I have been following the recent controversy surrounding a bail-out loan for the Big Three auto makers and have some very mixed feelings. Some experts have proclaimed that GM, Ford and Chrysler should seek bankruptcy and reorganize into more efficient, Green manufacturers. That seems to make sense, as Detroit insists on plodding along with an outdated business model and needs to be shocked into change. They produce oversized, overpowered vehicles that get lousy gas mileage and yet still remain clueless as to why Honda and others eat their lunch every day.
Others predict the millions of jobs tied to the auto industry would be lost without the bailout funding, throwing the United States into a depression. They point to the currently fragile economy, with each day bringing more bad news. After all, they say, the Fed bailed out AIG, etc., with a lot more money than Detroit is asking for.
I personally think that if we can spend (waste) approximately ten billion dollars each month on a no-win war in Iraq and Afghanistan, what’s another fifteen billion for our own country’s financial stake? But there have to be strong terms associated with spending taxpayer’s money on this loan.
There is enough blame both within and outside the auto companies for the current mess. What really irritates me, though, is the intransigence of the United Auto Workers (UAW) union in the equation. As of December 12th, the Senate came close to passing a bailout loan but the final vote failed. Enough Republicans voted against it, primarily because they wanted the UAW to be paid on par with the Honda and Toyota U.S. auto workers. The Democrats refused to include the language in the bill, and it failed.
The Democrats rant against Wall Street greed, and so do a lot of Republicans. Why in the world wouldn’t the Democrats at least try to negotiate the UAW parity aspect and reach a common ground with those opposed to the bailout? Simple: the Dems always have unions in this country in their back pocket due to their unwavering support of union demands. The symbiotic relationship includes the unions always voting for Democrats, no matter the level of government. Apparently, the change that Pelosi promised and Harry Reid supported is no more than political rhetoric.
Now the real wonderment is the UAW stance itself. It seems these folks would rather be out of their jobs than give up an inch to save them. The prudent person would think that the UAW would have been at the forefront of the bailout debacle, but they remained silent for the most part. The only two times I’ve seen their president on the news was when he stated how the economy would suffer badly if the UAW was out of work, and another time when he said they wouldn’t take a pay cut.
According to Professor Mark J. Perry, the 2007 annual labor and compensation packages for each auto worker were as follows:
> GM = $146,520 ($73.26/hour)
> Ford = $141,020 ($70.51/hour)
> Chrysler = $151,720 ($75.86/hour)
> Toyota, Honda and Nissan (in the U.S.) = $96,000 ($48.00/hour)
One thing that may change is the so-called “jobs bank” that paid laid off workers 95% of their pay indefinitely. There were 3,500 workers in 2007 who were still receiving their pay while laid off. This illogical extortion by the UAW started in the mid 1980s as a result of workers being replaced by automation. Now, the UAW president, Ron Gettelfinger says the UAW will suspend the bank but couldn’t offer any specifics.
As far as any wage cuts, he said they will be addressed when the current union contract expires in 2011! Yet, he says the situation now is critical and the jobs must be saved. Really, Mr. Gettelfinger? So what you are actually saying is that you would gamble the jobs of all your UAW members rather than give up any kind of a pay cut?
I find it offensive that an unskilled worker makes more money than people that are in the health business, the military, and any other occupations that are paid less than the average UAW worker. If you wonder why that pickup truck, or SUV costs so damn much, consider the exorbitant wages and compensation packages the UAW has forced upon the auto makers and, consequently, the public.
Unless the UAW comes to its senses, I wouldn’t care if all of them were replaced by those efficient robots on the assembly line.
Sources:
http://mjperry.blogspot.com/2007/07/uaw-pricing-themselves-out-of-market.html
