The Conservative Treehouse posted an article today about the closing of the General Motors plant in Lordstown, Ohio. The article points out that with the auto industry expanding its manufacturing in the United States, it makes no sense to close down an automobile manufacturing plant.
The article states:
…In just the past few months, specifically as an outcome of the USMCA, six auto companies have decided to massively expand U.S. operations and spend over $20 billion on auto-manufacturing investments in the U.S.
It makes no sense for an existing auto plant to sit idle. Come to terms with the UAW; make a good deal that helps membership and incentivizes ownership; sell the facility to a new group expanding U.S. investment; retool, and get people back to work.
The article lists the investments being made in the United States by other auto manufacturers:
- Toyota – $13 Billion Investment: Production capacity increases and building expansions at Toyota’s unit plants in Huntsville, Alabama; Buffalo, West Virginia; Troy, Missouri and Jackson, Tennessee. [SEE HERE]
- Fiat Chrysler – $4.5 billion for a new assembly plant in Detroit and boosting production at five existing factories. Hiring 6,500 workers. [SEE HERE]
- Ford Motor Co – New expansion for 500 workers and investment of additional $1 billion in its Chicago assembly operations to help keep up with booming demand for sport and crossover-utility vehicles. [SEE HERE]
- Volkswagen – New investment of $800 million by Volkswagen and the creation of 1,000 jobs in Hamilton County, Tennessee. [SEE HERE]
- BMW – Reacting to changes (75% rule of origin) in the new USMCA, BMW announced exploration for a second U.S. manufacturing plant that could produce engines and transmissions, Chief Executive Harald Krueger said. [SEE HERE]
Evidently the problem is the inability of General Motors to reach an agreement between GM CEO Mary Barra, and the UAW leadership. If General Motors intends to be a major part of the automobile market in the future, they need to work out a deal with the UAW and put people back to work.
The Detroit Free Press posted an article today about the vote by workers at the Volkswagen plant in Tennessee. The workers voted against the United Auto Workers Union (UAW).
The article reports:
Volkswagen has said it favors the creation of a German-style “works council,” which gives workers a voice on a variety of product and other decisions. Under U.S. law, a union must represent employees for a company to form a works council.
But Snyder voted against the UAW because, he said, Volkswagen is the best employer he’s ever worked for.
“How is somebody here really supposed to know what a works council is going to be like?” Snyder said. “You can have somebody tell you one thing and somebody tell you another thing. Nobody really knows.”
I think that is a really smart statement. The UAW has played something of a role in the bankruptcy of Detroit. They are not totally responsible, but they are not totally innocent either. I think this vote represents a realization by the workers that they have been treated fairly by the management of Volkswagen and they do not want to risk their current benefits. Unions have traditionally had a role to play in American industry, but many of the benefits of unionization have been taken over by the government. The government now monitors working conditions, waste disposal, and benefits–all things the unions were originally involved in. Unfortunately the unions have become political organizations with overpaid leadership that lives far above the living standard of union members. They have become no different than the corporations and corporate fat cats they continually criticize.
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A website called thetruthaboutcars.com posted a story on Thursday about the financial situation of the United Auto Workers Union (UAW).
The article points out:
In many ways, the UAW resembles the companies it opposed for so long. The UAW is America’s richest union. One of its biggest assets is its strike fund, which stood at $763 million at the end of 2010. If push comes to shove, a union is as strong as its strike fund. The trouble is: The UAW spends more than it takes in. Increasingly, the union has to dip into the strike fund, the Reuters report says. According to government filings, the UAW liquidated $222 million of investments from 2007 to 2009 to cover the shortfall between expenses and revenue.
The article has charts that illustrate the financial problems of the UAW in recent years. One thing mentioned in the article is the fact that the UAW membership fees have dropped to $30 a month. At the same time, the union is having to spend a great deal of money on organizing as some car manufacturers are no longer in Detroit and are no longer unionized.
A Reuters new story reports:
“Volkswagen AG is paying newly hired workers at its Chattanooga, Tennessee plant $14.50 per hour. That is almost exactly what a second-tier UAW worker would make in Detroit. In a sign of demand for jobs at that pay level, the Chattanooga plant had 85,000 applications for more than 2,000 jobs. VW workers have been promised $19.50 after three years on the job. That is just above the $19.28 per hour maximum that entry-level workers at GM would make over the term of the four-year contract now before workers for ratification.”
That is not good news for the future of the UAW.