Unions in the auto industries started emerging in the mid-1930s. The unions were mainly formed due to the production speeds in the production lines as well as the health and safety concerns that arose from the production(Bardou & James, 2009). The main union formed in the auto industries is the Union for the American Auto Workers. For over 70 years, the Union for Americas Auto Workers has set the pace in advocating for proper wages and working conditions for the employees in the American Auto industry. It also provides and fights for the pensions of the retired as well as the surviving partners and children of the workers under the union. The union of Americas Auto Workers also voices concerns for workers’ rights, holidays, salary payments, shifts and any other benefits that they are meant to achieve in the course of their employment in the auto industry. The union through the workers also advocates and markets the products from the American auto industry which has led to high marketability of their products.
The effect of the unions particularly the Union of Americas Auto workers on major production units is tremendous. The three major productions units or brands in the United States Auto industry are the General Motors, Ford and Chrysler (Meyer, 2012). In a positive way, the unions have motivated the workers in the sector. This motivation has, in a way, increased the production rate of the companies in general. The unions have also improved the marketability of the products of all three brands. This is mainly due to the advocacy by the members of the union.
However despite the positive impacts that the unions have had on the brands, it is still possible to argue that all the three companies would have possibly been in better positions in terms of profits if the unions didn’t exist. It is important to note that unions greatly undermine the private property rights. The owners and managers of the therefore, have their actions restricted to the protective provisions of the unions. For example, the unions ask for a lot of free time and holidays for the workers under the unions. Under different circumstances, the managers would have had the workers working during some of that time, and this would certainly have increased their production. However, doing that with the union in existences would be taking risks of industrial action by the workers (Arthur, 2012).
The price of the Toyota is higher than that of both the Hyundai and the Nissan. However, this varies with the model and specifications of the vehicle. However in the sub $60000 category, the categories come in the order of Toyota followed by Nissan and then Hyundai.
The Union of Americas Auto Workers is also bringing the three great companies to their knees. The numerous obligations that the union imposts on the industries with regards to their workers are slowly becoming overburdening, and this is resulting in a slow but almost sure demise of the industries(Meyer, 2012). Union free companies are slowly rising and gaining momentum and thus providing competition with their products. If the state of affairs remains unchanged, then it is obvious that General Motors, Ford and Chrysler will no longer be the leading brands in the auto production industries.
The American automakers face several issues when competing in the production with other international companies. The companies in the states for instance face restrictions when it comes to their freedom of productions. Unlike the other international industries that have more flexible working conditions, the American industries face restrictions and high level inspections by the working conditions. This increases the production cost as compared to those of the other industries. The extra payments that the companies have to make when contracting with the unions has a bearing on the profitability of the brands(Bardou & James, 2009). The unions also charge a given amount on every car that are produced by the American companies. Due to this, the prices of the American cars have gone up considerably. Preference by buyers is therefore, given to the other vehicles by the other companies which are relatively cheaper.
Competition between union members and non-union members is also very difficult. This is because the conditions of production are very different. For the union members, the unions have considerable control over what goes in the company with regards to how much work the workers can do. This lowers the production rate of the unionized companies. On the other hand, the non-union companies act on their own terms. The amount of work done in such companies is solely within the control of the managers, and there is no check as to the amount of work done.
In order to solve the problem and make the American brands regain control of the auto industry, it is vital that unions' actions be mitigated. The control and express control that the unions have on the companies need to be reduced. The unions should be able to give room for the companies to make some independent decisions when need be. Attention should be given to the private property rights of the company owners and managers (Bardou & James, 2009). It will in enable the companies to be run in a more flexible manner. This is bound to increase their ability to compete effectively.
An adjustment in the leadership of the unions would also be important. Inclusion of representatives from the company’s board of governors in the decision making council of the unions is important. It will enable the companies also to be able to voice their concerns and also have a say in the solutions that the unions come up with.
Arthur, J. (2012). Effects of Human Resource Systems on Manufacturing Performance and Turnover. Academy of Management journal, 1-30.
Bardou, J.-P., & James , L. (2009). The Automobile Revolution: The Impact of An Industry. Carolina: University of North Carolina Press.
Meyer, S. (2012). The Five Dollar Day: Labor Management and Social Control in the Ford Motor Company. New York: State University of New York Press.