The Point, Mr. AFL-CIO: Consumers Don't Care

By Warren Brown
Sunday, October 14, 2007

To: Mr. John J. Sweeney, president, AFL-CIO, Washington, D.C.

Dear Sir:

Thank you for your letter to the editor of The Washington Post ("What the UAW Was Fighting For"), published Wednesday.

It is a spirited response to my Car Culture column ("The UAW Can't Count on Buyers' Support Anymore") published Sept. 30 in the Car Pages of The Post. But it completely misses -- or chooses to ignore -- the point of that column, which is this: Consumers don't care.

By way of a non-automotive illustration of that truth, let us look at the emergence of Wal-Mart stores in Michigan, the United Auto Workers' home state.

There were no Wal-Mart stores in Michigan in 1987. By 1995, there were 53. Today, there are 43, including one in Flint, a former UAW stronghold. That decline partly is attributable to a loss of assembly plants and jobs in the domestic automobile industry. But ironically, those job losses and Wal-Mart's continued retail strength in Michigan stem from the same thing: When it comes to shopping, most consumers in the United States, including those who are union members, don't look for the union label. They don't care.

Wal-Mart, as you know, is nonunion. It also is an internationally known champion of outsourcing -- that is, acquiring most of the goods it sells from non-organized-labor suppliers overseas, including sources in China. But I am no longer surprised when I see customers wearing UAW T-shirts and sweatshirts trolling the aisles of Michigan Wal-Mart stores. Here's why:

They are union members. They also are consumers. When they shop for themselves and their families, they look for the same things most of us seek: quality, reliability, safety, emotional appeal -- all at an affordable price. They don't look for the union label; and they most assuredly are unlikely to find one in a Wal-Mart store. When it comes to going for the union or a bargain, they almost always go for the bargain.

The same thing, sir, happens in automotive retail. That is why only 73,000 UAW members were available for a two-day strike against General Motors in 2007 collective bargaining negotiations, compared with 400,000 UAW members who went on nationwide strike against the automaker in 1970. That is why that walkout and the subsequent six-hour strike against a crippled Chrysler were so silly, the moral equivalent of spoiled children throwing tantrums because no one has been paying attention to them.

You don't like that comparison? That's fine. But organized labor ignores the truth of it -- consumers don't care -- at its own risk.

Consider: The domestic automobile industry had a 71 percent share of its home market in 1998. Today, it is struggling to hold onto a 51.3 percent share. You say that decline has come about because of poorly implemented federal policies in international trade. I have no doubts that our government has messed up in that area. Still, my argument is that your argument misses the point.

BMW, Honda, Hyundai, Nissan, Mercedes-Benz and Toyota all build cars and trucks in America in solely owned plants. The UAW has failed to organize any of those solely owned, foreign-owned plants, effectively giving the foreign automakers a tremendous production-cost advantage in an America where few consumers, including union members, look for the union label. In the past, that production-cost advantage has translated to higher-quality foreign-sponsored cars and trucks sold at competitive and often lower prices than those of domestic rivals.

Consumers are selfish. They might bemoan the loss of American jobs. Some might even bemoan the decline of the UAW, although I sincerely doubt that. What's certain is that they have bought and continue to buy millions of cars and trucks from those foreign-sponsored plants the UAW has failed to organize.

How, sir, can I put it any more clearly? The man buying the non-UAW Hyundai Sonata does not care about the UAW. The woman buying the non-UAW Toyota Corolla or Nissan Sentra does not care. The affluent family buying the non-UAW Mercedes-Benz M-Class SUV does not care. All of the people who have made the non-UAW Toyota Camry America's best-selling car don't care about the UAW. That means the UAW can strike as long as it wants, as often as it wants. Most American consumers don't care. They will buy Toyota, Honda, Nissan, Hyundai, Kia, BMW and Mercedes-Benz for the same reasons so many Americans, union and nonunion, keep Wal-Mart stores in business: They want what they consider to be the best for less -- union demands and politics, union membership, union strikes be damned.

In closing, sir, you might have noticed that GM's sales went up in August and September during the same period in which sales declined for many of its rivals, including non-UAW Toyota. GM's fortunes aren't improving because American consumers feel sorry for GM, or because they've suddenly gotten into a buy-America mood or because they've decided to march in solidarity with the UAW.

GM's sales are rising because GM and the UAW at long last have decided to give American consumers what they've been asking for -- better cars and trucks, models such as the excellently executed Cadillac CTS4 luxury sports sedan; and the Saturn Outlook, Buick Enclave and GMC Acadia -- the best-looking, most useful, most comfortable, safest full-size crossover utility vehicles sold in North America.

Ford and Chrysler will turn around when they start following the new GM's example. If the UAW does not understand that, the companies employing UAW members will continue to lose market share, which means they will continue to close plants and cut jobs regardless of any "job security" provisions in recently negotiated contracts.

Likewise, if American consumers continue to want more for less, even if that means more and more outsourcing to bring in more components and products at lower cost from lower-wage sources, they will continue losing jobs -- just as autoworkers in Europe and Asia have lost production jobs to lower-wage workers in Alabama, Georgia, Kentucky, Mississippi, South Carolina and Tennessee; just as engineers in Western Europe are losing jobs to equally competent but lower-wage engineers in Central and Eastern Europe.

Global economics, sir, are driven as much by consumer greed as much as they are by the corporate greed the AFL-CIO loves to attack. That is the point. If you don't understand that, you don't understand anything. Best wishes.

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