Will the UAW run out of money?


How does the UAW end? I understand how the UAW could be in the middle of an existential crisis: the Detroit carmakers that employ its members are facing very strong competition from auto companies that assemble cars in the U.S. but don’t have to pay UAW salaries and pensions and don’t have to deal with UAW work rules. Unless the union cripples this competition  organizes the foreign “transplants” (e.g. VW, Hyundai, Toyota, Honda) the companies its members work for may go broke (for a second time,, in the case of two of them). No employers, no UAW.

But I don’t understand why the UAW would collapse just because of its own impending internal financial crisis–though that seems to be the Truth About Cars’ take on this report by Reuters. Sure, dues money has fallen dramatically as the UAW’s membership has shrunk dramatically. So the union will have to shrink its bureaucracy to fit a lean budget. And it will have a smaller strike fund. But its members still have jobs, and they still have a statutorily protected right to strike. And the UAW still has a billion dollars in assets. Money problems aren’t going to make them disappear the way money problems almost made GM disappear.

True, exercising that statutorily protected right to strike might not be a very bright idea. Unions are now held in such poor repute that even a Big Three manufacturer might be tempted to do something that just wasn’t done during  the great mid-century Wagner Act consensus, namely get tough and hire “permanent replacements.” Given the current economy, lots of people will be eager to do UAW members’ jobs at half the pay. Even if the union knows the names and addresses of these “scabs,” that might not be enough.

But for the UAW to disappear in a strike would require a suicidal PATCO-like misjudgment. Even then it wouldn’t be because the of the sorry state of its balance sheet. It would be because of the sorry state of the labor market, and the union’s reputation.

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