Automobile Bailout: Management and Union Work Together Too Late?

Everyone’s heard about yesterday’s plea to Congress by the CEOs of GM, Ford and Chrysler for their own bailout. Another person who appeared before the Senate banking committee was the head of the United Automobile Workers. He said the same thing that the CEOs said.

The auto industry is doomed without a bailout. Hundreds of thousands of jobs will be lost. The ripple effect, perhaps tidal wave, will be felt by  employees of suppliers, car dealers, and all sorts of business associated with the auto industry.

It was strange to see management and the union singing from the same hymnal. We’ve seen them fight before. We’ve heard them call each other names. We’ve seen strikes because compromise was out of the question. Apparently, imminent death brings peace.

The auto big wigs seemed surprised at their reception by members of the Senate. There was skepticism that no amount of money could bail out the auto industry, given how much they’re spending each month, how much mismanagement has occurred in the past, and how much in “legacy costs” (translation: costs pursuant to long-time union contracts) the big three have. Some senators said the big three need to seek Chapter 11 bankruptcy protection in order to reorganize.

Secretary of the Treasury Henry Paulson has made it clear that the Bush Administration also opposes an auto industry bailout. One wonders if Secretary Paulson had been the former CEO of GM instead of the former CEO of Goldman Sachs, he would have a different view of the situation. It’s disingenuous to bail out financial institutions that have been badly mismanaged and not bail out automakers because they’ve been badly mismanaged.

But I’m digressing. My main point is that it shouldn’t take a near-death experience to cause management and unions to work for the common good of an industry or a company and its employees. The hostility built up between management and organized labor over the past 70 years is ridiculous. It’s counterproductive. It’s destructive to workers. It hurts our economy and citizens in all walks of life. And there’s plenty of blame to go around. It’s fine to negotiate hard and disagree as long as it’s done in good faith. It’s not fine to begin every collective bargaining agreement negotiation by poking each other in the eye. It’s not fine for either side to always take a scorched earth approach to grievances and arbitrations.

Many employees are disgusted with both management and labor. The severe, fragile condition the auto industry finds itself in should cause both sides in every industry to change their regular tune of conflict. There’s simply no way that management and labor can sincerely believe what they always say (“We’re just trying to do what’s best for the company and the employees”) and take such extreme positions with each other about everything. It’s time for the adults to take charge.

1. 

   Peter Quinn says:

   November 19, 2008 at 1:03 pm

   Hi. I am a long time reader. I wanted to say that I like your blog and the layout.

   Peter Quinn
2. 

   John Phillips says:

   November 19, 2008 at 1:18 pm

   Peter,

   Thanks very much for your comment.

   John
3. 

   Notmytaxes77 says:

   April 1, 2009 at 1:04 am

   What can be made of this debacle called General Motors? Will they survive or wont they? Will saving GM save Jobs?
4. 

   John Phillips says:

   April 1, 2009 at 8:28 am

   The $64,000 questions?