The U.A.W.’s Plan to Move All Auto Manufacturing Overseas
By Randall Holcombe • Tuesday January 18, 2011 11:07 AM PST •
As the “big three” U.S. auto manufacturers have lost market share—and two of the three have gone into bankruptcy, only to be rescued by the federal government—foreign manufacturers have filled the void. Many of those foreign auto manufacturers now make many of the cars they sell in the U.S. in U.S. factories. The United Auto Workers (U.A.W.), which has unionized the workforce at the big three but has been unsuccessful in their efforts to unionize the U.S. auto workers employed by foreign manufacturers, has now come up with a plan to make the factories of foreign auto companies located in the U.S. uncompetitive, and eventually push all automobile manufacturing overseas. Their plan is to unionize the auto workers in those foreign-owned U.S. factories.
A big reason the big three have suffered losses to foreign competitors is that the U.A.W. has bargained for high wages, but more significantly, high non-wage benefits and inefficient work rules, which have made American auto manufacturers uncompetitive. Unionizing the foreign-owned plants in the U.S. would make them uncompetitive too, and would push those firms back toward manufacturing their automobiles in Japan, Korea, and Germany, rather than moving more of their operations into the U.S., where they are selling cars.
Bob King, U.A.W. president, said “If we don’t organize these transnationals, I don’t think there’s a long-term future for the U.A.W., I really don’t.” Sure, because auto workers are pricing themselves out of the market. King ought to realize that he can price the workers of the “transnationals” out of the market too, and that as foreign firms, it would be even easier for them to move jobs overseas than it has been for the big three.