Monday, August 29, 2005
GM & Health Benefits
The boys and girls over at Autoblog are running a quick post about how the UAW (United Auto Workers) are getting a little worried about how the price of oil will be affecting their ability to maintain current contract levels with their employers (the big 3 automakers).
Something I've been thinking about for a while is this:
GM, Ford, and DC, are all having problems keeping pace with the foreign makers, notably the Japanese (and now Korean) makers. A big reason is the cost of labour in North America - mostly in health benefits. The UAW fought long and hard to earn those health benefits, (which even I, an ardent pro-union dude, will admit are beginning to look a tad bit frivolous) and I don't think they should give them up if they don't have to. Now, lately, they've been talking about how they may have to, and I hope they do whatever they need to do to help the Big 3 out on this, or we'll all be driving noisy tin-can four-bangers.
While it is true that some of the Asian makers are using American blood and sweat to get some of their assembly done, it is pretty widely known that the Asian makers generally spend less money on labour than the domestics do.
I think this is a shame, and here's what I propose.
I think that while this current round of UAW-Domestics negotiations is going on, this should be an issue that is discussed and addressed as a UNIFIED front, consisting of all the domestic makers and the UAW and all affiliated unions. They should agree on a lobbying programme including schedualing and message, and have it written into their new contracts. This new lobbying programme should focus on getting legislation passed that restricts ANY foreign maker from selling products in North America unless they meet certain labour standards for the production of ALL the products and ALL the parts of those products. They would need to come up with some metric for this, of course, like 'health benefits paid per employee' or something like that. But they should be forcing the foreign makers to take care of their employees at home, and abroad. The American (we as Canadians are included in this group) consumer sure as hell hasn't seemed to give a rat's ass where their cars come from, or who built them, or how those people live.
This would do a few things:
Something I've been thinking about for a while is this:
GM, Ford, and DC, are all having problems keeping pace with the foreign makers, notably the Japanese (and now Korean) makers. A big reason is the cost of labour in North America - mostly in health benefits. The UAW fought long and hard to earn those health benefits, (which even I, an ardent pro-union dude, will admit are beginning to look a tad bit frivolous) and I don't think they should give them up if they don't have to. Now, lately, they've been talking about how they may have to, and I hope they do whatever they need to do to help the Big 3 out on this, or we'll all be driving noisy tin-can four-bangers.
While it is true that some of the Asian makers are using American blood and sweat to get some of their assembly done, it is pretty widely known that the Asian makers generally spend less money on labour than the domestics do.
I think this is a shame, and here's what I propose.
I think that while this current round of UAW-Domestics negotiations is going on, this should be an issue that is discussed and addressed as a UNIFIED front, consisting of all the domestic makers and the UAW and all affiliated unions. They should agree on a lobbying programme including schedualing and message, and have it written into their new contracts. This new lobbying programme should focus on getting legislation passed that restricts ANY foreign maker from selling products in North America unless they meet certain labour standards for the production of ALL the products and ALL the parts of those products. They would need to come up with some metric for this, of course, like 'health benefits paid per employee' or something like that. But they should be forcing the foreign makers to take care of their employees at home, and abroad. The American (we as Canadians are included in this group) consumer sure as hell hasn't seemed to give a rat's ass where their cars come from, or who built them, or how those people live.
This would do a few things:
- It would immediately and directly affect the lives of the people working in Honda, Toyota, Hyundai, Kia, Daewoo, Isuzu, Mitsubishi and Nissan plant, all over the world - for the better.
- It would level the playing field. No wonder the Asian makers are making money and being able to do research and still beat American makers on price and quality. According to that article I linked to up there, GM spent $5.6 billion on 1 million employees (retirees and family included) last year, and LOST $1.1 billion! I highly doubt ANY of the Asian makers pays out in a manner even CLOSE to this. If they were force to take care of their employees they would have similar operating expenses to the Big 3 domestics, and they could more evenly compete.
- It would get rid of some of the ridiculous pricing that's going on right now. Who the hell knows what's going on with prices anyway? Is this a good car? Is this? Is this a good price for that car? Or this one? Who the hell knows!!??!
- It would even out CASH FLOW issues. When point #2 started to take effect, the Asian makers would look more similar to the American makers on paper, and thus be LESS ATTRACTIVE TO FOREIGN INVESTMENT, which is a big reason for the Asian makers success, as far as I'm concerned. They've got this cash CYCLE going on, that's forced the domestics into a slump (invest in Toyota, they use your money to make money, you invest more in Toyota, they make more money, you invest more in Toyota, they make more money - meanwhile the big 3 are left out - they aren't making money because no one's investing in them, because they're not making money... etc)
