The new president of the United Auto Workers union had some harsh words for automakers recently on his first day in office.
UAW head Bob King demanded protests against Toyota manufacturing facilities in the United States. He said Toyotas would be safer and of higher quality if they were built at a recently shut-down unionized plant in California rather than at a non-union plant in Mississippi.
He said he would try to unionize the U.S. facilities of Toyota and other “foreign” car companies that have lots of American workers on U.S. soil. (Volkswagen is building such a plant in Chattanooga, with the promise of thousands of jobs.)
And he even bizarrely suggested that management at some auto plants engages in “terrorism” to prevent unionization, The Detroit News reported.
Unionizing the manufacturers would “give us the power to win back the concessions and sacrifices we made and win more than that,” Mr. King said during an angry speech to UAW members.
But why did the union have to accept “concessions and sacrifices” in wages and benefits? It’s because union officials had negotiated unsustainable compensation packages with the car companies to begin with. Over time, facing efficient foreign companies, the Big Three U.S. automakers became less able to compete. Union contracts added hundreds of dollars to the price of their cars, and many American opted for foreign cars — many of them made at non-union U.S. plants.
Those contracts were not the only thing that led the federal government to bail out General Motors and Chrysler with billions of dollars. (Ford made do without a bailout.) Styling of U.S. vehicles had grown drab over a period of years, and management had not been as engaged as it should have been.
The combination of those factors plus pricey union contracts led to serious difficulties in our domestic auto industry.
It is strange indeed that some want to return to the very policies that created the difficulties. Workers at “foreign” car manufacturers with plants in the United States might want to think long and hard about whether they wish to follow the path that got our Big Three in so much trouble.