If Chevrolet, Chrysler, and Ford are to survive, they will have to reach an agreement with the United Auto Workers (UAW) about providing workers and retirees with $100 billion of health insurance.
If those three auto companies are to become profitable and be able to compete with the Asian companies, they will need to cut costs by 33%. Health care costs for the Asian and European auto companies are paid for by their respective countries, so U.S. auto companies operate at a distinct disadvantage.
There are now 160,000 working UAW members, but there are 432,000 retirees. In other words, the auto companies are supporting more retirees than workers, an equation that is obviously out of whack.
One way of dealing with the problem is for the union to assume responsibility for retiree health care costs as occurred with Goodyear Tire, which provided $1-billion that went into the union pension fund and that will pay for the health care of retirees. A similar agreement was reached with Dana auto parts and the UAW. That agreement cost Dana $750 million. Both companies now have no financial responsibility for paying for retiree health care. A similar fund for retired auto workers would be significantly larger than the ones provided by Goodyear and Dana.
The U. S. auto companies and the UAW must come to an agreement before September 14, when contracts with Chevrolet, Chrysler, and Ford expire.
If they cannot come to an agreement, the future for the U. S. auto industry will be, indeed, be bleak.
Governor Arnold Schwarznegger is being pressured by two warring constituencies. Farm workers and the United Farm Workers union want him to sign Senate Bill 180 that would permit workers to join unions after signing cards, instead of having to participate in secret ballot elections. Farm owners, however, point out that workers already have sufficient protections to organize, and a card check bill, if signed, would expose workers to intimidation and threats by union organizers.
Under existing California law, farm workers can join a union after submitting a petition requesting union representation, if signed by a majority of workers. Following the submission of such a petition, California’s Agricultural Labor Relations Board must conduct a secret ballot election within seven days.
The United Farm Workers won slightly more than 50% of organizing elections from 1990 to 2005. They obviously want to increase that number and get as close to 100% as possible. They believe that card checks will ensure such an outcome.
Card checks are not only undemocratic, obviating the need for secret ballot elections which are a foundation of any democracy, but if card checks become the law Corporate America will continue to suffer when competing with non-union workers from around the globe. It’s time to say no to card checks.
Following the misguided effort to impose card checks on Corporate America, congress is now proposing the Public Safety Employer-Employee Cooperation Act of 2007. The intent of the act is to have in place a federalized collective-bargaining procedure for police officers, firefighters, and any other entity that deals with public safety. The Act is further evidence that a Democratically controlled congress is in the pocket of organized labor.
All but twelve states already have rules and regulations governing collective bargaining for public employees, and this new act is not designed merely to help those twelve states. It is designed to give a bargaining edge to all public employees, putting states and cities at a disadvantage.
The proposed Act will permit the Federal Labor Relations Authority to make over-riding decisions about the collective-bargaining procedures of states and cities. Furthermore, it will give preference to the opinion of affected employee organizations. In effect, union voices will be heard loud and clear.
While local public safety employees are being given enhanced leverage for collective bargaining, employees of the FBI and CIA are still not permitted to engage in collective bargaining, for it might compromise public safety. One wonders why local police are considered any less valuable to homeland security than national ones. The answer, of course, is that Democratic politicians want the endorsements of police and firefighter unions going into the 2008 elections.
Andy Stern, head of the Service Employees International Union (SEIU) recently took the stage with Wal-Mart CEO, Lee Scott, during a luncheon to discuss health care. Stern had formed a coalition called Better Health Care Together that comprises business leaders, politicians, and labor leaders.
At the meeting, Governor Ed Rendell, of Pennsylvania, praised Stern and Scott as the odd couple of health care. The group was also praised by Governor Arnold Schwarzenegger of California.
Stern has demonstrated considerable foresight for a union leader, for he realizes that if he is going to accomplish his goals, he must work with the business community. Indeed, I have preached for many years that there must be a coalition of management and labor for there to be optimal benefits for those on both sides of the equation. Stern has been pejoratively called the neo-con of the labor movement, but he really is a leader who knows that the old adversarial relationship hurts both workers and management.
Too often union leaders are not only out of step with their members, but they also have short-sighted views and so make demands of management that often hurt workers. In a global economy where cooperation is the key to success, companies and countries will thrive when workers and management realize that they share common goals. The best friend that Andy Stern could have is Corporate America with whom he shares numerous common goals.