The left and their media can blame President Trump for the closing of General Motors plants and the loss of jobs all they want. The problem is GM has been plagued by one very significant ill going back a decade plus.
An ill not addressed by the Obama administration bailout and still afflicting them today: higher-than-average wages and legacy costs.
The Associated Press reported that, for example, the average United Auto Workers member makes $29.78 per hour at GM, while Toyota pays its workers (most of whom are non-union) about $30 per hour. However, when total benefits (including pensions and health care for workers, retirees and their spouses) is factored in, GM’s total hourly labor costs is about $69, while Toyota’s is about $48.
— CBS News, 12/19/08
After the bailout, which required some belt-tightening and sacrifice for all, it didn’t take long for history to repeat.
Hourly labor costs will rise to an average of $60 per auto worker by 2019 if proposed contracts at General Motors Co (GM.N) and Ford Motor Co (F.N) are ratified by rank-and-file members of the United Auto Workers union, a study released on Friday said.
— Reuters, 11/20/15
And as of 2018….
When companies decide enough is enough, the unions who inflated the wages (and receive higher dues per employee) are the first to complain.
The AFL-CIO labor union is worried that General Motors’ decision this week to halt production at several factories and cut thousands of jobs in the U.S. could be a pretext for sending work outside the country where labor costs are significantly cheaper.
— NBC News, 11/27/18
Businesses are created to make money, not because their initial desire was to be employers.
If people working at a company feel they’re being paid less than they’re worth, they’re free to leave and find a higher paying job elsewhere. When a union muscles their way in and forces a company to pay employees more and force them to pay a benefits package that will eventually mess with the bottom line, bad things normally happen.
Leave a Reply