Earth To Ron Gettelfinger: Wake Up!

I just saw/heard UAW chief Ron Gettelfinger give a completely surreal press conference.

It's difficult to catalogue every single one of his mischaracterizations, lies and errors of reasoning. Among them, however, were these:

-Contending that if the US auto makers file for bankruptcy, then any market share losses will be made up exclusively from off-shore, foreign auto producers.

-The beating that equity prices of GM and Ford have taken is merely a 'distraction,' and doesn't reflect some of the better products which at least the former has developed.

-The auto industry is vital to the US economy, and its failure, by virtue of Chapter 11 filings by GM, Ford and/or Chrysler, would plunge us into a severe recession.

-There must be immediate Federal rescue of the auto makers by the Bush administration.

-The UAW is awaiting January 20, 2009, when Gettelfinger indicated that he and his union feel 'real' help will unquestionably arrive in the form of a Democratic President and Congress.

This is pretty scary stuff. As counterpoints, here is what I believe to be more realistic:

-Market share losses of GM, Ford and Chrysler will most probably continue to be filled in by US-based producers owned by foreign car companies. Thus, more US-based jobs and capital investment will follow, though perhaps not on a 1-for-1, dollar-for-dollar basis, as these predominantly southern-based, non-union plants are more efficient than those of Detroit-based auto makers. Gettelfinger completely misrepresented reality, and, in effect, lied, on this point.

-To most Americans, and especially to Americans as investors, the beating that the equity prices of GM and Ford have taken is precisely the point. Not a distraction, but an important, crucial signal in the lack of confidence by investors that these companies, and Chrysler, will ever be able to provide sufficient value to their customers, in sufficient volumes, to merit higher equity valuations.

-The UAW and its major employers, GM, Ford, Chrysler, and their suppliers, hardly represent the larger share of US GDP that they once did, say, as recently as even 20 years ago. It's not a growth industry, and any employee choosing to work for one of these three auto makers, or their suppliers, made a conscious choice to bet their livelihood on no-growth, or shrinking companies with a track record of losing market share and money.

It's simply not true that, as in the 1950s, the US economy is supremely, or even largely, dependent upon the Detroit-based auto makers.

For example, according to this news piece,

"United Auto Workers union membership has fallen below 500,000 for the first time since World War II, reflecting the massive restructuring undertaken by Detroit's automakers.

The union reported Friday in a filing with the Labor Department that it had 464,910 members by the end of 2007, compared with 538,448 at the end of 2006. UAW membership peaked in 1979 at 1.5 million but has been dropping ever since."

That sure doesn't sound like an economy-wrecking number of laborers, if furloughed, does it? It's about four months of recent unemployment, on current trends. And in a Chapter 11 filing, these wouldn't all be laid off.

So, once again, Gettelfinger is lying about the importance of his union, and its major employers, to the US economy.

Where do we draw the line between natural, healthy Schumpeterian dynamics, a/k/a 'creative destruction,' and a 'too big to fail' case requiring the US Treasury and taxpayers to save an entire industrial sector which has, through its own management, failed?

-Gettelfinger is wrong to lay the entire mess of his employers and his own union's exorbitant benefit and wage demands in the lap of the outgoing Bush administration. If this were so urgent, why did the four pigs wait until the last sixy or so days of the current, conservative, Republican administration to beseech Congress for help? To wait so long, present so thin and unconvincing a case, and then blame President Bush for any subsequent damage from a refusal to rescue a group of failing companies, is completely unrealistic and immoral.

-This, sadly, is a fact. It's clear that Gettelfinger's UAW is salivating at the prospect of raiding the Federal Treasury, courtesy of the Illinois rookie, Frisco Nan and Harry Reid, without taking any wage or benefit cuts whatsoever. So desperate are they that Gettelfinger is trying to mau-mau President Bush to cough up the funding in advance. The greed and lack of a sense of reality on the part of the UAW's senior officials is just mind boggling.