by Robert Stacy McCain | December 1, 2008 10:48 am
Want to be unemployed? Join a union!
Toyota, BMW, Kia and others now make 54% of the cars Americans buy. The internationals also employ some 113,000 Americans, compared with 239,000 at U.S.-owned carmakers . . .
To put it concisely, the transplants operate under conditions imposed by the free market. Detroit lives on Fantasy Island.
Consider labor costs. Take-home wages at the U.S. car makers average $28.42 an hour, according to the Center for Automotive Research. That’s on par with $26 at Toyota, $24 at Honda and $21 at Hyundai. But include benefits, and the picture changes. Hourly labor costs are $44.20 on average for the non-Detroit producers, in line with most manufacturing jobs, but are $73.21 for Detroit. . . .
This $29 cost gap reflects the way Big Three management and unions have conspired to make themselves uncompetitive — increasingly so as their market share has collapsed. . . . Over the decades the United Auto Workers won pension and health-care benefits far more generous than in almost any other American industry. As a result, for every UAW member working at a U.S. car maker today, three retirees collect benefits; at GM, the ratio is 4.6 to one. . . .
Mississippi, Alabama, Tennessee and South Carolina — which accounted for a quarter of U.S. car production last year — are “right-to-work” states where employees can’t be forced to join a union.
The absence of the UAW also gives car producers the flexibility to deploy employees as needed. Work rules vary across company and plant, but foreign rules are generally less restrictive. At Detroit’s plants, electricians or mechanics tend to perform certain narrow tasks and often sit idle. That rarely happens outside Michigan. In the nonunionized plants, temporary workers can also be hired, and let go, as market conditions dictate. (Emphasis added.)
Gee, letting automakers run their own factories — without meddling from thievish union bosses and their featherbedding rules — what an amazing idea!
(Cross-posted at The Other McCain.)
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