General Motors went into a controlled bankruptcy today, with the government pledging another $30 Billion of our tax dollars to subsidize union labor. The unions have also become the company’s largest (apart from the government) shareholders.
GM’s union workers still receive close to $50,000 per year in higher pay (including benefits) than Honda, Toyota, Nissan & BMW, etc. workers in non-union states. I see nothing in the current negotiations that is going to significantly reduce that union labor cost below $150,000 per worker.
Anyone who buys a car, both new and used, must pay more because of this. We also need to pay more in taxes because of this. That’s where the bailout money comes from. And this $30 Billion will grow into $100 Billion (or more) before it is over.
What the government should do is to allow GM to hire non-union labor without the threat of a strike. This way, they will pay a fair wage, as determined by market forces, and they will once-again become competitive.
Each U.S. automaker must pay somewhere between $1,500 and $2,500 for each car in “legacy” and excess-labor costs, before the car even hits the assembly line. No wonder the U.S. makers can’t compete. If they were the only producers, they could pass the cost along and no one would be the wiser. Unfortunately for them, they must compete with other car makers, who don’t have these costs. When a car retails for $18,000 there is no profit margin when you add $2,500 to your costs.
The hidden plan is to bring about government health insurance. If the taxpayer picks up the insurance cost, the auto makers can reduce their legacy costs by about $1,000 per car.
While nationalized health care is being put forward as a “cost cutting” measure, it will do no such thing. Nothing done by the government is done at a lesser cost than the competitive, private sector.
While the rhetoric for nationalized medicine sounds good, the practice will be devastating to many Americans.
If we want to insure everybody, that’s one thing. Maybe we want that. Put it to the voters to increase our taxes another few thousand dollars per year, because that’s what it will cost. If we want it, we’ll vote for it and pay for it. But trying to lull us all into thinking that a “one-payer” system will “save” us money is flat-out criminal. This is a lie and it should be exposed.
This isn’t cruel-hearted. It’s the plain truth. I do believe that a civilized society needs to provide care for all of its citizens and I am willing to help pay for it. But I don’t want my government and trial lawyers in charge of it.
The other GM strategy is to force the non-union auto makers to unionize. This would push competitors’ costs up by at least $1,000 per car (in addition to the projected $1,300 per car that the new CAFÉ standards will cost), with escalating costs after that. This would make U.S. car makers competitive again. Unfortunately, we will all have to pay the cost.
There are bills making their way through Congress that will make it virtually impossible to avoid the unionization of auto makers in the south. We hear nothing about this in the media, but we should be.
The Obama GM solution is for us all to have nationalized health care and unionized workers for their competition. The end result is that we will all pay another $2,500 more per car. Is that what you want?
Where is the outrage here? When hundreds of thousands of people are losing jobs and cutting expenses to make ends meet, why should GM still pay $150,000 per year for a union worker without a college degree? Isn’t $100,000 enough?
I have no problem with union workers being paid a fair, competitive wage. But the unions need to understand that this is a global economy, and that what they do affects us all. They shouldn’t ask us to pay for their excess wages and benefits. At some point, the normal American citizen is going to get fed up with the selfishness and pig-headedness by union bosses. Americans will finally see that there has been a $100 Billion payoff (by the government) to unions and say “enough.”
That day can’t come soon enough.
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