The UAW, which represents tens of thousands of GM hourly workers, has negotiated a base pay increase as well as an increased profit-sharing bonus, with the help of executive management (Bloomberg):
“When GM was struggling, our members shared in the sacrifice,” UAW Vice President Joe Ashton, who directs the union’s General Motors Department, said in a statement released last night. “Now that the company is posting profits again, our members want to share in the success.”
One Berkley “labor professor” (what the hell is that?) compared the compensation negotiations to economic stimulus:
“It’s an impressive agreement in a very tough economy,” said Shaiken, the Berkeley professor. “This agreement amounts to a stimulus package because it generates jobs and puts purchasing power into the economy.”
Question: why would anyone in their right mind want to be a GM shareholder?
Management has conspired with Marxist labor unions to increase hourly wages during a time period of general economic weakness, great challenges for the auto industry in particular and a near-death environment for GM specifically. Additionally, unionized factory employees are now being treated like they have capital-at-risk, when they do not. Factory employees don’t own or control GM capital and have nothing to do with intelligently or otherwise allocating that capital– it makes absolutely no sense that any entrepreneurial gains from the successful allocation of that capital should accrue to factory workers as some bargaining chip for securing their employment, especially when there are tens of millions of unemployed people looking for work in this country.
This is an odd inversion of the socialist principle of a divorce between costs and benefits.
To add insult to injury, the company has evidently become an auxiliary extension of the US government and its stimulus policy.
GM shareholders aren’t playing with fire, they’re standing outside the charred remains of a multistory apartment structure expecting to enjoy a high standard of living by moving in.