Thursday, September 27, 2007

If GM Can't Buy and Sell Globally, Why Should UAW?

Washington Post: "The UAW got the assurances it wanted that GM would invest in building new products in the United States, thereby providing job security for members."

Detroit News: "The contract offers assurances from GM that it will continue to invest in its U.S. factories and maintain union jobs."

Just wondering, wouldn't it be fair then to ask UAW members to:

1. Agree to not take any vacations out of the U.S. or engage in any foreign travel to maintain U.S. tourism jobs.

2. Agree not to make any investments in stock or bonds outside the U.S.

3. Agree not to wear any foreign-made clothing, thereby providing job security for American apparel workers.

4. Agree not to eat any foreign-produced food products like bananas or coffee, to maintain U.S. agricultural jobs.

5. Agree not to watch any foreign-made movies, read any books by foreign authors, or listen to any foreign music.

In other words, if the UAW wants to restrict GM's ability to invest, buy and sell globally, shouldn't UAW workers agree to the same restrictions?

18 Comments:

At 9/27/2007 1:52 PM, Anonymous Anonymous said...

To say nothing of going to baseball games between the Tigers and, say, the Blue Jays or hockey games between the Red Wings and, say, the Maple Leafs.

 
At 9/27/2007 3:18 PM, Anonymous Anonymous said...

Cool post / good points, thanks.

 
At 9/27/2007 4:24 PM, Anonymous El commentadór said...

Funny, but with the possible exception of number four, I thought you were actually describing the typical auto worker...

 
At 9/27/2007 8:28 PM, Blogger holeydonut said...

Do you remember the tizzy people were in when Ford (in conjunction with support from the UAW) made it so that competitor vehicles could not part in the Dearborn facility?

http://money.cnn.com/2006/01/27/news/companies/ford_parkinglot/index.htm

My favorite is towards the end; it's still in the worker's (or anyone's) best interest to spend his or her money as they see fit.

Which makes you wonder why GM would want to do more plant investment in the USA.

 
At 9/28/2007 6:06 AM, Blogger Walt G. said...

Is this a UAW hate website now?

 
At 9/28/2007 6:40 AM, Blogger holeydonut said...

Professor Perry posts about things that are contrary to a free market and events that create friction against the normal optimal flow of economic theory.

The following groups often tend to create friction at the sake of their odd motivations:

1) Government intervention to benefit select groups through subsidies.

2) Government intervention through trade restrictions

3) Media outlets making a fuss over high gas prices while ignoring gas price decreases.

4) The workforce not responding to excess supply of workers in some fields and workers ignoring excess demand in other fields of equal pay and skill level.

5) The UAW.

Perry has the "hate" you perceive against a whole bunch of groups.

 
At 9/28/2007 7:33 AM, Blogger Walt G. said...

Holeydonut:

I sincerely disagree. What I see here is facetious fallacies with no academic value or discussion of any relevant facts. This post is highly opinionated with lots of claims and no evidence. I expected better.

 
At 9/28/2007 8:17 AM, Anonymous Anonymous said...

How about the internet? You think UAW members can use the internet?

There are a lot of foreign websites out there!

 
At 9/28/2007 9:21 AM, Blogger juandos said...

Hey walt g, isn't there plenty of reason to hate the UAW?

Naw, just kidding amigo but I do think Professor Mark is indeed making a point, maybe a bit excessivly though...

Is the following from the WaPo correct? "union got the assurances it wanted that GM would invest in building new products in the United States, thereby providing job security for members"

I do like the sentiments expressed here by Gettlefinger but I can't help but wonder how practical it really is...

 
At 9/28/2007 10:02 AM, Blogger gm77man said...

if you worked as an hourly employee at gm you wouldnt say something as stupid as you wrote,long live the uaw

 
At 9/28/2007 10:04 AM, Blogger Walt G. said...

juandos,

We've received similar promises in the past that never materialized. It's good publicity and will probably get "yes" votes from the membership, but the actual decisions will be made on a business-case basis as they always have been. A violation of that part of the agreement would definitely not be a strikeable issue and probably would not hold up in court if, and when, the UAW filed a lawsuit.

The only real job security is a profitable company. Any automaker will keep a position in the most profitable market in the world—North America. Why do you think we have all the upstart transplants? So, in essence, we are probably just getting something GM would have done regardless; albeit on a much smaller scale.

 
At 9/28/2007 12:41 PM, Anonymous Anonymous said...

Fair?

What kind of socialist nonsense is this? There is no "fair" in business or life.

 
At 9/28/2007 3:41 PM, Anonymous Victor said...

I don't think that the contract says that GM can not buy and sell globally.

I don't consider this to be a ban on GM global interest. I believe that the UAW would like GM to use US facilities when it is feasible to do so.

For the sake of glorification, you could say that "GM Can't Buy and Sell Globally", but this is clearly not the case.

 
At 9/28/2007 5:05 PM, Blogger Walt G. said...

I've seen a summary of the UAW/GM contract. It specifically states what products will be assembled in which plants.

Of course, as always, some will think the contract went too far, and others will think it did not go far enough. People on both sides will share those views. Overall, though, I think it's an excellent contract that recognizes the competitive nature of the global auto market.

We have our work cut out for us attempting to compete with a young workforce in the new plants. You have to remember that many of our factories are not air conditioned in the summer or heated well in the winter; the transplants factories are all climate-controlled. In addition, our workforce is near fifty-years-old on the average compared to the thirty-year-old average or so at the transplants. We half a over a half-million retirees who helped pay to build our roads, bridges, and schools compared to the 1200 retirees from the transplants whose contributions, just by the numbers alone, pale in comparison to the U.S. traditional factory workers.

As a UAW worker, and the owner of a few thousand shares of GM stock, I have an investment in GM’s future. You might not realize it, or want to admit it to yourself or friends, but you do, too.

 
At 9/29/2007 7:23 AM, Anonymous bob wright said...

Today, there are only 73,000 UAW jobs at GM in the entire U.S.

Over the last couple of years, the U.S. economy has been producing close to 100,000 jobs every month.

Every month, the U.S. is producing more jobs than the entire UAW workforce at GM.

30 years ago, there were close to 120,000 UAW jobs at GM in Flint Michigan alone [Walt G: correct me if I'm wrong]- the birth place of GM.

I don't think the issue is whether GM jobs are important. I think it is a matter of relative importance.

 
At 9/29/2007 9:37 AM, Blogger Walt G. said...

Bob Wright,

The numbers are correct, but you can really do the math that way; it's not that simple. Sure, there are fewer UAW jobs; however, the traditional U.S. auto industry still feeds a whole lot of mouths. For example, we used to make all the little brackets that attached to our sheet metal hoods, fenders, and other body panels. Now we don't make a small part or a part that has less than $100 value added worth at our plant

Instead of having 2800 jobs at our place making $27-per-hour, we have about 1400 jobs making that much, and another 1400 jobs contracted out at maybe $10 or $12-per hour. We buy or contract out a LOT of stuff that we used to make or do ourselves.

People can complain all they want, and yearn for the "old days," but GM is going to make those types of business decisions and I can't blame them a bit. I comparison shop myself. At the same time, people have to realize that the auto industry creates a whole lot more than just UAW jobs. Chances are you do business with someone that depends on the auto industry for his or her paycheck.

Although not as obvious as in the past, and contrary to your observation, the relevant importance is still very much there.

 
At 9/29/2007 10:47 AM, Anonymous bob wright said...

Mathematically, the importance of the U.S. auto industry must diminish as its share of the U.S. economy diminishes.

 
At 9/29/2007 11:55 AM, Blogger holeydonut said...

If GM goes away (unlikely, but this is a hypothetical) and a demand for autos still exists... what will happen to meet the excess demand? Methinks other more efficient automakers will step up to fill the gap.

There may be a point of friction as the market adjusts, but all those brackets, cross beams, fuel tanks, electronics, seats, etc will still require a supplier. Maybe the supplier will be from Chinese workers making pennies or maybe it'll come from Americans at JCI. Either way the auto industry is dependent on demand of vehicle; it is not dependent on GM, Ford, or Chrysler to supply them. These same firms and their labor unions are also not the sole drivers of an economy.

 

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