RANTS #434

February 27, 2008

Detroit’s King of Delusion.

By Peter M. De Lorenzo

Detroit. What year is it again? 1968? 1978? How about 1988? No, actually, as most of us know, it’s 2008. But remarkably, there is one entity headquartered in this town that refuses to acknowledge reality, history, the writing on the wall, or anything even remotely resembling rational thought for that matter. The United Auto Workers union, that staunch bastion of head-in-the-sand, wrong-headed thinking – at least when what masquerades as their woefully skewed version of “thinking” rears its ugly head – launched a strike against American Axle & Manufacturing Holdings Inc. late Monday after negotiations broke down on a new labor deal.

What’s involved? 3,650 American Axle workers in Michigan and New York walked off the job and hit the picket lines, jeopardizing all truck production at GM, American Axle’s largest customer by far.

What part of this action seemed even remotely like a good idea? The domestic automobile industry – aka “Detroit” – has been in freefall for the better part of 25 years. This inexorable downward spiral has been punctuated by alarming annual losses in market share to the Asian and German manufacturers, as what was once formerly known as the “Big Three” saw their fortunes plummet. Detroit witnessed in horror as an entire generation of buyers, tired of mediocre products with average to dismal quality, abandoned the domestic manufacturers for imported brands in droves – never to return.

Pummeled by a $1500 per vehicle cost disadvantage brought on by absurdly expensive, union-driven healthcare costs – the most expensive and comprehensive programs of their kind in the nation - and crushing pension funding expenses, Detroit reeled as it tried to regain footing in the market, only to find that its way back was blocked by an uncooperative UAW and compounded by the fact that government-sanctioned currency manipulation was giving their Asian competitors a $1500 minimum advantage on every car and truck sold in this market – on top of the built-in cost disadvantages the Detroit automakers started out with.

But Detroit, determined to fight back, started to blow-up their obsolete processes and – paced by GM - rediscovered the fundamental law of this business that they had wandered away from so cavalierly in the past. And that is that The Product is and always will be King.

And hope emerged as GM rediscovered its product mojo and signs of life started to appear in the other Detroit manufacturers as well after years of being lost in the desert. And the UAW even got it together – or so it seemed anyway - agreeing to a series of what appeared to be landmark labor agreements last fall that would allow Detroit to at least approach being on a level playing field with their Asian and German rivals in terms of cost.

But I never bought into the words “groundbreaking” and “historic” – the terms bandied about last fall by the media in reference to the UAW - because I knew that deep down this labor organization was and is fundamentally flawed. That the UAW’s “M.O.” is not one of enlightened cooperation, but one of irrational, unflinching, relentless entitlement. That the words “we’ll get what we deserve” resonate far more through its depleted ranks than “we’ll have to do what’s best in order to see these companies remain competitive.”

The UAW only acquiesced to those agreements last fall because they had no other choice. Detroit was shrinking at a horrific pace and its market share couldn’t support anything but a dramatic consolidation, which meant that jobs would have to be cut and wages and benefits would have to be seriously reduced – or else. And at that point, the halcyon days of the UAW were indeed over.

While too many in the media back then were quick to canonize Ron Gettelfinger, the UAW President, and prematurely hail him as being some sort of “visionary” labor leader after those negotiations, I didn’t. Because I never thought the moniker “statesmanlike” should be used in reference to this intransigent, misguided, narrow-minded and maliciously inflexible individual who at any moment could and would choose to derail crucial agreements with the auto manufacturers or their suppliers, just because he could.

And as if right on cue, he demonstrated his true colors last fall when in the midst of those so-called “historic” agreements he authorized utterly futile and worthless work stoppages against the Detroit automakers in a pathetic, grandstanding gesture.

And now, here we go again.

In the face of massive layoffs in the automobile business as the Detroit manufacturers literally fight for their very survival, and with the state of Michigan mired in a monumental recession – one directly attributable to the dire straits the automakers find themselves in - the likes of which has never been seen before, and with foreclosures and unemployment at record levels, and with the mood grim and full of despair as desperation sets in for countless citizens in this region, this miserable excuse for a leader does the most un-statesmanlike thing he could possibly do by calling for a strike against American Axle that absolutely no one can afford, least of all the workers involved.

It’s no wonder that Steve Miller, the blunt, no-nonsense, straight-talking Delphi CEO, reserves particular ire for Gettelfinger in his new autobiography, "The Turnaround Kid: What I learned Rescuing America's Most Troubled Companies," published by Harper Collins (see “On the Table” – ed.). Miller summed-up the UAW front man this way: "Gettelfinger was a big disappointment. An industry in crisis needs leaders who can rise above the tactics of intimidation that may have worked decades earlier."

Uh, no kidding.

Ron Gettelfinger is quite simply Detroit’s King of Delusion, a Neanderthal figure operating in a hermitically-sealed time warp that prevents even a shred of reality or rational thinking to enter into his – or the UAW’s – atmosphere. As a matter of fact, he and his counterpart at the Canadian Auto Workers union - the equally thick-headed and wildly irrelevant Buzz Hargrove - are industry anachronisms who have become blatantly and painfully obsolete.

Even if this strike action were to end today, there’s no hiding the fact that Ron Gettelfinger is a small-minded irritant, a man who relishes being an obstinate obstacle to progress and a petty grandstander at every turn, just because he can.

And his so-called “act” grew tiresome years ago.

Thanks for listening, see you next Wednesday.