A travesty of economic justice has been laid upon General Motors and the American car companies in general. So last Wednesday I was listening to my boy Rush as usual when he was discussing the auto bailout fiasco. In the discussion Rush played some soundbites from two Republican Senators, Jim DiMent of South Carolina and Senator Tom Coburn of Oklahoma. One of Senator Coburn’s soundbites really hit home with me. Without quoting him, chew on this info for a minute.
Did you know that in 2007 both Toyota and GM sold the same number of vehicles worldwide? Both automakers each sold 9.37 million vehicles worldwide. That is an amazing coincidence on the one hand, but here’s the juicy part. Toyota, in selling the 9.37 million vehicles in 2007 made a profit of $17.7 billion dollars. General Motors, in their selling of 9.37 million vehicles in 2007 LOST $38.7 billion dollars! Absolutely amazing.
So Toyota sells the exact same number of vehicles as does GM and they make $17.7 billion dollars, while the same effort on the part of GM results in a loss of $38.7 billion dollars. What to make of this turn of events?
Gee, are those inscrutable little Asians outsmarting we good old Americans? Prolly. But then Toyota has at least two huge advantages on their side. Toyota is not saddled with the legacy costs of their retired workforce and they do not have to pay the outrageous current union-worker salaries. And therein lies the root of the difference and the root of the problem.
So if you’re a union member, get ready to get pissed off at me because I think your organization is as useless as tits on a hog. Now, I will freely admit the truth as to history, economy and the worker – that unions DID have a valuable place in the American worker’s landscape. But those days are past.
Unions have their roots in the crowded cities and urban areas of the Northeast and the current near-Midwest Rust Belt. This region of the nation that was heavily industrialized at the turn of the last century.
In the early industrialized United States the business owner had an unfair advantage over the worker. He had the job on which they and their urban families were so dependent. The bossman could demand six 14 hour days per week from the worker. If the worker complained the bossman fired him and hired some other poor sap in desperate need of employment. The company held all the cards, and the worker was at some level of disadvantage.
Unions addressed this inequity. They provided the “collective bargaining” so vital for the workers to improve their plight at the hands of the company. One man against the big bossman had no chance at all, so the workers “collected” their power in one entity – their union – hence the “collective bargaining” power of unions today.
Flash forward to the growth of the Federal government of the late 20th Century. Government put in all kinds of worker protections into laws and regulations that did not exist at the time union’s usefulness and popularity manifest themselves as an attractive bargaining tool for the workers. Once the Federal government came up with OSHA and various and myriad Federal wage compensation rules, the unions were rendered useless. Only problem is no one told the unions or their members that they were no longer needed.
And the unions and their members know a good thing when they see it, so they are holding on for all they’re worth, and they are killing the American car manufacturers.
Unions have destroyed numerous American industries. The south and Midwest used to have tons of textile jobs, clothing makers, etc, but not so much anymore. The American textile industry was destroyed by the cost of doing business with unions, especially when competition from foreign nations came into play. We hear a lot about “out-sourcing” jobs. Where do you think the “out-sourcing” comes from? Workers in foreign countries work for much less than an American unionized worker. You lefties keep preaching how great “globalization” is, well get used to seeing American union jobs move overseas.
Where do you think the Rust Belt got its name? Its name derives from the abandoned machinery and factories that used to be the vibrant economic engine of this formerly robust area. The steel industry was decimated by foreign steel that eventually equaled the quality of American steel, but at a much lower price. The unions did not run those industries in foreign lands like they do in America, hence the steel could be made and shipped to the US still cheaper than could be made by American unionized workers. It’s a sad reality, but a reality nonetheless.
And as the American steel industry went so went the factories and the local economies of the Rust Belt. Unions and their high wages and constant demands drove competition from non-union shops and foreign nations. If, for the sake of argument it cost $1.00 to make 1 pound of American steel, what happens when another enterprise (foreign nation or non-union shop) can supply the same quality 1 pound of steel for say $.75 cents per pound? Would anyone pay 1/3rd more because the steel came from a union shop? Hell no, not if they had any sense about them.
And remember, every company is responsible to its board of directors and its shareholders. No one can, in any business sense, justify paying a third more for something of equal quality just because it was made in a union shop. So naturally the buyers of steel went to the cheaper source when quality was equaled. If Japanese steel is the exact same quality as American steel, but can be manufactured and then shipped to the US and still sold for less than American steel, well I think you get what happens to the American steel industry. Don’t believe me? Go to the Rust Belt and look at the blight. Look at the miles of urban emptiness, the shells and foundations of factories and industries lying closed because they were driven out of competition by non-union industries. The proof is there for all to see.
Wanna see Detroit become an empty shell? Keep on with the unions and their insane demands and indeed you will see Detroit go the way of Pittsburgh, Cleveland and hundreds of other Rust Belt communities.
Now returning to the current discussion after the short little history lesson, does the reader have any idea of the numbers involved here? I recently heard the following recited somewhere (sorry I do not have the exact quote at my fingertips, but trust me, I am recounting accurately the numbers quoted):
The cost of a worker in a union auto manufacturing facility makes an average of $78.00 per hour with benefits included in that number, whereas workers in the southern US in non-union factories that build BMW’s, Toyota’s, etc., have an average hourly compensation of $45-48 per hour, benefits included in that number as well! That’s a huge chunk of change there folks!
That’s why so many businesses move south – NO UNIONS generally. The late 19th and early 20th Centuries need for union protections for the worker no longer exists. The US government has so many laws to protect the worker, pay him fairly, etc., that unions are useless nowadays, at least from the worker’s viewpoint UNLESS the worker cares more about the dollars in his pocket today versus the prospects of long term employment.
That means, yeah, the union will get you more money today, but at what price down the road? Will union salary and benefit packages price your employment out of existence? Look at Detroit and you’ll get your answer. Yeah, the union will get you a higher wage today, but soon the very same union that CLAIMED to be for your benefit will become an unwieldy entity whose demands will cause your employer to eventually relocate somewhere where the labor is cheaper. Sorry, but that’s the way it is. You may not like it, but I’ll be damned if you can deny it’s the reality!
So, still think unions are a great thing? If you’re a lefty, prolly so. But if you can put aside your political leanings and look at history and the reality of the numbers, you will see that unions will enrich you for a short time, but in the end money will always win out. Why should I plunk down $30K for an American midsized sedan when I can get a Toyota Camry for $25K? I don’t know about you but 5 grand is a huge chunk of change to me and damned if I will pay 5 grand more for something just so I can say “I drive American,” which is a misnomer anyway.
Most of the Toyota’s in this nation are made here anyway, by American workers who work for a company based in Japan. Big deal! Remember, as it stands now unions exist only to further their own existence. Watch as GM, Ford & Chrysler move south, if they survive. They will move to non-union areas and employ and pay people a great wage, just not $78.00 an hour.
So either the unions drop the greed and their members take a drastic pay & benefit cut or these factories and the economies that thrived on the factory workers wages will become ghost towns as well. Don’t believe me, do ya? Just take a ride through western PA or Ohio and then get back to me. All those empty buildings and closed down businesses are the remnants of a formerly vibrant economy that wasn’t smart enough to NOT sew the seeds of their own doom. Greed will get ya every time – no doubt!