Unions To Blame For The Failure Of American Automakers?

• June 13, 2006

It seems as though UAW chief Ron Gettlefinger is dangerously close to admitting that here (subscription required):

DETROIT — United Auto Workers President Ron Gettelfinger said the decline of the Big Three auto makers and the rise of their Japanese competitors means the union must accept big changes in its approach to health insurance and other contract issues.
Mr. Gettelfinger made the comment Monday in a report to the UAW’s constitutional convention, which was opening in Las Vegas.
The challenges facing General Motors Corp., Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group are greater than earlier crises, including Chrysler’s escape from bankruptcy in the 1970s, the recession of the early 1980s and GM’s record losses in 1992, Mr. Gettelfinger said.
“The challenges we face aren’t the kind that can be ridden out. They’re structural challenges, and they require new and farsighted solutions,” he said.
Among those challenges is that nonunion U.S.-based auto assembly plants made 1.1 million more vehicles in 2005 than they did in 2001, while production at unionized plants fell by 1.1 million, he said. Mr. Gettelfinger said U.S. labor laws heavily favor management and allow employers, such as Japanese auto makers that have opened plants in this country, to intimidate workers seeking to unionize.

So even as union employees perform far, far below non-union employees automakers like Ford and GM must continue to pay the union employees their exorbitant wages and benefits packages because, by union contract, they can’t be fired.
No wonder these companies are failing. Their struggles might not be entirely the fault of unions, but I wonder how many of the problems companies like Ford and GM have faced are secondary symptoms of labor problems with unions. After all, when you’ve got a labor force you can’t get rid of that is eating up tremendous amounts of capital in wages and benefits while performing below par what can you do? Cut costs in other areas, obviously. Cuts that more than likely result in a less-than-good-quality product which in turn causes a loss in market share to your competitors.
Who just happen to be, in this instance, foreign automakers who don’t have the same problems with unions you do.

Tags: Cultural Marxism, Doug Goehring

http://SayAnythingBlog.com The_Whistler_ofnd

It has taken them a long time to bring down the American auto industry

With their monopoly they could stick it to the automotive customers until foreign competition became too fierce. When you think about it you have to admire the management of the US automakers for staying competitive that long.

So what does a US worker working for Honda make as compared to a Big 3? I’m wondering if the problem are the wages or the workrules.
robert108

Historically speaking, auto industry management never foresaw the rise of foreign penetration of the US market, so they thought the degree of unionization was manageable, due to lack of competition. They were wrong. Bad management. Lack of vision.
http://SayAnythingBlog.com The_Whistler_ofnd

It was bad management to allow the unions such penetration into the American auto industry in the first place.

They’ve survived this way for 70 years. The situation that led to unionizing (sit in strikes etc) was a much different situation than from today.
robert108

At the root of it, TW, business failure is always about bad management. It was bad management to allow the unions such penetration into the American auto industry in the first place.
robert108

Unions exist to fix the price and supply of labor. Thus their negative effect on any business which has suffered their invasion. All we have to do is to enforce antitrust laws equally. It has taken them a long time to bring down the American auto industry, but they may finally have succeeded.
Anonomisly

I wouldn’t say they are the only ones to blames, but they deffinatly do hold a heavy burden of it
http://SayAnythingBlog.com The_Whistler_ofnd

Duh!

If those union guys want to keep their jobs they can change their attitudes.

It’s one thing to want more money, everyone does. It’s another thing to push for rules that hurt productivity.

If you want to earn more, produce more. If you don’t sooner or later you won’t have a job.

SayAnythingBlog.com

Unions To Blame For The Failure Of American Automakers?

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