It also puzzles me that considering a lot of foreign car makers producing in North America have a non union workforce and yet they too are in trouble. How does that jive with the unions causing the big three's troubles?
Bob
Because the union thing is an ideological issue rather than economic, the facts of the matter are irrelevant.
🙂 Obviously the workers are driving the company into the ground. If we could get rid of the workers, the company would florish
😀
What I think is humorous is that GM is a huge, huge company, and has been the largest automaker in the world for a long time. They've been union so long they have multiple generations drawing benefits. How is that
possible if unions are the ruin of the company? I would guess a lot of business owners wish they had the chain dragging them down like it dragged down GM to the tune of largest automaker for decade after decade.
The fact is, unions help busnesses like GM. They provide an organized, motivated workforce. The job is desirable with high paying, good benefits, and likely to be around for a while. The employer gets to pick the best appllicants from a large pool, people willing to be team players.
There is a downside, of course, because nothing is perfect. If the business cannot sustain enough profits to maintain the system, it gives up its expensive but top-line workforce. There is no guarnatee in a free market that a business will succeed, no matter how careful you are.
GM's problems were never the cars or trucks, no matter what "experts" might say. If their vehicles were truly inferior, Toyota would not brag about beating them in sales at long last. If you insist that GM's sales numbers aren't an indicator of quality, then you can't claim Toyota sales numbers are.
It's funny how short people's memories are. In the 90's during Clinton's presidency, the issue was the high cost of healthcare. For people not covered by an employer plan, it was unlikely to be affordable. While this was really more of a problem with the healthcare insurance industry, the fact remains that the rising costs of top quality healthcare hit GM hard.
They had been operating with union labor for so long that rising "legacy costs" (pentioned retirees) became an onerous burden. Looking ahead, the management and unions worked out their next contract with an eye towards reducing this long-term liability.
As an aside, thanks to the union organization Ford, GM, and Chrysler did not have to compete on labor costs. Whatever contract was hammered out between the union with one company pretty much became the boilerplate for the next. GM wasn't competing with companies with much lower employee costs, so they could focus on building better cars and growing markets.
Obviously this changed a bit when the US began encouraging foreign automakers to build factories here. But ultimately, labor contract between the UAW and Detriot set the wage bar. If BMW didn't pay something close, employees could always call up the UAW and ask for some organization tips. To protect themselves somewhat from union activity, most new foreign-owned auto factories are in states with pretty lax union protections. But the fact is that the wage earned by a worker in a factory that makes cars is pretty heavily influenced by contracts between the UAW and the Big Three.
What people continually forget is the primary financial issues of GM are tied directly to healthcare costs, not sales numbers or quality or unions. And those problems have been addressed repeatedly by both the unions and GM management working together. Neither side would like to admit it, but they need each other.
In a climate where prominent Republicans stand up and say some line worker is getting paid too much without showing any shame, you can't expect the average person to understand what is really going on. Our national leadership either doesn't understand or has an agenda to push, so we get union backlash when it makes no sense.
Does anyone think Newt Gingrich has any right to tell someone they get paid too much and are ruining the country? How much does Newt get for a speaking engagement again? Something like $50K per, last I read. Kind of puts the lie to his words, if you ask me. But it seems few people are willing or able to look at the whole issue.
