"Look at GM, and tell me strong unions are good for the economy"

A mostly political weblog.
Dec. 15 2008 12:36 AM

"Look at GM, and tell me strong unions are good for the economy"

Monday, December 15, 2008  

From Taylorism to Wagnerism:   Sympathetic but ultimately damning analysis of the U.A.W. from Michael Barone. ... P.S.:  A misguided Warren Court decision--basically requiring unions to prosecute individual grievances under a "duty of representation"--magnified the Wagner Act's inherent adversarialism, it should be noted. Before the decision, unions could pick and choose only the best grievances and drop the rest. (In 1957 at GM, for example, the UAW only pursued 24 grievances to arbitration, according to Robert M. Kaus ). After the 60s-era liberal legalists were through creating a right of individual workers to sue their unions, even a labor stalwart like AFSCME's Victor Gotbaum would say "It's almost as if we have to protect bad workers." ... 2:00 P.M.

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We need a Czar Czar, to crack the whip on all the czars . ... P.S.:  Also a federal czar policy. Right now, czar decisions are made on an ad hoc, case-by-case  basis, with no attempt at czar harmonization. ... 12:40 A.M.

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A Coming GM/UAW Split? I'd missed Clive Crook's Nov. 11 article on Detroit's collapse . It's behind a National Journal  subscription wall now, and a subscription to the National Journal costs roughly as much as a controlling share in the Chrysler Corporation. But here's the most relevant passage:

[T]he unions raised wages and benefits to insupportable levels, and for years blocked efforts to cut costs and increase efficiency. Worst of all, by anointing themselves co-managers, they reduced the domestic industry's ability to react promptly to shifts in demand. Is this how the Democratic Party intends to strengthen the economy?

By their own standards, admittedly, U.S. car producers have raised their game recently, and they have done it with the unions' help. Productivity in some of the domestic producers' plants is now as good as in nonunion plants run by foreigners. But this came late, and only under duress. It took the imminent collapse of the industry to moderate the unions' demands.

Unions destroyed Britain's car industry, and during the 1960s and '70s they accelerated the decline of British manufacturing and of the wider economy as well. Of course, they were far more powerful in those days than U.S. unions have ever been. Unions in America today are weak and getting weaker -- a trend that they hope to reverse with the incoming administration's help.

The point of the comparison is not to suggest that America might get a case of the pre-Thatcher British disease, but simply to question the Democrats' conviction that stronger unions serve their voters' wider interests. Look at GM, and tell me that strong unions are good for the economy. [E.A.]

P.S.: Paul Ingrassia updates the run-to-momma politics of the bailout, in which the Bush administration may give the U.A.W. what it wants, namely bailout money without either a)  further specific contract concessions (as demanded by Sen. Corker and other Republicans) or b) a quasi-bankruptcy proceeding that could nullify the unions' labor contracts entirely. ...

P.P.P.S.--'But It Took Us a Year to Negotiate': The sense of victimhood that Ingrassia criticizes comes through in the following passage from Saturday's NYT :

Alan Reuther, the chief lobbyist for the union, said labor leaders back in Detroit were astonished at what Mr. Corker was attempting to accomplish — a virtual rewriting of the U.A.W. contract, which typically takes the better part of a year to negotiate . "That’s one thing that our folks in Detroit were just amazed at," Mr. Reuther said. "Does Senator Corker really think he can do a restructuring of the industry in six hours?" [E.A.]

Hmm. I guess that's sort of what happens when you go bankrupt! The work of a year can disappear in a few hours! Did they expect Congress to (as the saying goes) leave the money on a stump in the middle of the night? ... Note also the almost reverent concern for process-- as if what's being protected here isn't the workers' wages or standard of living but the traditional painstaking dance of adversarial negotiation . It's always about respect--in this case, respect for the Wagner Act's elaborate formalities. Corker was short-circuiting them. But of course it's those elaborate formalities that got in the way of innovation and helped bankrupt the industry in the first place.

P.P.P.S.: I do think that in seeking a middle ground of specific wage concessions--but stopping short of a general contract nullification--Senator Corker wound up giving the unfortunate impression of political meddling in the details of wage rates, etc. It would have been simpler to just demand that the "auto czar" have bankruptcy-like powers to void the contracts. But of course the UAW, which is now vilifying Corker, would have liked that non-meddling solution even less than what Corker proposed. ...

More--Solidarity Not Forever: If the whole bailout deal is now really about protecting this (the U.A.W. contract) from a bankruptcy-style proceeding, how long will it be before General Motors realizes its interests are sharply different--and parts company with its union co-pleader? GM might like the UAW contract to be voided, after all. GM might also like the way a bankruptcy style proceed would give it the freedom to  prune its dealer networks . The main factor encouraging GM to join with the U.A.W. in avoiding bankruptcy has been the fear that consumers would stop buying cars from a bankrupt manufacturer. But as the Weekend Journal noted, consumers may have stopped buying GM cars already, in anticipation of bankruptcy. If that's true, why wouldn't it be in GM's interest to just go ahead and have a bankruptcy or bankruptcy-by-another name? Which is exactly what the U.A.W. is counting on the politicians to stop. ...

Update : The entire Clive Crook article is here , free. ...  12:02 A.M.

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Sunday, December 14, 2008
 

Maybe the Mumbai attacks really were originally supposed to take place before the U.S. election . ... 10:37 P.M.

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What Wagner Act unions are good at producing . ... P.S.: The Japanese have nothing like it! ... 9:42 P.M.

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