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Restoring givebacks will reverse Detroit 3's success

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Restoring givebacks will reverse Detroit 3's success

UAW would be better served by pursuing profit-sharing plans

After the Great Unraveling, can Detroit's auto culture handle success?

I ask because Thursday delivered two wildly conflicting signals: From J.D. Power and Associates comes news that domestic auto brands outscored their foreign rivals in its bellwether initial quality survey for the first time in 24 years of the study. It's hard to overstate just how seminal that accomplishment is for automakers not long ago relegated by the smart set to the industrial ash heap.

In fact, it's huge. It's an opportunity. It's a victory after who-knows-how-many years of restructuring, reengineering and redesign, all of it intended to refute the accumulated (and legit) evidence of foreign automotive superiority.

Not anymore. The J.D. Power findings follow another Associated Press-GfK poll that said more Americans rank the quality of domestic vehicles ahead of brands from foreign-owned manufacturers. Is that evidence of the toll of Toyota Motor Corp.'s troubles or the undeniable improvements in the metal coming from General Motors Co. and Ford Motor Co.?

It's all three and a big fat warning rolled into one: Perceptions eventually do catch up with reality, and reality can change -- which is why this quality rite of passage for Detroit should be tempered with the caution that staying on top is as difficult as getting there. Just ask ol' Akio Toyoda.

The second signal: From the new president of the United Auto Workers, Bob King, comes the risible promise to reclaim givebacks conceded amid a desperate attempt to keep General Motors Co., Chrysler Group LLC and Ford Motor Co. from financial collapse.

Just asking, but should a quarter or two of profitability -- profits that also accrue to the benefit of union members, by the way -- herald a return to the bad ol' days that pushed the Detroit Three to the brink?

They could. But they shouldn't, because the old ways will be as unsustainable in the future as they were in the past.

I'm not sure how King squares a push to restore concessions with his vow to a) keep Detroit competitive and b) stick it to Toyota Motor Corp. by redoubling efforts to organize the automaker's operations in the United States. Nor is it clear how the past 24 months of UAW decline amount to effective marketing to persuade Toyota hands to sign union cards.

Short answer: They probably don't, though King & Co. are welcome to give it another try. They could start with Toyota's NUMMI employees in the People's Republic of California -- the only auto plant west of Texas, at least for now.

The UAW has every right to try, again, to organize foreign-owned auto plants operating across the United States in a bid to expand its dues-paying membership. Its members have every right to want to restore contract arcana lost to one round of concessions after another, though that may be more difficult considering the union's no-strike clauses for GM and Chrysler courtesy of Team Obama.

But the union might consider a different tack: Like it or not, the UAW (through its health care trusts) owns major stakes in GM and Chrysler and its members have a vested interest in the financial success of Ford. In short, tens of thousands of workaday union members are owners of their employers, and they should consider acting like it.

Why not trade the push to restore givebacks for a bigger piece of the action next year, just like the brass get when the company does well (as appears increasingly likely should the economy continue to recover)? Toyota employees, to cite one example, roughly out-earned Detroit Three union members before the Great Recession because aggressive profit-sharing plans aligned their financial interests with those of their execs and the company.

In short, they acted more like the owners that UAW members now find themselves to be, whether they intended to or not. Jettisoning the zero-sum gamesmanship of the past and aligning the economic interests of management and hourly employees alike is the best way to keep Detroit's revived automakers where they need to be -- at the top of their game.

From The Detroit News: http://detnews.com/article/20100618/OPINION03/6180348/1148/AUTO01/Restoring-givebacks-will-reverse-Detroit-3-s-success#ixzz0rCzOn3X8

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