CarSPIN Editorial:  UAW Has Kept American Cars Down
By TurboDan | 05.10.05 | Comment on this article in the forum

I always start my day with an often random look at the newspapers across the country. This morning, I stumbled onto a Detroit News article about the financial woes of GM and Ford. The article itself, well, “been there, done that.” What was striking to me was the article comment section, where union employees, nonunion employees, and outsiders squared off in a surprisingly compelling debate that dragged on for page after page.

While neither side changed my opinion in the matter, the web site displayed a stirring example of the vast differences in opinion between these two sides. And I came to one conclusion: the pro-union folks just don't get it.  Comments included many phrases reminiscent of Karl Marx and Chairman Mao. Union workers (I suppose their long breaks allow them to log on the 'net for a while) were crying foul that GM executives had salaries worth millions of dollars while “average folk” suffered with middle wages. The disturbing comments by those claiming to be UAW employees reminded me of a brainwashed cult all repeating the same lines over and over again. The problem is that these sometimes off-the-wall Internet message board comments are echoed by those in the highest echelons of UAW hierarchy.

It struck me that the very employees that GM is breaking its financial back to support consistently described the General as some sort of evil behemoth that they were stuck working for. Not one union employee that commented on the article seemed satisfied with what he or she had. That is part of the overall problem. The UAW employees barely even feel they are working for Ford or GM, but that they are working as part of a union organization that happens to build cars for an evil multinational corporation because they are forced to; and they want to squeeze every last cent out of that evil corporation.

This financial squeeze has contributed to GM and Ford's quality issues over the years. The obscene amounts of money that is used for cushy union benefits (that will account for nearly 30% of every vehicle's cost to the consumer by 2007, according to Forbes) is money that cannot be spent on research and development of new models. Several UAW members lamented the money spent on the development of the disastrous Pontiac Aztek crossover SUV, but they forgot to mention that GM has been forced to replace most of their vehicle lines with medicore models that neither impress nor evoke emotion in the consumer.

The Pontiac G6 is a fresh design on a car that anyone could've built ten years ago. The flagrant and pathetic rebadging efforts of the Ford Crown Victoria platform is a direct result of not having the proper resources to develop new and interesting full size cars in so many years. GM allowed the heritage Camaro to stagnate for over a decade and become to butt of jokes about "1986 calling and wanting its top-selling sports car back." While the cars like the Ford Taurus and Chevy Malibu, and Chevy Cavalier went for years with the “same old” cheap plastic interiors and featureless consoles (mostly due to union production contract requirements), the Camry, Corolla, Accord, and Civic were continually upgraded throughout the 1990s and destroyed the American car market. At this point, I can't think of a single Ford or GM car outside of the Cadillac brand that I'd rather own over the European or Japanese competition. Even GM's Vice Chairman Bob Lutz uses a Swedish-designed Saab 9-5 as his personal vehicle.

Ford has resorted to pilfering Mazda and Volvo platforms for their vehicles because of the lack of R&D resources for their own brands. Of course, they did manage to produce the Excursion SUV, which rivaled the size of some Army tanks. Because the union-stranglehold on corporate resources was so strong, there was no one left to focus on cars and the customers who drive the cars. Instead of being able to leverage a century of carmaking experience, profitable band-aids in the form of monstrous SUVs were placed on the soars of GM and Ford.

Then, gas prices rose.

GM Chief Rick Waggoner said last week that he joined GM because he loved cars, but has found himself as the President of a massive health insurance giant. If I had to venture a guess, board meetings at GM and Ford probably discuss more about managing health care and retirement packages than how to defeat Honda, Toyota, BMW, or Nissan.

Unfortunately, the future does not look bright. While a GM or Ford bankruptcy restructuring would allow the union to finally be broken, the union most likely would negotiate before such a drastic event. That means that either carmaker will be allowed to continue on the same path of being somewhat solvent financially while producing the same old boring vehicles year after year. But eventually, the same situation will catch up to GM and Ford again. Competition is a good thing – but the union stranglehold has forced American companies into a strategic disadvantage that this country's auto industry can no longer sustain.