While you don’t mention Ford in your post, the Ford: Biggest loss ever link from it presents a more detailed breakdown of Ford’s decline in 2006.
Paying union workers not to work surely didn’t help Ford’s bottom line. It’s obvious that to whatever extent unions hurt the company, declining sales and other factors from the article make it clear they weren’t the only source of Ford’s troubles.
I’m not sure where you’re going with this. Yes, unionized and non-unionized industries both provide health care. But where does the article say union benefits are excessive? Is there any evidence to suggest that unions usually result in higher benefits costs than in companies without them? Now, they may be excessive to the extent that health care costs in this country are simply high in the first place, but what does this have to to with unions per se?
Labor advocates in the USA made a serious strategic mistake when they made employers responsible for pensions and benefits, instead of going straight to government policy.
Your pension and your health insurance should be through the state, not a private company. Private pension costs will make your employer less competitive over time, and employer-provided benefits make the work force less mobile and more serflike. We need to fund this stuff nationally.
Also, too many sectors were not unionized, even back in the day: Farm workers, domestic workers, white collar workers. The children of those workers didn’t grow up with the expectations of the blue-collar organized labor subculture, and those who entered those fields have built up decades of resentment against organized labor (among others) for demanding benefits workers in the ignored sectors never got.
I’m pro-union, in case it isn’t clear. But unions have to rebuild from next to nothing now, and they have to demand new and different things, and it may be a shooting war again. Labor really screwed up for a long time.
I don’t want to get too automotive centric, but there are two things to remember about the troubles of the big three. Every company existed under the same environment, Toyota and Honda had to sell cars in a down economy as well.
Not having unions is a evolutionary advantage for a company. What happened in the automotive industry is a microcosm of what happens in general for unionized industries. At the beginning a company is making lots of money with little competition. The unions see this and negotiate generous contracts, the company agrees because there is plenty of money to go around. All that money starts attracting competition though and margins start to tighten up. Then something in the larger economy happens and those companies without the union contracts are flexible enough to change, while those with the union contracts can’t change and go out of business. Having a union for a company is like being old, not fatal by itself but it makes diseases which other people survive fatal.
Secondly, apart from Government regulations there is no reason for domestic automakers to make anything but trucks and sports cars. This is because the labor per unit is much higher for domestic automakers because of union negotiated benefits. Since margins are so much smaller on cars then on trucks it is almost impossible for the big 3 to price their cars competively and still make money. Thus the big 3 focus on the truck and sports car business because that is where they make their money. Thus when the price of oil jumps up and the market for trucks dries the big 3 are sent into the crapper. So saying that it is Ford’s fault for concentrating on trucks and the union had nothing to do with it, neglects the fact that the primary reason Ford does not do better in the small car market is the cost disadvantage they have because their workforce is unionized.
The Big Three make sports cars? :dubious:
The figures are costs in america where toyota and other manufacturers have to pay health benefits. Toyota pays about $215 per vehicle in health care costs. GM was paying $800 per vehicle for retirees and about the same for current workers. The rest of the cost difference had to do with work rules and paying for workers whose factories are temporarily closed. So if you add the $1,000 for the non-healthcare union expenses to the $600 extra to provide healthcare for current workers above what Toyota pays, then you still have more than the $1,400 per vehicle that they lost.
This despite the fact that the union negotiated those healthcare benefits for retirement and whatever they negotiated above what is customary to provide retirees should be assigned to union greed. But even if you take that out to do a comparison it still shows union greed was a huge factor.
I wonder if instead of continuing to work with unions, American workers shouldn’t be organized into trade associations, like businesses. With the object and intent of lobbying Congress and other governmental entities just a businesses do, only for workers’ rights, higher minimum wages, etc. The big problem American workers have is that they have no organized political help, that’s why Wall Street owns the Democrats as well as the Republicans, there is no one else to bribe them. I have faith in our elected officials I KNOW they will take bribe … oh, excuse me, “campaign contributions” … from workers’ organizations as well as business organizations!
USA unions keeping wages up in the USA is good for other countries.
Unions already do that.
I’m not a rabid hater of unions but I think the OP has his thinking backwards.
He seems to believe that the decline of unions has led to the decline of the economy.
I think the reality is that the decline of he economy has led to the decline of unions.