How the unions scuppered the US bail-out

Published: 12 December 2008

This morning America will wake to the news that its own government will not save its domestic car industry. The decision by the Senate last night to veto the proposed short-term rescue package raises the very real possibility of both General Motors and Chrysler going out of business before the end of the year.

The Union of Auto Workers (UAW) effectively scuppered the rescue by refusing to accept a pay cut in 2009, which would put its 250,000 members on a par with equivalent workers in Japanese-owned car factories where unions play no part. This is not insultingly low pay, merely less than they currently earn.

It’s deeply ironic and desperately sad that the unions are so arrogant and pig-headed that they would rather condemn themselves to oblivion than be seen to take a difficult and humbling decision which may secure their own future.

Right now it doesn’t matter who is to blame for the Big Mess the Big Three are in – certainly the management has been weak, but that weakness is measurable mainly in the degree to which bosses have failed to stand up to union power over the years. They have allowed the workforce to price their own employers out of the market.

The moral surely is this: if there’s anyone out there who hasn’t yet got the message, This Is A Crisis, and crises call for an understanding of the need to change, to adapt to survive.

Stand by for UAW members huddling round braziers in January 2009, chanting anti-management and anti-government slogans while wondering how to feed their families. At that point they might think back to today and wonder how refusal to budge even an inch seemed like a good idea.

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By Greg Fountain

CAR's former managing editor, editor, caption chiseller, noticer of ironies