Saturday, November 15, 2008

Inciting Class Warfare is So Easy for Those with Ulterior Motives

Once again some look at the economic crisis and blame those at the bottom of the corporate pecking order rather than those at the top. Unions aren't perfect, but they should not be scapegoated for corporate mistakes, including top heavy CEO salaries and stupid, short-sighted decisions to buy foreign car companies instead of investing in hybrid and green technologies during the 1990s.  It's not even that GM is simply making cars that people don't want to buy.  GM has consistently held the largest market share (source) of all auto makers, and in 2008 their market share has grown.  People are choosing GM cars more than others.  The argument that they are not is a red herring.

If you read this simplistic post and graph (based on spin from the momentously wing-nut editorial voice of the Wall Street Journal) without digging any deeper, you may miss the facts that the big 3 employees make more because their unions have leveraged profit-sharing bonuses, decent health care packages in an extremely expensive health care market and 30-year pensions. So what's the alternative? Give CEO's decent health care and pension packages but not lower level employees? By the same token, in 2006, employees in 2 of the big 3 shops did not receive bonuses because of lack luster sales, even at a time where Toyota (which is listed on the graph) was catching the big 3 in base pay in order to be more competitive with union shops!  Even non-union workers should be thankful that unions set the bar high for all auto line workers.  Honda and Nissan are not far behind UAW shops in base salary.  If it were left up to the executives and the apologists for deregulation, the bar would be in the dirt.

Foreign auto makers like Honda can pay their employees less because they accept sunbelt incentives (a.k.a., corporate welfare) from non-union, exurban hinterlands in Ohio and Alabama where employment and wages are depressed and residents feel lucky just to get a job with a salary higher than the meager prospects offered locally.  One of the ways Honda boasts that its record on lay-offs is better than the big 3, is to utilize sub-contracted temp workers who have no benefits in place of full-time hires.  That depresses the salary of Honda employees and generates the illusion that Honda does more with less.  Honda decides to pay for work related surgery rather than design for workplace safety, which further drives up the price of medical care.  There is so much detail that matters, but which is left out of graphs and scapegoating commentary.

But in the end, why complain when the standard auto assembly line worker needs no health care, pensions, or remedial lessons on sexual harassment in the workplace?

The way some object, you would think that the Chrysler assembly line still looked like this (but with pensions, health care, and profit sharing):

I am by no means arguing that any of the big 3 auto makers deserve a bailout (unless it is a harsh loan with exacting regulations bent toward consumers and the environment). In fact, bankruptcy may be a viable option. GM doesn't deserve a leg up for the mistakes it made when it was raking in profits unless, as Ashton Kutcher argued on Bill Maher last night, the oil industry wants to bail them out. But blaming the unions for those mistakes is raptorial and reprehensible.

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