George Carty said:

When US car companies started running into problems, why did no major politicians suggest “ban foreign cars” as the solution?

I’m not sure. Possibly the fear of a trade war? In any case, I don’t think that’s really the problem that caused the car situation in the US. The automakers hit hard times for a number of reasons, not the least of which includes their financing situation. They all had big stakes in the moneymarket system that was destroyed by the bond collapse. There is also the fact that it’s astronomically expensive to manufacture cars in the US.

The US car makers are not (normally) entirely supported by the government like European makers are and they don’t have a free labor force like in Asia, so that makes things difficult.

The government is making things much much worse since it started exerting so much control on things.

Everyone seems to think that the problem is that these companies are making big cars and not little “green” cars. That’s bull****. Even if the market for big expensive cars has shrunk, the profit margin on them is huge, so only a small number need to be sold to get a descent return. Small cars are very difficult to make a profit on and damn near impossible in the US manufacturing system. They require a huge turnout and a huge initial investment.

We went through this same idiocy before, where it was thought that car makers needed to make “small” and “Green” cars that are “affordable” and “smart.” It damn near ruined us the first time, but after enough Gremlins fell apart and Pintos exploded eventually the industry came to realize that this was not how to do things. It took most of the 1980’s to get things back on track and now this again…

The New York MTA Transit Workers’ Union went on strike a couple of years ago after talks for a new labor contract stalled. This caused the shutdown of the New York Subway and almost all city buses – the only ones being the exception were a few operated on contract with private companies that were not unionized.

For one thing the strike was illegal. Courts had ordered that the union not strike because it was a vital public transit system and the strike would pose significant harm to security and commerce. They did anyway. The union president ended up going to jail – it was a slap on the wrist though, it was just a few days or something and he used the opportunity to grandstand about how he was fighting for the workers.

Fighting for the workers? The strike was not against people like JP Morgan and Andrew Carnagie in their big padded offices. This was not a strike against consolidated steel. Millions of New Yorkers couldn’t get to work. Tourists didn’t come to the city because of the strike and it was the holiday season. Everyone from the guy who plays violin in the subway station to the people who ran gift shops in Chinatown bled over this. It made everyone’s lives a living hell in the city.

So what was the strike over?

First of all, they wanted a pay raise. These unskilled workers were already being paid more than most teachers in New York City. They also were up in arms over plans to cut the workforce for certain jobs. New York City had plans to get rid of most of the signal workers over the next twenty years by putting in a system that would be safer, cheaper and more effecient – a fully computerized system that would remove most manual signalling.

Think about the gal there. They think they’re so entitled to their jobs even if they are no longer needed that they want the jobs kept instead of a cheaper and safer system. Those who would be cut would have been offered more than fair compensation in terms of severance, early retirement packages and so on. Do they think the system exists for no reason than to give them jobs? Do they expect vacuum tube changers to keep their jobs even when progress makes their position obsolete?

The union claimed they were working with the city and had made some very reasonable concessions. They conceded that they would allow the retirement age to be raised from 60 to 62. 62?!?!?! How about 65??? That’s generally the standard retirement age. Hell, plenty of people retire at 68 or 70 if they’re in a job that doesn’t require any heavy lifting.

The trems of the contract the city offered were more than fair, especially considering the MTA was in terrible financial shape. By 2005 they had spent tremendous amounts of money on the rebuilding of the entire Cortland Street connection and the Liberty Street and South Ferry stations after September 11th and had also spent a lot of money on the upgrades to the security on the system. If there was ever a time that the system could be forgiven for being in bad debt it was after the reconstruction.

Anyway, due to this strike and other strong armed tactics, the MTA ended up having to pay the transit workers and give them compensation greater than almost any other unskilled city workers or general labor. Someone who repairs buses gets paid way more than they could ever make in a private diesel garage. Someone who repairs subway tracks actually gets more than a city worker with a similar job description who repairs potholes and bridges – just because they’re not in the same union and thus the same contract. Many police officers get less compensation.

This also means that jobs with the transit authority are almost impossible to get – at least the fully unionized ones. The contract is so generous there’s almost no turnover and to get the jobs you need to have connections to get in.

Worst of all, the fares for busses and subways have been hiked more than the city wanted to try to compensate for the benefits. The city still has to subsidize the system and bleeds on every train and bus, but the increase in fair is an attempt to get something back. The fair went up something like a dollar in the past two years. That’s actually quite a bit to those who ride it every day and don’t have much money to begin with.

Case in point: A friend of mine got a job at Great Lakes Steel, and related to me that it was the union that was responsible for making acceptance of overtime a condition of employment. Unions have also been known to oppose labor saving automation.

I believe the problem is to a large extent the division-of-labor paradigm itself. It has made possible almost all of the standard of living we have, but at a cost when carried too far. Back when 90% of the population produced food for a living, at least people had a firm grasp on what it took to produce a loaf of bread. Nowadays, people have lost the grasp on what it takes to produce even their own company’s products. So we have people trying in panic to protect their own niches at the expense of each other, and calling for public policies that must fail to produce any improvement of conditions.

Having said that, unions are swiftly becoming anachronisms that have outlived their usefulness, and their reason to exist, but then again the same might be said of the mega corporation.

Its been said that a major economic collapse is like a forest fire; much is destroyed but it prepares the ground for fresh new growth. I doubt that ether of these two institutions will be recognizable when we reach the other side of current events.

        George Carty said:

One question to all the anti-union people:

Why do you believe that it is a good thing when capitalists join forces (in corporations) but a bad thing when workers join forces (in unions)?

Corporations can be overbearing too, but they have much more regulation and competition. The primary difference is that unions can get a monopoly that allows them to dictate the terms of employment.

The laws are very pro-union. They basically stop companies from avoiding union workers and allow unions to do things like charge all workers dues even if the worker does not want to be part of the union. In many cases they deny workers the right to act as free agents and negotiate aside from the union. The kind of contracts that they’re able to get the companies to sign really make them locked into things.

This is in part the fault of the company for signing into these contracts, but they don’t always have a lot of choice. The laws allow the unions to often dictate the terms. Companies are forbidden from discriminating against unions so if union workers want something that companies don’t think is fair, they can’t just say screw you, we’ll find others to work here.

The big difference is that if GM wants to charge ridiculous prices for a car, I don’t have to buy it. I can buy a Chrysler or a Ford or a Toyota or I could even buy really old car from a junk yard and restore it off-frame.

Why do you believe that it is a good thing when capitalists join forces (in corporations) but a bad thing when workers join forces (in unions)?

One big issue I’ve seen has been trying to shave costs by reducing features or specs of a product. That’s a valid business decision to a point, but eventually quality suffers enough to drive customers away. I think it’s possible to push the valid concept of building something as efficiently as possibly too far. Eventually you reduce the materials and construction to the point where the failure point is a razor thin margin away.

I’ve seen many examples. Palm, for example. Palm has had horrible leadership, terrible software support, an old operating system and so on. However, one thing that sticks out in my mind is when they produced a new product, the Treo 700p, they gave it 32 megabytes of storage space. This is not nearly enough to really store what is needed internally. The rational was expense – storage chips are an expensive part of the phone. They saved a few bucks on each unit by not putting in more.

The problem with this s that despite saving a few bucks on each unit, many customers were very dissatisfied. This combined with other lacking of features made people leave. They were willing to pay more for other manufacturers who put more into their products.

Also, my family used to have a Zenith television back in the 1990’s. It conked out with a blown tube after a few years. Before throwing it out I opened it up and was pretty disgusted with the quality of the internals. It was obvious the components were very very cheap and shotty. The wiring was all very narrow gauge with almost no insulation on it, the circuit board was just barely sitting in the chassis.

There’s a such thing as overbuilding a product. There’s also a such thing as underbuilding a product.

North American manufacturing is doing the same slow suicide by arrogance that British manufacturing inflicted on itself in the Post War period, and it’s going to suffer the same fate if it doesn’t stop looking for scapegoats and faces up to new realities. And that will have to be from the shop floor to the head office.

Workers have been de-skilled. MIS systems have been used instead of leadership, customers are considered suckers, companies futures are stripped to squeeze out a last dividend or stock rally so the CEO can get an obscene bonus and move on to his next victim, and so on and so on. Don’t tell me when you have leveraged out every last nickel of your companies credit and have nothing in the way of production tools or inventory to show for it, that your unions are all to blame.

This is the same as saying the only ones to blame for the credit crises were the stupid people that maxed out their credit cards and took out mortgages they couldn’t pay, and try to claim that it was the lenders who were victimized. In all of these cases it took two to dance.

Also, GM has been building railroad Locomotives for almost as long as they have been building cars. that doesn’t mean that they could do any better making trains in the future as cars now. The problem has never been that GM can’t make stuff. Or any of the other big three automakers. The problem is that they have been forced by the UAW to have a dinosaur fascistic business model, that only had viability for a short time in the middle of the last century. The management of GM commissioned a study on how Toyota operates as compared to themselves in the Eighties and had it published as a book. The study pointed out that the problems the automakers were having were cultural and could not be improved by trying to improve the systems without dealing with the internal culture.

Finally I’ve posted this link before, but I think that the old Westinghouse factory before unions looks a lot like that Ford plant in Brazil:
http://lcweb2.loc.gov/papr/west/westhome.html
http://info.detnews.com/video/index.cfm?id=1189
One thing is that both places seem to be much better workplaces than I’ve heard of any union shop being.