Why is the American Auto Industry in Trouble?

Well, unions have more than a little to do with it.

Take the “Jobs Bank” for example…

An October 2005 article in the Detroit News helps explain in graphic terms just how the unions have helped destroy U.S. automakers — namely, by forcing automakers to pay people for literally doing nothing:

Ken Pool is making good money. On weekdays, he shows up at 7 a.m. at Ford Motor Co.’s Michigan Truck Plant in Wayne, signs in, and then starts working — on a crossword puzzle. Pool hates the monotony, but the pay is good: more than $31 an hour, plus benefits.

“We just go in and play crossword puzzles, watch videos that someone brings in or read the newspaper,” he says. “Otherwise, I’ve just sat.”

Pool is one of more than 12,000 American autoworkers who, instead of installing windshields or bending sheet metal, spend their days counting the hours in a jobs bank set up by Detroit automakers and Delphi Corp. as part of an extraordinary job security agreement with the United Auto Workers union.

Luckily, as taxpayers brace themselves to get soaked to the tune of tens of billions of dollars, the UAW is considering “scaling back” the program as part of a range of concessions. Why, they might even “suspend” it.

“Scaling back”? “Suspending”? Jeez, at least the overpaid CEOs flying in their private jets are working. They might be screwing everything up, sure . . . but they’re working.

As of November, there were 1000 union workers in the “jobs bank,” getting paid up to 95% of their salary to do nothing. Three years ago, there were 12,000.

Now, this guy has an idea that only an acedemic would think up: put the burdens created by the Unions on all the auto companies.

Now why didn’t we think of that?  Because we’re not Jonathan Cutler, associate professor of sociology at Wesleyan University.  His notion in a nutshell, contained in his Los Angeles Times column of today [emphasis added]:

[N]ot 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.

Let’s count the ways that won’t work:

  • As he acknowledges, most of the foreign manufacturers were smart enough to build their plants in right-to-work states.
  • But even if starting tomorrow the boys of the UAW went to work 24/7 to unionize them and, against all odds, were successful, a labor lawyer friend tells me it would take six-to-twelve months just to be named the bargaining representative, at which point contract negotiations would only begin.
  • But Ron Gettelfinger, the president of the UAW, testified to the Senate this week that without immediate help, GM could be out of business by the end of this month. GM and perhaps the other domestic manufacturers would be long gone by the time the union was able to oppose an onerous contract on its foreign competitors.
  • But even if we could all clap our hands and impose union contracts on the foreign firms tomorrow, that would do zero to reduce the legacy costs for the tens of thousands of retired Big Three workers that are killing Detroit.

Bottom line: Jonathan Cutler’s concept has zero chance of success.  But a sociology professor can dream, can’t he?

Surely a better idea would be to get rid of the millstone, rather than forcing everyone to wear one.

That’s not to say that the companies themselves don’t have problems – they’re making cars no one wants to buy. But the unions are driving up costs to “protect” workers, not bothering to worry that doing this might actually achieve the exact opposite of what is intended.

Categorized as USA
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