Friday, December 5, 2008

Big 3 Automobile Woes and Union Wages

Kendra Marr and Steven Mufson blame the UAW:

Over the past three decades, they have lost ground to more agile foreign rivals that favored smaller cars built by non-unionized labor at lower wages.

Really? So what are the wages for the foreign rivals? They don’t tell us. Last night – Rachel Maddow did - $25 an hour. Oh, but UAW wages are $70 – right? No, try $28 an hour. Hat tip Dean Baker who adds:

Actually, many of these cars were built in unionized factories in Japan, South Korea, and Germany. Unions didn't keep foreign manufacturers from producing high-quality popular cars in these countries. Even when these companies set up shop in the U.S. they have been able to work well with unions. Toyota operated a plant in California where the workers were represented by the UAW for decades (it may still be open). There may have been problems with the way the Big Three management dealt with unions, but other car companies have been able to operate very effectively with a unionized workforce.

We will likely learn in a few hours that more workers have lost their jobs. And yet incompetent writers for the Washington Post still have theirs?


TheTrucker said...

When you look at these costs you are slapped with "legacy costs". These costs are retirement and health care. These costs are socialized in other counties and as such the manufacturers do not bear the burden of most of these costs. The solution to the problem is to socialize these costs like the sane countries do.

Anonymous said...

The legacy costs and union wages don't determine the types of cars that the Big 3 produced. Although costs (including legacy costs and union wages) are a factor in pricing, the actual pricing is determined by the success of their marketing campaigns (i.e., similar to the comparable models of other manufacturers').

The Big 3's executives chose to focus primarily on high priced, high-profit models and leave the lower price/lower profit models to the Asians.