Tag: chrysler

  • How To Fix the Auto Industry: Federal Right to Work Laws

    This is my second idea: Pass a federal right to work law. (Idea #1)

    For anyone outside of the pretend world known as Detroit, this solution is a no-brainer. In order for Ford, GM, and Chrysler to move forward into the next 100 years of automaking they have to restructure how their labor is paid.

    One important element, the heaviest of them all, is to dump the UAW as the only labor force. With unemployment hovering near 10% in most of the Detroit area counties there is no better time to renegotiate with the unions. (In other words, if the unions refuse to comply simply replace those workers with unemployed people at new, lower wages.) Simply put, if the federal government is going to loan automakers $34 billion to get out of this mess, they should also pass a federal law making every shop in America an equal opportunity employer. As I wrote in January 2008, I think allowing employees to decide whether or not they will join a union is fair. But, today in America, in many states that choice is not allowed.

    More importantly, for the former Big 3 to survive they need to scale back wages to more reasonable levels across the board to compete on the open market.

    Yes, I am arguing that the Big 3 compensate their employees like other US-based automakers. Toyota, Honda, Nissan, and many other “Japanese” automakers pay their employees well, but still roughly half what the UAW demand as “fair.” And when the Big 3 made money hand over fist, who cared what they paid people? But if you’re going to mortgage our childrens future on bailing out these failed companies… let’s spend the American tax payers dollars wisely. Their pay should be based on what these other automakers pay their employees. Or perhaps, since this is federal money, they should be compensated like government employees?

    I’m not suggesting that we make unions illegal. I’m suggesting that it become illegal to force people to join them! Allow auto workers, state employees, teachers, and other unionized types of workers to chose for themselves if they want to be in a union or not. Isn’t that fair?

    It’s time to have all employees work together for the good of the Big 3. Again, if you haven’t been exposed to the auto industry you have no idea of some of the silliness. There are two separate classes of employees at an auto manufacturer. There is union labor and there is management labor. They have different pay structures, different disciplinary structures, different hiring practices, and even different parking areas! It’s time this all ended! We need the plant manager and the woman on the line to be on the same team. We need the executive and the janitor to have the same health care options, benefits structure, and vacation times. We need to completely kill the entitlement society that the unions create. No more 80% pay layoffs. No more pools of employees who get paid 100% of their salary to play cards. No more union stewards making what a plant manager makes. On and on.

    If Ford, GM, and Chrysler are going to take federal money it is time they started acting like 21st century companies. In other words, it is time the former Big 3 started acting like the companies who are kicking their butts.

    Learn more about the National Right to Work movement.

    Idea one: Change the car buying experience

    Idea two: Open the manufactoring to non-union employees

    Idea three: Coming soon…

  • Don’t Bail Out US Automakers

    All of a sudden, the czar’s of the old guard Big 3 are interested in Washington again. (By Big 3 I mean Ford, GM, and Chrysler, not the real big 3 of Toyota, Honda, and Ford.) The news is full of stories of their CEO’s begging for federal bailout money to keep afloat. I can hear the words from here, “We only want $25 billion.” They probably each took their own corporate jets over there and are staying at $10,000 per night suites.

    Here’s why giving the Big 3 $25 billion is a bad idea:

    #1 Their problem isn’t bad loans, it’s bad labor contracts. I lived in Detroit for 5 years and I was totally sickened by labor practices. Over the last few generations an entitlement attitude has run rampant among workers. In short, until they can clean house and only keep the best workers regardless of union status or seniority any bailout will just be wasted on pouring more money into a broken vessel. Most people don’t know this, but they pay people not to work! They want federal dollars to keep paying people not to work! For $25 billion we need a federal right to work law. People should have a choice whether to join a union or not. Closed shops should be outlawed in every state… especially Michigan. Face a fact… unions were great at one point, but have helped bankrupt the auto industry.

    #2 Their problem isn’t bad loans, it’s over-generous retirement plans. In the last few year’s they have gotten wise and started buying people out. But the Big 3 are levied with a tax their competitors don’t pay… pensions. (Most have been structured on 401k plans since day one.) Until they can shed those pension problems the federal government shouldn’t give them a dime. I don’t think that they should just fore go the pensions. I think, once and for all, they should sell those debts off and let someone try to make a buck on distributing those dollars.

    #3 Their problem isn’t bad loans, it’s trying to sell cars people don’t want. Have you walked on a car lot lately? The Chrysler cars mostly look like space ships. The Ford ones look like Tonka trucks. The GM ones look like cars from the 1980s. I know that’s judgmental and I’m uneducated. But I was recently looking to buy a new car and literally laughed on most of the “U.S. Automaker” lots. For 20+ years they have whined about “foreign cars” on their market. The reason people aren’t buying them isn’t because they hate America, it’s because Honda, Nissan, Toyota, Volkswagen, and the rest are selling cars people want to drive.

    I have no doubt that the auto industry will get bailed out. They will become federally subsidized, just like the airline and farming industries. If it’s not the $25 billion today it’ll be $100 billion next week. My only hope is that in getting the money they will start to repair the damage.

    Meanwhile, I hope Michigan continues to look for a new economy. I hope they invest in the health care industry, technology, and financial industry. Michigan is full of amazingly brilliant people who want to succeed. Let’s hope that they get it sorted out soon!