A rant about the impending auto industry bailout. →
[More:]As a preface, let me say that I am not employed in an industry with any ties to the automotive industry. However, I am a blue collar factory worker at a large factory. I do not belong to a labor union.
When I read about the current situation in the American auto industry, I have conflicting feelings. I do not know what the answer is. I look at our current downturn with it's related fuel prices, and I wonder how it can hurt the American industry to such a large degree, but the foreign makers to a lesser degree. Yes, the profit margins will narrow for the foreign car makers, but they don't appear to be on the brink of bankruptcy.
Inevitably when discussing this issue there is mention of the "gold plated" benefits packages and high wages of the American auto workers. And here is where I start having my conflicts. In the nearly 15 years I've been working for my company, my raises have nowhere near kept up with inflation. I've increased my income over the years by improving my job skills, but if I was still in my original job I'd be on a backwards treadmill. When I started, I didn't have to pay anything for health benefits, but now I'm on an 80/20 plan, and my copays have gone up to 4 times what they were when I started. So that puts me even further back with regards to my pay keeping up with inflation. With most middle class people in the same situation as I am, our buying power is lessening, and things like new automobiles become harder to afford. It's our buying power that is driving this economy, and not the 5% that make more than 250,000 dollars a year. Yet we still hear stories about the lazy auto workers with their fat pay. The fact is American workers are amongst the most productive in the world. I'd think paying our workers more would be a good thing.
One of the most common results I see from the various solutions proposed from the outright bailout, to the companies filing bankruptcy, is that the workers contracts need to be renegotiated to reduce pay and benefits, and to reduce current retiree benefits. Now I'll be the first one to agree that the labor unions haven't grown with the times, and from what I've heard of the labor contracts regarding work rules etc. is that they are incredibly complex and byzantine in nature, but when you start talking about cutting pay and benefits to workers who are supposed to be buying those products, then I think we're regressing in this nation.
I know that there are suggestions that this new administration will have to put things like health care on the back burner while it wrestles with the current economic and international crises. I happen to think a health care plan has to be a part of the solution to the financial crisis, and I don't know why industry isn't begging congress for answers on that the same way they are begging for money to run their companies. Not to mention how it might help the federal budget if health care costs could be reigned in.
I can't help but think that there is huge mismanagement in the American auto companies. Companies based in Europe, even though they have factories here, remain competitive on the world market. They must have missed the boat somehow. It was the same thing in the late 70's and early 80's when the Japanese auto makers got their foothold on our market.
In the end, even if the companies go completely out of business, I can't see that having such a huge effect on jobs in this country. The "big three" auto makers sell a lot of cars, and the demand will still be there for them. Various parts of the companies have value, and could be purchased and operated by someone else. I don't see where the production will come from to fill the void if they all shut their doors. It's a big complicated confusing mess. This nowhere near touches on everything I think about this mess, but it's nice to get it off my mind just the same.