re: #350 Sharmuta

Once again Washington misses the mark.

The problem is big labor.

To be fair, Wagoner’s a real problem, and his ouster is long overdue. He has a near-decade of declining sales and market share under his belt.

Over the last few years, the American auto industry as a whole has made a lot of progress in bringing their labor costs in line with their competition. It’s still a bit higher, but not nearly as much as it used to be when comparing new hires to new hires. The older workers are still bound to their existing agreements, which has created a two-tiered labor force and brought a lot of resentment onto the floor, as might be imagined. But as the older labor pool drifts off into retirement, US auto companies will drift toward pay equity with their overseas counterparts. Honda, for example, has huge production facilities in Ohio; it isn’t having similar problems because it doesn’t have that long history of past excess to deal with.

The really big problem is all those decades of retirees that the Big Three are bound by contract to serve, and there’s just not a whole hell of a lot that can be done about those costs - although the Union would be happy to take control of the billions of dollars in pension funds now under GM’s control. No one but the UAW thinks this is a good idea, but it would make GM’s bottom line a lot brighter.