73,000 members of the United Auto Workers Union (UAW) went on nationwide strike Monday, stopping production at 80 GM (NYSE:GM) facilities.
This is the first GM strike in over 37 years, and surprisingly it is not about a wage increase or benefits. It seems the UAW wants GM to guarantee job security for union employees.
I am not an expert in economics, labor unions, or business, but I do have expertise in the area of common sense and it strikes me as counter-productive to further decrease the financial stability of a company whose U.S. production is already slackened by striking, all while demanding more stability.
Generally speaking I support worker's rights, but I'm still withholding final judgment on this one. I don't think GM can guarantee a significant portion of the population will suddenly decide mileage and reliability don't matter compared to the warm fuzzies they get from buying American. And unless the Toyotas (NYSE:TM) and Hondas (NYSE:HMC) of the world decide making reliable, fuel efficient cars is no longer on the agenda I don't see that happening. What would happen if GM guaranteed a number of jobs and hit a massive slump? Can't cut union employees pay, can't lay union members off, so what happens? Does GM use cheaper materials, dinging their reliability and reputation, or cut the pay of their oversees employees? Neither of these solutions seems good or fair.
One thing I do know for sure, neither CEO Rick Wagoner, nor the board will take a pay cut to offset the unions demands.
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