by Phil Wilson
A Wag-The-Dog Moment For The UAW?
The UAW and General Motors are reportedly near a tentative agreement to settle the historic strike the UAW called over a week ago. Nearly 50,000 UAW members have lost pay, health benefits (and probably a lot of sleep) over the strike. It remains to be seen how much different the tentative agreement will be from the last offer by GM, or whether members will ratify any eventual deal. But the company offered some significant concessions in an effort to prevent or at least delay the strike. The strike is reportedly costing GM over $400M per day.
The UAW says the strike is about making GM pay members back for major concessions made during the negotiations that pulled the company out of bankruptcy 10 years ago. They point to massive profits ($30 billion per year is commonly cited) to say that it’s time for GM to pay. They point to announced plant closings to say it is time to protect job security for members. They want to eliminate the two-tier wage system they were basically forced into during the last recession.
GM for its part points to the fact that even with the two-tier system their “all-in” labor costs are nearly 25% higher than competitors outside of the Detroit 3. As they forecast business conditions over the next several years there’s not much optimism. The plant closings they’ve announced are positioning the company for an expected downturn in the global economy along with massive changes in consumer demand for vehicles. Winter is coming.
None of these claims from the UAW or GM are completely right or wrong, and this round of negotiations was bound to require some big moves by GM to avoid a work stoppage. But many of those moves were made. Still 50,000 UAW members are on the street. Why?
I’ve got a theory. Have you ever seen the 1999 dark comedy Wag the Dog? Just days before his next election the President of the US is caught in a sex scandal that is all but certain to end his political career. But a political spin doctor hatches a brilliant plan. They will create a fake war in Albania that will divert attention from the scandal. Then the President will swoop in to heroically “end” the war, just before the election. The war hero President wins re-election and the problem is solved.
This strike feels a lot like a Wag the Dog situation to me. In case you haven’t kept up the UAW is in a crisis like we haven’t seen since Hoffa Sr. was running the Teamsters. The Justice Department has already gotten guilty pleas from numerous UAW officials and just days before the GM strike the FBI raided two homes, including sitting UAW President Gary Jones. Millions of dollars that were supposed to benefit UAW members were skimmed and used to line the pockets of UAW officials. This scandal reaches all the way to the top of the UAW, who may soon join the Teamsters under federal trusteeship. That’s a club you don’t want to join.
The scandal isn’t just impacting the crooked UAW officials (and, to be completely fair, numerous Detroit 3 company officials) who are about to be perp walked. It is devastating to the reputation of the UAW while it desperately tries to stop bleeding current members and hopes to convince new ones to join. The crisis is demoralizing to its membership. If anyone ever needed a Wag the Dog moment, it is the UAW now.
What better way to change the subject and divert attention than a historic strike? This new “crisis” puts a huge number of members on the street, going to war against a common enemy. It galvanizes the demoralized. Perhaps this even serves as an example of the “power” of unions the next time they try to organize a new location.
GM employees come out the big losers in this situation. After this contract gets settled make sure to read between the lines of the press releases. Exactly what improvements are gained that weren’t on the table before? Plus remember that many times the last-minute offers pre-strike don’t get publicized so members never know what they really gained by sacrificing their pay and benefits.
There is no question that the UAW leadership is corrupt. I just hope their corruption isn’t what led 50,000 workers out on a needless strike. Those members are just the beginning. A strike of this magnitude impacts many other businesses and communities. Some even believe this strike could be the tipping point into a recession in the Midwest. That could create further damage to these families and communities.
Anyone asked to join today’s UAW should seriously consider whether they want to put their livelihood into the hands of “leaders” like this. You probably guessed my answer is no.
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