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'Evening News' Calls Auto Strike 'Tactical Move' to Keep Up Appearances

     If there were any question that labor unions are an outdated institution, CBS has cleared that up.

 

     “CBS Evening News” business correspondent Anthony Mason explained to viewers why the United Auto Workers decided to walk off of the job at General Motors (NYSE:GM) plants nationwide.

 

     “This is a tactical move by the UAW in part to show its members that it's still fighting for them, because it's about to make a monumental concession, and that is taking over control of retiree health care benefits from GM,” said CBS correspondent Anthony Mason on September 24.

 

     Those health care benefits add $1,700 to the price of each car, according to CBS and that makes it difficult for GM to compete with foreign manufacturers. But the union issue goes even deeper than health care costs.

 

     “[T]hey want to get paid $73 an hour for workers with only a high school degree when you’ve got this massive foreign competition,” said James Sherk, the Bradley Fellow in Labor Policy at The Heritage Foundation, on the September 25 CNBC’s “Squawk On The Street.”

 

     And that’s much more than what foreign auto manufacturers are paying employees in domestic facilities, which stands up to the protectionist argument that U.S. workers are forced to strike for fear of losing their jobs to overseas plants. “The foreign car manufacturers are paying their U.S. workers good wages - $45 an hour including benefits,” Sherk said.

 

      CBS correspondent Dean Reynolds said the 73,000-union autoworker strike was an effort to exercise “what little leverage they have left on the biggest car company in the world.” And that might not be a lot of leverage according to a September 24 Dow Jones story which explained why this strike might be good for GM in the long run by improving its ability to compete.


     “The toll, however painful, may be welcome if it results in a significantly lower cost base, according to some observers,” said Dow Jones’ John D. Stoll. “GM, which has been restructuring its operations for two years, is leaning on the UAW to help reduce a $25-to-$30 an hour labor cost gap with Japanese rivals.”