Corporate entitlement behind American Axle strike

My father-in-law Ed is emblematic of the business titans who once ruled Corporate America with a moral backbone and a profound understanding of their public responsibility that reflected the communitarian spirit of their time.

Few Michigan corporate leaders could brag about the heights that Ed reached during his career. His beautiful last office at New York City’s Rockefeller Center, looking out over Manhattan, reflected his top leadership roles. He’s now retired and in his mid-70s.

Despite his power, Ed never forgot that he was just one guy of thousands at his global companies. He never believed he was more important "than the little guy out there working hard," as he would say.

The ending of the bitter American Axle strike last Thursday is a reminder of how much things have changed since the Eds of the world ruled America. If Ed was a sign of his generation, Dick Dauch reflects our time.

To be sure, Axle faced a stalling economy, challenging industry pressures and high assembly line-level wage costs. There had to be a shift in employee pay — and workers knew it.

But this landmark strike smacked of much more than a company simply fighting to stay competitive. Repeatedly Dauch sent the message that the United Auto Workers union and the fate of his workers’ lives were inconsequential — especially compared to his salary and his winter vacation.

As he beat down his workers’ pay from middle-class to working-poor, Dauch got an extravagant raise, doubling his $5.6 million in stock awards in addition to his $1.47 million base salary.

Threatening to move his workers’ jobs to Mexico, CEO Dauch flitted to Florida to sun himself, then complained that his company was being "profiled" by the UAW as if he was a poor homeboy in the ‘hood.

Unlike truly struggling companies like Ford, Axle remains profitable. Yet Dauch had the audacity to complain about Michigan workers’ "entitlement mentality" while his spokeswoman argued that he was "entitled" to multimillion-dollar compensation increases.

Rather than led by example, Dauch’s actions made another statement: It’s all about Dick.

Globalization’s leverage

That’s news to people across this state. For the auto industry has never been about one guy. Its success has always ridden on the backs of tens of thousands of people working in the plants and anonymous offices.

The Diego Rivera murals at the Detroit Institute of Arts tell that story. Witness exquisite artwork depicting the humanity, grit and collective spirit of Ford Motor Company’s assembly line, and notice the cars are not the primary focus. Nor is the Ford family who commissioned the work. Average working folks — my grandfather, your Dad — are the stars.

That philosophy made America the richest country on earth. It built our country’s middle class.

It continues to be shattered.

The Axle strike is a pivotal moment in the larger attack on that philosophy. Last year, the UAW agreed to essentially abandon the social (and formal union) contract negotiated in 1948 that largely gave birth to the modern middle class. The union agreed that the Big Three automakers, in deep trouble, needed the labor cost relief.

Axle went far beyond that. Dauch and Co. basically argued the company could use globalization to leverage concessions, so it did. His implicit message: "And you, workers, will take it."

Some business and political leaders’ rhetoric suggests this is just the start. (Simply look at the effort to make Michigan a right-to-work state.)

"The net result of this is, no doubt, a contract that other firms will want to use it as a blueprint," agrees Harley Shaiken, an University of California Berkeley professor and labor expert.

"That story does not bode well not only for the workers, but for the community and for the economy. People who earn higher wages spend more — and that was the secret of success of the American economy."

The laugh of entitlement

That classic America idea is under attack now, sometimes for warranted reasons, sometimes for dark ones.

Leaders such as Dauch display a disturbing attitude: Everyone out for themselves. It’s no way to lead a company, or a community, or a country. Call it a corporate entitlement mentality.

That attitude was on full display late last week when I called and asked Renee Rogers, Axle’s communications and media relations manager, whether the timing was right for Dauch to give himself a multimillion raise while he beat his workers for concessions. She laughed.

When I asked her if there is any consideration to whether Dauch will take a pay cut similar to what he’s demanded of his workers, she laughed again.

She and Dauch should remember: Globalization cuts both ways.

As Shaiken said: "You can get a helluva a CEO from Germany or Japan at a much, much lower salary."