Meadow CreekNews

Unions and the Anti-Trust Laws

Filed under Economy on April 22, 2009

While it may be unfair to lay all the blame for the demise of the domestic auto industry at the feet of the United Auto Workers, the union certainly deserves the lion’s share of the blame. From a selfish standpoint, its hard to fault their actions, they hold a monopoly on factory labor and they have successfully exacted hard to believe wage, benefit and work rule concessions from the Big Three for decades. All of this was done without killing them, but slowly wringing the life out of them.
With peak automotive employment long since past, the union has only to protect the hard earned rights of the old timers to worry about. The young men and women that may have expected a lifetime of work in the industry had better make other plans. The crocodile tears running down the cheeks of the UAW workers with every additional plant closure make good TV. The idea that they can’t understand how after three generations of the family working in any given plant that the gravy train is now over shouldn’t be a surprise.

If the Big Three wanted to make cars, they had to do it on terms dictated by the UAW. With so much talk these days about “too big to fail”, I have to conclude our anti-trust laws need a second look. I’ve already expressed by feelings on the industry side of that equation in my last blog. Let’s consider the labor side.

There is no doubt that unions corrected many abuses in the past. For the most part, they appear to be the abusers these days. Where a union has established a strangle hold on an industry’s supply of labor, they proceed to suck the life out of it. In the northwest, we can see the machinist union doing the same thing the UAW did to the auto industry to the commercial aircraft industry.

Why are unions exempted from the anti-trust laws? Wouldn’t it seem that a more free market approach would be to allow say three unions to exist with a supply of labor and compete for a company’s work. Union A might approach GM and describe the high standards they set for their members including minimum education standards, supplementary training, random drug and alcohol testing and a commitment to working with the company to improve productivity. Union A would contend that their workers deserved a premium pay package.

Union B would approach GM with an aggressive offer with lower pay and benefits, but without all of the membership standards of Union A. They might require a higher rate of employment for a given job than Union A, but would work with GM to discipline unproductive workers and attempt to improve productivity.

Union C would have the misfits that give unions a bad name today. These would be the workers that show up drunk or hungover, sabotage management’s efforts to improve productivity and come down with the flu enmasse when someone was disciplined. Union C would probably retain the rights to the proud UAW name.

GM or any of the Big Three would then have the opportunity to decide which union it wanted to do business with. This would seem to bridge the gap between keeping America competitive in manufacturing and protecting workers’ rights. The unions would behave in a more capitalistic fashion, desiring that their customers grow and be successful, while attempting to get a higher wage for the value added skill set they were offering.

Over time, Unions A, B and C would gravitate their offering to what sold. Each would try to differentiate their labor offering in a way that would bring value to the customer, the Big Three. In this environment, we could see another reindustrializtion of America.

When I managed a business in the northwest, we had a factory in the northwest and one in Mexico. The workers in the northwest lost sleep at night worrying about losing their jobs to the Mexico plant. The people in the Mexican plant worried about losing their jobs to China. In the foreseeable future, American factory workers cannot compete with Mexico or China on a wage basis. They can compete on the basis of education, training, ingenuity and a competitive spirit. That is not going to happen within the current model of our large labor unions.

It’s time to rethink how our anti-trust laws apply to unions. They have a monopoly and as such serve only themselves, not their members and not their customers, just themselves. This comes at a cost to American industry, American workers and American economic power and influence.
Richard Gabel

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