Report Exposes Shaky UAW FinancesBy Bill Visnic September 23, 2011
An investigative report published Thursday by the Reuters news service reveals the United Auto Workers (UAW) union in the news daily as it negotiates new four-year labor agreements with the Detroit Three automakers has for years been dealing with an internal financial crisis that threatens the existence of Americas richest labor union if not reversed. The report said the UAW has for some years been relying on savings to fund its ongoing operations and has since 2007 taken large drawdowns from its assets to finance ongoing operational and organizing efforts.
Two years after the wrenching restructuring of the U.S. auto industry and the bankruptcies that remade General Motors and Chrysler, the UAW is facing its own financial reckoning, the Reuters report begins. Americas richest union has been living beyond its means and running down its savings, and has persisted with poor real estate and other investments, not to mention spending as much as $2 million on advertising in 2008 to build support for the bailouts of General Motors Co. and the Chrysler Group LLC. The report also details offbeat promotional spending that included $5,000 for UAW-logo flyswatters and $33,000 for bowling-ball bags and buffers.
Reuters said the one of the Detroit automakers earlier this year commissioned its in-house economist to study the UAWs finances. The subsequent report said the union had five years or less to turn around its finances. The report nonetheless stated that the UAW remains the nations richest union, with assets of $1 billion. But, To bridge the gap between spending and revenue, the UAW has increasingly relied on selling its investments, which include U.S. Treasuries and stocks, and a handful of properties. From 2000 to 2006, the UAW sold $7.3 million. That ballooned to nearly $222 million from 2007 to 2010, government filings show, the report continued.
In the story, the union contended that the past four years would have been taxing on any organizations finances and that the union has no mandate to be profitable, only to ensure the viability of the union. To that end, the report notes, the UAW has spent heavily in recent years to organize laborers in other sectors and has turned up the dial on organizing efforts in southern auto plants owned by Japanese and German automakers.