Former General Motors vice chairman Bob Lutz doesn’t hold back when it comes to voicing his opinions, as evidenced in a recent interview in which he criticized the United Auto Workers union over the ongoing GM strike.
With nearly five decades of experience in the auto industry, including positions as a leader at each of the Big Three automakers, Bob Lutz certainly knows what it takes to run a car company. Now, Lutz has indicated that if the UAW demands too much in the current labor contract negotiations, it could end up hurting GM.
“The stakes really are American competitiveness,” Lutz said in an interview with CNBC. “General Motors pays well, cares for its people, has great health care.”
Of course, Lutz’s opinions aren’t simply the product of the recent GM strike. As he points out, the former exec had the same conservative mindset while earning his MBA at UC Berkeley in the ‘60s, a time when the campus was an epicenter for left-leaning political activism.
Although Lutz ended up graduating with a 3.83 GPA, the labor relations graduate course provided some problems for him.
“We had to write a term paper, and I touched on a number of aspects,” Lutz said. “But because I wanted some balance I wrote in it that large unions had plenty to answer for when it came to loss of competitiveness of American industry.”
Lutz said he got a D on the paper. “It was heavily red-circled. In the margin, it says, ‘You haven’t obviously been paying attention in class.'”
During the interview, UC Berkeley Labor Relations Professor Harley Shaiken chimed in, jokingly saying, “Bob, if you send me the paper, I’ll try to raise the grade for you.”
Shaiken also provided a counterpoint to Lutz’s argument. “It’s the competitiveness of the entire economy because of the union and the corporation working together versus being jammed like they are now.”
Meanwhile, the GM strike continues as contract negotiations between the union and automaker have thus far failed to find an amicable solution.
The UAW is negotiating for higher wages, greater job security, and a path for temporary workers to seniority.
The GM strike is now in its fourth week, first taking effect September 16th at midnight. It’s estimated that the strike could cost the automaker upwards of $100 million a day in lost profits.
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Source: CNBC
Comments
Totally agree, it’s “American” competitiveness. GM employees already make significantly more so this BS about “sacrifice” and what was “given up???” a decade ago…. lots of people lost during the GR, but things change yet the UAW BS never does… the employees of GM need to rise up, protect their jobs and decertify the UAW.
You must be someone who has never had to fight for a decent job. Look at all the fat cats on top of the heap that are reaping beau coup bucks with little or no effort put forth. I know, I worked as a union grunt for over 40 years. Labor always lags behind the white collar fat cats.
Former big wig criticizing the UAW? Say it isnt so. Idc what anybody says, UAW is trying to keep jobs here and grow here, GM is outsourcing every chance they get. End of story! Which side are you on? The rich or middle class? In solidarity ✊!
If I were GM, I’d take this as a sign that all manufacturing should be moved out of the country.
Things would be different if they could build non-UAW plants here and employ people here, but that doesn’t seem to be an option.
I’d be bussing in temporary workers that aren’t union. We all want job security. Unfortunately, unions are a bit passe and they are bleeding big companies dry. Yes, they did great things for safety and fair labor back in the day, but nothing works today as it did even 20 years ago. Look at how hard Toyota fought Unions. They came out ahead.
Mama,
Go tell that to the workers at the new State of the Art BMW plant in Mexico. Starting wages are from $1.57 to 2.43 per hour.
Are you mental?
GM tried that in the mid 70s and it didn’t work, they built 7 plants in the south and paid the workers good with benefits. Within 7 years they were all unionized, management can’t help themselves, if they get a good thing going they suddenly want more and start treating workers badly and start screwing with their work rules and demanding new rules with less pay and benefits. If you’re in a right-to-work law state you can be fired because the foreman doesn’t like the color of your shirt, personally I don’t consider that a good work invironment. That’s why there are unions!
The flip side is that unions are why there are hardly any manufacturing jobs left here.
The unions will die off even if they have to take companies with them.
I don’t see a way out of this, other than GM just being a US brand with everything made in other countries.
I stand by my statement that this current UAW behavior, while it might possibly gain some concessions from GM, will force more production out of the country in the long term.
But that’s OK, the UAW leaders will be fine in their luxury cottages on Black Lake.
They outsource to stay competitive because they have a bunch of entitled over paid hacks for employees.
Todd, what do you do for a living? I you are a blue collar worker you would’t talk like this. The union set the standard of living for the country. If you only relied on employers to take care of you, at their own discretion, they would pay you as little as they could get away with. You would be a wage slave. Then unions have tried to correct that.
@Chevyman: ….Respectfully, I think you’re trapped a bit in your own “sunshine”.
Giving up “knowns” for “unknowns” can be scary stuff, no question.
But history has universally proven one either adapts or one deteriorates.
So the sooner we learn to adapt, the sooner we prosper.
Deeds…not words.
I think GM bribed UAW officials to strike forcing GM to say that they have to leave the country and outsource jobs GM always wanted to create more jobs in other countries for higher profits. I don’t see empty lots at car dealers yet
We all want more, more, more. But, you take the chance of pricing yourself out of business if you go too far. It happens to everyone, car makers, unions, the corner store selling bananas and bread. Where I work, we had to give up a few things, and got a few things in our latest contract. The union wasn’t happy that we took the offer, but many of us also realize the present income/costs challenges facing the company.
This was from the same guy who wrote a few years ago that all privately owned cars would be banned within ten years in favor of AVs.
GM taking care of its people? Tell that to the 15,000 people that got canned earlier this year with no advanced notice.
You act like this doesn’t happen any where else it does. However the UAW is wanting more than comparable employees make at other car manufactures. It just crazy. I’m still trying to find where the 270 million dollars the union has taken in since the last strike. Oh that’s right couple of the top union guys are in jail/arrested for fraud and other charges. I fill some UAW members live in a cave if they can’t realize how corrupt the UAW is.
Bob Lutz is exactly right. GM cannot be competitive with the Greedy UAW sucking everything they can get out of GM. GM management is trying to improve the company and prepare for the future. UAW just takes anything they can get their hands on
He is right. I’m not anti-union but there is a time where the right decisions need to be made. The industrial story tells us that the unions often aren’t well-advised: if, just after the WWII, the Packard’s workers went on strike, maybe their cars still would be in the streets or Maybe, there always will be a british cars industry.
He is right. I’m not anti-union but there is a time where the right decisions need to be made. The industrial story tells us that the unions often aren’t well-advised: if, just after the WWII, the Packard’s workers didn’t go on strike, maybe their cars still would be in the streets or Maybe, there always will be a british cars industry.
It would be an interesting fact to know how many Americans have a vested stake in GM’s stock performance. (through direct ownership of GM stock, or investment in mutual funds/etc) I’d be willing to bet a paycheck that its greater than the 50k GM hourly workers… Should all of these individuals be asked to accept a reduction in the value of their 401K or retirement savings in order to fund GM accepting labor terms which allow their 50k hourly workforce to receive hourly income, healthcare co-pay, and job guarantees that FAR exceed those benefits received by every other similarly skilled domestic and global company workforce?
The reality is that while GM’s stock performance hasn’t been great since it came out as a new company back in 2009, there are way more variables for GM’s senior leadership to manage in order to drive value for its most important stakeholders, those individuals who’s savings are dependent on GM’s decisions and performance. Financial performance is a HUGE part of GM’s senior leadership performance, including liquidity, capitalization, and margins. Future technology investment is an EVEN bigger part of their actions, and GM is showing quite well with its investments in Cruise, AV’s and electrification. Have I mentioned how important keeping today’s GM vehicles competitive in terms of performance, style, functionality, safety, and quality, for today’s GM customers? And finally, GM’s stockholders also consider how GM takes care of its its workforce, the environment, safety, etc.
The bottom line is that in today’s marketplace, individual investors/savers are under no obligation to accept a reduced rate of return for their invested dollars, nor are vehicle consumers under any obligation to pay more for a vehicle because the company who made it agreed to pay their workforce more than other companies.
Unfortunately it’s these tactics that force jobs outside the US. The uaw isn’t oblivious to this, they’re just a virus that is looking to make as much money as they can until the gravy train ends and they move to the next target.
I’d bet money that GM cares more about it’s employees than the union leadership does about it’s members.
Which is EXACTLY their plan—to to this and then move on to Ford and Chrysler. And you (IMO) are 100% on GM vs Union employees.
Posting on this topic is a bootless errand. 🙁
I’m pro union in general for fairness reasons.
That said, I spent 40 years in a union facility where the union leadership saw the company as the enemy whereas they needed to look “over the fence” and overseas for the real threat.
I think pay should be highly scale-able based on quality, safety and financial performance metrics so that the rank and file get a fare share for their recognized contributions.
Regarding costs, especially healthcare, reward good healthy living habits. Based on the photo’s I see, the UAW members health care costs have to be very high and I bet there is some impact on productivity.
Here in Canada, we have the unions and the NDP that both want to suck every red cent out of all companies, then abandon the dead carcass, going on the the next victim. “We’re for the workers you know”. They don’t realize that “workers” need stable “companies” to work for.
A previous article stated the GM plants in Mexico make Bout $3.50 and hour and the US auto workers make earns about $23 an hour. Now let’s add in the benefits, medical, workers comp cost, employer social security payment, sick time if any. It would be probably more than $50 per hour per worker. Medical insurance runs about $1200 per month for family coverage regardless of your pay and status in the any company and that is a tax free benefit. I can go on an on the costs to run a plant.
There is that old saying, “don’t kick the gift horse in the mouth”. And my father always said, “don’t get greedy “.
Reading ALL input here as well as wherever I can to get incisive, true facts, In MY opinion, the General Membership MUST end this strike as GM is being MORE than fair. GM IS looking to the Future, and making needed changes to insure they stay in business. It very well may come to a point that GM indeed re-locates Production Plants to other Counties to keep overhead in balance, & continue to make a profit which is just Good Business. No Profit, No Company, NO JOBS in Many sectors! I have a 2020 Corvette Ordered & paid for and Yes I’m Pissed off, BUT, I WILL WAIT as long as it takes..
Fuck Bob Lutz, he has been fired by ever manufacture cause he does not have a clue what happens on the shopfloor.
I will not buy a GM product as long as they keep screwing the pooch with product and with labor. As far as the comments about American Manufactures leaving America then they would be giving the Marketplace to Foreign Manufactures. Toyota, Nissan, Volkswagen, Mercedes-Benz, BMW, Hyundai, and KIA will take over the Market along with the Chinese. Besides that the biggest product market for GM and Ford is China and other Foreign Markets. When I was in Columbia they are a huge GM market second only to Chinese Trucks and Buses. You people and Lutz are out of touch with the Global Marketplace. This strike is about reducing job streaming assembly for Electric Vehicles and the UAW wanting to maintain production at plants. More production would mean lower retail cost. GM is interested in high profit Trucks and SUV’s because they can sell few vehicles at higher prices. Don’t blame the Union’s for high prices. Blame Executive salaries and the devaluation of the American Dollar. When I was a new car buyer in 1977-1980 I bought two brand new Cadillacs for $14k and another for $20k. Try that today! All manufactures prices are high because of the devalued dollar on the world wide currency market. Why because currency is not back by precious metals like gold or silver. It is backed by paper and none of the coins are even copper anymore. Coin basically are cheaper clad zinc based metals. When people see money today they know there is no real value when the government just prints more and borrows more then taxes more. Wake up folks the problem is not the Union or GM it is the Government,
“F-Bob Lutz”…You mean that literally or figuratively?
the profit sharing should be in stock and that way the union members would have skin in the game
If you are a union member you are a doer, not a thinker. You simply follow what the union management tells you to do or allows you to do. You are part of an organism and not really an important part. If you miss work, there is always another to do your job. There were times when a the union was good for the work force but today with various laws and regulations, the value added proposition is questionable. All the workers get the union dues subtracted from their paycheck and really get little back. UAW members do get profit sharing checks so they are rewarded beyond the hourly wage. Many think they are some “owed” something. Nothing is usually owed unless there is work involved and I can assure no union worker is looking to work harder for more pay.
Go live china or mexico
UAW Big boss all going to jail right now , the union doesn t trust their own people today it s hard to negotiate in good faith !!!!
Gm dealers inventory are high so good luck ….
I believe when the union in the 80’s became so greedy with GM, their members became permanently unemployed.
That s why they close the camaro plant in montreal at the time .
You have greedy GM on one side that doesn’t seem to value its employees, and the corrupt UAW on the other side that doesn’t seem to value its members. The workers in the middle are between a rock and a hard place.
The poor victims. GM employees are the highest paid of the entire auto industry in the US. With all benefits, the average GM factory worker earns in excess of $60/hour as stated on Autoline. Other plants from Toyota and Honda earn on average more than than $10 / hour less.
They cant
I do not have details of hourly wages for the employees, we can spend hours on that. However, you have to look at the fact we are competing with (cheap) labor out side the US and fairly good wages within the auto manufacturers right here in our back yard.
We can talk all day about executive wages, but reduce them and will not add anything significant to the pool of money.
This is a competitive auto industry and we are not leaning our lessons, and this is not something that just started today.
I would like to purchase a new GM vehicle, but I wonder what the ramifications are now that the manufacturing is halted and once (and if) everyone returns to work, how quality will be affected, the rush to get things out the door, etc.
As a consumer, I’m tired of it and simply look to other Mfg.’s to spend my hard earned dollar.
Every consumer lost to GM will not return. Data has shown this over the last 30 years. The buyer will and have build their relationship with other manufacturers, you know who they are.
There are two sides to this and unfortunately compromising seems out of reach at this moment. Again, this is nothing new, it’s been happening since the 60’s.
I could go on and reference hard data, facts, etc., but what difference does it make. No one is paying attention to the big picture. We know the urgency to be competitive if we are to survive in a global economy.
This is like watching a rerun of Union/Mgmt. movie for the last 50 years, the cancer eventually consumes itself.
This is not good for either side.
It’s too bad that our government has helped to move factories overseas. Yes, do some research and you will see. AID, Aid to International Development, from the 1960’s still affects our country. Move the factories back here. But those owners of the factories are exploiting the cheap labor, lack of environmental regulations, etc, and then importing cheap products for maximum profits. Follow the money trail. It speaks volumes.
I agree with the strikes and their ramifications. Bad for both sides. I was Labor, and suffered from strikes and from abuses by management. I can’t change my feeling towards management. I dealt with a lot of a#@holes during my working years. Hard to forget.
We need more than Trump to get our country back on track. God save the republic!
GM builds some cars in mexico because mexico has free trade agreements with a lot of countries around the world that the USA does not have so these cars bult in mexico can be sold there without tariffs. this is why trump wants to do away with all tariffs around the world.
Then why did he recently impose the tariffs that threatened a trade war with China?
to hurt chinas economy and get china to treat american companies fairly.
And it’s a complete disaster. All tariffs are imposed on and paid by the US consumer. How the hell is that going to hurt China?
The net result is the US economy is slowing down to a growth rate currently at about 1% while China is still growing at over 6%.
you don’t buy stuff from china if the price goes up because of tariff. that is how we hurt china. I case you have not been paying attention companies are moving out of china and some are coming back to the USA. this is what tariffs do. go back to your mom’s basement with picture of hillary on the wall.
Motorman, I hope these companies will return to the US and our country will be like it was in the 50’s and 60’s when almost everything was made in the USA and radios and tv’s could be repaired and we didn’t have all of these shit products overflowing in our landfills because of the planned obsolescence built into the product. I grew up in the 50’s – 60’s. The best time to be alive in America!