From today's AIADA newswire...

In today's Wall Street Journal, Holman W. Jenkins, Jr. suggests that Washington is at least partly at fault for the collapse of Detroit's automakers. After all, Ford and GM manage to build viable auto businesses all over the world but not in North America. The reason is simple: The UAW is present only in the U.S., not all over the world.

What you wouldn't know is that the single biggest factor in preserving the UAW's monopolistic power has been Congress's fuel-economy rules. These effectively have required the Big Three to lose tens of billions making small cars at a loss in UAW factories. After his inauguration, Obama should simply get rid of the CAFE rules and impose a gasoline tax to move the country to a "new energy economy." And be prepared for Detroit to shift jobs offshore if the UAW won't concede competitive labor agreements.

Not acceptable? Here's an alternative plan: Buy out the UAW with taxpayer dollars and free the Big Three to staff their factories with nonunion workers the way Toyota and Honda and BMW do. The negotiation that really needs to take place now is between Democrats and their union allies. The Big Three executives are just in the way.

To read the full editorial: http://online.wsj.com/article/SB122765959966358461.html

 

Yet ANOTHER anti-union RANT! I swear, according to these people the U.S. would be a place where the bluebirds sing & there's a wiskey spring if only we could get rid of those damn unions that are ruining everything for everybody!,,,,Riiiight!

 

I don't see the point. (of getting rid of the union...CAFE still sucks)

UAW workers = Toyota, etc workers in 2010 for all intents and purposes...ignoring this (like that article does) displays a pointedly anti-union bias and no real logic...

 

I had to actually force myself to read this guys drivel all the way through in search of anything that was actually well thought out insted of being the usual anti-union blather. I didn't find it.

In case anyone misses where this guy stands, here's a nugget for you:

How about another?

Here's another telling gem:


He even goes as far as to blame CAFE for keeping the union in power (although CAFE gave rise to imports that decimated about 2/3s of the UAW), which is essentially a backflip:

Note that this guy completely ignores the fact that the reason why Detroit lost money making small cars at UAW plants (till recently... Cobalt & Focus make a razor thin profit) is because:

a) Japan was dumping vehicles in the US under cost for many years, gaining a foothold. Economics forced Japanese makers to open car factories here as the Yen climbed.

b) Wages in Korea were roughly equal to minimum wage here in the US for a long time.

c) All things equal, it cost as much to make a Impala as a Cobalt though the Cobalt had to sell for $6-8,000 less.

d) Small cars in Europe can be sold for what they are really worth, which is why most cars imported here from Europe run on the high side of pricing... something unacceptable in a Cobalt, Neon, or Focus.


This goal of this guy's "editorial" is moving jobs overseas.

His rant on the UAW completely ignores just about every issue outside of that:

1. The big 3 are in this prediciment because they put most all their resources in a market segment that was venerable to sudden changs in fuel prices and economic conditions.

2. UAW plants are now competitive with non UAW plants in the United States.

3. CAFE affected imports as much as it did US makers... and US makers have actually done better than import brands regarding fuel economy.

4. Every other country we're competing against has some form of government health care.

5. The biggest chunk of UAW costs is with those already retired, which by law has to be covered by the auto companies or the federal government has to pick up the bill. In any rate, it's not changing.

6. While he proclaims that "The UAW is present only in the U.S., not all over the world.", he fails to mention that Every European manufacturer has to deal with labor unions, ALL of which are stronger, more radical, and get paid comparatively more than our UAW. In China, the Chinese Government is worse than the UAW. They demand their huge share and demand a Chinese company be paired up with the transplant company. Australia has an union putting together it's cars and trucks, and Japan manufacturing has a culture of full benefits and against layoffs.

This guy conviently ignores all this.

And I can almost guarantee you he knows all this, yet wrote what he has anyway. That's what makes his editorial even more despicable.


He isn't proposing to save the US auto industry and it's related jobs. He's supporting additional imports as a way around his hated UAW.

And he's being grossly misleading if not outright lying to make his point.

 

Well said Guion!!!

But it's not surprising coming from the WSJ. Big business types want to minimize costs and maximize profits. Doesn't matter who gets hurt by that.

It's like you said, Gui. They hate the unions, what the unions stand for, who the union represents, and the perceived road blocks the union puts in the path of more profit.
They are greedy. Period.

 

I think all of you, so far, are missing the point.

The transplant manufacturers built factories here as a direct result of Congress placing huge tariffs on imported cars; tariffs placed there to “protect” Detroit at the behest of the UAW creating an economic necessity to build vehicles here to avoid the tariffs. That issue lays squarely at the feet of the UAW.

The point about the CAFÉ standards is with regards to the two fleet rule inside those standards which forced Detroit automakers to build small cars here at a loss that could have been build in other countries and imported to the U.S. at a profit…again, that rule was enacted at the behest of the UAW in order to protect their jobs at the cost of their employer’s profits.

And Guion, what specific evidence do you have that Japan was “dumping” cars here at below cost? And even if they were…so what? Businesses undercut other businesses all the time in order to gain some market share; even when for a period, they have to loose money.

 

They aren't perceived...they are quit real.

Now there is a surprising union sentiment!

 

It was the dual-fleet rule, specifically, that caused a problem for the U.S. automakers. Without that, they could import small cars from Korea, China, or whereever, and build the big cars and trucks here.

Nissan actually got an exception from that rule, so that they could import luxury cars and not pay CAFE fines.

 

They put their resources into that segment, because that was the only profitable segment they were in. It was a logical thing for the big 3 to do. If they'd put out top quality U.S. built small cars 10 years ago (read $$ to build), we'd have been talking about bankruptcy much sooner.

Except for the massive VEBA payments due, the labor cost problems are mostly solved. But that exception is huge. The problem is that healthcare costs have consistently risen faster than inflation, so insufficient funds were set aside over the decades to pay for today's retirees. This is not just a problem for the Big 3. It's a problem for state and local governments all over the country. Just look at the California budget.

 

fixed...transplanting means taking from one and putting it into another. Last time I checked foreign car companies HQ's were still in thier home lands..

the WSJ throwing a bunch of BS around like they know the real problem and the real solution and the real blame...yea right..another media outlet that is trying to sell papers..

The problem is not just the UAW its not just the goverment its not anything but WE AS A COUNTRY SOLD OUT..we are all to blame..our goverment sold out sold out to corruption and behind the curtain deals with the lobbyists ..sold out to big biz and making laws to suit them and not the people....in turn making it easy for deals that make this country weaker in both economy and military weaker...
..Americans sold out to forein powers invading our lands and sowing seeds of what we have now. Weather it be goods, products or industry. CHINA OWNES OUR MANUFACTURING INDUSTRY!! That makes me proud..
ASIA CAR COMPANIES PRETTY MUCH OWN OUR CAR MAKING!!! WOW That makes me proud to be an American..
3 of the biggest companies in NA that are responsible for more than its share of what makes this country tick than any other car maker from overseas..they are about to be whipped out and people are pointing fingers..and blaming.
WE SOLD OUT...
Is there a place for world products in the U.S. of course there is but at the cost of our own industries...no..next time you go shopping think of that..

 

The main problem I have with this editorial is that this guy is too ready to put blue collar employees into the poor house. Getting rid of unions from the entire auto industry sets them up for years of declining income.

You can see it in the national discussion. UAW costs have to come down to match the transplants. Then there will be a few of years of no raises at the transplants "due to the bad economy", and then UAW will be too expensive again. And the analysts will say, "time to cut wages again."

I don't know what the answer is, but it should not be continual declines in real income for working folks. It may end up that way, and that would be a tragedy.

In the race to the bottom, everyone loses.

I suppose that if this did come to pass, we'd eventually have a repeat of the unionization efforts in the 30s.

Folks on the left are just as bad, hating the big 3 as they do and lauding the imports, even though labor loses if the big 3 lose.

 

well it's not a smoking 100% article but i do agree with the anti union aspect and the review of what exactly CAFE is doing.

Revoking CAFE might not be necessary. Big three have been following the leaders on the "green" front. They can keep up, they just need to get everything else in order.

Union BS is unacceptable at this point. Parties over, lets fix the business.

 

I saw on television last night that the $70 per hour total compensation figure for an American auto worker is a little misleading.
That number is achieved by taking the salaries and benefits of all the active workers, AND all of the retired workers, AND all of the retired workers spouses (if worker is dead) and then dividing it ONLY by the number of active workers.
If you took the total compensation figure for the active workers, and divided it by the number of JUST the active workers, that number comes out to be around $38 per hour, which is actually LESS than the transplant workers.

This info comes from the Center of Automotive Studies (I think that was the name).

 

That would be great and competitive if they didn't pay benefits to all of the retired workers and their spouses, but unfortunately they do, so the $7x.xx/hr compensation figure is not misleading at all. It all comes back to the benefits of retired workers hurting the Big 3.

 

I'm not saying it's not an important number, but I still think it's a little misleading
The media should show both numbers and how they are calculated to give a clearer picture.
People think that a line worker makes $70 per hour wages & benefits when it's simply not true.