The General Motors strike is over, but a few things should be said. Imagine you are a supplier. Your best customer accounts for 30% of your business. He pays top dollar for your goods. The last few years his business hasn't been so good, so he has cut back on his orders. He complains about your prices - says you're not competitive in this global market. But he still pays top dollar for your work. Now your overall business has been slumping, too, and this customer is more important than ever.
So what do you do?
Should you try and screw him up, ruin what's left of his business, drive him into bankruptcy? Or would you try to help him out, improve your quality, your prices and work with him to improve his productivity. After all, when your best customer flourishes, so do you. Right?
If you're the United Auto Workers union, the answer is screw him up, wreck his business. The UAW is a supplier, and General Motors, employing more than 200,000 UAW members, is its best customer. Now GM is in trouble. Productivity isn't high enough. Costs aren't low enough.
So what does the UAW do? They try to make things worse!
What an ungrateful bunch. Don't they know that every time they pull one of these we-won't-work-harder-or-smarter strikes, they:
n Hurt the business of their biggest customer and reduce the number of jobs GM will have for UAW members down the road.
n Convince those GM bosses that the only way to get a fair deal and survive is to ship more work to Mexico.
This strategy worked when there were only three car companies, and the union could make them march in lockstep. But that world is long gone, with non-union auto plants sprouting up across the U.S. and Canada, and imports pouring in from all corners of the globe.
These UAW leaders should be pushing their members to increase productivity as a way of saving their own jobs and creating more for the future. They should tear up work rules that raise costs unreasonably. They should be telling their members that it's a tough world and the new watchwords are "better, faster, cheaper," and that strikes destroy jobs, now and for the future.
Maybe the 55-year-old skilled tradesmen with a cottage in northern Michigan wouldn't like that message, but leaders are supposed to lead. Instead, they are still playing the juvenile game called "Mine is Bigger than Yours."
Then there's General Motors. That crew isn't any better.
BMW is expanding in America. Mercedes is expanding in America. Honda is expanding. They take jobs away from Germans and Japanese to put them here.
They love American workers.
Ford and Chrysler are making record profits here, with the same confusing UAW contract that GM accepted.
If BMW and Mercedes and Ford and Chrysler and Honda and Toyota do so well with American workers, what's wrong with GM?
I covered the UAW and Big Three for 15 years in Detroit, but I can't figure out this GM bunch. My impression is that they hate their own American workers. I figure they've got one production job in Mexico for every three in the U.S. already, and dream of getting them all down there. They don't understand the union, and don't seem to want to spend any time trying to learn.
As far as strategy goes, you can't figure out what they're trying to do, because they provoke the UAW into a strike, then act surprised when they are struck, and just when they are about to win, throw in the towel.
Sure GM has troubles, design troubles, selling troubles, cost troubles. But the UAW isn't the main cause for cost, productivity and over-staffing problems.
n GM didn't downsize back in the middle 1980s as Ford and Chrysler did, because those two were in trouble then, and GM wasn't. Now it is playing catch-up.
n GM fell behind the others in design for manufacturing (which lowers costs) because its designers were too snooty to talk to manufacturing engineers. Every new design, though, catches up and requires 25% to 30% fewer assembly hours than its predecessor, meaning GM needs fewer people per car. They're on the right path. They just haven't caught up yet.
n GM is more vertically integrated, so it has high-cost ($45/hour labor) people making simple parts like oil filters and spark plugs. Delphi Automotive Systems wants and needs to close or sell off parts plants, but that means fewer GM jobs.
n And the new style of production calls for supplier-built modules for as much as you can get, meaning less need for your workers.
n On top of that, GM's market share is struggling because management, not the workers, has done a poor job creating new products, like failing to introduce its new full-size pickup trucks with four doors.
Okay, this strike is over. Unless things change there will be another strike, perhaps next summer or fall, as they attempt to hammer out a new national contract.
That will be the BIG one, as they say in California, the one that wrecks the company and the union. (Remember International Harvester, anyone? And the union-busting boss and the UAW strike that finished that company?)
Of course, there's the Caterpillar strike where management went for the jugular and won. Don't think GM executives haven't studied that case closely.
If that's what it comes to, you deserve each other. A plague on both of your houses. - Jerry Flint is a columnist and former senior editor of Forbes magazine.
