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CASE 8.2 When More May Be Too Much The United Automobile Workers of American (UAW) had through their economic crisis with conditions. The conditions practiced the traditional goals of the American labor union stated essentially were that they were to achieve reduced movement well for more than 60 years when the twenty-first labor costs through negotiations with the UAW, and that century began. The union had effectively lifted hundreds of without success in that effort the government would do thousands of workers associated with the traditional nothing to prevent their bankruptcies. The government mes- American automobile industry into comfortable middle-class sage indirectly to the UAW was for the union to agree to status. The only adjudged failing of the UAW appeared to be sul stantial labor cost its limited lack of success in organizing the transplanted to health insurance benefits for retirees. The UAWs bargain- foreign auto makers' workforces. As a result, in the 1990s, the ing power position relative to the three companies had been total cost package of wages, benefits, and work rules of the achieved in large part by its strategy of threatening a strike Big Three companies of General Motors, Ford, and Chrysler against "a chosen target company in order to put it in a were estimated to be up to two and a half to three times the non-competitive position while the other companies total economic package of the workers in the "foreign trans produced product plants" producing in the United States. The economic toll of the difference began to be felt by 2002-2003.Ga Ford did not However, all three were able, under threat of the Motors, for example, began to run its automobile production federal government to allow bankruptcy of the American operations at a loss beginning in that period. y with regard General Motors and Chrysler welcomed the loans automobile industry and the potential of the loss to the UAVW of almost, if not effectively all, of its members' jobs, to suc- The Ford and Chrysler companies also began to operate at a loss shortly after General Motors, and by the cessfully rework their labor agreements. These concession- beginning of the 2007-2008 economic recession all three ary agreements significantly reduced labor costs and fulfilled companies admitted to the public that they were experiencing the government's demand to achieve approximate parity with significant economic difficulty. The acknowledged problem for the labor costs of the foreign transplants all three companies was their total cost of labor relative to that of the foreign transplants particularly at a time of low sales volume. The U.S. government offered the three companies The U.S. government mandate tied financial help to the traditional automobile companies with a requirement that economic assistance in the form of loans to aid them 228 Chapter 8. Collective Bargaining in the Private Sector the companies renegotiate their labor agreements to essentially equalize labor costs with the foreign trans- plants. Did this mandate represent a change in the govem- ment's traditional legal stance of hands off the results of necessity of having also to lower its historic contrac- tual gains and accept the requirement to modify its contract cost to approximately equalize labor costs with the foreign transplants? good faith negotiations" under the NLRA, Sections 8 (a) 4. Under what circumstances in the future should the US 5) and 8 (b) (3) government inject its interpretation of public-interest requirements on private and/or public collective bargain- ing results reached through good faith negotiations? 2. When should for the good of the public" considerations, if ever, negate the results of collective bargaining "in good faith 5. Does the fact that the U.S. govemment owns a majority 3. Should the fact that the Ford Company did not accept of General Motors place the company under the federal Civil Service Statute? federal loans have exempted the UAW from the

Answer 1

1. Under good faith negotiation law it is moral duty of parties to renegotiate contracts in good faith at reasonable times with willingness from each of party. However as we see Ford did not oblige neither was willing to do so, the collective bargaining doesn't seem to be case here and hence it is seen government changed the traditional legal stance in this matter.
2. Good of public should negate good faith bargaining when the rising cost for companies induce higher prices of products which make it expensive and make public worse off while the workers better off.
3. Ford should not modify its contract just for the sake that other players are reeling under losses ,rather should defend stance against equalisation of contract labor costs and disallow collective bargaining to happen which would mean all three players on level playing field.
4. Under circumstances to end monopolistic prices or shortage of supply the government must interpret or induce good faith bargaining where all players have equal advantage and consumers are not worse off.
5. Since general motors has great government backing it definitely held statutaos advantage interms of lobbying and meeting bureaucracy and their expectations and give them slight comparative edge over other players in getting things done quickly .