Blame the Union Contracts, Not the Workers

Mary Katherine Ham, writing at HughHewitt.com, points out an excellent editorial from a small New England paper (The Waterbury Connecticut Republican American) which pretty accurately sums up the problem with the U.S. auto industry:

Blaming the American worker is also fallacious. Toyota employs 37,000 people at its 12 U.S. manufacturing plants; Honda, 25,000 at its three manufacturing plants and 18 other facilities. South Korea's Hyundai is building Sonata sedans and Santa Fe SUVs in Alabama, where 2,000 workers will be employed when the plant reaches capacity. Those are just three of the Asian and European companies that are taking advantage of the American worker's high productivity by building cars and trucks in the United States.

Significantly, these workers are not represented by the United Auto Workers. Over several decades, short-sighted managers and union leaders negotiated contracts that have forced once-vibrant giants such as Ford and GM to become shadows of their former selves, slashing their research-and-development and quality-control budgets to accommodate increasingly burdensome labor costs.

In GM's case, contractual health-insurance obligations add $1,500 to the price of every new vehicle. "When you buy a Hyundai you get a satellite radio as your option, but if you buy a Chevrolet you get social welfare as an option," said Steve Miller, CEO of GM's bankrupt parts supplier Delphi. "Long term, the customer is going to desert you if you try to price for your social-welfare costs."

UAW President Ron Gettelfinger and Vice President Gerald Bantom blamed senior management for failing to halt Ford's sliding market share. Rather than casting about for scapegoats, however, they should look in the mirror, and in the UAW history books. A close, personal reading of the fable about the goose that laid the golden eggs would be a good place to start.

We know that U.S. workers are top-notch, but if the companies they work for are bound by union contracts that inhibit the company's ability to improvise and create, those workers will find themselves being passed up by non-union shops and foreign competition. It's happening every day.