The Daily Mail says it much better than I could on this subject. Great editorial.

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Last dance with disaster
Print StoryEmail StoryAFTER decades of resistance to change, and the subsequent loss of big chunks of their own U.S. market, General Motors and the United Auto Workers finally agreed on something: Their arrangement must change dramatically, or they will both end up in the junkyard of U.S. history.
Earlier this week, after intense negotiations over a new contract appeared to break down, the 73,000 UAW members who still work for GM went out on strike, briefly idling more than 80 of the GM plants still operating in the United States.

But early Wednesday morning, these longtime industrial partners announced tentative agreement on a way forward. Union leaders will meet at the end of this week, and the pact will then go to workers for a vote.

Approval is not guaranteed, and neither is survival.

The labor costs of the shrinking Big Three American automakers — GM Chrysler and Ford — are estimated at $70 to $75 an hour. The labor costs of the Big Three Asian automakers — Honda, Toyota and Nissan — are estimated at $45 to $50 an hour.

GM, for example, has promised retirees $55 billion in health care benefits. Another element lies in the cost of defined-benefit pensions. GM wants to cut costs in the future by moving new employees to 401(k) plans.

Attempting to put the problems of U.S. automakers into perspective, the Wall Street Journal noted: “Totaling an estimated $90 billion, the Big Three’s benefits obligations are roughly equal to the gross domestic product of Peru.”

GM lost more than $12 billion in the United States in 2005 and 2006. Its debt, like that of Ford and Chrysler, is rated at the junk level.

The UAW is a basket case, too. Its job losses at GM alone have been staggering.

In 1985, the union represented more than 400,500 GM employees. This year, it’s estimated to represent only about 70,000.

In 1979, the union had 1.5 million members working for the Big Three. As of December, it had 538,448.

As UAW President Ron Gettelfinger noted when the walkout began: “Nobody wins in a strike.”

This is shatteringly true. In 1998, a walkout at two GM plants crippled GM’s production for a couple of months and cost the company $2 billion. It never regained the market share it lost.

A company that had 40 percent of the U.S. market in the mid-1980s has less than 24 percent of the American market today.

The UAW played the game right to the edge of the grave. Now, its leadership agrees with GM that it would be better not to step in.

Restructuring will involve painful changes to health care and pension benefits. But they may avert a far more painful outcome — the loss of a shared industrial future in the United States.