On Monday, I heard Neal Boortz mention how it is the fault of the unions for these problems with the U.S. automakers. Unfortunately, I wasn't able to listen to the rest of what he had to say for rushing to class.
Can someone explain to me how the unions are responsible for this? I have a vague idea how but need a little more "splainin'".
Primarily, the unions have driven up company costs for healthcare and other benefits. Those costs are then, also primarily, passed on directly to consumers in higher costs for cheaper products.
Then there's the "jobs bank," under which laid-off workers still receive 95 percent of their wages, a benefit that seems sure to be on the chopping block when Ford and the United Auto Workers enter bargaining on a new contract next year.
Back in the days of yore, UAW and others associated with the industry pressured the companies into some rather unsustainable contracts.
At the time, the companies were extremely profitable and saw no dark days ahead, plus they were afraid of the political pressure the unions could put on them, not to mention the potential losses in strike situations, so they caved. It's worth noting that there were and are still places in MI where one cannot park a foreign car, and where one does not dare to hire non-union labor, for fear of violence (assault, vandalism, theft, etc.).
As time has gone on, the contractual pay increases, pensions, and health care cost increases, coupled with increasingly soft demand for US autos at the prices they are offered, has put a heavy strain on the ability of these companies to compete in the global market (though some are doing far better overseas than domestically, again due to labor costs).
It's also worth knowing that the vast majority of the blue-collar (waged) employees and some subset of the white-collar (salaried) employees that were part of these contracts and currently being laid off (under union contract, they CANNOT be fired) will continue to receive full health benefits and 90% of their pay for 18 months after receiving their notices. After that, they still qualify for unemployment benefits from the state. So Ford is looking at it's balance sheet and laying these people off now, knowing it will have to pay nearly all of them most of their wage (the average line worker makes over $65,000 a year) for this period of time for no labor whatsoever. Things have gotten that bad.
I'll add to "Miller Creek's" explanation:
The unions asked for & received more than that...they got permanent protection for dead-beat workers. A person can come in drunk, high on whatever, have a fight with the boss, sabotage the parts on the line which effects the production of a whole plant and NOT get written up, let alone fired. Also, some are on a permanent dose of medical leave: They go on leave, come back just enough to renew benefits, and go back on leave. THAT, too, is the union's doing.
It's the dead-beats. There are many who work their tails off & have pride in what they do, but it's almost futile to do a good job.