Careful There, Bob

The UAW President thinks he sees an opportunity in the wake of the Japanese earthquake.

WLNS is reporting that UAW President Bob King sees an opportunity for his union to roll back concessions, based on gains that GM, Ford and Chrysler will make in the auto market. Japanese automobile production was severely cut back because of damage from the March earthquake, a massive tsunami and the strain on Japan's electric grid from the failure of the Fukushima Daiichi nuclear power plant.

Now there's actually a germ of economic thinking here: even in the midst of a weak recovery from a recession, Japan's problems create opportunities for domestic automakers; there are still customers who want cars and Detroit is in a nice position to provide them. But King needs to keep in mind that Japan has automakers and suppliers in the US now too, and none of them were damaged by the earthquake. King should not allow himself to think that Honda, Nissan, Toyota and the rest have been crippled. Nor should King let himself think that the damage is permanent. This is not the first time the Japanese have had to rebuild after a natural disaster, and massive earthquakes don't happen there every year.

Detroit may have an opportunity here to maybe regain some customers from the Japanese automakers. The main chance here is not to sell some cars and make a quick buck, but to regain market share, provide quality cars at a good value and regain the good will of car buyers. But that means not pushing things too far.

Estimating the impact of the earthquake on Japan's auto industry will be difficult given the complicated relationship between suppliers and automakers. It's not clear that the UAW president has much patience for sound economics. Resentment over Japanese success in the auto industry runs deep in Detroit, and that resentment can cloud judgment. The UAW has a track record of declaring happy days are here again prematurely. There is a very real chance, even a likelihood, that King will overestimate the damage suffered by Japanese automakers, demand more than is wise, blow an opportunity to stabilize his industry over the long haul, and eventually cost more UAW members their jobs.