I wrote this response to a friend who had a cousin who was doing his part to defend the auto industry and all the great things they have done lately. I agreed with most of the points brought up but I then discovered within myself what others may be feeling. There is simply a “hate” and disgust of the Big 3 in the auto industry despite their recent achievements and accomplishments. People hate their culture, the extortionistic union, and ongoing stupidity of management. In many ways, people are willing to suffer the economic pain of the auto industry failing.
Your cousin may be correct. But if they Big 3 are so smart, why is it only American auto manufacturer”s dying? Why are all the other U.S. based manufacturers like Honda, Toyota, etc. at least getting by?
One of the big reasons is the legacy costs where people feel entitled they should be taken cared of for life. It is also the back-breaking unions that have been infamous for extorting the auto industry. You have basically uneducated factory workers making extorted wage rates. According to the UAW themselves, http://www.uaw.org/barg/07fact/fact02.php an assembler in 2006 made nearly $28/hr. People with skills made $32/hour. Add the very generous benefits thrown in and it becomes much higher than that. Michigan”s cost of living isn”t substantially more than most places in the U.S. I think a casual poll of the average person is that a high school grad with few skills making over $15/hour is quite good. Premium pay is an extra 10%-25% pay, not DOUBLE what market rates should be.
So the UAW think they have been doing a good job for years protecting its workers. This has been going on since I was in high school many years ago. This is infamous. And people also remember how stupid the Big 3 were for allowing the Japanese companies like Toyota and Honda made gains like they did over the last 20 years. They did not make Americans proud like they once did 30 years ago.
Bottom line, there is very little sympathy for the auto industry because people remember these many things. No one is sympathetic to a group of workers who has successfully extorted outrageous wages from management for decades. No one is sympathetic to a group of workers who get life-long entitlements to the point it bankrupts the host company. Most people in the U.S. do not get life-long entitlements. What makes them special and why should taxpayers be forced to fund it? No one is sympathetic to an industry where many Americans won”t buy American despite their patriotic feelings.
Even the fact that the Big 3 going down will have a huge negative impact on the overall economy, people are still disgusted with them and won”t help them. That tells you how much negative Karma the Big 3 have generated over the decades.
It is not simply an economic issue. There is a “hateâ€ issue against the Big 3. That is why there is such a revolt against them. The CEO”s say let the past be the past. However, the “loanâ€ they want will simply go and continue to support many of people and entitlements that got them there. Chapter 11 will force a major restructure and culture shift in the auto industry like we have never seen before.