EATEN ALIVE FROM BOTH ENDS Can the UAW really be blamed for the sorry fate of Packard — and Detroit? Yes, to a large extent. It’s not certain that Packard would have survived had the union not been such a financial and logistical burden. But there is no question that the UAW made it more, not less, difficult for Packard to weather the Sturm und Drang of the business cycle. In the Eighties and Nineties, when foreign-owned companies like Toyota were entering the U.S. market in large numbers, UAW contracts bound and gagged the Big Three with costs and obligations that fatally restricted their ability to innovate and compete, just as the UAW had done to Packard against the Big Three in the Fifties. This absence of flexibility has proven disastrous for the workers that the UAW claims to champion: As we wrote for Forbes, since the turn of the 21st century, “the Detroit-based auto companies have shed 200,000 jobs — three-fifths of [their] hourly workforce.” And the dying industry has dragged its home city into the grave along with it. On Thursday, July 18, Detroit — suffocating under more than $18 billion in debt — filed for Chapter 9 bankruptcy protection, making it the largest city in U.S. history to go bust. The Motor City had at last run out of gas. True, the causes of Detroit’s decline have been many and varied. Corruption and bad management played a role, for sure. But between the UAW’s crippling its prime and vital industry, and its unionized public-sector workforce demanding larger and larger shares of the public purse, the Motor City has been eaten alive from both ends by . . . what? How to characterize this thing that has consumed one of our great cities? After World War II, the Japanese people struggled to come to terms with the fact that two of their cities had been erased from the map. Japanese filmmakers channeled the nightmares of all Nippon with their films featuring giant monsters wakened by nuclear explosions, monsters like Godzilla, that then proceeded to lay waste to their cities. At the time when Japan lay in ruins and its people were imagining monsters to explain their supine and smoldering existence, Detroit was a shining and bursting example of America’s industrial might. Now Detroit lies broke and broken. But no imaginary monsters or foreign bombs are needed to explain its demise. Only three letters are needed: UAW. — Matt Patterson is editor-in-chief for WorkplaceChoice.org. Julia Tavlas is a contributor for WorkplaceChoice.org.
Posted on: Thu, 25 Jul 2013 18:58:20 +0000
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