For the record, Democrats:
- Refuse to build more coal-fired power plants because they spew deadly (that’s a joke folks) carbon dioxide into the atmosphere
- Refuse to drill in ANWR because its bad for the environment and those poor porcupine caribou
- Idolize Al Gore because he drives a Prius
- Key Hummers because the burn so much gasoline and create so much carbon dioxide
- Don’t mind high gas prices because it encourages people to take public transportation
- Think that the exhaust from the internal combustion engine is advancing anthropogenic global warming
The big three automakers they are talking about bailing out are the same companies that make Hummers, Expeditions, and other huge SUVs that the left hates you to use. Seeing their dedication to the above environmental causes, why are Democrats now working on a bailout package for one of the biggest causes of pollution in the world?
Union jobs.
They are more dedicated to preserving union jobs than they are to environmental issues. (Probably because environmental groups don’t donate as much as the unions do.) The problem here, as usual, is that the Democrat’s supporters are the biggest hindrance to success:
According to the latest calculations, the gap between Japanese and American carmakers’ profits average out to about $2900 per vehicle, and the home team does not have the advantage.
A big reason is the cost of labor. As analyzed by Harbour-Felax, labor costs the Detroit Three substantially more per vehicle than it does the Japanese.
Health care is the biggest chunk. GM (Charts), for instance spends $1,635 per vehicle on health care for active and retired workers in the U.S. Toyota (Charts) pays nothing for retired workers – it has very few – and only $215 for active ones.
Other labor costs add to the bill. Contract issues like work rules, line relief and holiday pay amount to $630 per vehicle – costs that the Japanese don’t have. And paying UAW members for not working when plants are shut costs another $350 per vehicle.
Here’s one example of how knotty Detroit’s labor problem can be:
If an assembly plant with 3,000 workers has no dealer orders, it has two options. One is to close the plant for a week and not build any cars. Then the company still has to give the idled workers 95 percent of their take-home pay plus all benefits for not working. So a one-week shutdown costs $7.7 million or $1,545 for each vehicle it didn’t make.
So when the plant closes down for a week, and the union members aren’t working, they still get 95% of their check. Not bad, but not as good as the union members in the job bank:
The Jobs Bank was set up by mutual agreement between U.S. automakers and the United Auto Workers union to protect workers from layoffs. Begun in the mid-1980s, the program is being tapped by thousands of workers. Many of those receiving checks do community service work or take courses. Others sit around, watching movies or doing crossword puzzles — all while making $26 an hour or more.
The Big Three automakers agreed to the system to protect union workers from outsourcing and technology. But with Ford and General Motors losing money in North America — and contract negotiations due in 2007 — the future of the unique program is uncertain.
Is there any wonder why the U.S. automakers are in such trouble? Perhaps they would be selling more cars and earning more profit if the cars were priced lower and of the same or better quality as the competition. Unions prevent that in America.
Now the Democrats and other fiscal liberals in the Republican party are ready to rescue this stupidity with your tax dollars.
Pelosi said any aid to the automakers would come with conditions. She didn’t specify the level of assistance she supports, but said it should come from the $700 billion Congress authorized the Treasury to use to help stabilize the financial services industry. Pelosi said she is tapping House Financial Services Committee Chairman Barney Frank to write the legislation that may be considered as early as next week.
Unbelievable. Barney Frank is working on this? The same Barney Frank who is partly responsible for the subprime mortgage meltdown is the one creating legislation to bailout the unions. If this were a movie, you wouldn’t believe it.
So what is the solution to this mess?
Failure. Let them fail. I’m sorry for the families that would suffer because of it. I truly am. But rescuing and enabling destructive behaviors is not a plan for future success.
Let the market work like it should. Businesses fail every day because of poor decisions. There will be other jobs, other factories, other plants.
They will just be better run.
Photo by anyjazz65.
Cross posted at Right Wing News.
