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March 11, 2009
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Ford, which is in the best shape of all three American automakers and has not gotten (nor will it seek) government bailout funds, has wrung a deal out of the United Automobile Workers (UAW) to cut costs in health care and in overtime and unemployment pay.
Or is the shoe actually on the other foot?
The UAW has typically struck a deal with one automaker that it then sets up as the gold standard for the other two. By cutting a deal with Ford that leaves pay scales and health care for existing workers intact, the union may be drawing a line in the sand for GM and Chrysler, both of whom are on a federal umbilical court and under orders to cut costs or die.
It's unlikely that the union, outside of government or courtroom pressure, will go any further in making concessions, even to two firms that may expire of their own decrepitude and obesity. It's also highly unlikely that the Obama administration will try to force the UAW into further concessions, so it looks like this is a union gambit that could play out for them.
Of course, if GM or Chrysler or both disappear, then all the gambits in the world won't help.
It should be an interesting side show as the Great American Recession continues.
