Bring It On!

Pass the Vick’s 44

November 20th, 2008 | by Omnipotent Poobah |

CEO Road Rally

If you work, you have a union to thank for many of the things you take for granted. Forty-hour work weeks, work-safety rules - and if you haven’t already lost them - vacations, retirement plans and medical insurance. Without unions, people would still be working 12-16 hours days, end-on-end, until they dropped in their traces.

Unions are now in decline because they accomplished much of what they started out to do and the corporate and governmental worlds have become toxic to labor. For the past 20-30 years unions concentrated mostly on wage and benefit issues. Unfortunately, they lost many of those battles. Union workers have seen their pay and benefits stagnate or disappear. A corporate culture based on layoffs to cut costs and many union members inexplicably voting “values” issues instead of their pocketbooks hasn’t helped either.

The CEOs Will Get Plumper
The UAW has given up much over the last 10 years. That’s why they reacted to the Big Three crisis by telling the companies, “Look somewhere else for cuts. You’re the ones who managed the company into the ground.” And they’re right. Detroit’s inability to develop the right products at the right time is legendary and while pay and benefits are a big chunk of the issue, CEOs shoulder most of the responsibility for failure.

None of the Big Three CEOs are returning their plump bonuses, salaries, or other perks while asking the UAW drones to give their’s back. Their usual way of dealing with economic issues is to close plants just in time to make their racquetball dates at the club. If for no other reason than the arrogance of the CEOs, the union is morally quite right to fight them tooth and nail.

But now the Big Three might not survive past Christmas. They’ve built too many Pintos and Gremlins and people no longer want their junk, especially when they can’t pay their mortgages. However, their arrogance is still on display even as they go hat-in-hand to the taxpayers for big money without even getting an exploding Pinto fuel tank in return. They made their trip to Washington with silver begging cups. They’re still on the clock for big money and they’re still using their perks, like $20,000 rides on the company jet, to beg for ill-deserved alms.

‘Screw You and the Vega You Drove In!’
The proper response from most fair-minded people is, “Screw you and the Vega you drove in! I ain’t giving you a nickel!” But the Big Three bailout question is bigger and more complex than that. The CEOs and politicians lose nothing in the deal except having to publicly beg for help - although that assumes they have a shred of dignity to begin with. The taxpayers and workers are the ones getting the shaft. The problem is, we’re at a gangbang.

Regardless of who got us here, we’re in a heap of trouble. We’re faced with decisions to either look the other way at arrogance and greed or not bail companies out and lose our livelihoods. Neither is a good choice. The UAW doesn’t have the luxury of saying no to bailout concessions they’ll no doubt be asked for. If they want to keep their companies alive, they’ll have to cough up more even though they’ve coughed themselves raw before. Company failures won’t hurt the honchos. They already have theirs and enough capital to go out and screw someone else when they burn off the millions they’ve stashed away. Union workers have bupkis. They only have the prospect of losing their jobs and feeding the hungry mouths at the dinner table.

Like it or not, the UAW and many other union and non-union workers will be need to buy industrial quantities of Vick’s 44 to get through this mess.

Cross posted at The Omnipotent Poobah Speaks!

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  1. 6 Responses to “Pass the Vick’s 44”

  2. By Matthew O'Keefe on Nov 21, 2008 | Reply

    I think it would be best to point out all the other industries intertwinned witht he auto industry that would lose even if just one of them declares bankruptcy. Wire and Cable would be hit hard, Plastic Molding would be hit hard and the list goes on right to the chasis of cars and the steele industry. Does your manufacturing company supply Detroit with parts? Let us not forget that this is not just an American issue anymore. Canada has a say in this just as well! If Washington is stupid then maybe our friends to the North can offer a “Loan”?

    The only people winning this arguement are the foriegn owned car makers and the politicians in their pockets.

    Great post OP!!!!

  3. By Paul Watson on Nov 21, 2008 | Reply

    Matt,
    The foreign owned car companies are benefiting because they actually make cars people want to buy. If you want to pay car companies to produce things people don’t want to buy, they’ll still produce crap and so still lose out.

    In short, shit happens. For the individuals involved, it’s a catastrophe. But every other economy has had to go through this with the US acting as stern custodian of free market values and against protectionism and subsidy. Well, now it’s your turn to take the medicine. Open wide.

  4. By Omnipotent Poobah on Nov 21, 2008 | Reply

    Paul,
    Much of what you say is true, but with respect to protectionism and subsidy, there are some things to consider.

    In many cases, the US has historically backed down on protectionism. For example, one of the reasons Japanese car makers became so big in the US, is because for years we allowed them to ship cars into the US at lower prices than our domestics and allowed them to protect their markets while they had unrestricted access to ours, hence the free market / protectionism / subsidy arguments.

    I thought it these were stupid moves to begin with, but as you say, shit happens.

    The point is, if the US had been as protectionist as many of our trade partners, it would have hurt both of us. But the downside from a US perspective was the loss of our manufacturing base - even the manufacturers who made good products people wanted to buy.

    You’re right that it cuts both ways, but it does that from both the US and rest of the world sides.

  5. By Paul Watson on Nov 21, 2008 | Reply

    Poobah,
    There is something to that, but living in the UK, we’ve been even more open than the US and have correspondingly fewer manufacturing jobs of home-owned industry.

    I was mostly responding to the foreign-owned car company thing. It’s not the fact that they’re foreign owned that its the problem, it’s that, as you said, American-owned car companies are not making cars people want. Giving them a bailout won’t help with that little problem. I might have come across a little harshly, but knee-jerk nationalism tends to be a problem. The nationalists here (the BNP) are rabidly xenophobic and racist, so I tend to associate those things together.

  6. By manapp99 on Nov 21, 2008 | Reply

    “The foreign owned car companies are benefiting because they actually make cars people want to buy.”

    http://www.bankrate.com/brm/news/auto/car-guide-2008/20080804_top_10_cars_sales_a1.asp

    Five of the top ten cars sold in the US were by GM (three) and Ford (two). It is less about making cars no one wants and more about not being able to compete due to high costs. Most specifically labor costs.

  7. By manapp99 on Nov 21, 2008 | Reply

    Check out this chart comparing big three hourly wage vs others:

    http://www.heritage.org/Research/Economy/images/wm2135_chart1.gif

    US auto three times the average private sector worker and almost twice the American based Japanese plants.

    It is great for workers to get a fair wage but it is stupid to expect a greater wage than the market can allow for.

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