Stop Blaming the Unions

Predictably, the right wingers are blaming workers, not management for the US auto industry problems. The problem with that is that it isn't true.

The Detroit Free press ran this article disputing the allegation that unioin wages are out of line for American carmakers.

The UAW is losing its edge in pay compared with non-unionized U.S. assembly plant workers for foreign companies, even as Detroit automakers aim for deeper benefit cuts to trim their losses.

In at least one case last year, workers for a foreign automaker for the first time averaged more in base pay and bonuses than UAW members working for domestic automakers, according to an economist for the Center for Automotive Research and figures supplied to the Free Press by auto companies.

In that instance, Toyota Motor Corp. gave workers at its largest U.S. plant bonuses of $6,000 to $8,000, boosting the average pay at the Georgetown, KY, plant to the equivalent of $30 an hour. That compares with a $27 hourly average for UAW workers, most of whom did not receive profit-sharing checks last year. Toyota would not provide a U.S. average, but said its 7,000-worker Georgetown plant is representative of its U.S. operations.

Honda Motor Co. and Nissan Motor Co. are not far behind Toyota and UAW pay levels. Comparable wages have long been one way foreign companies fight off UAW organizing efforts.

But Toyota workers' pay topping that of UAW members comes as the union faces contract negotiations this year with struggling Detroit companies that will seek billions in concessions, partly because they face higher costs for retiree health care and pensions than their foreign-owned competitors.

Who's to blame?

UAW Region 8 Director Gary Casteel said if Toyota workers were paid more than union workers last year, the blame lies with Detroit's auto executives. The companies have lost market share because of past mistakes, which have translated into fewer bonuses for workers, said Casteel, who is on the union's executive board.

"Our profit-sharing formula, I know, is better than theirs -- if our vehicles are selling," Casteel said.

Ron Lare, a 59-year-old Ford employee on pre-retirement leave, said Toyota workers shouldn't get too excited about their wages because bonuses fluctuate. The only thing consistent, Lare said, is union protection.

"The floor beneath their feet is basically what the UAW has won," said Lare of Detroit, who has worked at Ford for 28 1/2 years. "If the UAW gets beaten down, their pay is going to come down. You let there be a real recession in the auto industry -- that bonus won't be there for Toyota, either."

Union perks vs. nonunion perks

The pay comparisons reflect the relative profitability of the foreign and domestic companies more than shortcomings of the UAW. But the situation chips at the argument that workers united in solidarity can get better wages, benefits and job security -- especially as the UAW shrinks and growing foreign companies continue to ward off organizing efforts.

"How do you convince someone you're better off with the protection of a union when they're making more money than the union employee?" asked Alfred McLean, a 66-year-old hourly UAW member at General Motors Corp.'s Warren Tech Center. He has 28 years of experience.

Workers for foreign automakers don't pay union dues, but they do share the costs of insurance and retirement plans. UAW-represented autoworkers get health insurance and a full pension after 30 years -- valuable perks they will fight to keep during contract negotiations this year.

But even accounting for Toyota employees' health care spending -- $700 per year on average, according to the company -- the Georgetown workers still made more in 2006.

General Motors Corp., which lost $10.6 billion in 2005 and didn't issue profit-sharing checks last year, paid its production workers an average of $27 an hour, GM spokesman Daniel Flores said. That would be a base of about $54,000 a year, based on a 2,000-hour work year. The $30 average at Toyota's Georgetown plant, which includes a bonus, equals $60,000 a year.

Ford Motor Co. and Chrysler Group representatives said GM's base pay figures are similar to theirs. Only Chrysler, which had a 2005 profit, paid a bonus last year. The $650 bonus was not enough to surpass Toyota's pay.

For years consumers have been asking for fuel efficient vehicles. What has been the response from US carmakers? Build more trucks and SUVs because the profit margin is larger. Unfortunately management failed to provide American consumers with the high mileage vehicles they wanted- which is why Toyota and Honda sold out in the US.

But American carmakers did build them for Europe.

Here are some links to wonderful, fuel efficient cars GM is building in Europe. These would've sold in the US.


http://wheels.blogs.nytimes.com/2008/11/18/european-car-of-the-year-goes-to-general-motors/

http://blog.wired.com/cars/2007/07/gms-new-europea.html

So enough of the BS about union wages destroying the car industry.

I sail bail out the carmakers - only if their entire management teams step down, or agree to work for free until profitability is restored.

Out with the old -- an update

Well, yes, out with the old Bush administration, in with Obama's team. But there's the rub. By offering Hillary the Secretary of State position (if Bill gets a clean bill), Obama is flirting with keeping too much of the old.

The old team of rivals idea is great, and some say bringing in Hillary shows Obama's confidence that he can still be in charge. With anyone else, I'd agree. But Bill and Hillary are in another class altogether when it comes to dramatically using the media to stir up controversy and cause trouble.

But SoS would put her as the administration's leading voice and policy person in the very area in which they differed most in the primaries. Not only on the Iraq war but in her more hawkish position vis a vis meeting with our enemies and her hardline stance generally internationally. Disagree in private, yes. But will she then be a team player and accept his decisions? Or will she undermine him and subtly push her own views.

But even that concerns me less than the Clintons' affinity for drama and for using the media to promote their view and undermine the administration. And if (when) that happens, it would be a huge political risk for Obama to fire her. That's scenario is playing out even now. Look how they're talking to the media, making it seem inevitable even before Bill has been vetted, thus making it difficult for Obama not to give it to her.

Maybe it's worth it. In some ways, it would be brilliant. And I guess if Obama can forgive her for the primary negativity, I can. But I worry about her and Bill being able to accept being #2.

Ralph

Hillary for Sec. of State??

My first reaction to news that Obama had offered the Secretary of State position to Hillary Clinton was negative. He's already surrounding himself with more people from the Clinton administration than seems consistent with "change." And then there's the over-riding problem of Bill -- his larger than life presence, his foundation contributors, and most troubling of all some of his financial dealings with important figures in other countries that might prove to be conflicts of interest with his wife as SoS (like the Khazakhstan uranium deal, or one with a Chinese internet company, and contributions to his library from several middle east Arab governments).

On the other hand, choosing Hillary suggests that Obama is not afraid of strong opposing voices in his cabinet -- in fact, he is embracing Lincoln's idea of a "team of rivals," in which he brought his political enemies into the cabinet. The Clinton name would definitely be an asset internationally, and Hillary would probably do a great job rebuilding our reputation.

On yet another hand, the messy, barely competent way her campaign was run does not bode well for Hillary as the administrator of the huge State Department organization, which is said to be rather demoralized after eight years of political ideology trumping career service.

Then there is the matter of Hillary's hawkish stance on the Iraq war. How well would that mesh with Obama's diplomacy and withdrawal stance?

Aside from the merits of the appointment (Kissinger has called it "outstanding"), how does it play out politically? Hillary supporters would be delighted. But what about Obama's netroot supporters, for whom Hillary is still something of a pariah after her negative campaign against him?

And what's in it for Hillary? She's still too junior in the Senate for a major committee chairmanship, and she's not likely to become majority leader in the foreseeable future. Ted Kennedy turned down her request for a new subcommittee on health care, which would have shifted the leadership on that issue from him to her. Although she's said she just wants to be the best senator for the people of NY, will she be satisfied to end her political career there? If she has any idea of another run for president, might SoS be a better launching platform for 2016 than the Senate? Obama may not be thinking this way, but if things don't go well for him in the next 4 years, it would make it more difficult for her to run against him in 2012 if she has a major cabinet position.

I'm puzzled by the undenied reports that Obama has offered it to her and that she asked for time to consider it -- alongside reports that he's also interviewing Bill Richardson. Now I read online that Richardson was interviewed on Friday, which is definitely after the leaks that Obama had offered it to Hillary. That seems strange. Either he didn't offer it yet but just discussed it, or maybe they both know she can't take it (because of Bill) and the offer is a gesture.

I'm eager to see how this plays out. I'm ambivalent about it myself, seeing both positive and negative factors.

Ralph