Bailout GM? Are you getting the full story in the mainstream media?
Posted by Liberty on November 13, 2008
If you’re watching Katie Couric [seriously, why are you doing that?!] or some other MSM teleprompter reader, you probably haven’t seen anything about the effect that the United Auto Workers have had on GM’s current financial stress. Professor Mark Perry was on to this last week on his blog Carpe Diem. He’s had a chart posted that compares the average salary of a Big 3 autoworker [generally under UAW contract] with the salaries of Toyota workers [free market/non-union], management and professional workers, other forms of manufacturing and the workforce in general. [Naturally, the chart is easier to visualize. See it here.] Guess who’s making the highest average salary? You’re right–the UAW workers at GM, Chrysler and Ford. On average, they make $73.20 per hour, compared with Toyota at $48.00 per hour. The Big 3 are also saddled with paying massive union pension and health care expenses for their retirees. Is it any wonder that they aren’t competitive? I don’t pretend to know how to solve this problem but if there were some way they could divorce the UAW, I suspect that would help. On the one hand, I blame the Big 3 for even agreeing to these union contracts but then again, what choice did they have?
Auto companies have also been in Congress’s cross-hairs in recent years, at the behest of environmental activist groups. Time after time, Congress has raised CAFE standards, telling auto makers that they have to build vehicles that attain a certain fuel economy, regardless of what their customers actually want to buy. Between the unions demanding inflated wages and fat benefit packages and the government regulations, auto makers have been existing in something other than a free market for years.
Here’s one more link on this subject, from the Wall Street Journal.