Oct 11, 2019 - 4:45pm

The UAW’s GM Smokescreen


Executive Director, Labor Policy

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United Auto Workers logo
Photographer: Jeff Kowalsky/Bloomberg.

The United Auto Workers (UAW) launched a strike against General Motors (GM) several weeks ago, and despite numerous offers from the automotive manufacturer, the union remains at loggerheads with the company. Following another offer and counteroffer last weekend, the UAW’s vice president declared that talks had “taken a turn for the worse.” As a result, nearly 50,000 GM employees are still not working

Wrapped up in the dispute is the UAW’s demands for more wages and benefits for its members, not much different from any union’s, but as is often the case in such situations, the UAW is basing its demands on flawed premises and overheated rhetoric. Indeed, the head of the AFL-CIO, Richard Trumka, recently penned an opinion piece that advanced the UAW’s narrative that GM somehow is forsaking its workers in the aftermath of the “Great Recession.”. 

As Trumka tells it, “autoworkers took on personal financial sacrifices” as GM worked its way through bankruptcy protection, when in fact the UAW did not sacrifice wages, benefits, or pensions. In fact, former “car czar” Steve Rattner, who was responsible for restructuring the Big Three auto companies back then, was roundly criticized in 2011 when he merely suggested that some form of benefits cuts should have been contemplated at the time. Meanwhile, GM bond holders saw their investments essentially eradicated while the UAW was handed 17% of the company under the terms of the bankruptcy. 

Former Secretary of Labor Robert Reich similarly has chimed in with an opinion piece of his own in which he repeats some of the same points and accuses GM of “betraying the American worker.”  In noting that GM earned $35 bn. in the last three years, however, both Trumka and Reich fail to mention that it also paid out an average of $10,750 in profit-sharing bonuses to UAW members in 2018 alone, and it has paid approximately $80,500 to them since 2010. Also omitted is the fact that GM’s average hourly employee earns around $90,000 per year before benefits, which is roughly 50% above the median household income in the country.

While those statistics are a positive for GM’s employees, for the company itself it adds pressure in an increasingly competitive world. With an ongoing scandal in which several UAW officials, including its president, find themselves in extreme legal jeopardy, one could be forgiven for wondering if there is a little more to the UAW’s decision to take its workers out on strike. After all, a disruptive strike offers a pretty good distraction from the UAW’s own internal turmoil. 

 

 

 

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About the Author

About the Author

Sean P. Redmond
Executive Director, Labor Policy

Sean P. Redmond is Executive Director, Labor Policy at the U.S. Chamber of Commerce.