May 14, 2008

The Automotive Industry of Doom Part 1

I’ve called this entry “The Automotive Industry of Doom Part 1” for two reasons. One, Indiana Jones and the Kingdom of the Crystal Skull is coming out May 22, 2008. And Two, I’ve been working on a fairly long rant about the UAW (United Auto Workers Union) strikes and their affects on American automotive companies. The long rant is saved on my laptop, which is currently undergoing so work due to issues with heating up and a hard drive that's full. The long rant should follow soon.

The problem I see is the idea of the union in the first place. If we go way back to when unions were started, they had a purpose they served in protecting the rights of the workers. The problem today is their power is out of control and their affect on businesses, and subsequently, consumers is enormous.

My first example is General Motors (GM). GM has been hit with several strikes by the UAW that include shutdowns of plants that produce popular models (Malibu, Acadia, all the truck lines, etc), shutdowns of plants that supply parts for various vehicles (axles, plastics), and now another one that affects metal stamping plant (doors, hoods). Now it may seem like GM has some serious issues with the treatment of its employees, but as one auto blogger writes, “Is the United Auto Workers (UAW) subjecting GM to a death by a thousand cuts? What's the point of negotiating a national contract if every plant covered by the agreement goes out on strike over "local issues?"” (The Truth About Cars).

You see, GM already dealt with a national contract for the members of the UAW, but now there are other local unions and smaller unions such as American Axle’s union that are attacking GM. Theories are that these smaller unions want in on the UAW contract and agreements. Some even believe these unions want to join the UAW.

And the UAW, it’s the same union that represents the workers over at Ford and Chrysler. They’ve become so powerful, they tell the auto companies what they will build and, probably, not build. I read an article a few months back about the Ford Ranger. It’s not even a decent selling vehicle anymore, but the UAW wants to keep building it for a couple of years. Why? Because this will keep a specific group of union members in that job. Sure, this hurts Ford and over time these types of decisions will catch up with the profitability of the automotive companies, but the unions don’t care about that. They don’t see the larger picture. Instead, all 3 American automotive companies are heading towards Chapter 11. One blog even said GM may file this year.

Of course, then the government will work on a bail out program, loaning our tax dollars to these businesses; these businesses that can’t seem to build what the people want. Why are foreign cars so much more desirable? Why are all 3 American companies struggling? It’s a tough question. And I’ll work on that answer in the next installment of The Automotive Industry of Doom.

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