Wednesday, June 04, 2008

Big 3 Want to Build Cars, Just Not With Union Labor

Word that Ford will build its new fuel-efficient Fiesta "global car" in Mexico City is bad news for American auto unions. U.S. companies still want to build cars; they just don't want to build them with union labor.

We don't fault workers for trying to get more in labor negotiations. But the fact is, past UAW deals have saddled U.S. companies with such high costs that they can no longer make cars here and compete on a global market. So they make cars elsewhere.

Like a coyote caught in a trap, U.S. automakers have been desperately gnawing off a leg to escape certain death. They're closing plants and slashing jobs in Michigan, Ohio and other U.S. union havens, in favor of non-union, foreign places. Like Mexico and China.

Meanwhile, foreign companies have no problem making cars here. They do it in the non-union South, where the UAW is weak.

Ford's move to Mexico should be a warning to the UAW, which has seen its membership shrink from 1.5 million in 1979 to about 500,000 today. The UAW may "win" every negotiation they enter from now until doomsday, but to what end? The decline of Ford, GM or Chrysler is bad news for the U.S. — but it may be a death-knell for the UAW.

IBD Editorial

16 Comments:

At 6/04/2008 9:53 AM, Anonymous Anonymous said...

The decline of Ford, GM or Chrysler is bad news for the U.S. — but it may be a death-knell for the UAW.

The UAW will probably survive by re-inventing itself but Detroit is dead for sure.

In the coming decades Detroit is going to be used as a backdrop for movie makers making films about Armageddon.

Second Great Depression in Detroit

Housing in Detroit can be shocking to the uninitiated. Still want to buy a house for $1.00?

Even the Downtown Detroit Partnership can't get it right. Notice a disturbing lack of people in many of the photographs?

Unless a person has actually been to Detroit and looked around there is no fathoming the utter wasteland that it has become. (Note: It is even more of a wasteland now than it ever has been.)

 
At 6/04/2008 11:07 AM, Blogger James R Ament said...

It is another sign that Atlas is shrugging.

 
At 6/04/2008 11:16 AM, Blogger rufus said...

We may burn up, Someday; but, it doesn't look like it'll be, Today.

Coldest May since 1992, or some such.

 
At 6/04/2008 11:18 AM, Anonymous The Masked Millionaire said...

Anonymous is right.

You can win every battle and lose the war.

It seems as though the union is really not concerned, at all, with the long time survival of the auto companies. Only the survival of the union is imperative. But in the end they will probably both cease to exist in the USA.

Live From Las Vegas
The Masked Millionaire

 
At 6/04/2008 11:45 AM, Blogger bobble said...

wow! great.

now those auto workers can get jobs in one of the new, better, higher paying, occupations that globalization has created. like uh, well, i can't think of any right now. but those jobs must be out there, the economists and politicians were sure they would be created.

not only that, but they can buy cheap flatscreens at walmart with their credit card.

 
At 6/04/2008 12:07 PM, Blogger Walt G. said...

You might be right about the past; however, I think you need to look at the latest UAW/GM contract before you condemn the union today. A complete reexamination of the old thought process is currently underway.

Will the UAW ever be able to compete with sub $1-per-hour pay? No. That’s not likely. And, as anyone who has bought an older house knows, there are costs associated with established structures—just like legacy labor costs. But, the current agreement does substantially lessen the pay gap between the established unionized factories in the North and the non-unionized factories in the South.

Don’t let anyone tell you that the UAW does not have a successful presence in the future. Examine the facts for yourself and then make your own judgment. Don’t overlook the people and the company that brought you the 1955 Chevy, the 1969 Camaro, the 1970 Chevelle, the ’87 Grand National, the ’95 Trans Am, and of course Corvettes from 54 to 2008.

 
At 6/04/2008 2:57 PM, Blogger juandos said...

"now those auto workers can get jobs in one of the new, better, higher paying, occupations that globalization has created. like uh, well, i can't think of any right now"...

Hmmm, bobble I'm guessing you didn't think about it very hard, right?

Off hand I can think of several large American companies that have benefited from globalization, hence the number of employees at these facilities has also increased...

Companies like Allis-Chalmers, Case-North America, Catepillar, Corning Glass,John Deere, Farmall, IBM just name a few...

Hey bobble, are companies in business to give people jobs or to make a profit for their shareholders?

 
At 6/04/2008 3:31 PM, Blogger bobble said...

juandos: "companies that have benefited from globalization, hence the number of employees at these facilities has also increased..."

or maybe they offshored the production and created no new US jobs? do you have any proof to back up your assertion?

juandos:"Hey bobble, are companies in business to give people jobs or to make a profit for their shareholders?"

profit, of course. but that's not relevant to my post. what i said was we were promised new, better, *higher paying* jobs as a result of globalization. we didn't get them.

 
At 6/04/2008 4:16 PM, Blogger randian said...

Detroit has what, 1/2 its 1960 population? No wonder it's a wasteland, there must be huge sections of the city that are nothing but acres and acres of empty, decaying housing.

 
At 6/04/2008 10:21 PM, Blogger OBloodyHell said...

> now those auto workers can get jobs in one of the new, better, higher paying, occupations that globalization has created. like uh, well, i can't think of any right now.

Which is why you're a liberal idiot, bobbie. You've never learned to actually think.

But, hey, thanks for playing !!

 
At 6/04/2008 10:36 PM, Blogger OBloodyHell said...

> profit, of course. but that's not relevant to my post.

AHHHHNKKKKKK!!

Bobbie, you already said you can't think. Now stop trying to prove it.

Profit is ALWAYS the point. If a company cannot make a PROFIT, its workers cannot continue to WORK.

Investors (those people with money to invest) will take their money ELSEWHERE -- to where they CAN make a profit. Because that's the point of INVESTING.

So those precious workers you are solely concerned with will be out of jobs ANYWAY.

So an industry being profitable is ALWAYS the point.

The facts are simple: Manufacturing has been headed the way of Agriculture for over 50 years -- in the end, 2-5% of the American populace will be involved in creating manufactured goods, just as 2-5% of the American populace IS involved in farm jobs.

The rest will have jobs in the IP and services economy. Yes, some of those are "McJobs". But a damned hell of a lot of them are NOT. And most of the ones which are NOT pay a hell of a lot better than minimum wage, despite your pointy headed determination that that must be the case.

The current MEDIAN family income is over 60,000. That is a HUGE boost over what it was just 20 years ago -- far more than inflation. -- Median, Bobbie. More than FIFTY PERCENT of ALL Families out there are now making MORE than 60k a year. Boy, this economy REALLY SUCKS, don't it!?!? "Please sir, can I have some more?"

You can find the data yourself elsewhere on this blog in the last month or so: The current average INDIVIDUAL income is $40k, up from only 20k in 1993, only 15 years ago. Inflation since that time HAS NOT doubled, you can bet your dumb friggin' liberal twit ass.

Where does this tremendous increase come from, Bobbie, if it isn't from the non-manufacturing, non-McJobs?

Is your brain so utterly DENSE that it can't retain this information for more than 60 seconds, simply because it doesn't fit the liberal idiot template?

Get a clue, bobbie. They're FREE!

Geez, what a maroon.

 
At 6/05/2008 12:17 AM, Blogger bobble said...

OBH: "Which is why you're a liberal idiot, bobbie. You've never learned to actually think . . . . AHHHHNKKKKKK!! "

easy there OBH, you're going to blow a gasket.

first, i did agree that profit, not jobs, is the the purpose of a business, no exceptions. i never said companies shouldn't fire workers if that would enhance profits.

second, i lamented that proponents of globalisation have promised all of us that better jobs would replace the jobs that were lost via offshoring, etc. i took that promise to mean that these jobs would naturally arise in companies from an economic need caused by globalization.

that didn't happen. that's my point.

i bring it up because this blog glorifies all that is globalisation. that's fine, there are some good things that have happened. there is a larger pie, no doubt. i'm just pointing out that it didn't get split evenly. some people lost.

i have no solution. life's not fair and can't be made fair.

 
At 6/06/2008 3:54 AM, Blogger OBloodyHell said...

> that didn't happen. that's my point.

And I repeat the one I made:

If those jobs "didn't happen" then where did this vast increase in family and individual income come from? Sure you might be able to argue that the family income came solely from two people working (although it seems highly doubtful that it did so in just the last 10 years, given that trend has been on since the 70s) -- the fact is, the average INCOME has doubled in the past fifteen years.

Those aren't McJobs, bobbie.

When you are unemployed, your income does not go up.

When a crap job takes the place of an overpaid union job, income does not go up.

But income went up, and spectacularly so -- so neither of those has been in effect for most people.

Q. E. f'in D.

> some people lost.

Some people always do. Usually, they survive and prosper in the long run, anyway.

Sometimes the reason they lost is because they got greedy in the first place.

I feel little ruth for those employees who lost their life savings in Enron, for example.

You NEVER put all your savings in one basket -- no matter how feather-lined it may be. The chances of the basket getting dropped is too high.

A tough lesson, but one they could've learned by something other than personal experience.

I bet they won't forget it ever again, though.

 
At 6/09/2008 8:45 PM, Blogger OBloodyHell said...

> Will the UAW ever be able to compete with sub $1-per-hour pay? No. That’s not likely.

Not at all. They can certainly do this with robots. A factory with 10 workers making $50 an hour can compete with a factory using 500 workers at $1 an hour.

And they can probably produce a more consistent quality product, and also, they can be located closer to the delivery market.

So the UAW can compete, it just can't do so while maintaining the historical size of the workforce in factory work. And it shouldn't. There's no new wealth to be obtained from manufacturing, any more than there is from farming. It's time to move on. IP and services are where all new wealth got the coming century will be derived from.
As this entry so blatantly shows

Failure to grasp the significance of the transition from an Ag-based economy to an Industrial Economy was one of the major causes of woe in the 20th century. It was behind WWI (and, thus, indirectly, its continuation as WWII) as well as the Great Depression.

Let's try not to repeat that error in the 21st. The results won't be pretty.

 
At 6/09/2008 8:48 PM, Blogger OBloodyHell said...

> new wealth got the coming century

LOL
GoT==FoR with the left hand shifted one key to the right:

new wealth FOR the coming century

 
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