When Did Auto Workers Become Like NFL Players?

GM production workers

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?

-tgriffith

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8 Comments

  1. Lots of passion on this topic! Unions had their place once but I dont see the point anymore. I hope the non union brands building cars here stay that way! It’s like an old dark energy that needs to go away once and. For all.

  2. About hiring from laid off workers– GM and Chrysler laid of tens of thousands of salaried people during the bankruptcy, and the majority were older workers over 40. They’ve now hired many thousands of new salaried people, but they will not even interview one of those laid-off workers, most of whom had 20 years or more experience in the automotive engineer field and where excellent workers. Why? Because they’d rather hire foreign engineers (and they forge immigration documents claiming they can’t find an American citizen who can do the work) and young entry level engineers. I think if more potential customers understand the way companies like GM and Chrysler treat their employees, they’d know the union is necessary and they’d want to spend their money elsewhere. Frankly, companies like Toyota and Honda treat their employees much better and deserve to remain in business. I know I will never buy another GM or Chrysler vehicle.

  3. Well, I’m with Randy and jerrry grossman on this one. It’s too bad the unions have done such a poor PR job, and it’s also too bad that so few car fans understand what UAW negotiations are really about.

    First, you anti-union guys need to remember that UAW is a big part-owner in GM. Second, tgriffith brings up education, really a red-herring since union workers are in fact better trained and generally more qualified. Third, the rehires: Well, why wouldn’t GM want to rehire trained workers? Why shouldn’t the union push to get its laid-off people back to work? They clearly will be coming back on an as-needed basis. Fourth, the signing bonus: That makes sense for both sides—it’s basically profit-sharing for the union, and the company avoids putting money into the legacy costs Randy mentioned, like the former retiree health care fund. Fifth, the union didn’t threaten a strike, per tgriffith. They made a no-strike pledge to both GM and Chrysler.

    GM reportedly has agreed to an entry-level wage which is close to the US average manufacturing wage. The company has also agreed to reopen the former Saturn plant in Spring Hill, Tennessee. If you think this is happening solely because of union pressure, you have no idea of how contract negotiations work or the economic reality out there.

    I’m a little tired of the union-bashing that is so prevalent among car people who should know better. I think the two tier system is wrong, but it’s the best deal the union could get. In the course of setting up a new system, each union member gave up many thousands of dollars in concessions, some of which were indeed necessary for the industry to survive.

    Finally, the Toyota workers: They make less in pay and benefits, have no stake in their company, and can and will be replaced tomorrow if management so chooses. In an economy like this, I’m sure they are happy to have jobs. Which indeed they may not have tomorrow.

  4. If you never worked in an auto plant you have no way to know what you are talking about. Keep you mouth shut then nobody knows how stupid you really are.

  5. The problem, to me, isn’t what auto workers are paid. I couldn’t care less. What bugs me is the entitlement unions promote. Hiring back laid off workers? Insane! Auto workers shouldn’t be guaranteed a job anymore than anyone else. If you’re fired or laid off, don’t whine to a union rep about losing your job. Put on your big-kid panties and go find a new one.

  6. I didn’t say I believe auto workers should be paid minimum wage… I absolutely do not. Many commenters on news stories about the GM/UAW agreement apparently do.
    People on the assembly line work hard and the American public relies on the reliability and safety of the products they produce. I believe these people earn their money. I Just happen to also believe they don’t need the union to demand decent pay. Like the Toyota workers, as you brought up.

  7. Given GM’s recent history and the way it historically treats it’s employees, I’m happy to see union members get whatever they can get.

    One of the prejudices that raises it’s ugly head in tgriffith’s continuing tirade against union workers is “auto workers, and other manual labor assembly positions, should be paid minimum wage considering the amount of education required for the job.” Unfortunately, we can extend the same argument to tgriffith’s line of work when someone with a higher level degree from India or China wants to do his job for half the money. Then we can argue that tgriffith’s lack of education only merits a very low wage. Don’t laugh, I saw it happen many, many times.

    In my career in R&D, the most intelligent people I worked with were the technicians and practical engineers (at the lower level of tgriffith’s elite pay for education scale). Although they didn’t have as much education as the PHD’s, they had an enormous array of skills and knowledge learned on the job that allowed them to translate the researcher’s ideas into hardware. Frankly, many of these PHD’s were what I call “educated idiots” who had a hard time figuring out how to open a jar of pickles.
    tgriffith, we need EVERYONE to move forward in our country. We know that autoworker’s wages and benefits are a fairly small part of the price of a car (and you don’t mind promoting cars that cost six figure or more). The real danger that the industry faces is to allow the workers to accrue large amounts of legacy benfits– that’s what pushed GM and Chrysler into bankruptcy. By making sure retirement and retirement health care is fully funded, independent of the automaker’s equity base, they will never have that monkey on their back again and can afford to pay the workers a good wage. I don’t hear you complaining about the average earnings and benefits of Toyota workers here in the USA, who don’t have a union. Why the double standard?

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