They’re big. They’re tough. They’re represented by a powerful union.
When things don’t go their way, the union threatens a strike that could derail the employer’s ability to continue operating.
They sign contracts.
They get hefty signing bonuses.
These descriptions fit both National Football League players and American auto workers. Their respective unions, the National Football League Players Association and the United Auto Workers, routinely negotiate big-money contracts that leave some people questioning whether or not the workers deserve so much cash.
After weeks of negotiations, the UAW and General Motors reached an agreement late Friday night on a contract for about 48,000 employees. The new contract includes improvements in health care and profit sharing and, according to UAW boss Bob King, new investment that “will result in a rehiring of an undisclosed number of workers who lost their jobs during recent downsizings.”
And that, friends, is one of the problems with unions. Why should companies be forced to hire back people it has already determined it doesn’t need? That’s just bad business and will lead only to the same bloat that caused the bankruptcies in the first place.
On top of that, Bloomberg reports that sources with knowledge of the contract say that pay for entry-level workers will rise to between $16 and $19 per hour. Furthermore, each UAW member who signs the contract will receive a $5,000 bonus if the contract is ratified. That’ll ding GM to the tune of roughly $240 million. Big bucks, for sure.
Next on the UAW’s radar is Chrysler. Expect a feisty negotiation between King and FIAT/Chrysler chairman Sergio Marchionne, who already isn’t happy to play second fiddle to the GM talks.
However the new contracts end up, there will always be arguments that auto workers, and other manual labor assembly positions, should be paid minimum wage considering the amount of education required for the job.
By that logic, though, the same could be said for NFL players.
Do you believe new hires at GM should earn $19 per hour and get a $5,000 signing bonus?