The Brian Sullivan Blog
  • December 12, 2008 10:19 AM EST by Brian Sullivan

    Presser Reaction: UAW Keeps Talking About Wages, Not Talking About Legacy Costs

    Listening to UAW President Ron Gettelfinger's press conference regarding auto rescue bill failure... 

    It's what he is not saying that speaks volumes.   In continuing to hammer the concept that the wages of UAW workers are similar to those of the U.S.-based foreign manufacturers, he is saying nothing about the real problem: the legacy costs of pensions, benefits and health care.

    As the New York Times reported this week, the actual hourly pay - what the workers make in a paycheck - is not that much different between union and non-union.   But because the meaning of "wage" and "compensation" can often be used interchangeably, Gettelfinger is using the "wage" argument to prove a point on hourly pay but not mentioning the difference in total "compensation."  

    The biggest problem - an additional $13 per hour per worker in legacy costs - was not mentioned at all by Gettelfinger.    He said nothing about working to reduce the crippling benefits.    It is clear those benefits are sacrosant to the UAW.

    While we wait for more news out of the White House - they are hinting about using TARP funds to replace the $4 billion not passed in the Senate - the UAW must eventually address the issue of pension and benefit costs instead of just talking about hourly "wages."   Trying to dance around the difference in language between "wage" and "compensation" serves no one well, especially his union membership.

THC

I am a recently retired COO of a NYSE manufacturing company with international operations and have 35 years of experience in both union and non-union environments. I began my career as a union member. I am amazed that so little is being said about the real labor issue affecting the competitiveness of the American automotive industry. Inevitably the discussion goes to pay and benefits, which misses the overriding factor controlling total cost: WORK RULES. Work rules de-lever the efficacy of capital thereby contributing to significantly higher total costs and lower product quality. The notion that labor contributes 10% to the cost of a car may be valid under archaic accounting conventions. It is pure fantasy to think the impact of labor is only 10% of the total cost. Until American automotive company management and labor practice what their foreign competitors have long known regarding work rules, we are simply wasting money on loans, bailouts or any other attempts to bridge them to competitiveness. Work rules rob employees of the their natural desire to contribute and the opportunity to secure their own future. Those whose labor generates the greatest leverage on invested capital win. The winners can and should be well compensated. In an organization with competent management and good leadership employees find restrictive work rules demeaning. THC, Portland, OR

December 15, 2008 at 4:57 pm

Just Wondering

Just wondering.....if you had worked for an employer for 30 years under a mutual promise that at the end of 30 years, you would be given $xxxx per month for the rest of your life - and then you went ahead and did the work, made future financial decisions based on that promise, and then retired, what would you do if it were suddenly taken away and you were close to 60 years old? How are you supposed to make it up NOW?

December 22, 2008 at 12:41 pm

Richard Miller

Boycott all UAW products.If the Guvernment dosen't have the gutts to bring theese people down to earth,We the people must.

December 22, 2008 at 1:11 pm

Al.

I just have one question. Does Ron Gettlefinger have a real job or his sole mission in life is to suck dry the blood of great american companies?

December 22, 2008 at 6:50 pm

Ralph

UAW: United Auto Workers But doesn’t a more meaningful description of the “UAW” include the following??? Underachievers Automotive Welfare Unconstitutional American Welfare Unearned, Undeserved, Unmerited, Unnecessary, Unjustified, Undemocratic

December 22, 2008 at 11:26 pm

about this blog

  • Brian Sullivan joined FOX Business Network (FBN) in April 2008 as an anchor. He co-anchors the 10am-12pm ET hours of the FOX Business block. Prior to joining FBN, Sullivan served as an anchor for Bloomberg Television where he hosted the programs Morning Call and In Focus.

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