A couple of weeks ago I posted about General Motors announcing that they’d be increasing their outsourcing to countries like China and Mexico. I guess that news just hit home with minority stockholders in GM at the UAW, and they’re not liking what they’re hearing.
DETROIT (AP) – As thousands of General Motors workers await word on more U.S. plant closures, reports that the company plans to import Chinese-made vehicles to the U.S. have created a political problem for the automaker and the White House.
The reports, which GM will neither confirm nor deny, could mean trouble because GM is supported by $15.4 billion in U.S. government loans, largely due to the Obama administration’s desire to preserve the company’s 90,000 U.S. jobs.
The United Auto Workers charged last week that the Detroit automaker intends to almost double over the next five years the number of vehicles it imports to the U.S. from Mexico, South Korea, China and Japan.
“GM should not be taking taxpayers’ money simply to finance the outsourcing of jobs to other countries,” Alan Reuther, the union’s Washington lobbyist, wrote in a letter to U.S. lawmakers.
I’d respond to Mr. Reuther by saying that perhaps the UAW should quit strangling GM to death so that they can keep some of those jobs here in America. I think Big Labor forgets that businesses don’t exist exclusively to wages and health care for union workers. They exist to turn a profit. If General Motors is to stay solvent, they no doubt have to flee the overpriced labor of the UAW to China.
But doesn’t this illustrate just how absurd it is to have the UAW as a minority stakeholder in GM? The UAW has a majority stake in Chrysler, and stands to get a minority stake in General Motors under the Obama administration’s current plans. Meaning that General Motors would be partly owned by a union that could use their minority stake to force the company to make decisions that are best for the union. And not the company as a whole.
It’s a conflict of interest. The unions shouldn’t own the companies they negotiate contracts with. The government shouldn’t own any companies at all. Companies should be run for profit, not for the best interests of the unions.