Sunday, October 28, 2007

Promises, promises -- UAW falls in love again

Promises made the UAW contract with GM a reality. GM promised to build specific vehicles in the future including the Volt in Hamtramck in 2010. GM's promises gave Chrysler workers pause as they considered their own contract, which did not contain any such promises. Chrysler would not, and further claimed it could not, make those sorts of promises. To do so would have been irresponsible, irrational and unrealistic. In the end, the UAW did accept the Chrysler contract.

The International Herald Tribune reminds us that the Volt "is a concept car that cannot be built until the technology is available, and one that the company has not even officially announced it will build."

The piece quotes Professor Walter McManus, an auto industry economist at the University of Michigan:

"The problem," he added, "is the battery technology is still not ready. I would say, when they break ground on a plant to make batteries, two years later the Volt will come out."

For the car to be built starting in 2010, he added, "a factory has to be built soon, and it doesn't look like the batteries are that near production."

Those promises to build the Volt, while well-intentioned and seductive, are premature.

Less than three weeks after ratifying the GM contract, nearly 2000 Michigan workers were laid off -- 767 of them in Hamtramck. Lay offs are a rational response to market conditions. You shouldn't build cars you can't sell. GM is in the business of building and selling cars, not guaranteeing employment. So how could they make promises about future production? After the recent lay offs, those promises seem suspect. How can GM assure future employment or promise to build something it cannot build?

Although the Chrysler agreement made no predictions beyond its four-year term, it may end up a fairer, honest commitment to workers.

Now, on to negotiations have resumed.