Isn't America wonderful? Not to get too deep into sappy patriotism, but how many other places on earth can you be born into a culture that places no limits on your ultimate success? The American dream, as cliche and romanticized as it may be, is still a very real opportunity: The only thing limiting the amount of prosperity one can amass is their own drive and determination.
Since we live in a culture that embraces entrepreneurship and ingenuity, it is very troubling to me to see UAW's chief publicly blast Ford CEO Alan Mulally's pay as being "morally wrong."
Before we go any further, let me get one thing straight: I hate discussing union issues. In fact, getting into a union argument lies somewhere between visiting the proctologist and giving a sponge bath to Bea Arthur in the list of things I avoid at all costs. I'm not decidedly anti-union, but I wouldn't label myself as pro-union either. I can argue both sides, but generally try to avoid talking about it at all.
Let's hop in the DeLorean and travel back a few years, if we may. The year is 2008: The housing bubble has burst, the Great Recession is in full swing, and the CEO's of Detroit's Big Three were called before Congress, hat in hand, to beg for money and receive their public lashings. The once great American automakers were on the verge of insolvency, bleeding cash, and marching towards bankruptcy.
As any History textbook (and every Conservative talkshow host this side of Texarkana) will tell you, General Motors and Chrysler entered into Chapter 11 Bankruptcy protection, while Ford took a massive loan against the family farm to fund their turnaround plans. Through the darkest days of all 3 companies the UAW made concessions, an important step in stopping the hemorrhaging.
When the dust settled, GM and Chrysler emerged from bankruptcy as very different companies. The government owned stakes in both, but so did the UAW. The union was awarded a 17.5% share in New GM, and a 55% share in Chrysler (to fund the retirement health care trust), and was forbidden from striking against either company over wage or benefits issues until 2015.
Over in Dearborn, though, Ford Motor was heading down a different path. A new focus brought by former Boeing chief Alan Mulally was starting to bear fruit: Similar models from around the globe were being consolidated under the brilliant "One Ford" directive, and the financial situation started to improve sharply. In 2009, the same year which saw GM and Chrysler's bankruptcy filings, Ford produced a $2.7Billion profit. Mulally's plan was a much bigger (and faster) success than most had anticipated.
How quickly people forget.
At a 3-day UAW conference in Detroit this week, UAW boss Bob King took several cheap shots at the very man who kept Ford out of bankruptcy. “When Alan Mulally can make over $50 million in a bonus, temporary workers have a right to a permanent job and decent wages and benefits,” he said. Ford defended their chief's pay, pointing out that the bonus King was griping about was a simple stock option which Mulally exercised, a stock option that would have been worth much less had Mulally not righted the ship and gained Wall Street's confidence.
While this battle cry may have gotten cheers from those workers attending the meeting, it certainly does nothing to improve the UAW's tarnished image amongst the general public. By calling Mulally's compensation "morally wrong," King opened himself up to all kinds of trouble. Compared to the $14/hr "tier-2" autoworker, where does King's salary rank on the morality scale? While certain concessions should be restored, it's a very slippery slope to be heading down this soon after the Carpocolypse.
Ford needs the UAW's workforce, and the UAW needs Ford's jobs. In this economic climate, though, it would be wise for King to realize that he (and the union) need Ford much worse than Ford needs the union. It would be much easier for Ford to move their jobs to another country than it would be for UAW to replace jobs domestically.
It was Mulally's vision, leadership, and unmistakable charisma that saved the company from impending collapse. Ford management and the UAW together have closed the quality gap between their products and their Japanese competitors, made dramatic improvements in their vehicles quality and efficiency, and by skirting bankruptcy become the most remarkable modern example of American ambition, drive, and sticktoitiveness.
Had Bill Ford Jr not been able to steal Mulally away from his comfortable gig at Boeing, where would the storied Detroit automaker be today? In my opinion, alongside their other domestic counterparts: Trying to bounce bank from bankruptcy, being owned by the taxpayers and the union. Could this be what Mr. King wanted all along?
Thoughts?
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