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General Motors should ask UAW to take a ride



General Motors & # 39; s management should not interfere in the negotiations with the United Automobile Workers union representing its employees. As with most unions, the UAW has little interest in the high rhetoric of justice they utter. They simply care about extracting maximum resources without taking into account major financial factors.

But GM workers are already getting a lot – a far better deal than other car workers around the country. If GM wanted to offer more than the extremely generous new contract it has presented, a contract that includes generous new profit sharing offers, it would betray its shareholders and risk its financial viability. That is, it would act unfairly.

UAW sees things differently. Citing GM's current profitable status, the union says its members deserve the improvement of fixed pay and benefits. But their claims have a fatal factual error. As the Center for Automotive Research notes, "Automakers point out that the average American worker pays 28% of their health care costs (Henry J. Kaiser Family Foundation, 201

8), but UAW workers pay only around 3% (Naughton, 2019)." Considering inflation in the health care system, this is absurd. It reflects a real increase in costs per employee without any significant goal of cost sharing – and thus incentivized personal responsibility, so look for more effective care options.

What about salary?

Well, while the production and supervisory state's wage growth has slowed, GM wages remain far higher than competitors. As this chart shows, GM workers earn an average of $ 13 more than US-based foreign manufacturers.

  Screen Shot 2019-09-17 at 13.33 PM (2) .png

(Center for Automotive Research)

CNBC also notes that out of the three major US automakers (GM, Fiat Chrysler and Ford), GM gave its employees the largest profit-sharing payments between 2015-2018: an average of $ 45,500. GM also employs far fewer temporary workers who are unions (7% of the total workforce) than the average for US-based foreign car manufacturers (20%). And further, indicating the UAW's greedy malfeasance, the top executives are under federal investigation, and one is charged. CNBC also notes that "union leaders earlier this year also received a 31% annual salary increase. This compares with two 3% salary increases for senior rank-and-file workers in 2015 and 2017."

Therefore, GM should ask the UAW to take a turn.

If GM gives in, it will only invite fiscal self-destruction when an economic downturn inevitably comes. Or it must come to grips with another government grant, funded by us, the taxpayers. It is not acceptable. What we see here exemplifies the silliness of Senator Elizabeth Wear's pledge to force corporate boards to provide seats to union members. Where unions are substantially interested in short-term benefits, senior executives focus on long-term profitability.


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