicted, but not nearly as much as his words suggested. And soon after the open, stocks began to rally. Some will say investors grew hopeful that the White House and Treasury Secretary Henry Paulson would step in and use TARP money to save the auto industry. However, I believe investors are simply pleased that Congress is taking a hard stand against bailout seekers. Bad companies should be allowed to fail. At least some of our politicians have finally gotten that message.

Ron Gettelfinger, president of the United Automobile Workers, gave a press conference Friday morning blaming Republicans for the failure of the bailout, but the conference only proved how defensive Gettelfinger has become. The U.S. auto industry is dying, yet the UAW refused to allow any wage concessions in 2009. The UAW doesn't seem to understand that it has priced its membership out of the market. While this union tries to "protect" its members, foreign manufacturers are grabbing market share and putting Americans to work throughout the South. It won't be long before out-of-work union members begin migrating south seeking employment at these non-union shops.

Comments

[Eagle Jim:]

This isn't the first union that has priced themselves out of business. Another example is the ILWU which destroyed the sugar industry in Hawaii. In economics it is called "the law of dimishing returns". When the wages and benefits exceed company profits, businesses have no alternative but close the doors permanently. Nobody wins and the ones that get hurt the most are the employees who followed the advice of their union leaders.

2008 Dec 14 04:09 AM

[datum100:]

Although, uniouns have played a vital role in the development of workers rights, fair pay, and health issues, at the turn of the century, I dont believe that in today's world, today's business, that the union does little more than gather money and basically drive prices up. America needs manufacturing, to remain a strong and free country, however, why should someone with barely less than a high school education; punched in and out by his buddy's at the plant; make double that of the
average 7 am to 7pm working family.

The uniouns served their purpose, but now with so many government regualtions, the average worker can stand against any company.


A job at a lower pay is much better than no job at all.

2008 Dec 14 08:13 AM

[User 319212:]

Pride goes before a fall.....perhaps these UAW people should swallow their pride so they don't fall completely off the gravy train. I wonder what would happen if the McDonald's workers unionized and demanded high salaries and benefits. And why stop there? There tons of employee groups currently non-union who could do the same thing. They could then all buy those un-economical American cars and greatly exagerraged prices because of the high labor costs. UAW needs to go!!!

2008 Dec 14 08:40 AM

[rjynand:]

Senator Bob Corker's proposal is in fact the solution. This gentleman is a true patriot and cares about us - strange but caring about "us" rarely if ever becomes a topic, it's always the so called "big three" and the "union".

2008 Dec 14 09:05 AM

[sstro:]

If Hank gives them cash I hope he puts the Corker restrictions on them getting it. Anything less will become a black hole and the UAW won't do a thing as long as they can suck money from somewhere. The UAW has held these companies hostage long enough now they want to hold the rest of America hostage to their corrupt and greedy ways.

2008 Dec 14 10:15 AM

[il_soto_voce:]

Right on the money!!! Another good commentary and ideas was posted last night at fromwhereistand.info/t.../ .

2008 Dec 14 11:13 AM

[UseMyFedTax...:]

The Republican Party will become very popular with their new platform of Low Wages for All............

2008 Dec 14 11:57 AM

[Paul Killinger:]

Guess what, guys? Your deal's not over yet, it's still on the table! All you need do is have the UAW call Sens. Corker and Reid to tell them they'll go along with the other stakeholders and take a reasonable haircut. The Senate would reconvene on Monday.

But the UAW's not about to do that, of course. They're too busy playing this inane game of chicken. So when there are no presents under your tree come Christmas morning, don't blame the Senators. You can call your union bosses and ask him how their Christmas is going instead.

2008 Dec 14 12:35 PM

[CLH:]

The unions are stalling until their messiah is president. The Democrats need to kiss the hinder of the unions. They have taken millions from the unions even though many workers are Republicans.

2008 Dec 14 02:46 PM

[Kodi:]

A union is a business within a business that redirects employee alliegiance towards itself at the expense of the primary business. This is parasitism. And when the parasite becomes too big, it kills it's host. That is what is happening to the automakers. Shame on them for allowing the unions to grow so powerful. There again, strikes and sabotage were used to extort the unions position to which the companys capitulated.

2008 Dec 14 04:22 PM

[J. B. Wulff:]

The UAW is so out of touch with reality while sadly in touch with politics. It's the only one at the table that won't do anything to help. The only way to get around them is via bankruptcy! Then the UAW will be forced to accept a more reasonable wage. Sadly, I'm afraid President Bush is going to reward their stubbornness.

2008 Dec 14 04:35 PM

[33Nick:]

Why don't they look at France and Renault who somehow managed to become efficient in a country completely overrun by unions? Oh wait, that is also because Carlos Ghosn is in on it, the same person GM refused last year as a major stakeholder. Unions can be made to understand the dead end road they are pushing their subscribers to. What was it I read, only 150,000 unionized auto labor force in Detroit? A force, indeed.

2008 Dec 14 06:15 PM

[UseMyFedTax...:]

On Dec 14 09:05 AM rjynand wrote:
> Senator Bob Corker's proposal is in fact the solution. This gentleman
> is a true patriot and cares about us - strange but caring about "us"
> rarely if ever becomes a topic, it's always the so called "big three"
> and the "union".

It should not go unnoticed that Corker, as mayor of Chattanooga, probably played a significant role in marshalling over $0.5 Billion Dollars in incentives to have a foreign automaker, VW, build a plant in Chattanooga – all in the name of 2000 plus automaker jobs in Tennessee.

2008 Dec 21 11:54 AM