Wednesday, November 19, 2008

What Killed the Auto Industry: Unions Follow-up

The debate on a bailout continues for the big three automakers and again I say that the Unions are the problem. Let them go through bankruptcy so their labor contracts can be redone. Of course my previous post was all theory, how be it sound theory. I have found another article that actually backs up my assertion with real data. I suggest reading the article from the Heritage Foundation and looking at the charts before you sign up for things like bailouts and tariffs.

Some of the highlights include the fact that the average worker gets $75 an hour. Does it really take that level of skill to do the same kind of work they manage to do in Mexico for a fraction of the cost. GM has three times the number of retirees than workers, mirroring my statement that it reflects our future Social Security crisis.

2 comments:

Kansas Bob said...

What do you think the moral thing to do about retiree pensions and the older folks who are depending on these pensions to buy groceries?

I ask because I don't know and I think that embedded base may be a big part of the $75/hour.

jrchaard said...

Apparently, in 2010, The big 3 were going to pay 60 billion to the Unions and then the pensions would be managed by them. Aside from that, I don't know either