• Apr 21, 2006
George Reisman, professor of Economics at Pepperdine University and author of the book Capitalism: A Treatise on Economics, attempts to answer the question of where would General Motors* be today without the United Auto Workers. Some of his ten conclusions include:
#1. GM management could fire inefficient employees without worrying about a strike, resulting in higher quality vehicles.

#2. GM would be able to use more efficient, lower-cost methods in building their products instead of negotiating it with the union to the point of creating 'phony' jobs to placate the membership.

#6. GM would not be paying $140,000 per employee to leave.

#10. GM workers, without the union benefits, would be motivated to consider saving for the future instead of threatening for more money from an already financially-strapped company.

Hmmm. A bit harsh but perhaps there are some grains of truth in there. Opinions? Shout out in comments.

*Reisman does state his analysis also applies to Ford Motor Co. and Chrysler. He chose GM for his example since it's the largest automaker.

[Source: Ludwig von Mises Institute]


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  • 79 Comments
      • 8 Years Ago
      I won't disagree that most lawyers don't deserve the money they make WhyDrive... but it is a service industry and no one can force you to hire a lawyer especially a crappy one. If you want to buy a domestic vehicle you have no choice but to support the union mentality and to pay their inflated wages and well above average health benefits.

      I hate to generalize union workers and I really should be more careful, but it needs to be seen that in a capitalistic society such as the US nothing is guaranteed. You have to differentiate yourself through your skills, education and hardwork. The union structure does not give you incentive to move up. My uncle makes the same wages as a guy with half his work experience and no matter what he does that will always stay the same. Just CRAZY!!
      • 8 Years Ago
      No way, it was the egg!
      • 8 Years Ago
      Well, there are a lot of different opinions on this post, so here is my 2 cents. This is what I have exerperienced or observed first hand.

      First, yes, There is a problem with the UAW/MFGR relationship. But Richard is right, the problem is not all on the union. But their clout does have quite an impact, as far as protecting the screw off workers. My uncle is in middle management at Ford. 2 guys were leaving work after they clocked in and the head count was conducted. They were going bowling on company time. Long story short, they were caught and my uncle gave them 2 weeks off. They filed a grievence with their local UAW steward and he(UAW) made my uncle take them back to work. My uncle gets reprimanded over this, but since he's salary he isn't protected under the union.

      Second, my brother works for a big engine testing company, Horiba, down in Dearborn at the testing labs at Ford Motor Co. He has told me many times how lazy so many UAW workers he works along with. I think that it should be up to the company and management to set their work policies and employee standards, not the union. It should be made easier for a person to be fired if they violate company policy.

      That said, if I were running GM, I would switch from pensions to conventional retirement tools, 401k, IRA's etc., like most large corporations today. Also, get rid of redundant management. Do you have 3 vice presidents doing basically the same job? Gotta go.
      Richard W. is right about managment plays the biggest role in how the company is operating. To make the workers feel like a part of the team , why not vest all the employees with stock? The better worker you are, the better vested you are. This would, I think, close the gap of the "us vs. them" thinking. Because as everyone who owns stock in the company, it should be everyone's best interest to give 100% to make the company profitable, so that everyone benefits. Sorry to go a little of skew on the subject, but the bottom line is that if management would treat their employees like true assets and in turn employees respecting their employee, would union representation be necessary anymore? I know this is what I would do if I had a chance to run GM for a bit.

      • 8 Years Ago
      Michael Karesh:
      Yes, the unions are responsible. I feel they laid the foundation that started the problems. They eat off of the business so much that money can't be spent on good research and development or put into place efficient processes because the investment capital they need is going to some guy playing domino's in the break room!
      • 8 Years Ago
      Nobody's arguing the management isn't to blame. But to pretend the unions have nothing to do with GM's demise is just as stupid.

      It's the Me vs. Them mentality espoused by the UAW that makes them blind to their own destructive behavior. They truly are driving the company to the ground. And when GM is ultimately forced to file a Chapter 11, it'll finally then hit them that you can sheer a sheep many times, but skin it only once. Until then, they'll still feel that entitlement to exorbitant health care benefits.

      Yes, I look at autoblog during work (funny, but since you're calling me out on it aren't YOU doing the same??). I also sometimes stay till 7pm, work at home and respond to emails at 12pm--long after the blue collar workers are at home.
      • 8 Years Ago
      I think GM, Ford & Chrysler should slowly transfer all their operations to South East Asia where unions arent pigheaded like the UAW.
      • 8 Years Ago
      I agree with comment #51. there definately is a general apathy in certain unions, I've heard worse things happening in the laborers unions from someone who worked on them. People shooting up herion on the job/strung out when they show up, people going to the bar on the job, just lots and lots of screwing around.
      Or in the case of the Big Dig in Boston, there was a story about union workers putting their kids on the payroll at birth, so when they did do start doing a job in said union, they'd already have say 16-18 years senority.

      Then again, unions did excellent things for workers rights and work conditions and helped improve the work conditions of the blue-collar worker throughout the US, but corruption has made them into a shadow of what they were.

      I also gotta agree with some other points, there is a lot more to blame than the UAW, it is up to the executives as to improving the quality of the product being produced.

      It isn't the line assembly worker that's thinking up the rebadged crap they put out, or going with a lower quality product like the dash in my family's GM minivan that delaminated like a fruit rollup or the crappy cladding that popped off it within 5 years of ownership(the drivetrain was solid tho) , or the AMAZING THINK TANK that made the Cimmaron or Aztek(what a rolling abortion that was).

      GM has a very tough road ahead and some very heavy decisions to make , and possibly some sacrifices should be made on both sides (and possibly more so on the managment side) to keep this company and a lot of workers' jobs afloat.
      • 8 Years Ago
      Do you have to go to college to be a professor? Evidently not by the looks of this article.You can blame a lot of this on the union,the management,even the hard working people who slowly destroy their bodies on the assembly line.Why doesnt anyone ever blame our goverment. THey are so worried about the other countries and free trade that they are desroying their own country.Our goverment subsidizes the foreign car companies to be their cars.Of course its cheaper for them to build their cars and trucks. When will the president learn that taking one mans job away by creating another is not exactly a good economy.We will all be living under a foreign flag one day.
      • 8 Years Ago
      I agree with #7 100%
      • 8 Years Ago
      John (#12),
      I would suggest you do a few things in order to make your posts believable.

      Go back to school.

      Learn to spell.

      Learn grammar.

      Learn punctuation.

      Learn to be polite.

      Come back when you're 14.
      • 8 Years Ago
      Unions are a problem but I think most people in unions want the company that they work for to do well. Just like management, it is the guys at the top causing all the problems. Politics is killing the motivation of the majority of union employees and management to excel. Just treat people with respect (regardless of union on management positions), design great cars that people want to buy, treat suppliers as partners and all will work out. You don't need any of the B.S.
      • 8 Years Ago
      The author is completely right. This UAW thing is dragging GM and other American auto companies down the drain. Absurd to say the least. This is something we only see in developing nations...In America, there should be no such thing. Are you in a comunist state?
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