This is why you need unions. Most businesses will happily screw over workers whenever they can to maximize profits and the workers are lucky if they get peanuts back when they're swimming in cash.
The funny thing is, they might behave this way even if the management of all the car companies actually agreed with the unions and wanted to give them a 40% increase.
Suppose, hypothetically, that most of the management are actually good people who want to share their profits, but don't know what the management of the other companies think. Here are their options:
1. Raise worker wages in line with profits.
1a. The other companies do the same. Everyone's happy, no strike.
1b. The other companies don't do the same. Your company now makes significantly less profit; it's punished by the market -- stock price goes down, meaning you're at a risk of either a hostile takeover, or the board of directors firing you and getting someone else who's more ruthless (and will punish workers even more).
2. Talk with the management at other companies and convince them to raise wages. Actually, this is illegal, and you could face really steep legal fees or consequences.
3. Keep wages the same, and hope the unions do their job and call a strike.
Comments
The funny thing is, they might behave this way even if the management of all the car companies actually agreed with the unions and wanted to give them a 40% increase.
Suppose, hypothetically, that most of the management are actually good people who want to share their profits, but don't know what the management of the other companies think. Here are their options:
1. Raise worker wages in line with profits. 1a. The other companies do the same. Everyone's happy, no strike. 1b. The other companies don't do the same. Your company now makes significantly less profit; it's punished by the market -- stock price goes down, meaning you're at a risk of either a hostile takeover, or the board of directors firing you and getting someone else who's more ruthless (and will punish workers even more).
2. Talk with the management at other companies and convince them to raise wages. Actually, this is illegal, and you could face really steep legal fees or consequences.
3. Keep wages the same, and hope the unions do their job and call a strike.
Basically, #3 is the least risky option.