The American Auto…Not Dead?Congratulations GM on a Job Well Done

With the tentative agreement reached in the General Motors strike, the biggest news is not that organized labor won out, but that it is dying. That is good news for me because I like buying American, and there was no way GM was going to be making any car I would want if they were still an insurance company. So what did they do? They got the United Auto Workers Union (UAW) to accept an independent trust to manage health benefits. GM will put out a lump sum, maybe $35 billion according to The Wall Street Journal, and then the Trust will manage the money and dispense it in a manner similar to the operation of 401(k) plans.

The outdated notion of union jobs and benefits has handicapped American manufacturing for the past decade and a half. The collective sense of entitlement and urge for exploitation on both sides of employee-employer bargaining has created the mess we are in today. What is truly amazing is how long it has taken to reach this point. With employers paralyzed by numerous regulations and increasingly complex codes designed to protect workers, one would think that the unions would rest easy The pillars of their existence, including reasonable work weeks, overtime pay, and safe work environments were all but guaranteed. Yet greed pushed them to demand more, which GM and other manufacturing giants were willing to provide in times of prosperity. But as the industry faced sagging markets and fierce competition from cheaper, more reliable, foreign cars, it became wary of further sacrifices. Labor wanted guns and butter until, finally, defeat.

While praising GM (collectively, the company and the workers) for crafting a noble solution that is beneficial to American industry, they are making important progress in other ways. We can almost all agree that no matter how nice it is to have a big car, most of us do not need an SUV. Next year, GM will bring Americans the most popular car in Europe last year, the Opel Astra, as a Saturn. GM also has sponsored, and continues to sponsor, the Formula SAE annual competition, in partnership with Ford and the former DaimlerChrysler, to develop automotive engineering talent. It also worked with the Department of Energy to coordinate the Challenge X competition for college engineers. The aim is to convert a current GM Equinox SUV so as to minimize energy consumption and emissions, while maintaining or improving the level of performance.

That Buick LeSabre suddenly seems a little bit better. It was a nice, American car, but now it is the car of a reasonable company with reasonable workers. The quality and condition have not changed since the strike ended, but suddenly it symbolizes a little more of the American spirit, a little more vigor and a willingness to win as well as a degree of ingenuity and the promise of development. Instead of pretending as if everything were all right, as if we were dominating the markets and the Japanese did not even make cars, GM and its workers have decided to face facts, make sacrifices, and win with American ingenuity and know-how.