Grand Rapids Pundit

Michigan Ouch

Over the last month we’ve seen several events which will permanently shift the economic reality of Michigan.

1) Northwest Airline’s mechanics strike, which flopped and ended up in a busted union, had no consequence for NWA. This marks a major turning point for unions in Michigan – they have lost the organizational power and they don’t have the sympathy of the average Joe.

2) Delphi’s Bankruptcy. This will have some very far-reaching effects, and it is already starting to ripple. Not only is it likely that thousands more manufacturing jobs will be lost here in Michigan (including some in the Grand Rapids area), the Unions are suddenly on their heels. Nearly immediately after the Delphi Bankruptcy filing, GM and the United Auto Workers worked out an agreement to shave billions off GM’s health care bill.

3) Today, the Detroit News reported that October car sales dropped to a seven year low. Total Big Three US market share dropped from 57% in October of 2004, to 52.4% in October of 2005. In the mean time, Toyota captured 15.1% of the market, the highest ever for that company. This will continue to have far-reaching effects on the Big Three (Ford and GM in particular) and will put further pressure on those companies to achieve higher cost savings, in turn putting pressure on the UAW for more concessions.

Things aren’t looking good. What can be done to help? Michigan must aggressively become a business-friendly state to attract non-manufacturing jobs. How do we do that?

1) Eliminate the single business tax – the most onerous business tax in the nation.

2) Lift the cap on charter schools – our traditional public school systems are collapsing under their own bureaucratic weight. A market in education will fix this problem. Competition will improve achievement for all students.

3) Pass a “right to work” law which allows employees to decide whether or not to join a union when they take a job at a union shop.

Those are just first steps. Hopefully we can stand up to special interests in order to improve the economic situation for all Michiganders – but we’re not holding our GR Pundit breath.

Posted by: GRPundit on Wednesday, 2nd Nov, 2005

Union Shafts Workers

In reading about the striking workers from Northwest Airlines, one can’t help but feel sorry for them. Northwest is operating smoothly after replacing them, their health insurance runs out tomorrow, and they get their last paycheck on Friday.

Here are GR Pundit, we’re often hard on unions, but it’s important that our readers understand that we’re hard on union leadership, not union members. The airline mechanics’ union had the opportunity to make concessions to keep the jobs of most of the union members, but those concessions were rejected. Intead, over 4,000 mechanics are now out of work with no income.

Today’s unions are losing their clout and their muscle. The airline mechanics’ union is just one example of many to come where the members are going to be out of a job in the name of solidarity.

Now there are 1,200 replacement mechanincs working at Northwest who, we’re sure, are happy to have a job. In the mean time, the head of the mechanics’ union makes statements which are clearly untrue:

AMFA co-founder and national director O.V. Delle-Femine visited picketers Monday at Detroit Metro Airport to boost spirits.

“In a couple weeks, people are going to see the failure of this airline,” Delle-Femine told strikers gathering at a nearby United Auto Workers union hall before heading to picket lines.

He’s lying to his members to try and keep them in line. In the mean time, we’re sure Mr. Delle-Femine is receiving his full salary and health benefits.

Posted by: GRPundit on Tuesday, 30th Aug, 2005

Fork in the Road for Unions

The Detroit News had a good selection of articles yesterday on the crisis faced by unions in today’s America. The current Northwest Airlines strike is highlighting the fact that the ability of unions to flex muscle and take on “big business” is severely weakened. Northwest trained replacement mechanics for 18 months prior to last week’s strike. An article from today’s DetNews says that the strikers’ chances of forcing the airline into an agreement are slim.

Northwest says that 96% of flights were successfully completed on Tuesday, up from 91% on Saturday. The strike caused a momentary disruption, but things are back to normal. Looks like the strike was just a blip on the radar.

An important quote from the article:

In interviews this week, the replacement hires say they don’t regret their move, despite being derided as “scabs” and “scum” by the strikers, who yell at them from sidewalks above the tarmac.

The Northwest jobs are a chance for better pay and, for many laid off from other airlines, a chance to return to the industry.

That sums the situation up well. While the union members strike, people who are happy just to have a job are filling in. The poor state of the economy in Michigan makes it unwise to walk off the job.

Particularly interesting about the Detroit News’ web site is that a poll of online readers shows that 67% believe that union demands are out of line. Read the comments as well, they are mostly anti-union.

While unions had an important role to play in the past, they have outlived their usefulness and now just stand in the way of economic progress. The legacy air carriers and automakers, weighted down with the union mentality of the 1950s, are the big losers in today’s economy. As companies such as Northwest aggressively challenge unions, the unions will become less and less relevant.

Posted by: GRPundit on Wednesday, 24th Aug, 2005