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There is a Better Way Yanking dies, shutting down the company doesn't cut it

I'm no Richard Holbrooke, Jimmy Carter or Henry Kissinger, but I've lived through enough senseless labor-management madness to offer a suggestion or two to the United Auto Workers and General Motors Corp.

First, there won't be any reversal in your death spiral until leaders on both sides understand that you need each other.

GM, you obviously have the financial muscle, and, it now appears, the legal leverage, to financially cripple the UAW. Point taken. We won't know what Arbitrator Thomas Roberts would have ruled, but it's clear the UAW didn't want to find out.

Next time the management faction that wanted to hire replacement workers, at least in certain locations, just might prevail.

That would be a grave mistake.

To UAW President Stephen Yokich and GM Department Vice President Richard Shoemaker I suggest it's time to start leveling with your rank and file about the number of jobs you can realistically protect within GM. You both know that the number is probably closer to 150,000 than the current 220,000.

If Ford Motor Co. can build enough vehicles for its 25% of the market with 19 assembly plants in the U.S. and Canada, why does GM need 27 plants to build for 31% of the U.S. market?

Then there's the issue of Delphi Automotive Systems' future. It has a right to sell 20%, or any other equity portion, to the public. But it must be competitive to do that. It must continue building its customer base outside of GM. That's why you let your members cross picket lines if the products they made went to Toyota or Chrysler or Ford. But if the union wants to have any Delphi jobs left five years from now, Delphi can't be shackled to the same labor agreement as GM. Yes, that means a lower wage tier and less generous benefits.

As politically painful as that sounds, narrowing the gap between Delphi's cost structure and that of other top-tier suppliers will only help the union's now-slim chances of organizing more of those suppliers. That is your only hope for growth unless you plan on becoming known as a public employees union.

Of course, none of this can happen without trust.

There's no easy way to build it.

GM managers: It might help if you threw out all the consultants' studies that show how far behind you are. You already knew that.

All of those statistics, which often confuse as much as they clarify, are just used to browbeat workers whose morale is devastated already. You don't encourage people by ranting at them incessantly about how inadequate they are.

After all, one of those widely venerated studies - yes the Harbour Report - recently found that Chrysler Corp. is the industry's most inefficient producer in North America, even behind you folks at GM. Yet Chrysler's second-quarter profits were an enviable 5.9% of sales. Go figure.

Focus on the progress that can be made between today and tomorrow. Listen more closely to the folks on the floor. You might be surprised by how much they know. They want to improve as much as you do.

Forget what the language in the national labor agreement says about profit sharing. For each of the next three years, GM should pay profit-sharing based not on what the corporation collectively earns in the U.S, but on the percentage improvement on an agreed-upon productivity measure in each plant, something other than profitability per vehicle.

Workers must see a tangible connection between improved efficiency and their financial health.

All of which brings us to Saturn, which lost its virginity in this strike.

One of the more traumatic sideshows to this 54-day bloodbath was the UAW's leaking of internal GM memos outlining the Yellowstone project, a low-cost approach to building small cars in which suppliers build up large modules, or chunks, of the car and deliver them almost to the assembly line, requiring far fewer workers in the assembly plant. It also eliminates inventories of many small parts inside the assembly plant.

It's no secret that GM and its competitors plan to radically change the way they build small cars. Suppliers will have much larger roles in designing and building any car that sells for less than $20,000. The prototypes for this concept are just now revving up in Brazil and Europe. Variations on that theme are headed stateside fast.

But it means there will be far fewer people needed in places like Spring Hill, TN; Lordstown, OH, and Lansing, MI, where GM builds its small cars now.

Saturn won't disappear, but it is destined to become more like every other GM small car plant, only much less integrated. The dream of growing it into a labor-management cooperative kibbutz capable of cranking out a half-million vehicles annually won't come true.

This will be one of the bit-terest pills for the UAW to swallow, and could unravel into a public relations disaster for the company.

If the folks at Saturn can't trust GM, who can?

Then there is the threat that more small and midsize vehicles will be built at the corporation's rapidly growing complex in Ramos Arizpe, Mexico, where low wages help limit technology investments while keeping production costs very competitive.

Finding a consensus, even in the context of a healthy relationship, will be extremely difficult given these dynamics. Obviously the Flint settlement didn't resolve any of this hard stuff. You all just got tired of beating each other's brains out.

So you can continue your war games, but remember, the bullets are real. Sure, GM, you can run every assembly plant seven days a week for the rest of the year to make up the more than 500,000 units of lost production. But you're only fooling yourselves if you think the $2 billion in lost profits can be justified in exchange for a 15% increase in the daily quotas of engine cradles from one of your least efficient stamping plants.

As for those of you who want the UAW to remain a viable force into the 21st century: There's nothing fair about the erosion of high-paying manufacturing jobs. There are gut-wrenching choices ahead of you. But putting them off again will assure the end result will be more painful than anything you've experienced so far.