Battle to the Death – No Winners

The UAW is on strike against General Motors, as contract talks continue.

The popular interpretation now is that the two parties are close and the strike adds just enough pressure to encourage the parties to finish.

I’m not certain, and in the long run I don’t think it matters.

Ultimately the only way GM can escape its union workforce and restructure costs is to move most of the production overseas. The UAW wants some protection against this attrition strategy. I think the attrition will continue regardless.

Here is the coming irony: someday to get an American built car we will have to buy Toyotas or Hondas.

As GM moves most production overseas it loses the “buy American” cachet, and its market share plummets even faster (without the “buy American” sentiment I think GM will deteriorate very quickly, except maybe in truck lines). GM cannot compete on either quality or design (with the exception of a few specific models).

GM loses, UAW loses.

I am pessimistic because it is impossible to overcome three decades of lousy management and three decades of union overreaching.

The world will keep on turning however. The American middle class will deteriorate faster, as directed by Wall Street and K Street. A brave new world will emerge.