What can Big Three do in order to survive?

PATRICK SAUNDERS

As Yogi Berra said so aptly, “its déjà vu all over again.” The column by Mark Mix, spokesperson for the National Right to Work Committee echoed its same old tired refrain, blame the workers and the unions, and arguing against helping the U.S. auto industry — Ford, GM and Chrysler in their time of trouble.

Mr. Mix’s argument that lays all of the woes on the doorstep of the UAW simply does not hold water in the present time. The UAW leadership has worked hand and glove with the Big Three since the early 80s to make their operations more efficient, allowing drastic changes in work rules, the introduction of automation and robotics that lowered the labor cost per unit to its lowest point. While this allowed the Big Three to greatly increase their profits on larger cars and SUV’s loaded with accessories once thought to be luxuries. The UAW and its declining worker-membership base were not allowed to have input into the type of products being made.

If you look at the UAW plants in this region, the impact of the concessions by labor was shown in the drop in work force. The now closed Ford plant in Lorain once employed more than 5,000 workers. After the concessions of the 80s, the workforce there shrank by one half in the early 90s and by another 50 percent before it closed its doors several years ago. The former New Departure in Perkins Township that had thousands of workers now has about 800. The former Ford/Visteon/ACH plant in Margaretta Township has shrunk by half or more from about 2500. The UAW members have been forced into a defensive posture, ratifying contracts in 2007 that cut wages by 50 percent to an average worker wage of $29,000 a year and reduced benefits (pension and healthcare) won by years of negotiating to a mere shadow of their former selves. What this means is that auto workers with families cannot afford to buy the cars they make every day. So to picture them as an omnipotent power in the 21st century as Mr. Mix did in his column is far from the truth.

Mr. Mix talks about the foreign plants in our country, Toyota, Nissan, Hyundai and Mercedes being among them and their profitability. He points out that they are in “Right to Work” states, but does not discuss that those states took on major debt in infrastructure costs, economic aid and training of employees to lure those plants. In Alabama, the Mercedes plant located there costs the state annually more than the taxes it produces. The average wage in all of those plants is about $15 per hour and they are heavily automated to reduce the number of workers needed. Their workforce is also much younger than the Big Three’s and has not incurred the healthcare and pension costs of the big three. The ripple from these plants in the local economic pond has not helped those states to shake off the desperate poverty that traps more than half of their citizens.

One element that Mr. Mix does not discuss is healthcare costs, something that the Big Three cannot control, health care costs run about $1600 per unit in the US, opposed to about $250 per unit in Canada, the land of the hated socialized medicine, but where most of the new auto plants have been built. Healthcare, a central issue of the recent campaign is one of the causes of our inability to compete on a global scale, for all of the other developed nations have a single payer healthcare system in place. This allows manufacturers to concentrate on producing products, and not on negotiating increasing costs with HMOs, PPOs and Insurance corporations for health care services that rank 37th in the world in quality and first in cost. But that would cast aspersions on those who really fund the National Right to Work Committee and pay Mr. Mix’s salary.

The question we should be asking ourselves, what will happen if the Big Three are allowed to crumble? In our area, there are at least a dozen plants that will probably close or reduce operations drastically. Across the Great Lakes Region are hundreds of thousands of families who are directly tied to the future of the big three, either through employment or their retirement pension. What will happen to these folks? Retirees will find their income reduced by at least 33 percent when the Federal Pension Benefit Guarantee Fund absorbs them into its system, which is also running in the red from the increase of failures of private corporate pension funds in the last 10 years. Health care for the employees will end immediately and retirees will find their healthcare either drastically reduced or cease to exist as the payments cease from the auto companies into the UAW VEBA (the UAW took over the administration of the retiree healthcare from the Big Three) created last year from the new contracts. These folks are going to be forced to ask the government for help to live and their request has to be answered, for they are our neighbors, friends, and family. So instead of killing the messenger of bad news, which Mr. Mix advocates, what about discussing the shape that the U.S. auto industry should take in the future to compete in the global market? What about breaking the hold that the fossil fuel cartel (BP, Exxon, OPEC etc.) has over our economy? Involving the manufacturing expertise and trained workforce of the Big Three in creating a green solution for our transportation quandary in this country would be a better choice than letting them be bought up piece meal on the cheap by foreign corporations in a bankruptcy fire sale.

After all, we don’t want Toyotas to be the only make of car racing on the NASCAR circuit, do we?