Saturday, December 6, 2008

Union Tomfoolery

It's union lunacy day here at Shaving Leviathan. Tune in and have some laughs.

First up we have a sociology professor proving that you don't have to be a trade unionist (a type of communist 75 years ago, and apparently still) to teach humanities, but it clearly helps.

Channeling Norman Thomas, six-time socialist candidate for president in the Depression era, he argues that the problem with the Big Three automakers is the UAW didn't go far enough. They should have, in his view, organized the foreign automakers plants in the U.S. too.
[T]here is nothing inherently unsustainable about employing a high-priced, unionized workforce. The crisis of Detroit's wage bill is entirely relative. Specifically, their labor costs far exceed the low-cost, nonunion American workforce at the U.S.-based, foreign-owned plants of competitors Toyota, Honda, Nissan and Subaru.

If the UAW really is to blame at all, then, it is because of the union's utter failure to unionize any of the transplants. What has the UAW been doing all these years? Isn't it the responsibility of any good union to protect union employers from competitive labor disadvantages by organizing wall to wall, throughout the industry? How could it have left these transplants unorganized?
By all means, let's have still higher priced cars and greater injustice in the form of higher wages for those who do less work in comparable tasks, along with arm-twisting of the employers. Let's enforce it by the descendant legislation of the Wagner Act that amplified government coercion in labor relations. Apparently it's not required to have any knowledge of economics — or ethics — to teach sociology.

A laugh a minute.

Then we have this joke from one of the chief thugs himself, Andy Stern, head of the SEIU (Service Employees International Union). Arguing in a similar vein, Mr. Stern suggests the U.S. should be still more like Europe — as if going down that road culturally for the past 40 years hasn't caused enough damage already.

Here's a tidbit from a WSJ editorial that will tell you all you need to know about Mr. Stern's views:
The SEIU targets private equity firms, shames business leaders, and competes with other unions to build up its membership. Mr. Stern is unapologetic. "We like to say: We use the power of persuasion first. If it doesn't work, we try the persuasion of power." [emphasis added]
For something more particular, feast on this (and hope you don't choke):
Universal health care, widespread unionization, stronger regulations on business, profit-sharing for employees, higher taxes — all that sounds like Western Europe. Mr. Stern considers that a worthy model. "I think Western Europe as much as we used to make fun of it has made different trade-offs which may have ended up with a little more unemployment but a lot more equality."
The equality of the grave as one wag famously put it. As some other brilliant wit recently observed, with friends like this who needs friends?


Brad said...

I was listening to the Jim Bohanon show the other night and his guest was the VP of the auto rating branch of JD Powers and Associates. A caller asked the JD guy why American car quality isn’t on par with foreign imports to which he replied that actually, American made cars are on par with foreign competitors and have been for some time. The perception that they are not is testament to how hard it is to overcome years of negative press.

Another caller asked if American auto worker wages were one of the reasons the American car companies are in trouble to which the JD obliquely replied that they aren’t the only issue. Fair enough, but as you will see below they are a significant issue.

Over the course of the show, the JD guy made it quite clear that the quality being produced by the American car companies was completely on par with the quality being produced by the foreign car companies which is proof that American car companies are just as good as anyone on the planet. It is also important to note that JD doesn’t distinguish on country of manufacture when rating cars and trucks, but rather on the car companies themselves. In other words, they make no distinction between a Toyota manufactured in the US verses one manufactured in Japan. Any car companies overall quality rating is a mixed bag comprised of all the manufacturing plants regardless of country.

The thing that both of them totally missed is that the American located foreign car factories are turning out very high quality cars and trucks and are doing it at total hourly labor plus benefits cost of $48 as compared to the American auto companies that do it for $73. That’s an astounding 52% increase over there foreign competitors.

One might be inclined to ask ones self the following:
 Are you getting half again as much quality? No, as mentioned above the quality is on par.
 Are you getting half again as much value? No, American cars aren’t any cheaper than foreign cars when comparing like model, trim and performance levels.
 Are you getting half again as much fuel efficiency? Again, no.

What you are getting is the right to pay the UAW worker who is no better than their non-union counterparts a premium for their labor which ads no real value to the car you are buying or to our economy.

Jeff Perren said...

Good points. I've read many conservative and libertarian commenters decry the quality of American cars, but I've not found them to be substantially different from domestic-made foreign makes.

The more important point is the cost differences, of course. I read recently, though that beyond the wage difference, the larger part of the cost burden for American auto companies is the huge population of retirees they're supporting.