UAW shoots self in foot - Auto Bailout Successfully Blocked in Senate
Rescue Bid for Detroit Collapses in Senate
"Sen. Christopher Dodd, a Connecticut Democrat, complained that Republicans had attempted to turn the wage issue into a political matter about organized labor, instead of making it an "an economic issue." With the economy in recession, he suggested it wouldn't be fair to force auto workers to accept wage cuts in 2009."
Dodd has beeen a leading force behind this push for the Auto-bailout. But I have to wonder what his level of understanding of the real issues at stake here are. The opposition to the auto-bailout without significant concessions from the UAW was absolutely an economic decision.
You can't just wave a magic wand and have the companies suddenly be profitable. Over the last few years, Honda & Toyota's sales were similar in volume and size to GMs... and yet GM lost money while Honda and Toyota made money. The biggest difference? GM was forced into untenable labor contracts by the UAW to have to pay out unreasonable benefits and thus the cost of their labor was way higher. Meanwhile the Foreign companies producing here in the US managed non-union workers and did fine, because they were paying a competitive wage.
The costs of labor are sinking Detroit. Cuts to the cost of labor can't wait until 2011. They need to happen now or a short time from now in 2009, or these companies will go under. That's just the reality. Even if we threw billions at their ultimately unsuccessful business model, we'd only end up losing it while they squander it on paying wages that are simply too high to sustain.
The Republicans were right on this. The UAW needed to make significant concessions, and they needed to make them now. They refused, and thus the talks fell apart. I just can't understand how the Auto-union could make this decision though. They're being stubborn, and instead of walking away with some losses, they're set up now to lose everything. If GM & Chrysler go into Chapter 11 protection - which is how this should have been taking place from the start - the Bankruptcy Judge can get the companies out from under the boot of Organized Labor. If that happens, the UAW is done for.
There is no "good" solution to this. There is only the "least bad" solution to this. For the UAW, the least bad solution would have been to make the concessions and keep their people in work - working for less - but hey, you want a job in a faltering economy, sometimes you need to accept pay cuts. The UAW's stubborn refusal might be a bluff hoping for a stronger Democratic Congress coming in next year to support their nonsense, but I think it's a gamble that's going to cost them the game - permanently.
Honestly, I think that's a good thing. Things are falling into place to bust the Union and break its stranglehold on the Detroit Auto-industry. The weaker the Union - and maybe if we get lucky it'll just break apart and die for good - the better for the country & economy.
"Sen. Christopher Dodd, a Connecticut Democrat, complained that Republicans had attempted to turn the wage issue into a political matter about organized labor, instead of making it an "an economic issue." With the economy in recession, he suggested it wouldn't be fair to force auto workers to accept wage cuts in 2009."
Dodd has beeen a leading force behind this push for the Auto-bailout. But I have to wonder what his level of understanding of the real issues at stake here are. The opposition to the auto-bailout without significant concessions from the UAW was absolutely an economic decision.
You can't just wave a magic wand and have the companies suddenly be profitable. Over the last few years, Honda & Toyota's sales were similar in volume and size to GMs... and yet GM lost money while Honda and Toyota made money. The biggest difference? GM was forced into untenable labor contracts by the UAW to have to pay out unreasonable benefits and thus the cost of their labor was way higher. Meanwhile the Foreign companies producing here in the US managed non-union workers and did fine, because they were paying a competitive wage.
The costs of labor are sinking Detroit. Cuts to the cost of labor can't wait until 2011. They need to happen now or a short time from now in 2009, or these companies will go under. That's just the reality. Even if we threw billions at their ultimately unsuccessful business model, we'd only end up losing it while they squander it on paying wages that are simply too high to sustain.
The Republicans were right on this. The UAW needed to make significant concessions, and they needed to make them now. They refused, and thus the talks fell apart. I just can't understand how the Auto-union could make this decision though. They're being stubborn, and instead of walking away with some losses, they're set up now to lose everything. If GM & Chrysler go into Chapter 11 protection - which is how this should have been taking place from the start - the Bankruptcy Judge can get the companies out from under the boot of Organized Labor. If that happens, the UAW is done for.
There is no "good" solution to this. There is only the "least bad" solution to this. For the UAW, the least bad solution would have been to make the concessions and keep their people in work - working for less - but hey, you want a job in a faltering economy, sometimes you need to accept pay cuts. The UAW's stubborn refusal might be a bluff hoping for a stronger Democratic Congress coming in next year to support their nonsense, but I think it's a gamble that's going to cost them the game - permanently.
Honestly, I think that's a good thing. Things are falling into place to bust the Union and break its stranglehold on the Detroit Auto-industry. The weaker the Union - and maybe if we get lucky it'll just break apart and die for good - the better for the country & economy.
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