Economists would predict that higher gas prices would lead consumers to put pressure on auto manufacturers for more fuel efficient cars. But would anyone expect pressure from the United Auto Workers? If we think about it, the incentives are there.
UAW members rely on the profitability of U.S. auto manufacturers to keep their jobs. As gas prices rise, UAW knows that demand for SUV's and trucks will decrease. Since these are the cash cows for the automakers, there's an incentive for UAW to put pressure on the manufacturers to make them more fuel efficient. Here's CNN.com's take:
...Demand for the fuel-thirsty vehicles dropped sharply earlier this year, on a shift in consumer sentiment as gasoline prices began their upward spiral.
...
"Some people say that until it gets over $3 dollars (a gallon) it won't really matter," Gettelfinger [UAW president] told reporters on Friday, when asked how gas prices were affecting demand for Detroit's most profitable vehicles.
"I think when the average person pulls up to the fuel pumps it does have an impact on them," he said.
A union source said Gettelfinger has raised his concern about gas prices in talks with GM about the company's demand for union concessions on health care and other benefits to help the automaker return to profitability.
Oh, and the name of the story? "Auto worker union boss goes hybrid."
"I drive a hybrid myself, a Ford Escape hybrid. I love it," he said.
Cool stuff. I love when economic incentives work.
