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  • Oh Yes They Did

    Big labor apologist EJ Dionne Jr. asserts in the Washington Post today:

    The failure of the Big Three is regularly attributed to the high wages and benefits earned by members of the United Auto Workers union, and it’s true that the Detroit-based auto companies operate under heavy “legacy costs” for retirees’ pensions and health coverage negotiated during the industry’s fat times.

    But the blame-the-workers-first cant ignores the fact that if the Big Three had designed better cars, they would not have lost as much market share to Toyota, Nissan and other competitors. The unions did not prevent management from producing a better product — and I say that as someone who has enjoyed driving Saturns for the past 15 years.

    Oh but the union most certainly did restrict the type of cars the Big Three were able to produce. Megan McArdle explains:

    Management has made a lot of mistakes. But making big cars wasn’t one of them. That’s because they couldn’t profitably make small cars in the United States. And the reason they couldn’t is that their labor costs were too high. All in, Detroit was paying about $30 more an hour than other companies to make cars. At that kind of differential, you have to concentrate on large cars with big profit margins, not economy cars where consumers fight to save $15 on the headlight bezels.

    Posted in Economics [slideshow_deploy]

    6 Responses to Oh Yes They Did

    1. Mark,Houston says:

      Ya'know , there has been alot of talk about blaming the U.A.W and other unions for the problems with the auto industry . The real story is that I know of no AMERICAN who would turn down more money in the job their doing . The upper mgmnt. at the U.A.W.has indeed made some mistakes but do not blame the workers . remember ENRON wasn't a union company and niether is AIG but they seem to have no problems with the govt. bailing them out( AIG that is.).we need to stop putting the blame on union workers and start putting it where it belongs .

    2. Gary, Virginia says:

      The Union Members (workers) elect the Union leaders. The Union leaders negotiated (threatened the companies with strike) to achieve wages and benefits outside the competitive norm without consideration for effect. They squeezed the golden goose too hard and now it might die. The company management is complicit in agreeing to the terms. Both are at fault in the end and each is pointing in all directions except at their reflection in the mirror.

    3. Chris Orange Park, F says:

      You in the UAW can make $500K per year putting bumpers on new cars if the business model supports it, but when it doesn't, as is the case now, DON'T COME TO ME FOR A HANDOUT THAT DOESN'T FIX THE PROBLEM! YOU ARE UNCOMPETITIVE IN THE MARKET AND THAT IS WHY YOU MUST RENEGOTIATE YOUR CONTRACTS! I had to do it with Delta as a Comair pilot under Chapter 11, you need to too.

    4. kent/virginia says:

      I propose term limits to rid us of the Ruling Class dinosaurs in Washington and bankruptcy for the 'Big Three' in Detroit to rid us of the socialist dinosaurs in union management. We are burdened with too many greedy, rich, and powerful dinosaurs in Federal Government and the auto industry to compete–even in our own country. American taxpayers should begin to tell their leaders–the people who are supposed to be SERVING the interests of the American taxpayer–enough is enough. Stop the bailouts!

    5. Dennis Aderholt Soci says:

      Yes part of the blame must go to management, but a large part of the blame goes to the uaw. The time for the union is past, it did a good job while it was needed. We now have labor laws that prevent the very things the union was needed for. The union is out of date. When management can not fire a worker for being under the influence of alcohol or drugs while at work because of the union, what do you expect from the product. Poor quality, shody work, lousy cars. I bet the other companies do not have this problem.

      Now the democrtas want to have a public vote on haveing the unuion in their plant. this will lead to intimation of workers that do not want a union by those that do. This will only lead to more shoddy work and poor products.

    6. Drew, Arizona says:

      Unions are not too bright in that they promote their member's vote democratic. They are basically brain-dead drones unable to understand that it is the very government, the democratic party inparticular, who impose such regulations upon car manufacturers that it is difficult to make a decent profit. This coupled with union greed in that they believe they're entitled to the type of income received by a college graduate, it is no wonder the car companies are in such sad condition. Thanks a million unions…you jerks.

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