The Future of labor unions, particularly, the UAW

The Big 3 American auto companies are in desparate financial condition. If GM's CEO is to be believed, GM is at risk of going bankrupt if it doesn't get help fast. So, who's to blame? The anti-union crowd, mostly conservatives, want to blame unions. But the answer can't be that simple. With a companies as old and complex as any of the the automakers, there are too many elements that went into making the companies successful when they were kings of the hill and that have now coalesced to put them on the brink of financial disaster.

Yes, the UAW has insisted on huge hourly wages for essentially unskilled labor. The unions have negotatiated collective bargaining agreements that create specialized jobs that can be done by only certain workers, diminishing the flexibility of the auto companies to simply get the job done.

But the simple fact is that there is plenty of blame to go around: the execs who failed to develop fuel efficient cars or to design and build cars that matched the reliability of the Japanese cars to start. And let's not forget American consumers who demanded their pick-up trucks and SUVs (this consumer included). Detroit gave us what we wanted. Gas was relatively cheap, so that unlike many other parts of the world, where SUVs are a rarity, Hummers and Excursions ruled our roads.

The UAW did what all unions are supposed to do: get the best wages and working conditions they can for their members. It was the UAW's duty to seek top wages and the best retirement plans, as well as the best health care plans and working conditions it could get. To put it another way, the UAW did what every party to a contract does: looks out for its own best interest. That's true of every union--and every executive, who negotiated multi-million dollar compensation packages--and collected their paychecks religiously, even when their companies were bleeding money.

The UAW has already shown signs of granting concessions, as well it must. The future of the UAW is quite obviously dependent on the survival of the automakers, and like any organization, the UAW will experience a paradigm shift to ensure its continued existence. I expect that Congress will work out a bail-out package for the companies and that everyone with an interest in the automakers will have to concede in ways they might have never imagined. In the end, the UAW will survive.