As the big boys from the big three pressed their case this week for a taxpayer funded bridge or bailout (pick your metaphor), the role of big labor in Mr. Obama’s coming administration is being seriously tested even before the guy gets to say “so help me God.”
Of course, at issue is the fact that he promised the proverbial moon to an interest group not really known in recent years for its capacity to pack too much of an electoral punch. Whether or not he will be able – or inclined – to actually keep his pledges is quite another thing.
It is likely that many months ago, when Barack Obama was assuring various union dense audiences of his support for them, he never anticipated having to really do anything about it so soon. But it will be on his plate on day one and the issue may just keep him up some nights until 3:00 a.m. – in case the phone rings in the wee hours.
The problems with the American automobile industry are legion, but likely the most glaring is the cost of labor and management. Bloated salaries in the boardroom and borderline outrageous wages on the assembly lines have pretty much brought the entire U.S. auto industry, once the envy of the world, to its knees - if not the brink of disaster.
Workers at a Toyota plant in Kentucky, a non-union shop, receive about $47.00 per hour in wages and benefits. That translates to about $98,000.00 per year (not counting overtime). Those doing essentially the same job at GM, Ford, or Chrysler – whose assembly line workers are members of the United Auto Workers union – receive roughly $71.00 per hour – or about $150,000.00 annually (again, minus any overtime).
Public school teachers across the country make, on the average, no more than a third of that.
Detroit has been losing money on every car sold for quite some time. The easy criticism is that they have been building “gas guzzlers.” But that dog won’t hunt because one of the reasons they have had difficulty shifting gears (so to speak) to smaller, cheaper, and more fuel efficient models is that they would lose more money per unit on them. They have not been competitive for a long time and there isn’t a bailout number big enough to fix the problem without changing management (getting rid of the guys who ran the place into the ground) and renegotiating labor contracts downward.
And there’s the rub. The United Auto Workers is a formidable foe with a new best friend moving into the White House.