So I watched the auto companies’ CEOs ask Congress for money. In fact, I watched almost all four hours of Tuesday’s beg-a-thon before the Senate Banking Committee. I didn’t blog about it because I was frantically struggling to tease a magazine column out of it. Now that’s done, and I want to share one thing I learned: The car CEOs and UAW President Ron Gettelfinger have a really interesting relationship. I mean, I guess I knew that before, but still …
They all sat at the same table, and made pretty much the same arguments for why the Detroit Three needed cash. But as pesky University of Maryland Professor Peter Morici–invited by Chris Dodd as a foil to the auto guys–kept pointing out in the Senate hearing, the Detroit Three’s problems stem in part from the fact that their labor costs are still substantially higher than those of the (non-union) U.S. operations of foreign carmakers. They’re higher because the UAW has succeeded in keeping them higher. Because that’s, you know, the UAW’s job.
Gettelfinger in recent years has made some concessions (a two-tier wage structure, the union taking over retiree health care) that would have been unimaginable a decade ago. The auto CEOs appreciate this, and know he’s gone out on something of a limb inside the union. So whenever somebody, like Tennessee Republican Bob Corker, tried to goad them into blaming the union or even just high labor costs, they wouldn’t bite. Rick Wagoner did talk a lot about the burden of high “legacy costs,” but that seemed to be a way of shoving the blame into the past and not fingering Gettelfinger (or himself, for that matter).
High labor costs are still part of the Detroit Three’s problem. Yeah, it’s also fair to blame poor management decisions, the credit crisis, high (until recently) gas prices, and the Pontiac Aztek. But getting the UAW to give in even more would make GM’s and Chrysler’s survival likelier (Ford seems to have the survival thing taken care of, for the moment at least). Yet Wagoner and Bob Nardelli can’t bring themselves to say that in public. I guess they’re afraid that if they push Gettelfinger too far he might break.
Saddest made me Rick Wagoner. If he would have done the Iacocca, if he would have said, “Yes, I work for $1, I’m not worthy of more,” the bailout package would already be in the can. He blew it. Now there I sat, tears in my face, and German as I am, I thought: Rick Wagoner? As in Richard Wagoner? As in Richard Wagner with a typo? Last night was Richard Wagoner’s Götterdämmerung.
Update 2: In response to plukasiak’s comments below and Felix Salmon’s post on The Return of the $70 Per Hour Meme, I’ve been trying to separate out how much of GM’s labor costs can fairly be classified as legacy and how much reflect better benefits than the Toyota and Honda and Nissan and Mercedes (etc.) workers in the U.S. are getting. (The hourly wages aren’t all that much different.) It’s harder than I thought–GM won’t tell you, for instance. I’ll report back when I have a better idea.