What does this all mean to United Auto Workers union boss Bob King in upcoming Ford Motor Company contract negotiations? “There will be no concessions, no sacrifices by our members, no cutting wages or benefits,” King said last week in an interview with Bloomberg. “It’s not justified given how well the companies are doing.”
King’s brash rhetoric leaves us with only one conclusion: he has no concern for the welfare of his members. In 2009, the Big Three were failing, staving off bankruptcy, partly because of the gains made by UAW in negotiations. In 2007-2008 the Big Three automakers were paying workers on average $73.20 per hour, an outrageous rate. In comparison, Toyota workers average rate was $48.00 per hour. Without labor concessions, mainly moving to a two-tier pay system, there would be no jobs at all.
Now Boss King enters negotiations with reprisal, determined to obtain a board seat from Ford. The single documented demand of demand of King: “union representation on all three automaker boards of directors, a proposal aimed at Ford, where the UAW still lacks a seat. The union’s health care trust funds already have representation on the GM and Chrysler boards, a result of the 2009 bailouts.”
King is goal is simple gain power, not to create jobs or a sustainable contract.
No love will be lost during the negotiations between Ford and United Auto Workers. The contract expires September 14 and Ford is the only one of the Big Three who UAW can strike. Ford’s ability to deftly outmaneuver bankruptcy, opposed to GM and Chrysler’s submission and government bailout, will not go unpunished by the laws of crony capitalism. Ford was unwilling to submit to a bailout in 2009 and mortgaged the farm to avoid bankruptcy. In 2011, Ford has posted nine consecutive profitable quarters and King wants his cut of the profits. Prosperity may doom Ford. In the Obama administration, succeeding on merit and good business practices will not be tolerated.
Democrats, accentuated by the Obama administration, take care of their political donors, and demand access and control of private business. Examples of this practice of crony capitalism in the Obama administration are widespread, evident from the automakers’ bailout — or more accurately the UAW bailout. UAW gained ownership and board seats from GM and Chrysler via the bailout. Ford’s passing on the government handout will be painful in upcoming negotiations.
General Motors and Chrysler practice of poor business tactics and playing ball with the commander-in-chief will end up paying off big. Not only did they receive huge federal handouts, around $25 billion, Chrysler was able to pay the government below value, approximately $1.9 billion according to Treasury officials, which is “unlikely to fully recover its remaining outstanding investment of $1.9 billion in Chrysler.”
UAW has no leverage to bargain with GM and Chrysler. Further, it would be bad taste to strike after Obama cut them a deal. Ford will have no such luck in contract negotiations and is certainly prepared to deal with the full wrath of UAW. Bob King is still stinging from the concessions he made to keep the Big Three afloat. The negotiations will be a sign if Big Labor understands they have no leverage and the gains they seek will put the automakers back into bankruptcy.