UAW / GM – A New Beginning or a death blow to America's Fabric

I have never been part of a union. When Ciba Geigy became a union shop I did not join. I left a job, as a young pup, from General Motors because I simply got board. As managing director or CEO, over the years I have found the unions to be difficult to work with. They made unreasonable requests and took up a great deal of time. The thing I hated the most was them wanting to favor certain members or to insert some friend.

Initially the public was led to believe that GM needed to eliminate health care costs to be competitive with other producers. Over the years they had negotiated contracts with employees offering benefits. They had a contract that they now want to breach. Contracts with US companies mean nothing. Corporate America uses bankruptcy to not pay their debts and break their contracts while maintaining management perks and major financial interests equity positions.

It seemed obvious that the strike would be avoided and an agreement could be reached. It would be simple for GM to set up an annuity that would be able to cover the associated future liabilities. Monday the union went on strike. In the press conference the union indicated that their sticking point was US production. The union wants guarantees that GM will keep part of its production here in the US. GM, as the rest of Corporate America, wants access to US markets while taking advantage of the disastrous trade agreements negotiated over the years by the government. Reaganomics at its best.

I have written about how producing offshore does not reduce costs, it simply shifts costs from the company to the government and general population. GM wants to become another marketing company selling its name to cover made in China. We have seen why companies do this. Mattel, Disney and others prefer to produce goods where they have fewer safety and quality regulations.

If the union caves, America loses. A union loss will mean the final blow to an America that actually produces a good. It will mean the death of the union by loss of members and would be the final step toward a “service” economy. It will mean the loss of America that produces physical goods. It will mean the loss of America’s capability to regulate quality. It will mean that America will live in fear other countries shutting off the supply of food and goods. Once we have consumed the equity in our nation built by our ancestors we will be less than Mexico. Americans will have to migrate around the world to find work.

The unions do not realize it but they are fighting a battle of epic proportions. This battle will determine the future of America. It will determine if WE THE PEOPLE have a future. The type of agreement will tell us whether or not the US will continue to be a super power.

Tags: Government Politics Recession Corporate America Finance GM Economy Reaganomics