The U.A.W.’s Plan to Move All Auto Manufacturing Overseas
By Randall Holcombe • Tuesday January 18, 2011 11:07 AM PDT • 11 Comments
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.
Tags: Business, Economics, Employment, Labor, Trade, Transportation, Unemployment 
The history of Bethlehem Steel is much the same. My brother worked in the fabrication shop there for 40 years. Every few years he got 3 months off, with pay, as did all union employees.
ralph | Jan 18, 2011 | Reply
The railroad industry in the US is another significant example. Nobel Laureate Paul Samuelson said, “The whole history of unionism has been ... in determining how industries in decline are accelerated toward their extinction”
Randall Holcombe | Jan 18, 2011 | Reply
Going to be hard to do since many of those factories are located in right-to-work states.
PeterK | Jan 18, 2011 | Reply
I remember when goods from communist countries were prohibited in America. No ‘Made in the USSR’. No made in Red China (made in China meant Free China – what they call Taiwan today). I couldn’t even find a Cuban cigar.
Bob Williams | Jan 20, 2011 | Reply
The unions have completely screwed themselves. They went from protecting the rights of their workers, to protecting their own fat butts. A union is only successful and needed if the entire market treats their employees like dirt. Since no company really treats their employees in that manner any more, unions have really lost their purpose. They claim to protect the rights of the working man, but the people who do the protecting also protect individuals who need to be disposed of. How many times has a real good member of your team or work force been let go, while some bum gets to stay? You know of at least one person who takes that long smoke break when they do not even smoke. No? What about that colleague who comes to work late and leaves early? While these p***** get to keep their jobs because of “rank” or “tenure”, the individual who comes in early, skips lunch, and stays late, gets laid off.
In order for this country to even maintain the remnants of a once great manufacturing industry, unions must be self-governing. By not expelling the incompetent from their ranks, the unions have condemned themselves to a bureaucratic existence. I believe in the “survival of the fittest” mentality. Union representatives go to bat for any “joe blow” who is about to be fired. This is what needs to be changed. The weak must be sacrificed for the benefit of the herd. Look no further than the teachers union. Union reps protect pedophiles and absolutely useless individuals because they have been around for “x” amount of time. Can you imagine the waves that would be sent through the ranks of unions everywhere, if just one union started firing people in the same way the private sector works? Overnight productivity would skyrocket and the “American work ethic” would be reborn. A union job should be one of pride and status. Union status should represent that this individual is the best person at whatever it is he or she does.
Unless this trend is corrected, I fear that all manufacturing will be headed overseas. Unions must drastically improve the health of the organization by ridding themselves of the toxic workers and bureaucrats that have filled their ranks. If unions right their ship, than the health of the American manufacturing industry will finally be restored.
Kyle Paquette | Jan 22, 2011 | Reply
Believe it or not we need UAW at these plants I work for BMW and all they have done during record sales year after year is take benefits away from us and they keep making rules to make it harder and harder to stay employed for the permanent employee because they want temps in our spot ! No raise for 4 years but the German comps get raises and incentive bonuses and we get “just be happy you got a job”! And our plant is the second largest producer of BMWs! They exploit us because we are non-union! The textile industry also was non-union and where have they gone? That’s the main reason we need to organize these foreign plants because when they get all they can from US they will go and exploit another country! We need UAW we need a voice!!!!!!
Willie P | Jan 23, 2011 | Reply
“The textile industry also was non-union and where have they gone?”
.....? No textile unions? What about the Amalgamated Clothing and Textile Workers Union?
Your “voice” has yelled and whined so damn much that the employers are sick of hearing from you and send the jobs to people who are bloody happy they get a chance to eat. There is nothing wrong with this, it is overall a healthy phenomenon. Capital flees capital rich countries (where it has a low rate of return) and flows to capital poor countries (where it has a much higher rate of return).
If you want to blame anyone then blame the government for making it cost prohibitive to run businesses here.
Slim934 | Jan 24, 2011 | Reply
Willie P, what kind of a person needs someone to stand up for him? I have had several jobs that I thought were treating me unfairly. Know what I did? I left. Simple really. Don’t like what you are being given in exchange for your labor, stop providing that labor. See how easy that is? If however, you have decided that you prefer to give that labor in exchange for that pay-check then stay at the job. The choices are simple really a) be satisfied with your current station. B) convince your boss that you are more valuable to him than what he is currently paying you C) spend your time in pursuit of employment more suited to your abilities. Complaining that you can’t get what you want, and recruiting some thugs to get it for you is not a noble way to conduct one’s self.
Unions are a group of people FORCING other people to do what they do not want to do – see “theft”. That is all, let’s not sugar coat it. You want something from someone who does not want to give it to you – so you propose to take it from him by force.
This is akin to a man unable to seduce a woman turning to his friends to help hold her down.
Voluntary exchange is the ONLY way to live a noble life.
joe4liberty | Jan 25, 2011 | Reply
Willie P, maybe if you didn’t use so many exclamation points????
N. Joseph Potts | Jan 25, 2011 | Reply
There has got to be a way to compromise to some of the union demands and keep U.S jobs here. Right now America needs all the jobs it can get; to have these manufacturing jobs move overseas would be disastrous and affect or ability to recover from the recession.
Fullerton McCoy | Oct 27, 2011 | Reply