GM, UAW – Nothing New

In the early 1970’s, Japanese cars had a reputation of getting good mileage, but very little else. They were small, tinny and not very attractive. General Motors was the monolithic corporate giant that dominated the auto industry. Now, of course, Japanese automakers dominate the auto industry, and General Motors is a corporate dinosaur on the verge of extinction. What happened over the past 40 years can be viewed from many perspectives, and fingers can be pointed in many directions, but one of those directions is toward the United Auto Workers.

The evolution of Toyota and Nissan is very American – underdogs taking on an industry leader, using great ideas and new technologies. It seemed to all start in 1970, with the introduction of the Datsun 240Z This was a great little sports car that young Americans wanted to drive. It didn’t matter that it was made by a Japanese company. It was reasonably priced, well-made, fast and cool, and it began a run that continues to this day.

Throughout the 1970’s and 1980’s, American automakers slowly gave away the trust they had earned from American consumers. They seem to have traded in on their name and brands, producing planned-obsolescent, tinny versions of once great cars. And despite this, they continued to make huge profits from a generation that still saw the Japanese as somewhat of an enemy, and buying American as a form of patriotism.

It seemed that the good times would always roll, and so the UAW sought to share the wealth with its members. Unions have a history of balancing the scale of corporate profits and workers wages, but the UAW wanted more than that – they wanted long-term job security bolted to the status quo, and benefits packages second to none. In the 1970’s and 1980’s, college graduates were entering the workforce in large numbers – a tide of Baby Boomers armed with new ideas looking for ways to change the world. But the auto industry wasn’t the place for them. The combination of strong market share and union benefits had turned a dream job of ideas and innovations into an assembly line of mediocrity.

The lure of General Motors had become its UAW inspired benefits package, and the security of knowing that it was nearly impossible to lose your union-protected job. And while Japanese automakers improved efficiency, incorporated new technologies, designed new innovations and made cool cars, the US auto industry was anchored to the past, and is now sinking from the weight of that short-sighted greed.

So, here we are, in September of 2007. General Motors is in deep financial trouble, having lost its market leadership, reputation, and consumer loyalty, while each of their new cars costs $1500 more, just to pay retired worker’s benefits – the so called legacy costs. Toyota and other Japanese and Korean automakers are winning the game our way. And what of the UAW – now itself a far less powerful force because the Americans working in Japanese auto plants don’t want to join the union – they called a strike because they don’t want to assume more responsibility for health care costs.

It seems that General Motors is an aging wood ship – off course, and in stormy seas, while the union wants to take boards from its hull to improve the rooms of its workers. General Motors, as it’s been, will sink – simply because they cannot compete in the marketplace they helped create. But they only need to look at what the Japanese did to overthrow them, and remember that the Japanese took a page from what they used to be.

George R. Lovelock, Writer/Producer, New York