Diverting the blame for the big three's woes on the current economic crisis, UAW President Ron Gettelfinger said, "the focus has to be on the economy as a whole as opposed to a UAW contract."
UAW has chosen not to work with the companies that employ their members and alternatively push for the federal government to partially nationalize the companies and take on the long-term health care and pensions costs for UAW retirees. With the current class of Democrats in congress and President-Elect Obama endorsing such a plan, UAW is not likely to reconsider its decision.
“We’re here not because of what the auto industry has done”, Mr Gettelfinger said during a rare press conference. “We’re here because of what has happened to the economy.”
Mr Gettelfinger said that “we need a package approved by this lame-duck session of Congress. If we don’t get it, I’m not sure some of these automakers will make it to mid-January when Barack Obama becomes president.”
Gettelfinger doesn't want the blame for the dire state of the companies put on U.S. automakers themselves because that would mean UAW's labor agreements are partially responsible. That;s why he's working hard to try and convince the public that the big three's problems are simply related to the slow down in the U.S. economy. But, under scrutiny this argument doesn't hold up.
When you look at the auto industry's foreign competitors, who manufacture cars in the U.S. at an average employment cost of $46 per hour per employee, 36% lower than their U.S. counterparts, you get a much different economic outlook. Companies like Toyota, Honda, and Nissan are generating annual profits of $17, 6, and 5 billion respectively, while U.S. automakers continue to lose billions. GM lost $43 billion and Ford $3 billion. Adding fuel to the fire, U.S. automakers' international sales are operating at a profit, which means those divisions are being used to subsidize losses from domestic operation.
UAW leadership clearly understands that the labor agreements they currently hold with the big three are unsustainable to free market companies that must make a profit to survive. By nationalizing a portion of those companies and offloading the costs for health care and pension benefits to U.S. taxpayers, UAW believes the companies will be able to return to profitably without having to reduce any of the benefits to their union members. This means that while the average American struggles to pay their own rising health care costs and declining 401k assets, they will have to help pay for the cost of UAW's members' health care and pensions through higher taxes.