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naraburns  nihil supernum  1yr ago (text post)   35347 thread views

Culture War Roundup for the week of April 3, 2023

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Can the UAW Rise Again?

I would like to give a brief overview and submit for discussion this article and the broader questions it raises. The article's premise is whether the UAW can recover from its multi decade decline from globalization, concessions during the automotive bankruptcies, and corruption; given the recent election of new leadership within the UAW.

The article starts with detailing some of the corruption issues in the UAW highlighting UAW members thoughts and opinions. Including an interesting tidbit from a member so disillusioned from the corruption that:

The loss of union pride was so devastating that he briefly saw a therapist to help him grieve.

Apparently the UAW elections for years have used a delegation system to elect their leaders with a particular caucus - The Administration Caucus - maintaining control and crushing dissent for decades within the UAW. Recently after a large corruption scandal that landed twelve UAW officials in prison, a federal monitor was appointed in which the UAW held a referendum for direct elections which passed.

After the subsequent direct election a new president and seven other board seats were elected from a new caucus - Unite All Workers for Democracy (UAWD) - with the party slogan, “No Corruption. No Concessions. No Tiers.” The board has six other seats belonging to the Administration Caucus and one other seat filled by an independent leaving the UAWD with a slight advantedge. After winning the election, the new UAW president Shawn Fain is quoted as saying:

“We’re here to come together to prepare ourselves for the war against our only one and only true enemy: multibillion-dollar corporations and employers who refuse to give our members their fair share,” said Fain from the stage.

The Administration Caucus is presented in the article as managing the unions decline, being closer to the automotive companies than the members, and rife with blatant corruption. From the article:

As in other unions, concessionary bargaining and a shrinking membership went hand in hand with corruption, as UAW leaders, closer with management than with their rank-and-file members, managed the decline of their industry. The agreements left workers in an ever-worse position even as the leadership enriched themselves, securing resources for their personal fiefdoms and select allies in the union. The details of such corruption are almost cartoonish: a federal investigation found that senior officials had embezzled millions, spending it on, among other luxuries, golf outings and extended stays at a Palm Springs villa. According to the New York Times, union officials acquired enough “golf bags, sunglasses, shirts and ‘fashion shorts’” on these trips that they used a semitruck to ship the items home to Michigan.

The article then goes on to highlight the various issues the recently elected officials are going to face. Namely:

Reversing bankruptcy concessions

The UAW made concessions with the automakers during the GFC and subsequent bankruptcies that faced Chrysler and GM. The concessions gave up Cost-of-living allowances (COLA) and introduced the tiered and temporary system - basically new workers get less pay and benefits and pre-existing workers get to keep what they had.

Bringing EV plants under UAW contract

Something I did not realize, the new EV production plants don't fall under UAW control.

Further agenda items of the new UAWD leadership include:

... pushing for thirty-hour workweeks, building cross-border solidarity with workers abroad, expanding health care coverage to include reproductive care, and gaining the right to strike an employer nationally over plant closures.

In summary the rest of the article goes on to talk about the grad students - which are apparently members - working with the UAW to strategize. Then the article talks about the history of the UAW and its advancement of civil rights. These topics to me aren't what was more interesting to me however I'm sure there's some great CW fodder in there which I encourage you to read.

My answer to the authors premise - can the UAW rise again? - no not by a long shot. The concept of a union, much less the UAW, is dead on arrival in a globalized world. Furthermore, it seems to me that the UAW have been useful pawns by the political class in their own destruction.

It always bothered me how union members always seemed to vote at the direction of their union - unbothered by it, as if they have no free will. The politicians their UAW has supported went on to push globalism and now EV manufacture, which require fewer workers and is outside of the UAW contract.

As far as the issues are concerned I don't see the auto manufacturers allowing EV plants into the UAW agreement. Right now with the UAW out of the picture for EVs, it provides a path for the auto manufacturers to become independent of the UAW. I can see the auto companies giving back some of the concessions in order to keep the UAW out of the EV manufacture as a compromise but thats a minor victory to a longer war.

As for the future of the UAW, I see the automotive companies slowly phasing them out and politicians continuing to use them for virtue signaling until they are no longer useful. While the workers may have finally regained control of their union, it seems like too little, too late.

I have a little bit of insight from my experience with a few UAW members and the industry.

EV manufacturing requires high-tech equipment: clean rooms to build the batteries, state-of-the-art HVAC filters to remove metal dust, toxic gasses.

Not only are the production workers not qualified for the production work, but union workers are not qualified to maintain the factory itself either.

Companies use that as an excuse to bring in outside contractors to replace them.

The big problem is the demographic. I don't know exactly the history, but there was a hiring freeze in the last part of the 20th century, so the demographic structure of the union members is lopsided, with a lot more retired union members than actually working ones.

When times are bad, the retired members have all the time in the world to attend day-time union meetings to steer the union's direction toward protecting their retirement benefits. Wages and other workers' benefits get the short end of the stick.

I think being a union worker in the auto industry is still preferable to not being in a union, but it's not easy to get in.

Regarding the corruption, at some point it was possible for a company manager to join the union on their last day / week before company retirement, go work on the line for a day with the guys that were your subordinates until then, and then get full union retirement benefits on top of the company pension.

I don’t see unions becoming nearly what they were a century ago. What Union boosters don’t get is that not only are they competing with third world pennies-on-the-dollar labor, but increasingly, robotics , self-driving cars, and AI. You cannot bid up your labor the way unions do because you’re simply making yourself the expensive option. GM isn’t going to concede to COLA. GM is going to invest in getting rid of their expensive labor. Whether it means offshoring parts of the production process or replacing a machinist with a machine, either investment, over time will be much cheaper than paying a human $25 an hour to do that work.

The key thing is the business needs an economic moat. UAW worked well when imports didn’t exists which was their “moat”. UAW then could extract an economic rent on the rest of society. Big tech seems to have moats nowadays so it’s why their workers get all the perks.

It's not a moat, it's scarcity. A moat is a way of maintaining artificial scarcity. Software engineers have actual scarcity at least until AI replaces us.

Big techs moats are primarily network effects which allows pricing power.

That helps the companies, not the employees.

Sure it helps the employees. Unlike privately-held businesses, large corporations generally don't operate to maximize shareholder return. FANG companies are bloated with overpaid staff. They can do this because they have monopoly profits (a moat) and will not go out of business by overpaying their employees.

Sure, Google could double profits overnight by laying off the useless mouths, but why would they do this just to reward a bunch of faceless shareholders? That is simply not done in polite society.

Twitter's reduction in force by 75-90% with no degradation in service shows you what's possible in tech when management is not motivated by social desirability bias.

Which is necessary for a union to be successful. Otherwise it will bankrupt the business. The company needs to have excess profits.

For whatever reason big tech did get crazy with employee numbers. And it turned out they could get rid of a lot of their workforce.

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