In Detroit, Failure's A Done Deal



You have no idea how difficult it is to say anything negative about the auto industry or the UAW or their ridiculous anti-white collar or anti-business owner mentality around these parts unless you live here in Michigan. Those two groups are the enemy of the working man in Michigan. Kinda like being an anti-Semite in Israel. Not only that, it gets real personal real fast. Everyone living here has a relative or friend no more than one person away that works in or has retired from and therefore dependent on the auto industry somewhere. It affects EVERYTHING, including my own industry, real estate. It dictates virtually all public policy, politicians kiss so much auto ass that they have metal lips, even the schools are geared to "producing students ready for the work force".

Having said that, George Will with another excellent article in which he attacks some of Detroit's most sacred cows, such as:
""Nothing," said a General Motors spokesman last week, "has changed relative to the GM board's support for the GM management team during this historically difficult economic period for the U.S. auto industry." Nothing? Not even the evaporation of almost all shareholder value?

How ludicrous is this? Your company is facing total bankruptcy and nobody's job is on the line? Sometimes you actually do understand some of what the line guys are talking about with a management mentality like that.

And this:
"Some opponents of bankruptcy stress that it might terminate health-care coverage enjoyed by UAW retirees who are too young for Medicare. Think about that. If people want to retire before 65, or 35 for that matter, that is their business. But there is no public interest in protecting the luxury of retirement in the prime of life just because in palmy days a private contract between a union and a corporation established it as an entitlement for all seasons."

Can I just ask one simple question here? Who ever said it could work out that everybody can retire at 55 - or younger? The answer is, of course, the UAW and the contract they worked out with the companies. So, why the hell should I put money on the line as a taxpayer to guarantee some Joe's retirement while I will have to continue to work probably until I die?

Plus, nobody around here wants to face the fact that the unions have managed to blackmail the auto companies for decades and most auto workers, who have no real skills to use somewhere else in the marketplace (that's why they are called, and not by me, unskilled labor) will offer NO concessions as stated by their head jerk United Auto Workers President Ron Gettelfinger: "Gettelfinger rejected new wage cuts for UAW workers or a reduction in payments to a $60 billion UAW-run health care trust that takes over responsibility for retiree health care in 2010. ..."We do not believe there is any justification for conditioning assistance to the Detroit-based auto companies on further deep cuts in wages and benefits for active and retired workers. We would also note that in the cases where the Treasury Department has acted to rescue financial institutions, it has only imposed restrictions on executive compensation. It has never mandated cuts in wages or benefits for rank-and-file workers and retirees. Thus, there is no basis for singling out the auto industry for different treatment," Gettelfinger said in his prepared remarks.

Investor's Business Daily:
"Credit this idea to Robert Reich, the former Clinton administration official. We've had lots of disagreements with Reich in the past, and no doubt will in the future. But on this he's right: If a bailout is to be given, the Big Three and their unions must thoroughly revamp their businesses, almost as if it were a bankruptcy. Call it a Chapter 11 Bailout.

Above all, the companies' poisonous contracts with the United Auto Workers union have to be torn up. The problem is that the UAW, under President Ron Gettelfinger, remains adamant: No givebacks. This is financial lunacy.

Thanks in part to managerial incompetence, but mostly due to pricey union contracts, it costs American carmakers too much to build cars here; they can't compete. When you fold in health care, pensions, hourly pay, vacations and the rest, average total compensation for a Big Three autoworker is $73.21 an hour, according to data cited by University of Michigan economist Mark Perry.

Toyota, Honda and Nissan pay a still-generous $44.20 an hour in total compensation — a cost edge of nearly 40%. Is it any wonder that Ford, GM and Chrysler can't compete? Or that, after paying their workers, they never have enough cash left to retool?

These aren't temporary problems. They've been brewing for decades, as management agreed over and over to labor deals that now financially strangle the industry. Yet, UAW's Gettelfinger claims the weak economy is to blame for the industry's woes. Nonsense. As blogger (and former corporate CEO) Jim Manzi notes, American carmakers in 1960 owned 90% of the U.S. auto market. This year, for the first time ever, that share slipped below 50%.

Japan's Big Three — Honda, Nissan and Toyota — make anywhere from $900 to $1,600 in pretax profit on each car they make in North America (mostly in southeastern states, with non-union contracts). America's Big Three, by comparison, lose anywhere from $400 to $1,500.

Truth is, they're being out-hustled and out-priced in their own backyard due mainly to labor agreements that have driven up costs and become a millstone around their neck."

That's it, Ron. Talk tough, right into no jobs for your guys. Force YOUR member's employers to pay 40% MORE to your guys and forcing the company into non-competitiveness. Atta boy.

UPDATE:



RedState: "If taxpayers are being asked to fund a bailout for Detroit automakers, the UAW should come to the table with concessions. Maintaining this rate of pay is unsustainable in the current economic environment. Everyone but Detroit seems to get the message."

 

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