So, this will lower GM’s per vehicle labor cost by what, 2%?
If the unions still control GM’s labor supply, they will go chapter 7 in less than 4 years.
Not with all that “government” money flowing in.
Yes. Which is one of the major reasons why I am dead set against any kind of bailout.
Another issue with unions is that they take an adversarial approach to dealings with a company in order to wring more benefits from a company.
Through strikes, intimidation and other union tactics, they hold a company over the barrel until they force them to submit.
This submission by the company removes market forces from the equation, and the costs of doing business are no longer driven by the market, but are instead driven by intimidation, emotion and a variety of other factors that have nothing to do with market forces of supply an demand.
These costs of increased wages and benefits are simply passed on to the consumer, where market forces WILL take effect. The company then is faced with having to produce a product or service that is unsustainable in the face of market forces, and consumers will not buy the same (or sometimes inferior product) at an increased price, and the company will do poorly, often going out of business. This is one of the key reasons the US Steel Industry went belly up in the Sixties and Seventies, because they refused to modernize (which would have required fewer people to produce the same amount of steel) The unions were not interested in staying competitive with a market, they were interested PRIMARILY with increasing wages and benefits while ensuring no jobs were lost.
The Japanese did not have the same kinds of issues, because their unions are not the same as our unions. Their unions work WITH the company. Our unions work AGAINST the company.
The UAW is going to ensure that the US auto industry goes the same route as the US Steel industry. And the same thing is going to happen to the autoworkers.
The people in charge at the unions are going to pull up their tents, shrug their shoulders and say “Sorry folks, we tried! The evil company would rather fold than meet our demands, so...you all have a good life and all...Bye!” They will find some other unionized industry to get involved in.
Union members love to point out that the higher wages enjoyed by many non-union people are due to their efforts. It is also worth noting that the higher prices paid by all of us for damn near everything that comes out of a unionized industry is also due to their efforts. Too many of them view their unions as operating in a vacuum, but they don’t. If a company has to pay higher prices to a truckers union, you think they are just going to eat those profits? If an electricians union sets a floor on wages for their members, do you think any of us as homeowners don’t simply pay more for those services?
It will be Amtraked. A permanent money sucking hole.