2008.11.13
Four words you'll never hear me say:
Cal Thomas is right.
But this time he is.
Sorta.
In a word, the syndicated columnist says what has driven the auto industry to its current state are unions. I've been saying that for years. In a column last week in the Wall Street Journal, Pulitzer Prize-winner Paul Ingrassia suggested ripping up the existing contracts with the unions.
I am a former GM employee. Also as a native of Flint, Mich. -- home of the 1937 Sit-down strike, the precursor to the once-powerful United Auto Workers -- I'm fully cognizant of the role auto unions played in creating this country's middle class of which I am a direct beneficiary.
But as the economy changed and unions' influence waned, their demands didn't. Thomas noted "increasing UAW demands, strikes and threats of strike unless health care and pension benefits were regularly increased."
A few years back a family member was outraged -- OUTRAGED! -- by news that GM might start charging retirees a health-care co-pay or premium or some such cost. I explained I've always paid a portion of my health care since I finished college.
So here we are -- GM, Ford and Chrysler execs trolling the halls of Capitol Hill, hat in hand like a beggar on a corner. (Brother, can you spare $25 billion?)
Unlike Thomas, I won't cite just the unions as the plague of the auto industry. The automakers themselves have some serious soul-searching to do.
Why all the balking at fuel efficient standards? When the unions became flat-out greedy, what about telling them to step off, and everyone -- management and employees -- thinking less about the next quarter's projected profits and more about the long-term health of the industry?
So Thomas is right -- partially. Everyone deserves to be taken behind the woodshed on this one.
The saying always has been (at least in the home state) that as GM goes, so goes the economy. Does Congress give the Big Three a bailout? Yeah....but with lots of caveats. Ingrassia suggests kicking out the management and boards and appointing a government overseer to run the car companies, revamp and return them to private operation.
Whether or not government goes for that, a drastically new way of thinking is essential. I have a dog in this fight, and I don't want to see the Big Three go down.
But I don't want to see them continuing to go down the same perilous road, either.
I couldn't agree more. Unions served their purpose at one time, but in my opinion, that time has passed. I also agree that automakers' problems are not solely the fault of the unions. Corporate compensation has gotten ridiculously out of hand. I don't like government bailouts, but losing the Big 3 is unthinkable.
Comment by Mike — November 14, 2008 @ 1:12 pm
Hey Shanna, however reluctantly, I have to agree with you. To a degree, I agree with you too, Mike. Unions, in the automotive industry are just as guilty as management in pursuit of short term profit instead of long term viability. I am rooting for the Big 3, but I have to admit I've owned my share of foreign cars. German, Japanese and Korean. I was brought up Genuine GM products, too.
Somewhere along the way, we lost our focus. Quality in an automobile is a sensory feeling, that seemed to evaporate in later day American products.
However, I still want a Cadillac CTS, when I am so blessed...
Comment by Shaun — November 14, 2008 @ 10:12 pm
The unions didn't fail to increase fuel efficiency, the engineers did. People didn't stop buying the cars because the workers were unionized... they stopped buying them because the companies were in league with the oil companies and failed to keep up with the standard of quality put out by foreign companies. The only thing the unions are guilty of is making sure the workers were taken care of.
Comment by Shan — November 15, 2008 @ 5:45 am
The UAW must either capitulate or be unemployed. The middle ground is now gone. In a few months we will be having the same conversation about Boeing.
Comment by Chris G. Muse — November 15, 2008 @ 8:51 am
No wonder they are going broke, if they are paying the full health insurance premium in addition to the high wages reportedly paid to the employees, not to mention the Union. I am a retired state employee and I have to pay $469.00 monthly for single coverage. Even when I was employed, we still had to pay a portion of our premium. I wonder if the auto industry is picking up the tab for the retired people also. Can you imagine the cost? Probably $500 to $1,000 monthly per employee depending on whether they have a spouse and family plan. I think the Union has run that industry into ruin.
Yes, the automakers pay health care for retired workers--s
Comment by Stephanie — November 15, 2008 @ 9:16 am
The only difference between a free man and a slave is a union. GM, Ford, and Chrysler is in trouble because they built cars no one wanted. The 8-hour day, 40 hour week, every benefit ALL workers have today came about because unions pushed them first. When 'Ol Massa had an "uppity" slave 150 years ago, he just sold him down the river. Today's bosses just fire 'em. NO difference. UNION TODAY, UNION TOMORROW, UNION FOREVER.
Comment by Percy Kution — November 15, 2008 @ 11:06 am
Engineers? Shan, my friend, engineers can only *wish* we had a say in the product or direction of the company.
(no, I'm not an automotive engineer, but most engineers share a lack of respect and audience by upper management)
Automakers didn't force people to buy low-mpg cars; they developed them to meet market demand. Now if demand suddenly switched from guzzlers to low-mpg cars leaving automakers flat-footed, then yes, they were at fault for that point knowing it takes time to re-tool and switch lines to new vehicles.
(and keep drawing, the sketches are looking good! that's something I've never been good at)
Comment by Ed S. — November 15, 2008 @ 11:36 am
Stephanie,
You make an interesting observation. (pensions and health care dragging down corp finances)
I wonder if there is a parallel to social security (already on its way to "broke" and "national health care"?
Comment by Ed S. — November 15, 2008 @ 4:33 pm
I am sitting here looking at the article written by Cal Thomas that started this thread. I could be wrong, but I don't think his figures add up. He says the current GM hourly pay with benefits is 78.21 per hour and 26.65 for new hires. That is a huge difference. He says that Toyota labor costs with benefits are 35.00 per hour. That is 8.00 more than GM new hires. Then he says that GM is cancelling lifetime health care for 100,000 white collar retirees. The UAW did not negotiate that contract. These numbers just do not sound right to me. I know one thing that is right.
When I was in high school, about 1962, a friend with an after school job bought a new car. He bought it because it was cheap. That car was a Datsun Blue Bird. A lot of people told me they bought them for that reason. But, I'll bet it has been 20 years since anyone told me he bought a Japanese car because it was cheaper than the competition. By the way, Datsun is now known as Nissan.
I'll bet they did not cancel all white collar retirees lifetime health care.
One more thing, the time for unions may have passed as a lot of people say. As soon as the unions are gone, we will be back to 14 hours a day 7 days a week just like we were before unions. The time for greedy employers will never be passed.
Yeah, that comparison was a little suspect, but his overall premise is right. I do know that new employees make a lot less...last I heard, their pay was about $14/hr.--s
Comment by Allen Bunch — November 15, 2008 @ 6:44 pm
The companies that I represent have repeatedly voted NO to the union. When you treat your people like people, and provide them good benefits (our blue collar people have identical benefits to the executives), they recognize a good thing when they see it. There may be exceptions, and the mere existence of unions may keep companies like ours honest, but by and large they have gone the way of the Edsel. If the comments by the new president are to be given any credence, he intends to tax our particular industry out of existence anyway. In that case, no family will be able to afford to turn on their lights at night.
Comment by Mike — November 16, 2008 @ 4:10 am
You hit the nail on the head.
Comment by Pat W — November 16, 2008 @ 8:34 am
Mike, there are a few companies like Sullair and Lincoln Electric that know how to get people to do a good job for them. I haven't been associated with either of them for about 15 years but I doubt if they have changed. I know they are both still in business and still produce top quality products. The point is, they not only take care of their employees, they take care of their customers too. In turn the employees and the customers take care of them. I love this world.
Comment by Allen Bunch — November 17, 2008 @ 1:47 pm
Unions, in concept, were a great idea back when they were first created. They defintiely were needed to force better working conditions on employers at the time. That being said, unions have not changed along with the times, and now themselves are just as bad if not worse than the companies that they feed off of. Remember folks, the only way a union has any money is by charging dues to the folks who are members, decreasing thier "take home" pay that much farther. While I myself have never belonged to a union (the majority of my working life I have been a white collar professional), I know plenty of folks who either have or currently do. Several years ago, a local manufacturing company went on stike at the urging of thier national union folks, until it became known that the only reason the national wanted the local to strike was to use them as leverage in another strike elsewhere in the country. Once this fact became known, the local folks told the natinal folks to take a hike and the workers, who were the only ones being harmed (not helped) by thier national union's shenannigans, were back at work supporting thier famiies and the local economy within a week.
Healthcare costs and who pays them are a huge problem for the entire country. I have worked for employers in the past who picked up the entire tab for as long as they cound, but the days of any employer making enough profit to continue doing so are long over. What I don't think a lot of people understand is how much thier benefits (and taxes) cost thier employer in addition to what they are being paid. On average, the additional taxes and medical benefits cost the employer a minimum of 30 percent above what the employee is being paid (i.e. an employee being paid $15 per hour actually costs the emloyer $20 to $25 per hour to employ them). Do the math for the Big Three with top union employees making $50 per hour and higher and you begin to see what a portion of the problem is.
Executive compensation is another whole argument. Suffice to say, I personaly believe what these folks are paid is obscene, given what they do as opposed to what the folks down in the trenches do on a daily basis. As I have reminded more than one muckity-muck at various employers over the years, without me doing my job and actually producing something, you don't have a job either.
As for fuel efficient vehicles, the technology has been there for a long time, it just hasn't been considered "profitable" enough to force the Big Three to persue it. Now that gas prices have gone as high as they have (and that is a WHOLE 'nother rant for another post), John Q. Public is finally screaming for more fuel efficient vehicles. We'll see if anybody listens.
Comment by Purvis Ledbetter — November 18, 2008 @ 8:24 am