The union will be the death of the auto industry, and perhaps BHO’s presidency (for the obvious vote garnering payback, also known as “bailout funds”). Here’s a quote from President Obama in Chicago, addressing the AMA today:
"A big part of what led General Motors and Chrysler into trouble," he said, "were the huge costs they racked up providing health care for their workers — costs that made them less profitable and less competitive with automakers around the world."
What?! So Healthcare costs led to the demise of two American auto-making icons? What about the unionized workforce that currently produces the American automobile?
Here’s a quote that seems so much more fitting.
“You can not pay someone $50.00 per hr. to build a car and sell it to someone that makes $12.00 per hr.”
I wish I could take credit for it, but alas it was an anonymous online poster responding to NASCAR’s considering allowing other foreign manufacturers into their circuits.
I make it no secret that I am a NASCAR fan, I have a yellow ‘17’ in the upper corner of the back window of my American made SUV (it’s a Ford, Explorer even). For not having a mullet, red neck, or a beer dispensing hat, I could fit into a conversation with any level of fan. I respect that they all have a passion for racing. But I digress…
I wish we had the time to talk about racing all day, me to write about it and you to read, but that’s not how it works in the real world, is it? Speaking of the real world again. Labor costs make up for a much bigger % of how profitable a business is rather than healthcare. It doesn’t matter what industry you are in, profit margins exist in the narrow confines of production costs and retail price.
Kudos to Ford Motor Company for not taking any bailout money; also for negotiating with the UAW and getting the best concessions for their business to run…for now. I tend to negotiate with a little more logic, such as…”concede, or we are all out of a job”…but hey, I’ve never been much of a “union guy”. I understand how/why they were created. To protect the workers from abuse, unsafe conditions, etc…but today, those poor working conditions simply do not exist anymore. Wal-Mart, operates it’s retail/grocery store union free, and may get a bad rap for low-paid workers, but you’ve got to hand it to them…do we, as consumers, really care? The worker has federal laws protecting them from discrimination, long hours, unfair pay rates, and poor working conditions. The employee is not an indentured servant, if they disagree with the corporate policy they can file a grievance, or resign.
Back to the real world where folks are just happy to have a job, and public outcry is beginning to harden regarding labor disputes, strikes, etc. With near-historical unemployment numbers, and growing jobless claims. No one is happy to see their tax dollars go to obviously failing businesses. No one is happy to see workers fight for more money rather than making concessions to stay employed.
I am a consumer, these are hard times, if someone in China is making a better product cheaper…and I’m more apt to buy it. Does it make me un-American? Not at all…consider that China already owns our debt, our government has made the same decision, well before I did.
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1 comment:
Great post. The one caveat I'd allow is that someone in China is making pennies a day to create that cheaper product. I'm all for free trade, but you have to have a balanced playing field to do it right.
Either the US scraps it's minimum wage laws or else convinces China to implement their own version. Otherwise, capital will continually flow out of America to China. And despite the huge wealth of the United States, with a uni-directional flow, eventually that outflow will become unsustainable.
On the plus side there is opportunity - less restriction on companies operating in America would mean more manufacturing which means more jobs. Of course Democrats campaigned on more regulation not less, and sadly, they won.
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