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UAW Won't Let Detroit Make Competitively Priced Cars

Posted By James Sherk On December 17, 2008 @ 5:08 pm In Economics | Comments Disabled

Even as the Detroit automakers are asking Congress for a taxpayer bailout, the Detroit News reports that Ford Motor Co. is operating highly automated, highly integrated, and highly profitable auto plants — in Brazil [1]. They employ state of the art technology and techniques to produce high-quality vehicles:

This state-of-the-art manufacturing complex in the northeastern Brazilian state of Bahia is not only the centerpiece of Ford’s Brazilian turnaround plan, it is also one of the most advanced automobile plants in the world. It is more automated than many of Ford’s U.S. factories, and leaner and more flexible than any other Ford facility. It can produce five different vehicle platforms at the same time and on the same line. …

At Camaçari, more than two dozen suppliers operate right inside the Ford complex, in many cases producing components alongside Ford’s main production line. Having those supplier operations on-site allows Ford to take the concept of just-in-time manufacturing to a whole new level. Inventories are kept to a bare minimum, or dispensed with entirely. Components such as dashboard assemblies flow directly into the main Ford assembly line at the precise point and time they are needed. …

The system also helps with quality. If there is a problem with a part, it is a simple matter for Ford engineers to trace it to its source and work with the supplier to correct it.

However, plants like this won’t be coming to the United States any time soon. Why? The United Auto Workers.

The UAW has been heavily criticized for its role in driving the Detroit automakers to the brink of bankruptcy, mostly for the $70 an hour that active workers earn in wages and benefits. Active and retiree health benefits alone add $1,200 to the cost of each vehicle GM produces [2].

But excessive wages and benefits are not the only way the UAW has hurt the once-mighty Big Three. The UAW has also saddled them with complex work rules that allow only certain workers to do certain tasks, and no one else. Ford’s master contract with the UAW is more than 2,200 pages long and weighs more than 22 pounds [3]. Those work rules prevent the Big Three from opening any integrated and competitive plants like this in the United States [1] any time soon:

Ford sources said it is the sort of plant the company wants in the United States, were it not for the United Auto Workers, which has historically opposed such extensive supplier integration on the factory floor.

Bailing out the Detroit automakers would only subsidize failure. Detroit knows how to make competitively priced cars efficiently. The United Auto Workers simply won’t let them.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2008/12/17/uaw-wont-let-detroit-make-competitively-priced-cars/

URLs in this post:

[1] Ford Motor Co. is operating highly automated, highly integrated, and highly profitable auto plants — in Brazil: http://www.detnews.com/apps/pbcs.dll/article?AID=/20070822/AUTO01/708220407/0/special

[2] add $1,200 to the cost of each vehicle GM produces: http://www.heritage.org/research/economy/wm2135.cfm

[3] Ford’s master contract with the UAW is more than 2,200 pages long and weighs more than 22 pounds: http://laborpains.org/index.php/2008/12/12/22-pounds-uaw-rules-and-regulations/

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