The Republicans who killed the Big Three bail out did so because they refused to vote for any interference in the market that would impose more constraints on management than labor. Their argument is that the main reason the Big Three are in trouble is because the unions have inflated labor costs to such an extent that the Big Three are getting beat by the foreign auto makers operating plants in the US (the Japanese companies like Honda in particular) who have non-union workforces and can under sell their American competition as a result.
Saturday, December 13, 2008
OK. So let's take a look at the mid-sized sedan category of cars. Here is a list of the best and worst mid sized sedans on the market in the US. Notice that only one of the best 5 is an American car (the Chevy Malibu). All of the worst 5 are American cars. Now let's talk about cost. The Honda Accord (the best car in the category) sells for a retail sticker price of about $21,000. The Pontiac G6 (one of the worst cars in the category - essentially a renamed Grand Am) sells for a retail sticker price of about $21, 160. Now, no one pays sticker so the actual sale price of these cars is probably about the same and which is more expensive depends on the dealer, the buyer and the deal being struck. My point is this. Given that the G6 and the Accord cost the buyer about the same amount, it's hard to make the argument that the UAW's high labor costs are reason more people want an Accord than a G6. Might part of the problem be that the G6 is essentially a retread design of the old Grand Am that never well regarded by people who judge cars.
I believe that one of our occasional visitors is quite well versed in the kinds of wage and benefits concessions that Union workers have been making in the auto industry lately (is it you Rolleroid?). I'd love it if we got a little primer on that kind of thing from you.
Posted by Raised By Republicans at 3:32 PM