The Big Three American automakers have been struggling to return to profitability for a while now. It seems odd how General Motors could lose 39 billion dollars in the third quarter of 2007 by manufacturing a product that is ingrained in Americana’s soul and indispensable to our way of life. I mean, this isn’t Pets.com here.
But the US auto industry gradually squandered whatever vehicular loyalty Americans felt towards their Buicks, Cadilliacs, Mustangs, and Pintos. They refused to innovate their designs, production, and technology. They were blind to the future — heck, blind to the present — and must now recover from massive financial losses lest they suffer the emasculation of being overtaken by a company called Tata.
One popular tactic is to shed well-payed unionized factory workers by plying them with buyout packages. As in “We pay you, you don’t work, and you get your health care through Medicaid like the rest of Detroit.” Since 2006, GM, Ford and Chrysler have teamed up with the increasingly-impotent UAW union to cut 80,000 blue-collar workers through buyouts, and Ford is particularly aggressive about getting rid of as many employees as possible, as was reported yesterday in the New York Times:
Employees with as little as one year of seniority can receive $100,000 cash, although they give up all health benefits after a six-month period. For employees at least 55 years old and with at least 10 years on the job, the payout jumps to $140,000. One buyout offer provides a worker four years of tuition reimbursement up to $15,000 annually, plus health care coverage over that period and a stipend equal to 50 percent of base wages.
Incredibly, some auto workers vow to hang onto their 80k/year Ford paychecks, unable to imagine that one day they’ll arrive at the Ford factory to find a non-unionized worker at their place in the assembly line. Silly, foolish autoworkers: Get out while the getting is absurdly lucrative. You know what I got when I was disemployed last week? Two weeks of pay, and I felt lucky, because there is no rule in capitalism that the cast-offs have to be cared for.
