Monday, December 08, 2008

Two Different Views of the Automobile Industry Bailout

Our first story is one about typical liberal hypocrisy with regards to dealing with auto companies. No surprise there. Go take a read, it's fairly short and fairly entertaining. The closing line: "If Washington wants to see what ails Detroit, it's looking at it in the mirror."

So what should we do about the car companies' troubles? Well, this genius thinks we should burden Japanese car companies with the same troubles that have afflicted American car companies!

Even if a deal for a $15-billion to $17-billion preliminary bailout comes together this weekend to keep carmakers afloat into 2009, they will continue to be dogged by their most significant competitive disadvantage: a high-priced, unionized workforce. After all, hasn't it always been the central goal of labor unions to maximize the per capita wage bill -- including medical and retirement benefits -- paid out to its membership? Maybe the UAW is simply too good at what it does...

If the UAW really is to blame at all, then, it is because of the union's utter failure to unionize any of the transplants (Japanese companies which produce cars in the US)...

As is now clear, when the UAW exposed the Big Three to insurmountable competitive disadvantages, it cut its own throat...

It is not too late to save the Big Three. But the solution is not to tear down the historic and heroic gains won by prior generations of UAW workers. If there is hope long term -- for the unionized Big Three companies and for the UAW -- it rests in dealing with the unfinished business of the 1980s: unionizing the unorganized transplants.

This guy probably thinks that communism could work--if it were implemented correctly.


allen (in Michigan) said...

The poor schmoe is like Cinderella's ugly step-sisters trying to jam their big, fat feet into the glass slipper.

Like the ugly step-sisters, Mr. Payne's too fixated on his rosy dreams of a historic and heroic union to accept what current affairs is telling him: that unions are parasites and you put up with parasites when things are good enough to allow you to ignore the parasites. Well things aren't so good now and that's due in part to those unions.

What I find interesting is that, and this is just my perception, the appreciation of the unions role as a parasite on the body economic is displacing the previous view of unions as heroic organizations empowering the powerless at the expense of the greedy. Not to say there aren't plenty of lefties who hew to the old view but since there aren't plenty of lefties that view has less and less political force.

What's funny is that the group that's likely to come out of this most clearly damaged is the unions. The unions are frantically trying to shore up the gains of theirs that have been slipping away since the mid-eighties and this debacle isn't helping since it highlights how much they've lost and how little power they have to hang on to what they've got left.

I'm not quite ready to predict the end of closed-shop here in Michigan but I think that, even with a Democrat-controlled Congress and a Democrat in the White House we ought to get ready for successes by those in favor of right-to-work laws.

If the unions can't hang onto closed-shop laws that'll reduce the political power of all unions meaning the forces arrayed in favor of the educational status quo will be more isolated and thrown more on their own resources. When it comes time to hold the line against charters and vouchers there'll be that much less in the way of influence and resources to throw into the fight.

David said...

To make his idea work, we would also have to put very high import tariffs on automobiles, so that consumers wouldn't have the choice of getting lower prices and/or lower quality from abroad.

Ellen K said...

The unions have never understood that it's not all cookies and marshmallow fluff on the other side of the building. While CEO's may be making out like bandits, many of the sales and support workers are losing jobs and benefits right and left. You can't pay employees unless you make enough money to pay for power, supplies and all of the side issues facing any industry. When employees get legal might to force exorbitant payments from employers, the businesses go away. Where's Bethlehem Steel these days? Do you think steelworkers would back off on their earlier demands if they had realized they were driving a stake in the viability of their own companies? Yet the unions persist in saying the trouble isn't with them. When Company A has to compensate employees at $72 per hour and Company B only pays them $42 per hour, who will make more profit, have lower costs, charge less for products and be more profitable?