In this issue
April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review Oct. 1, 2007 / 19 Tishrei 5768

GM strike marks end of an era

By Michael Barone

Printer Friendly Version
Email this article

http://www.JewishWorldReview.com | The United Auto Workers' strike against General Motors last week turned out to be brief. The company and union negotiators reached agreement not much more than 48 hours after union members started picketing. It barely made the front pages of most newspapers and seems to have made few ripples in the stock market. It didn't last long enough for any Democratic presidential candidate to walk the picket line.

What a contrast with the last UAW national strike against GM. In September 1970, 400,000 workers, 0.5 percent of the nation's nonfarm employees — 1 of every 200 workers — walked off the job. Last week, only 73,000 workers struck, 0.05 percent of the national total. The 1970 strike lasted two months, during which the national unemployment rate rose from 5.1 percent to 5.5 percent. It was estimated that the strike cut the growth in gross domestic product for the quarter from 2.5 percent to 1.4 percent. The 2007 strike lasted two days, and its effect on GDP seems negligible. At the time of the 1970 strike, GM accounted for 50 percent of all U.S. auto sales and foreign manufacturers for only 15 percent. Now GM accounts for 24 percent of U.S. auto sales and foreign manufacturers 49 percent.

And, of course, there is this: In 1970, GM was the nation's largest corporation, hugely profitable, so dominant in the industry that its executives were fearful the government would bring an antitrust suit against it. In the past two years, GM lost $12 billion.

30-and-out. No one seems to have expected this back in 1970. "We are the architects of the future," Walter Reuther, UAW president from 1946 until his death in a plane crash in spring 1970, proclaimed. The 1970 contract restored the cost-of-living adjustments Reuther had set aside three years before, instituted "30-and-out" (retirement after 30 years), and increased the already lavish healthcare benefits. The definitive book on the 1970 strike, The Company and the Union, by William Serrin and published in 1973, criticized the union for not asking for more. John Kenneth Galbraith's The New Industrial State, published in 1967, predicted that big corporations would only get bigger, that they could create demand for their products through advertising, and that U.S. auto companies could increase sales by jazzy styling and planned obsolescence (i.e., cars that would wear out in two or three years).

This has not proved to be a sustainable business model, as GM executives figured out some time ago and as the UAW in effect conceded last week. Thanks largely to the healthcare and retiree benefits, GM's hourly labor costs in the United States are about $75, compared with about $50 for Toyota and other non-U.S. companies. Last week, even before the strike, the union agreed to let GM offload its $51 billion of retiree healthcare benefits to a trust fund for a $35 billion payment. The settlement after the strike allows GM to offer more buyouts to older workers and hire new workers at lower wages; pay increases are limited to a couple of lump-sum payments. The jobs bank — in which GM pays laid-off employees not to work — will be pared way back. Why did the UAW agree? Because GM made it plain that if it didn't, it would shift more production to plants abroad, from Mexico to China.

Reuther hoped that UAW contracts would set a pattern for the economy and lead America toward a social democratic state. The 1970 contract seemed to be doing that: The number of workers covered by COLAs increased from 30 million to 57 million by the end of 1971. But that only fueled inflation, which led to massive job losses in the auto industry in the recessions of 1979-83. In the 1980s, foreign companies began building auto plants in the United States, almost none of them organized by the UAW. As the Wall Street Journal concluded, "Toyota, not GM or the UAW, now sets the pattern for auto industry labor costs in the U.S. economy."

It turns out that market competition punishes those firms whose costs are out of line with others. It also produces better value for consumers, as today's cars are far superior in quality to the clunkers of 1970. And it can make things better for workers as well. The reason the UAW demanded 30-and-out in 1970 was that workers hated their assembly-line jobs. Newer manufacturing techniques, pioneered by Japanese firms, give workers more autonomy and responsibility — and more job satisfaction. The business model of 1970 is history. But most of us are better off today.

Every weekday JewishWorldReview.com publishes what many in in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.

The New Americans  

Now, more than ever, the melting pot must be used to keep America great. Barone attacks multiculturalism and anti-American apologists--but he also rejects proposals for building a wall to keep immigrants out, or rounding up millions of illegals to send back home. Rather, the melting pot must be allowed to work (as it has for centuries) to teach new Americans the values, history, and unique spirit of America so they, too, can enjoy the American dream.. Sales help fund JWR.

JWR contributor Michael Barone is a columnist at U.S. News & World Report. Comment by clicking here.

Michael Barone Archives

© 2006, US News & World Report