The perverse incentives of UAW wage contracts is shuttering a GM plant in Indianapolis, Indiana, straining the city’s tax base and cratering surrounding property values. The new UAW sounds a lot like the old UAW.
By a vote of five to one, UAW workers rejected a plan by JD Norman Industries to keep a GM metal plant open by reducing wages from an uncompetitive $29 an hour to $15.50 (in line with America’s average manufacturing wage).
But didn’t workers just vote to eliminate 650 union jobs?
Not by the logic of Big Labor’s national contract with GM. By rejecting the Norman offer, workers now get the option under the larger GM labor contract to transfer to another GM factory at $29-an-hour when jobs become available. By this logic, the $15.50 wage was not only a cut in pay, but would have set precedent threatening the $29 wage in future national talks.
Instead, they voted to devastate a riverfront community. The Indianapolis plant that will be stripped of its equipment and rendered a non-taxpaying shell. Marion County receives nearly $2 million-a-year in property taxes from the facility, and local businesses will be devastated by the loss of $40 million in plant wages.
“We are withdrawing from pursuing the plant any further,” JD Norman Industries announced after the vote. The company was the only bidder interested in keeping open the 80-year-old plant after GM abandoned it to shed excess capacity.
Local officials were outraged after ponying up state and local incentives to encourage JD Norman’s purchase. “After having the U.S taxpayer bail out these workers, [they] turned their back on the next generation of Indiana workers in a way that is very frustrating,” said Indiana Commerce Secretary Mitch Roob.
One GM worker summed up the damn-the-next-generation greed of UAW workers. “It was a great deal for the young kids,’’ said one autoworker, “but . . . at least I know what I have now (with GM).”