The UAW Agreement

I remember when I was in high school, I wrote a paper about how the United Auo Workers Union was ruining the American Auto Industry by demanding too much. At the time, the Big Three were losing billions of dollars and jobs were fleeing the rust belt, where the UAW has a stronghold, as a result.

The time around, the UAW has less ground to stand on in that they cannot strike against Chrysler or General Motors. This was part of the agreement when the US bailed out those two companies in light of the financial crisis. Ford did not take the money, so they do have to worry about a potential strike. Additionally, Ford appears to be the healthiest of the three companies.

In these recent negotiations, there are signs that the UAW and the Big Three are on better terms:

Not many decades ago, contract expirations used to be firm deadlines for the UAW. Agreements, or strike notification, usually came around the midnight deadline when the negotiators were groggy from several nights of very little sleep.

This year it helped that the union had agreed not to strike General Motors and Chrysler over wages.

This shows a pleasant change between the two parties. It's funny how a few lean years can do to a relationship. I think it's always important that the interests of a union and the companies it is negotiating with are aligned. So often, the interests are not aligned and this is not good for either party.

The UAW seems happy:

“They’re all new jobs, and quite a few of those jobs were located in Mexico,” UAW Vice President Joe Ashton said. “What we said going into negotiations is one of our major objectives is jobs, and we think we met that objective.”

“I am really proud of our whole team,” King said at the press conference. “We really came into negotiations to create jobs in America.”

Perhaps the most important result of this good news is that it is good for Michigan, a state that has been hit hard by the automakers' struggles:

Although the details will not be confirmed until today, early word suggests that workers will get a nice array of one-time rewards, in the form of a signing bonus and increased profit-sharing. That keeps the company's day-to-day costs fixed going forward, a boon in this still all-too-uncertain economy, while recognizing that workers deserve recognition for the role they continue to play in keeping the company and its products strong.

As a fan of the American Auto Industry, it was important for an amicable deal to get done. Hopefully, this deal will signal a new era of better relationships between the UAW and the automakers. Hopefully, it will lead to a more successful Michigan.