UAW revisited

Steve Diamond makes an excellent point in his comment on this post. The UAW isn’t the direct owner of the Chrysler shares (nor will it be of the GM shares). The owner is the Voluntary Employee Beneficiary Association, or VEBA, which was set up to pay benefits to the retirees. So the retirees are now dependent on the success of Chrysler and its stock. As Diamond points out, the VEBA’s first duty is to retirees, which puts it at odds with the active workers in the UAW. The structure also makes the retirees utterly dependent on the success of a corporation in which the union has no voice in running.

As Sam Gindin, who was for many years the top economist at the Canadian Auto Workers, pointed out to me, the UAW has bet everything on maintaining health care benefits. That bet looks shakier than ever.

A word on the UAW itself: this is not a poor union. As of 2006, it had assets of almost $1.3 billion, and annual receipts of $304 million. (I wish I could provide a link to the UAW’s own financial statements, but if they’re on their website, I can’t find them. I had to go to the anti-union site,, to find this basic financial info. And I learned that there that the AFL-CIO had successfully lobbied the Obama administration to loosen financial disclosure requirements for unions.) It could have easily financed serious research into a better strategic direction for the auto industry than the idiot management has been able to—cleaner cars, better modes of work organization. Its PAC spent $13 million on campaign contributions during the 2008 election cycle; it could have spent a few mil of that on campaigning for national health insurance.

But they didn’t. And now they’re pretty well screwed.

9 Comments on “UAW revisited

  1. The UAW has abandoned any pretense to act in the interests of the entire working class. It is all about cutting deals. How can a union agree to a two-tier wage system in which new hires get about 1/2 of veterans, for the same work? No union will be able to have a united front about anything with such as scheme in place. And you are certainly right about the union having lots of wealth and income. It would be interesting to know how much money, if any, is in all the jointness funds the union negotiated with the companies.

    All in all, how could anyone be optimistic about organized labor in the United States? The new healthcare union started by the good people in California who rejected SEIU’s trusteeship will need a million dollars or so just to fend off the lawsuits and other charges the SEIU has filed and will file against it.

    More and more, our entire society, including much of the labor movement, seems to be a kind of racket, aimed at squeezing money out of us to finance good living for a few.

  2. Great point on the distinction between the UAW actives and retirees. Great angle to look at as this unfolds. I think organized labor may be passe in this country (for better or worse).

  3. What did Andy Stern say? The class-struggle is obsolete?

  4. Pingback: TheTradingReport » Blog Archive » links for 2009-05-04

  5. “As Diamond points out, the VEBA’s first duty is to retirees, which puts it at odds with the active workers in the UAW.”

    Ironic, and it’s not just VEBA. Where’s the solidarity? At his press conference last Wednesday Obama promised new financial regulations by the end of year. For me that will be where the rubber hits the road, after the Demcrats sold out on EFCA.

  6. Dough,

    Given the Borg-Warner limitations on mandatory subjects for collective bargaining, its a little unclear what good it would have done the UAW to develop alternative strategic plans for the industry. They would have had little opportunity to put them in place. Moreover, I had always thought that you were very skeptical of union efforts to influence company decision making, for instance through activism by pension fund shareholders (not that the UAW has any influence there, since its members have mainly been in corporate, and not Taft-Hartley funds). I mean, I don’t disagree that being able to present a coherent and plausible alternative strategy for the industry would not have been good, but this seems to me to be very much at odds with what you’ve previously viewed as good approaches for a union to follow.

  7. Two of the most depressing experiences of my life have been attendances at national union conventions.

    Meanwhile, my mentor David Milton wrote an excellent history of the triumph of paycheck unionism in the early Cold War years.

    Now, among other things, I believe it’s actually illegal to try to engage in political unionism. As Michael says, trying that would bring rafts of lawsuits, not to mention employer unfair labor practices charges.

    The AFL-ack-CIO needs to spend its money on labor law reform plus organizing/public education.

    Ain’t gonna happen, barring a rank-and-file rebellion. That’s take a while longer, even if people can tear themselves away from commercial TV and Twitter.

  8. They wouldn’t have had to present any strategic plans in a collective bargaining framework – one of the problems with business unionism is precisely how it makes everything about bargaining. They could have presented it to the world, to influence political discourse.

    My objection to pension fund activism is that it largely occurs on the terrain of capital – the financial markets – which seriously constricts the discourse, and often puts unions into strange alliances with shareholder rights types. Presenting a different vision for the auto industry would challenge the discursive limitations of both the collective bargaining and capital markets arenas.

    And the failure to act on single-payer, well, that’s a profound error. And since you’re writing from a Change to Win address, need I mention that they’re not the only ones to make such a mistake?

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