Friday, December 12, 2008

Saying Goodbye to American Cars : is it also saying Good Riddance?

Over the past couple of weeks the news has been pretty much unavoidable. The US car industry is going down the toilet, and 2 of the big 3 USA carmakers are facing the very real possibility of bankruptcy. Right now there is a very real chance that General Motors and Chrysler will cease to exist as car-manufactures, with only Ford surviving due to actually having some money in the bank.

I've seen a lot of doom and gloom takes on the demise of the US car industry, but I can't say I'm convinced that it's a bad thing, or that it wasn't going to happen anyways. National car companies with tens upon thousands of workers have gone bust before. Case in point, British Leyland. As far as I can tell, Britain got over the demise of their own national automaker, and while many people lost their jobs, the British economy recovered and is chugging along relatively nicely.

I'm also not convinced that the US car-makers dying is a bad thing because, well, they haven't made good cars. Seriously, go pick up a Consumer Reports from the past two decades. Tune into Top Gear on BBC. Check out Top Gears annual car survey results from people who actually buy cars. The short version is, US cars have been overpriced and under-performing for not just years, but decades. Jeremy Clarkson loves to point out that Ford's premium muscle car, the Mustang, was shipping with leaf springs for the suspension, less than 2 years ago. Leaf springs are something you'd literally find on a horse draw cart. Top Gear also wondered aloud on camera how Porsche, BMW, Ferrari, and Lamborghini get 500 horsepower out of the same size engine that Dodge only gets 400 horsepower from.

The reality is, when people I know buy cars today, they start with non-American cars. There's a reason why Japanese, Korean, and Malaysian cars have hammered out massive shares in the US car market. They simply make better cars for the price. There's a reason why Europe dominates the sports car market. They simply make a better car. It wasn't until the most recent Corvette that Chevy finally made something Jeremy Clarkson liked, then loved. Now, I don't care what you think about Jeremy Clarkson, but as long as he's been driving and talking about sports cars, I'm pretty sure he knows what he's talking about.

Even though the US car makers are finally stepping and competing on a practical level by making cars that can compete against their European, Japanese, Korean, and Malaysian counterparts, they haven't solved the real problem. The real problem of the US car industry is the Union.

One of the points that I see a lot of news analysts just skipping over is that the United Auto Workers Union declined to take a $3 to $4 an hour pay cut in order to have pay scales in line with non-unionized car manufactures. Now, speaking for myself, when I got hired on to help Adventure Crossing, I flat out told the owner when he asked me how much I was looking to get paid, I said this : Pay me whats in the budget. If that's minimum starting salary, that's minimum starting salary. Unless the work I do helps the business I don't deserve the big bucks, and you shouldn't be paying me big bucks.

I still remember my first trip to Anthrocon resulting in a What was I thinking moment. During the closing ceremony the con chairman offered thanks to the local Union, and I turned to somebody who was local to Pittsburgh and said something to the effect of the following : You still have Unions up here?

The result was a completely confused expression on the local's face as unions were second nature to him and responded to the effect asking why didn't we have unions down south. I remember sitting there trying to come up with a polite way to say that unions where one of the worst business concepts going, and that for the most part, most Southern businessmen and employees had figured out that unions were a BAD THING.

One of the issues with Unions is that they once did have a practical use in the American Economy. I'd even say that as little as 20 years ago Unions still had a place in the US economy. At one point there was a need for employees and workers to get together and unionize themselves through select representatives to promote their rights and ideas to their employers. However, in a democracy like the United States, one of the basic governmental foundations is that if you have an idea, and it's a good idea, and you want it to become law, convince your fellow citizens to vote for your idea to become law. Today there are both federal and state regulations regarding workers employment rights, payment rights, overtime rights, and safety rights. All of the issues that unions used to fight for are safely ensconced in federal and state law.

Instead of disbanding after the legal rights were achieved, unions continued to hang together, and the effects today are bank shattering. I've lost count of the horror stories where several hundred people in a union were paid to sit around on their read ends and do nothing because there was no work for them to, but they couldn't be sent home because they were unionized, and they had to be paid for work they didn't do because they were part of the union.

What we learned in the South, and what is practiced in the South, is a form of the free-market economy. There is someone out there better than me at what I do. There is somebody out there who will do my job for less money. I do not have job security. If I mess up, screw up, or do something wrong, I can be fired. Yes, I can make life difficult for my successor by not leaving proper documentation, changing all the passwords and locking systems out, and so on and so forth. But, if they are as good as me, it will just take them some time and aggravation to undo everything I did.

Thus I have to work at my best, doing my best, to prove that I am valuable enough to keep getting paid.

Unions do not encourage that behavior. Once a person is part of a Union, such as United Auto Workers is today, they don't have to the work. If they screw up, mess up, or whatever, so what. Nobody else is going to take their job, and the employer gets stuck with a logistics nightmare.

That is what has happened with the car makers in the US. The Unions have such control over the production of the cars that the companies are effectively held hostage. US cars cost more than their counterparts because US cars have to calculate in the exorbitant pay of the unions, the ludicrous benefits of the unions, and the outrageous pensions of the unions. When push came to shove, rather than backing down, the unions torpedoed a deal that would have bailed General Motors and Chrysler out of trouble.

As I see it, Unions as represented by the UAW, don't understand real-world economics. They don't understand that they have to be better, and that they have to produce better products. Shoving out brand new cars with yesteryears technology just doesn't cut it for the smart consumer.

For me then, I welcome the collapse of the US car market. General Motors and Chryslers bankruptcies will shut the unions down and remove their power base. And like Britain did after the collapse of British Leyland, the US will no doubt recover.

There's just one slight problem. The unions are democrats. Oh yes. They vote democrat. And there is a democrat senate, a democrat house, and a democrat president coming up really soon.

Do I really need to spell out why this is a bad thing?
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