The United Auto Workers Union and Its Effects on the City of Detroit - Term Paper Example

The United Auto Workers Union and Its Effects on the of Detroit The United Auto Workers Union and ItsEffects on the City of Detroit Introduction A company’s relationship with its employees is not necessarily smooth as intended. Some companies foster this relationship through open communication while others are barely suffused with an authoritarian speech either from the employers or employees. In situations wherein this communication is ineffective in carrying out the requisites of the employer-employee relationship, third party intervention is sometimes recommended. A popular third party representation for almost any labor or industry type is referred to as the labor unions. These unions are comprised of workers from within the company and industry; their collective function is to bridge the gap between the employees and employer through communication and serve as an organized voice for all employees. A labor union’s main objective varies and depends on the employees’ needs or grievances. However, majority of these objectives are geared towards the well-being of employees -- health care benefits, good or improved working conditions, increased salary to accommodate rising costs of living, skills enhancement, contract longevity, and so on. Employers, on the other hand, establish the relationship with labor unions through certain access to facts (e.g., profit, loss, operation costs, labor costs, et cetera) to which negotiation and a coordinated decision-making is firmly grounded. This access and hearing out of employer’s side enables the labor union to observe impartiality. On a labor union’s perspective, this may also permit them to come up with demands that are realistically feasible for employers to meet. However, this does not work all the time. There are times when labor unions inadvertently choke up the business and industry with their demands. This challenge calls for a more diverse and flexible approach from labor unions. One such labor union, alleged of choking up the auto-making industry in Detroit, Michigan, is the United Auto Workers Union or UAW. This paper attempts to explore the effects of this labor union to the core industry of Detroit City. The UAW Founded in 1935 and is considered to be “one of the largest in North America,” the United Auto Workers Union (UAW) accomplished its pioneering work of “expanding the nation’s labor movement” as well as establishing the standards of labor conditions through “generous pension, health care, and job security provisions” (“United Automobile Workers,” 2011, para. 1). Evidently, the UAW was successful in bringing about improvement in the working conditions of auto-laborers in vast coverage and was expected to continue growing and carrying out its mission. However, the year 1970 had marked the start of UAW’s turbulent years ahead; the “shrinking of the North American auto industry” and “the crisis that engulfed” Detroit’s Big Three (i.e., General Motors, Ford, and Chrysler) had set the “downward path” for the labor union (“United Automobile Workers,” 2011, para. 2). This series of crises had not just hurt the industry but also hurts the employees, as well. Inevitably, industries have to lower overall costs and the pressure of lowering these costs weigh down on the laborers’ wage and benefits. Consequently, companies cannot afford anymore the costs of benefits demanded by laborers and the UAW. Companies and employees are torn between retrenchment and retaining but in the expense of lower wages and/or lesser benefits. Most laborers chose the latter and around December 2008, UAW membership among the Big Three’s, General Motors, Ford, and Chrysler, declined -- from 305, 000 to 139, 000 workers (“United Automobile Workers,” 2011). The Automakers’ fall Looking close, particular advancements in the auto industry had paved the way for Detroit’s demise. Price (2000) collectively called these advancements the “opportunities for decentralization,” which implied that “a concentration of industry and workers such as what existed in Detroit was no longer necessary” (Pattern not an Exception section, para. 4). Though these advancements meant to salvage costs and enable automakers to compete, it hurled a labor paralysis among Detroit workers. While decentralization became an inventive tool for the industry to “escape Detroit’s unionized work force,” the UAW exacerbated the labor woes by using a “defensive, rear-guard campaign” approach (Price, 2000, Pattern not an Exception section, para. 4). This was one of UAW’s earliest mistakes -- a mistake dearly paid by the Detroit workers. The crises that plagued everyone in the auto industry should have called for a re-evaluation and adjustment on the part of UAW; instead, the union chose to believe that these companies are part of the bigger economic evil and fought when it was time to cooperate. Another determining factor of Detroit’s fall heavily lied on the industry’s price forecast. As it is now of common knowledge among consumers and manufacturers, a high petroleum price means a demand shift towards fuel-efficient cars. However, Walter McNamus of Transportation Research Institute (University of Michigan) claimed that “Detroit automakers long ignored signs that higher fuel prices would shift demand” (Tankersley, 2009). Thus, apart from UAW’s defensive and exacerbating stance, the industry itself had weaved its crises through this forecasting glitch. Apparently, the auto industry had been experiencing early signs of recuperation. However, if this recuperation meant to flow down the Detroit workers is yet to be seen. Isidore (2012) points out that “while the auto industry is still a major presence in Michigan, there’s relatively little left of it inside the city limits” (para. 5). It’s as if the UAW‘s ghost still hovers and lurks among the Detroit city and it would not be a wonder if the laborers loathe the union. The results proffered by UAW to the Detroit laborers are crucial-- the high wage and generous benefits for brief moments of auto success, or the minimum wage and less benefits but constant job security in the long run of auto turmoil. Another interesting point is that the success of the auto industry was quite shorter compared to its crisis. Right after the industry was doing well, these companies found ways of competing without complying with UAW’s demands. This was through pursuing other locations aside from Detroit and preferring these alternatives -- an unforgettable impairment of Detroit’s labor force. The Downside Industrial changes and tougher labor policies had significantly developed the envisioned labor terrain. Employees and prospective laborers are as educated to their labor rights as to their skills, capabilities, and potentials. Employing companies are well-versed in these policies, as well as the current human resource information. The perspective approach of viewing the labor force as a major or crucial company asset is fast-growing. Coupled with this recognition are various efforts pursued by companies to meet the workers’ needs and to effectively communicate with them through mediums offered by technological advancements (e.g., database, internal networks) aside from the traditional written and verbal communication mediums employed. The shared knowledge and dynamic approaches by the labor and industry regulators, employees or workers, and companies had worked towards an improved and smooth employer-employee relationship. The efforts made by these players show that the smooth flow of communication and cooperation is possible between each person. With all of the players getting in place, it is interesting to note where the union’s function or role lies now. The Birmingham, Alabama-based South Business and Development editor, Mike Randle quips, “we’ve got folks who do not have a college degree and making $50,000 to $70,000 a year working in an auto plant … What do you need a union for?” (Poovey, 2011, n.p.). Indeed, labor unions were meant to bridge the gap between the employer-employee relationships -- if the gap exists. At instances wherein this gap is closed independently by the employees and the employer, then third party intervention is just out of the question. This leaves UAW to re-evaluate and expand its functions, focus on other labor-related functions, or choose to desist upon the needs for its existence ceases. These are crucial steps for UAW to take, which is if they seek out to become economic aids among its labor force or a mere refuge for labor folks’ grievances. The Upside Aside from the aforementioned downside of UAW and labor unions in general, accomplishments that reflect its progress do come in handy. For instance, UAW was successful in its 2011 contract negotiations with General Motors, Ford, and Chrysler, including signing bonuses, assembly plant reopening, and additional jobs (The New York Times, 2011). This accomplishment signals the schooling eye of the UAW; this union is in the look of newer ways to help the labor force. With the labor glut, every worker is subjected since the onslaught of different financial and economic crises, providing jobs are not just highly valued as income resource, but most importantly to remind the workers of their productive potential. Jobs in a tight job market are great sources of boosting self-esteem and efficacy. Moreover, these improved steps taken by UAW illustrate their growing understanding of the importance of working with, as opposed to working against the employers. Instead of the earlier, defensive approaches, which rendered both employee and employer significant losses, working with employers proved to harvest a more win-win scenario for both sides. Thus, negotiation had attained higher importance more than just parading or lobbying the laborers’ grievances. Industry analysts expressed their agreement of this new UAW approach and further indicated that “the union achieved its goals of balancing economic gains,” thereby effectively leaving the laborers satisfied and the employers competition-enabled (Vlasic & Bunkley, 2011, p. A22). This also goes to show that UAW had successfully recognized their mistake in Detroit city’s auto industry -- the lack of balance between the interests of the laborers and the crises-stricken auto industry. Conclusion Labor unions were primarily and genuinely designed for the good of laborers. Unfortunately, there were instances wherein unions were not effectively able to use their influence and ended up choking up Detroit’s auto industry. The UAW had successfully permeated their influence that with other evidences pointing as another causal factor for the Big Three’s demise, UAW’s participation is considered to have played the dominant role of hurting industries in the expense of laborers. One such evidence was the automakers’ overlooking of the demand shift accompanied by high petroleum prices. UAW’s negative impact on the auto industry had made irreversible damage to the city, coupled by these ‘opportunities of decentralization.’ As painful as it sounds, UAW has a longer journey to redeeming itself in the Detroit-laborer’s eyes. The union had started through its contract negotiations with Detroit’s Big Three -- General Motors, Ford, and Chrysler. Apart from UAW’s redemption efforts, more threats pertaining to its function and existence are plaguing UAW and other unions. These threats are present for those industries or labor types that have been receiving the results of a highly developed labor and industry regulation, as well as those employees or workers who are happy (and lucky) under the wing of employers fostering a healthy relationship with them. References Isidore, C. (2012, January 18). Detroit teeters on the brink despite autos comeback. CNNMoney. Retrieved from http://money.cnn.com/2012/01/18/news/ economy/detroit_bankruptcy/index.htm?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29 United Automobile Workers. (2011, October 19). Times Topics. Retrieved from http:// http://topics.nytimes.com/top/reference/ timestopics/organizations/u/united_automobile_workers/index.html Poovey, B. (2011, July 2). The United Auto Workers Union courts Volkswagen. Huffpost Business. Retrieved from http://www.huffingtonpost.com/ 2011/07/03/the-united-auto-workers-u_n_889421.html Price, C. (2000, July). Fragile prosperity? Fragile social peace? Notes on the US. libcom.org. Retrieved from http://libcom.org/library/ fragile-prosperity-fragile-social-peace-collective-action-notes Tankersley, J. (2009, April 09). No easy road for U.S. auto industry. Los Angeles Times. Retrieved from http://articles.latimes.com/2009/apr/09/nation/na-green-cars9 Vlasic, B., & Bunkley, N. (2011, September 18). G.M. offers bonuses to workers in New Deal. The New York Times, p. A22. Read More