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I may not agree with everything the UAW is asking for in their current strike, but I do think they have a lot of important points on their side. Two key points are Bidenflation and Biden’s completely unbalanced, insane climate policies.
On Bidenflation, remember when former President Obama negotiated the auto bailout back in 2009, the UAW agreed to forego cost-of-living adjustments in their contract. Hat-tip to Breitbart’s John Carney for reminding me of that one. So, they haven’t had a COLA increase in over 20 years.
That was OK until recently when Joe Biden came into the White House and launched a left-wing spending frenzy, which the Federal Reserve playing along, at least until recently.
The Consumer Price Index has increased almost 17% since Joe Biden took office. Necessities like food and gasoline have spiked 20% and over 60% respectively. So, their real wages have plunged and they’re not happy about it. Can’t blame them. Not surprisingly, one of the key union demands is the return of cost-of-living adjustments.
The Big Three carmakers are so far holding out on this point, along with demands for outsized union wage and benefit demands, and the UAW has gone on strike in factories in Missouri, Toledo and Wayne, Mich. Then, there’s the issue of Biden’s lavish subsidies for electric vehicles, as embodied in the misnamed Inflation Reduction Act.
Nobody knows how much those subsidies are going to be worth over time, but it’s going to be at least $500 billion. Probably a lot more, since there are no money or time caps. So, autoworkers are asking the guy who says he’s the most pro-union president in history: “Where are our subsidies?”
Don’t take it from me. Take it from Pro-Union Joe himself:
JOE BIDEN: I intend to be the most pro-union president leading the most pro-union administration in American history. I meant what I said when I said I’m going to be the most pro-union president in American history and I make no apologies for it… I’m proud to be the most pro-union president.
You couldn’t convince the union of all of that. The key point here is that Joe Biden’s EVs could spell the end of the UAW and union leaders know it. Studies have shown that EVs require only 40% of the hours worked, compared to gas-powered cars.
The entire auto industry — including the knock-on effects for dealers, repair shops, gas stations, diners and who knows what else — could see a half-a-million jobs obliterated. Maybe even more. Plus, of course, the UAW faces stiff competition from right-to-work states in the South and elsewhere, where a lot of the EV car and battery subsidies are being invested.
So, between the combination of Joe Bidenflation and his crazy climate policies, all this sets up a huge doom loop for the car business as it exists today and, remember, Bidenomics is jamming these climate policies down our throats, taking away consumer choice. People do not want to be told they can’t drive gas-powered cars.
Does any of this save the UAW? I don’t know, but I don’t think they bargained on Biden’s price hikes and EVs and Chinese batteries. So maybe folks should think twice before they bash the UAW’s positions.
Now, here’s a final thought. Take a read of Donald Trump’s Agenda47 whitepaper called “Rescuing America’s Auto Industry from Joe Biden’s Disastrous Job-Killing Policies.”
The former president pledges to end the assault on the internal combustion engine and to cancel harmful emission regulations for trucks and cars. The former president would also end Biden’s insane CAFE fuel-economy standards. Trump would also revisit some USMCA cheating on regional auto parts content. Of course, the former president would reopen the spigots for liquid gold and “drill, baby, drill.” He intends to seek new reciprocal fair trade legislation.
As far as I know, no other candidate in either party has a policy prescription to deal with any of these auto-related problems. So far, the UAW leadership has held back a Biden presidential endorsement, but I suspect in the end the leaders will throw in with the Democrat Party. On the other hand, I’m taking the over for rank-and-file autoworkers voting for Trump. You can bet on it. That’s my riff.
This article is adapted from Larry Kudlow’s opening commentary on the September 15, 2023, edition of “Kudlow.”
The National Owners Association called California’s recently-passed AB 1228 “draconian” and costly to franchisees in a memo distributed to its members.
“The new ‘AB 1228’ legislation has been voted into law and will result in a devastating financial blow to California McDonald’s franchisees at a projected annual cost of $250,000 per McDonald’s restaurant,” the advocacy group representing some 1,000 McDonald’s franchisees said in the memo obtained by FOX Business.
“These costs simply cannot be absorbed by the current business model.”
CNBC earlier reported on the NOA memo.
Among the bill’s key components:
When signing the original version of the legislation, California Gov. Gavin Newsom said, “California is committed to ensuring that the men and women who have helped build our world-class economy are able to share in the state’s prosperity. Today’s action gives hardworking fast-food workers a stronger voice and seat at the table to set fair wages and critical health and safety standards across the industry.”
The state Senate passed AB 1228 Thursday.
The NOA said franchisees, suppliers and McDonald’s “must engage to support our California McFamily” and identified steps it said they each should take with ideas ranging from the franchisees establishing 501(c)4 entities and state political action committees (PACs) to create an official arm to lobby the government.
Suppliers urged the reduction of costs in operations that could lead to cost savings for fast-food restaurants they work with.
The NOA called on McDonald’s to direct “rent and service fees collected from sales” from potential price increases in response to the bill to efforts like “overhauling” the operational platform and doing more labor-related research and development to help franchisees.
In its memo, the NOA also made allegations about a “small coalition of franchisors” having “negotiated a deal with” the Service Employees International Union without franchisee involvement “causing the legislative outcome to now become certain.” It mentioned McDonald’s, the National Restaurant Association and the International Franchise Association.
IFA CEO Matthew Haller told FOX Business he participated in the negotiations with a goal of making sure franchises had involvement and representation. Some franchisees spoke directly to the governor’s office, he added.
FOX Business also reached out to the National Restaurant Association for comment.
“Over the past year, I’ve worked closely with company leaders, a task force of fellow franchisees and our own independent advisers as part of a coalition of brands working to protect our business model against an all-out attack on restaurant owner/operators,” California McDonald’s franchisee Roger Delph said in a statement to FOX Business.
“Anyone who is suggesting this was not a collaborative and successful effort to protect the franchised business model in California, or that franchisee involvement was absent, was either not involved or is contorting the facts.”
The NOA suggested AB 1228’s passage could lead to similar efforts by legislative bodies elsewhere in the country, adding, “We need to remain unified so that this can not gain a foothold anywhere else.”
In a recent internal message obtained by FOX Business, McDonald’s told its restaurant system AB 1228’s terms “are entirely different” compared to the prior version of the bill that it described as “harmful to our system.”
It said AB 1228 created a “significantly limited Fast Food Council,” did away with AB 257, prevented joint liability from getting applied to franchisors and franchisees, and made a “clearer, predictable wage schedule through 2029,” among other things.
McDonald’s “worked tirelessly” with the “California Owner/Operator Task Force” and others in the state to “protect owner/operators’ ability to make decisions for their businesses locally and protect their restaurants and their crew,” the company said in the message.
Those included the creation of a “coalition of brands to refer AB 257 to California voters in November 2024” and “significantly” increasing its “political engagement in the state,” according to the message.
The company said it has established a “cross-function, fast-action team of McDonald’s staff as well as Owner/Operators from California, New York and Illinois, to co-invest and work collaboratively on an action plan.”
It will “pilot innovative short and long-term solutions” for California using best practices adapted from other places that have experienced similar legislation, according to the internal message.
Jay Caruso contributed to this report.
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