So I followed the hearings last night and it is comical to watch anyone with a brain say it is good to pay people 95% of their wages and benefits when they are not working and a plant is idled as Senator Dodd suggested.
Look, there is a reason General Motors makes money in Russia and most other emerging markets, the reason, they pay far less in labor costs in those markets. There is also a reason they do not make money here, they pay far too much in labor and benefits. Yes, the UAW is taking significant cuts in 2010 and beyond but GM still has far too many brands and too many employees making too much money to compete with Honda and Toyota factories in the US.
I think the auto industry is a great american industry but the reality is if we give them the money, the auto workers should immediately have their pay cut to the average of the foreign care companies operating in the US. Level the playing field. Dead weight brands should also be eliminated.
I really don't have a problem giving them the money with those conditions and the condition that when times slow you can layoff employees as needed and in good times the workers should get a bonus. Autos are highly cyclical and highly dependent on economic cycles. The workers should know that and plan accordingly, socking away the bonuses they receive in the good years to take care of themselves in the lean years.
2 comments:
My favorite when they talk chapter 11 for the autos is the autos say but but 80% of people said they would not buy an auto from a chapter 11 company, well guess what, probably 95% of those 80% when never buy an american car in the first place.
Agree wholeheartedly - great insight. At one time in this country Unions were a necessary entity. Now they promote mediocrity and support the slackers - kinda like tenure for undeserving teachers. What's wrong with rewarding
merit?
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