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The UAW bites back

Copyright 2009 The Toledo Blade.




Article published November 6, 2009

The UAW bites back

THERE was a fair amount of shock at Ford Motor Co. this week when it became clear that rank-and-file United Auto Workers union members had ignored their leaders’ advice and decisively turned down a package of contract concessions. Ford executives shouldn’t have been surprised, however. They brought this one on themselves.

For nearly a year, Ford has maintained – with increasing smugness – that it was different from its rivals, General Motors and Chrysler, in two important ways.

For one thing, Ford, alone among the once-big three, has neither sought government loans, nor declared bankruptcy. There were a number of reasons for this. First, Ford had borrowed heavily in the private sector back when big corporations could still do so, prior to last year’s Wall Street crash. Ford had also recruited Alan Mulally from Boeing, who took over as CEO and promptly began turning the stagnant automaker around. Finally, Ford has a better product line right now than its rivals. The company is not above bragging about all of that.

But the Ford brass should have realized they couldn’t have it both ways. Their UAW workers reasoned that if they were in much better shape than the bankrupt automakers, why then should the guys on the line have to grant them the same concessions? They also remembered CEO Mulally telling accongressional committee that he thought his $13.6 million annual compensation package was perfectly appropriate.

No wonder workers said no, especially since the UAW was being asked to give up the right to strike, any union’s most potent weapon, for the next seven years.

Ironically, in some ways Ford may need concessions worse than GM or Chrysler. Those automakers shed most of their debt in bankruptcy court. Ford has an enormous debt burden: $27 billion, by most calculations. The union workers’ decision to turn down contract concessions may cost the company money in the short run and the union jobs over time. But Ford has only itself to blame. You can’t brag about how well you are doing and then expect your workers to give you charity.

The world, as founder Henry Ford could have told them, just doesn’t work that way.

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