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Automotive News & Views United Automobile Workers of America (UAW)
16738 messages, Last post on Dec 03, 2009 at 10:07 AM
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...on the American Axle Strike: Detroit’s King of Delusion. By Peter M. De Lorenzo Detroit. What year is it again? 1968? 1978? How about 1988? No, actually, as most of us know, it’s 2008. But remarkably, there is one entity headquartered in this town that refuses to acknowledge reality, history, the writing on the wall, or anything even remotely resembling rational thought for that matter. The United Auto Workers union, that staunch bastion of head-in-the-sand, wrong-headed thinking – at least when what masquerades as their woefully skewed version of “thinking” rears its ugly head – launched a strike against American Axle & Manufacturing Holdings Inc. late Monday after negotiations broke down on a new labor deal. What’s involved? 3,650 American Axle workers in Michigan and New York walked off the job and hit the picket lines, jeopardizing all truck production at GM, American Axle’s largest customer by far. What part of this action seemed even remotely like a good idea? The domestic automobile industry – aka “Detroit” – has been in freefall for the better part of 25 years. This inexorable downward spiral has been punctuated by alarming annual losses in market share to the Asian and German manufacturers, as what was once formerly known as the “Big Three” saw their fortunes plummet. Detroit witnessed in horror as an entire generation of buyers, tired of mediocre products with average to dismal quality, abandoned the domestic manufacturers for imported brands in droves – never to return. Pummeled by a $1500 per vehicle cost disadvantage brought on by absurdly expensive, union-driven healthcare costs – the most expensive and comprehensive programs of their kind in the nation - and crushing pension funding expenses, Detroit reeled as it tried to regain footing in the market, only to find that its way back was blocked by an uncooperative UAW and compounded by the fact that government-sanctioned currency manipulation was giving their Asian competitors a $1500 minimum advantage on every car and truck sold in this market – on top of the built-in cost disadvantages the Detroit automakers started out with. But Detroit, determined to fight back, started to blow-up their obsolete processes and – paced by GM - rediscovered the fundamental law of this business that they had wandered away from so cavalierly in the past. And that is that The Product is and always will be King. And hope emerged as GM rediscovered its product mojo and signs of life started to appear in the other Detroit manufacturers as well after years of being lost in the desert. And the UAW even got it together – or so it seemed anyway - agreeing to a series of what appeared to be landmark labor agreements last fall that would allow Detroit to at least approach being on a level playing field with their Asian and German rivals in terms of cost. But I never bought into the words “groundbreaking” and “historic” – the terms bandied about last fall by the media in reference to the UAW - because I knew that deep down this labor organization was and is fundamentally flawed. That the UAW’s “M.O.” is not one of enlightened cooperation, but one of irrational, unflinching, relentless entitlement. That the words “we’ll get what we deserve” resonate far more through its depleted ranks than “we’ll have to do what’s best in order to see these companies remain competitive.” The UAW only acquiesced to those agreements last fall because they had no other choice. Detroit was shrinking at a horrific pace and its market share couldn’t support anything but a dramatic consolidation, which meant that jobs would have to be cut and wages and benefits would have to be seriously reduced – or else. And at that point, the halcyon days of the UAW were indeed over. While too many in the media back then were quick to canonize Ron Gettelfinger, the UAW President, and prematurely hail him as being some sort of “visionary” labor leader after those negotiations, I didn’t. Because I never thought the moniker “statesmanlike” should be used in reference to this intransigent, misguided, narrow-minded and maliciously inflexible individual who at any moment could and would choose to derail crucial agreements with the auto manufacturers or their suppliers, just because he could. And as if right on cue, he demonstrated his true colors last fall when in the midst of those so-called “historic” agreements he authorized utterly futile and worthless work stoppages against the Detroit automakers in a pathetic, grandstanding gesture. And now, here we go again. In the face of massive layoffs in the automobile business as the Detroit manufacturers literally fight for their very survival, and with the state of Michigan mired in a monumental recession – one directly attributable to the dire straits the automakers find themselves in - the likes of which has never been seen before, and with foreclosures and unemployment at record levels, and with the mood grim and full of despair as desperation sets in for countless citizens in this region, this miserable excuse for a leader does the most un-statesmanlike thing he could possibly do by calling for a strike against American Axle that absolutely no one can afford, least of all the workers involved. It’s no wonder that Steve Miller, the blunt, no-nonsense, straight-talking Delphi CEO, reserves particular ire for Gettelfinger in his new autobiography, "The Turnaround Kid: What I learned Rescuing America's Most Troubled Companies," published by Harper Collins (see “On the Table” – ed.). Miller summed-up the UAW front man this way: "Gettelfinger was a big disappointment. An industry in crisis needs leaders who can rise above the tactics of intimidation that may have worked decades earlier." Uh, no kidding. Ron Gettelfinger is quite simply Detroit’s King of Delusion, a Neanderthal figure operating in a hermitically-sealed time warp that prevents even a shred of reality or rational thinking to enter into his – or the UAW’s – atmosphere. As a matter of fact, he and his counterpart at the Canadian Auto Workers union - the equally thick-headed and wildly irrelevant Buzz Hargrove - are industry anachronisms who have become blatantly and painfully obsolete. Even if this strike action were to end today, there’s no hiding the fact that Ron Gettelfinger is a small-minded irritant, a man who relishes being an obstinate obstacle to progress and a petty grandstander at every turn, just because he can. And his so-called “act” grew tiresome years ago. Thanks for listening, see you next Wednesday. |
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Mr. DeLorenzo...I have detested the UAW for 3 decades, and even I could never have stated the bare truth so eloquently...and proven just how ignorant, childish, whiney, and immature the mindless workers in the union really are...it would serve them right for Axle to simply shut down and send the workers home for good, telling them they have succeeded in eliminating their own jobs, just like they intended... But it won't happen...Axle will sign some agreement and start slowly shipping jobs overseas, and the workers will complain that bad management took their jobs away... I am fully of the opinion that in order to join the UAW, one must have an IQ certified below moron, and to become an officer you must be certified below comatose... |
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We've pulled the scab (no pun intended) off the wound here. The news report I heard on Fox news said it was expected that a settlement would be reached w/in a few days. Do you think anybody in the negotiating room was blindsided by this?? This will prove to be nothing. I'll bet w/in a week they are back to work and this blog will be "read only" again. |
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>"UAW President Ronald Gettelfinger also said American Axle wants to cut workers' wages in half, from about $28 an hour to as little as $14 an hour." >"The total cost of wages and benefits is more than $70 an hour, Dauch says, while competitors such as Dana Corp. are paying $20 to $30 an hour in total wages and benefits." "American Axle did post a profit of $37 million last year, but the earnings were an anemic 1 percent of sales." >"What was once the model (GM) spin-off is now the highest-cost supplier in North America," Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor said Wednesday. "It's sad to see. It's not a good signal for Michigan once again." >DETROIT -- American Axle & Manufacturing Inc., long considered the most successful of former General Motors Corp. parts operations, now is mired in an ugly labor dispute while the market for its products is shrinking." Is it any wonder that the jobs are leaving the country? $28 per hour is over $58K a year wages, plus OT and bennefits. $70 per hour, including wages and bennefits, is roughly $145.600 annually that a self employed worker would have to earn to have near equivalent health coverage and retirement income. Actually he would have to earn a bit more than that because he would not have as good of rates on the health insurance. Might not even be able to get it, if he has pre existing problems. Those having to purchase health insurance and build private retirement income know this very well. Imagine working for ourselves and walking into a "Machine Shop" that offered no health care or bennefits, but needed help. How successful would we be, if we said, "I will work for you for $70 per hour and re negotiate more pay every year or so"! In a shrinking industry, due to the competition having lower labor cost among other things, the UAW needs to understand, the 1% earnings of American Axle places them on the ragged edge of going under. The UAW workers need to get on their knees every day and thank God Almighty that they are still working. Then they need to elect a real leader with some degree of understanding of economics. If they don't do just that, American Axle will surely close it's doors. GM, in order to survive, will be forced to go elsewhere for those equivalent or better parts. Or they are going to have to close their doors. Those, out of work, UAW workers will then be able to go to that "Machine Shop" and negotiate. We are now living in a competitive world. The Big 3 and Detroit no longer have a captive audience as in the past. They need to wake up. UAW workers have had a good run for many years. Just as many companies have had to down size to survive, and find more economical ways to survive, so may their workers. Just doesn't make sense to kill the goose that is laying the golden eggs! While it is possible that American Axle is trying to cut "ALL" workers pay in half, it is doubtful. Flame resistant suit is in place!  Kip |
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Replying to: kipk (Feb 29, 2008 5:34 am) Does anyone know about the executives at American Axle? Pay? Benefits? Number of them? Pay cuts they've taken--Halvsies?
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Replying to: imidazol97 (Feb 29, 2008 6:50 am) Salary.com |
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Replying to: kipk (Feb 29, 2008 5:34 am) But, of course, the CEO has NO COMPETITION, so he can name his own price. I'll bet he also has the unmitigated BALLS to tell his employees that he has to pay for his own healthcare, so they should pony up some for theirs. |
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The 3650 striking workers, IF they gave up the $40 in benefits to bring them down to $30/hr compensation would save $292 million (yes, I know, I have no life, the laundry is piling up downstairs, blah, blah)  Now, if the TOP 5 EXECS took the same 57.1% (?? 4/7 ths??) compensation cut that alone would be about $30 million (imagine that, the cost savings from just 5 EXECS is 11% of 3650 WORKERS). I find it hard to believe that ANY company would ask for a 57% compensation cut and have their employees roll over and say Oh,OK boss, gee thanks. I'm NOT saying that there isn't room for negotiating some more profitability to allow for more competitiveness, and I assume you start by saying all new hires get a lower wage tier, if pensions are involved, a VEBA, and so forth. But to demand that people who have been living at a certain standard take THAT BIG of a compensation cut is ludicrous. |
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Replying to: cooterbfd (Feb 29, 2008 8:56 am) Which reminds me... Car Stock Exchange kicks off tomorrow for real (for real prizes that is).
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Replying to: steve_ (Feb 29, 2008 10:51 am) To put another way: If his plan were enacted today, by my math by the end of the year the companies profit would go up another $292 million. This would probably blow away any forecast Wall St has, possibly causing my stock to skyrocket. This would cause his option to be worth more than it is now, meaning his compensation would go even higher than $35 million.
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