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Book of Matthew: Leave the unions alone, blame the auto makers!

Published: November 21, 2008
Section: Opinions

It’s a fact. Anytime the “Big Three” automakers (Ford, GM, and Chrysler) have problems, someone always tries to blame it on unionized labor.

For example, recently I was skimming through the blog Think Progress, as I do from time to time, and I came across some quotes by Republican leaders regarding the possibility of a federal bailout of the auto industry. They are not, as you may have guessed, happy about it.

According to Senator Jim DeMint (R-SC), “Some auto manufacturers are struggling because of a bad business structure with high unionized labor costs and burdensome federal regulations. Taxpayers did not create these problems and they should not be forced to pay for them.”

Senator Jon Kyl (R-AZ), the current Senate Minority Whip, echoes this position, claiming, “For years they’ve [Automakers] been sick. They have a bad business model. They have contracts negotiated with the United Auto Workers that impose huge costs. The average hourly cost per worker in this country is about $28.48. For these auto makers, it’s $73. And for the Japanese auto companies working here in the United States, it’s $48.”

I must say, it is disappointing to hear such unfair and misleading arguments coming from United States Senators. Allow me to clarify.

For starters, unions do not hurt businesses; in fact, they are often beneficial. The Harbour Report, a well-respected annual study of manufacturing efficiency, recently demonstrated this by comparing the unionized plants of the Big Three to the non-union plants of Toyota. The Report found that in almost all categories the unionized workers were more efficient.

Moreover, the $73 per hour figure touted by Senator Kyl is highly inflated. Sure, if one were to total all of GM’s labor, health, and pension costs–including money spent on retired workers–and then by divide this number by the total number of hours worked, the answer would be about $73 per hour. But this number has nothing to do with how much money autoworkers are making per hour. The actual average wage for autoworkers is about $28 per hour, which is on par with the average wage for all workers in the US.

Finally, it seems that both Senators, along with many of their colleagues, have forgotten that the UAW has made many concessions to automakers as of late in order to help them stay afloat. These include allowing the companies to pay new hires lower base wages and offer them smaller benefit packages.

I think it’s reasonably fair to argue that if anyone is working to save the Big Three, it is the UAW. These workers want to keep their jobs, after all. The fault of this crisis lies solely on the corporate management of the Big Three, who spent the last two decades making terrible business decisions.

They were the ones who insisted on focusing almost entirely on the production and sale of large SUV’s during the 1990’s and early 2000’s, back when gas prices were lower. It really should not be surprising that, now that gas prices are so much higher, the Big Three is losing sales to foreign companies who offer more fuel-efficient models.

Even worse, the Big Three is losing the advertising war against foreign competitors. Toyota has spent the last few years advertising the quality and reliability of its cars, while GM, Ford, and Chrysler–all of whom make cars that have been independently rated to be just as reliable as foreign models–have let it get away with this. Ford in particular put considerable focus on the “stylish” nature of its cars. Now, I don’t know about you, but if I were a US consumer with a certain amount of money and a need for a new car, I would buy the one that I thought would last me the longest, not the one that I thought would look the best.

I must urge you, readers, not to jump on the anti-union bandwagon. It would be a disaster, for both organized labor and employers, if conservative Republicans are allowed to scare Congress and the Americans people into authorizing punishment for the UAW, which has done nothing to deserve it.