By Paul Mongerson, retired chairman and CEO of Stanadyne Corp., which made auto parts among its many products.
I believe the unions, press and public are being misled into thinking poor systems ... as in the auto industry ... are the result of poor USA management. Actually, starting in the 1950s, most UAW contracts were rewritten so changes in production methods that reduced labor costs must be approved by the UAW. In the rest of the world, labor tries to reduce labor cost. In the USA, the unions often try to increase labor use.
Thus the American labor cost problem is getting the UAW's approval of the use of some modern labor saving technology ...not the lack of American knowhow or innovation. The UAW ban on much modern technology is censored or ignored by the USA press which ultimately paints those restrictions as poor management ... not poor union rules or leadership. USA companies manufacture competitively every place in the world except the USA, where the UAW contracts mainly make them not competitive.
Unions have a good role in our society, but allowing them to approve production methods has been a disaster. It is also the main cause of the demise of UAW union manufacturing.
The DetNews.com website shows Ford's most modern plant is in Camacari in rural Brazil. The conclusion says Ford could do it in this country IF the UAW would let them do it. My personal experience is that union rules increase our labor inefficiency as much as higher wage rates.
I have seen NO press stories on the huge harm caused by the UAW restriction on modern manufacturing methods. Instead, the press (most reporters are unionized) blame poor management.No wonder new factories are built overseas.
The UAW's harm to USA productivity is the main cause of our automotive problems. It is now ignored. OurBlook will publicize this censored real cause of our problem.
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Some specifics about the union’s work rules ...
Ford’s master contract with the UAW for 2007 is 2,215 pages long and weighs 22 pounds.
Worse yet, each plant of the Big Three has its own rules, so instead of just modifying the master contract, there have to be negotiations plant by plant.
What would this involve? Here’s an example. Each plant has various job classifications, and if management goes too far in having a worker do something outside the classification, the union files a grievance.
In Japanese auto plants, in contrast, there is only one classification of workers, and it’s called “production.” Thus management can run the plant efficiently, it can make money, and that means the workers get paid and get to keep working instead of having to run to the federal government for a bailout.
About the media's amnesia with the UAW ...
A CBS-TV investigative report on Dec. 3 by Sharyl Attkisson symbolized the press' ineptitude.
She did an excellent job, actually, in focusing on how the Big Three ... the very same Big Three pleading poverty ... spent a cool $50 million in lobbying Congress during the first nine months of this year and another $15 million in campaign contributions to politicians like Sen. Carl Levin ($438,000), Rep. Joe Knollenberg ($879,000) and Rep. John Dingell (nearly $1 million). Ms. Attkisson suavely pointed out, according to a transcript published on the Internet by CBS News, that 1) all three are from Michigan and 2) all three support the bailout.
What she did NOT mention, though, were the millions and millions of dollars in political contributions from the UAW ... contributions extracted in forced dues payments from the members.
Coverup might be too strong a word but certainly the so-called Mainstream Media like CBS have dropped the ball in neglecting to include the machinations of the union in discussing the auto industry meltdown, and the money it spent trying to force the bailout.
Marina v.N. Whitman, former member of the Council of Economic Advisers, hopes the global crisis pushes countries in the direction of greater cooperation and coordination of economic policies
Terry Neese, former dir. of the US Mint, believes the stimulus package relies on out-of-date economic theories.
Leigh Riddick, American University professor, believes massive restructuring is needed in the domestic automobile industry.
Sean Snaith, one of the nations most important economic forecasters, believes we are not heading into a depression.
Barbara Moran president and CEO of Moran Industries, believes gov't should focus more on the needs of small business.
Thomas Hopkins, economics professor at RIT, believes the unemployment rate will worsen.
Jim Camp, author and president of Camp Negotiation Systems, talks about the auto bailout.
Alison Fraser, director of the Roe Institute for Economic Policy Studies at the Heritage Foundation, believes Social Security, and other programs need to be reformed.