-By Thierry Godard
Detroit in 2010 is unlike any other American city. Once a bastion of American industrial might, Detroit was not only home to the Big Three, but a thriving community of small business owners who supported the automotive industry. In a sad twist of fate, Detroit has come to symbolize the crippled state of the American economy.
Foreclosure has rendered the city nearly vacant. Detroit is a modern-day ghost town. The infamous bailout of GM and Chrysler came about largely because of the massive obligations these automotive companies had to pay to their labor unions. The Democratic Congress, left with the option of propping up failing companies or risking a complete breakdown of mid-western society, chose the bailout instead of confronting the true problem—unions—head on.
It’s no secret to industry insiders that the United Auto Workers’ unreasonable demands played a large role in the collapse of the auto industry in 2008. The irony, of course, is that the UAW’s rampant waste prompted the downfall of the very industry it not only claims to serve, but wholly relies on for the employment of its members.
While General Motors has had its fair share of misfortune, the Big Three company never had a particularly bad track record as far as selling cars to the American public. In fact, GM was able to build better models, in accordance with public demand, with relative ease. So the question remains: Why the bailout? The answer is simple: The Big Three found themselves in the red when it became alarmingly obvious that they could not meet the union’s demands for excessive pension and health benefits for retiring union workers.
The amount of money lost to unions is so great that American auto manufacturers have moved to Canada where lower operating costs and a union-free atmosphere has made it easier for the Big Three to make cars Americans could afford. In a time when our jobs are already being outsourced overseas, the own petty greed and inefficiency of American unions is alarming. We need to take a better look at the true expense of unions and the constant burden placed on tax-payers.
It was the UAW, with its lavish Ann-Arbor lodge, high salaries of managing members, high dues and unreasonable demands that led to the bailout. The negative effect unions have on the economy is undeniable. The false promises of job security that the UAW routinely made to lure its members are completely out of sync with the realities of the American marketplace.
The money spent funding union promises could have been spent better stimulating the nationwide economy, which would have no doubt lead to increased auto sales for Detroit, and more jobs for auto workers. Unions are an unnecessary drag on an American economy sputtering to get started again. Without the obligations of unreasonable pensions and salary increases, companies and local government can begin making the changes necessary to jump-start the economy and move forward.
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Thierry Godard is a blogger.
Growing up in the rust belt, I thought the unions a necessary evil
That was, until Reagan fired the air traffic controllers… then I started to wonder why we ever put up with any of their destructive agenda in the first place.