The UAW says that troubles in the car industry are not its fault. According to the union, it was not a series of bad decisions by management either.
"This industry is in a crisis situation not of its own making," Ron Gettelfinger said in an interview Saturday afternoon with The Wall Street Journal (subscription required).
The statement is worth a bit of examination.
Gas prices have been historically low, well under $2 a gallon. The real spike is only a year old and the price per gallon is now back to $2 in many regions of the country. So, did a price pop which lasted three quarters of a year bring down The Big Three?
The other culprit Gettelfinger points to is the problems in the credit markets. Most consumers did not have trouble getting car loans as recent as this summer. Auto companies were offering zero percent financing and thousands of dollars in cash back Buying a car on credit was as easy as getting a subprime loan was three years ago.
The UAW did not ask for exorbitant wages and benefits over the last four decades. Management at the car companies did not rely on SUVs and pick-ups for profits even though they had seen the tremendous damage that the Arab Oil Embargo did to their finances in the 1970s.
In other words, no one involved in the car industry is to blame.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 2 of 2)
11-16-2008 @ 9:55PM
Alex said...
of course the unions are going to say it's not them and most of us wouldn't deny that companies abused workers back in the day, but those days are over and unions have out lived themselves. we all know where the union money is going and it is no exzaguration about what people are saying that union workers got paid for doing nothing, because I saw it first hand 20 years ago and I'm sure it's even worse now. the dumd ass auto worker who in many cases quit school to work in a plant like daddy cause he always thought he had it made, has to realize that the days of getting paid $75 an hour for screwing a bolt is over and it's been a long time coming.
11-17-2008 @ 12:03AM
Rudy said...
Bankrupt companies: Enron, Worldcom, Atkins Diet, Dana Corp., First Alliance Mortgage Co., AIG, WaMu, Levitz, Sharper Image, AB&C, Hollywood Video, Performance Team Freight, Linens-n-Things, Circuit City, Bed, Bath and Beyond, all none union so what was their problem. The U.S. auto industry is run by morons but we shouldn’t let the Blue Collar workers take the fall for these idiots. Management saw gas prices spike four times over the past 30 years and they did nothing different during that time. They had no plan to switch to fuel efficient cars rapidly. It takes almost two years to get a new car to showroom floors. GM has the Chevy Vote, but it will not be out until 2010. Also the unions tend to put a damper on CEO pay any at many the union companies, Rick Wagner at GM, his salary is ranked 433 on list of 500. At Enron and Worldcom management robbed those companies before they went under.
11-16-2008 @ 10:22PM
Revealer said...
Unions create bankruptcy with wages out of line compared to other non union industries. Unions initially did good things but is now no more than blackmail of business. [Auto industry already got $25 billion a month or so back].
If they go under, as with other businesses, another will take its place. Would you give a loan to a disfunctional and uncreditworthy person over and over? Well, neither should government use our money to do a bailout of any industry including the auto industry.
Auto workers have been overpaid far too long, though they would disagree, and it's time to bring the pay level down to scale to enable competition for American goods and services.
Unions are why business has moved overseas to avoid the high costs associated with unions and regulation. If you want Americans to have and hold jobs within the USA then they have to be competitive and taxes lowered for corporations who provide jobs. Remembering that not all corporations are conglomerates like GM, Chrysler and Ford.
11-17-2008 @ 12:07AM
jerry mcdonald said...
where do you think the japanese learned how to make a car,cnc machine,or engineer a car line?The chineese can't engineer anything,they steal the technology.the congress gets free health care.Why don't you?They bring illegals in to drive down labor costs.How about we drive down government costs?Hang all the lazy,lying congress from the white house.We elect them,they send jobs overseas or bring in illegals.get a brain.
11-23-2008 @ 9:46AM
docmike said...
Let's check the record. Govt. bails out Chrysler in '79, gets paid back early, with interest. $150 billion for AIG but nothing for GM? Know anyone who drives an AIG? Know anyone who works there? One in ten US jobs reliant on auto industry. Mustang GT in US-$30k. In Japan or Australia-$100,000. Sounds fair to me. I think our gov't could do a lot worse than make the loans to save our economy.
11-17-2008 @ 9:36AM
DavidL said...
In 1970 the average working stiff could buy a new car for roughly 1/3 of his annual income. Today it would take about 100 percent of his annual income to buy a new car. Thank you UAW and greedy, overpaid, corporate execs. If the big three auto makers spent as much time actully worrying about their quality instead of thinking up new slogans (ie: quality is job one"......."we are professional grade")
they might be able to compete in a world market. Not long ago I owned 8 GM vehicles. I am now down to one. I am just plain fed up with their junk. I just bought my first "foreign" car.....a Toyota Avalon. I feel like I just got paroled!!!!!
11-17-2008 @ 9:47AM
DavidL said...
Do I care about General Motors? Oh yes, almost as much as General Motors (and the UAW) cares about my satisfaction with the purchase of their junk vehicles.
After months of fighting with numerous bugs in a new GM vehicle, and multiple complaints to GM, I finally succeeded in getting a GM "customer service" employee so frustrated that she almost yelled at me "what is it that the dealership can't fix?!!!!!". I nearly blew a gasket as I yelled back at her........"that's the damned problem, THEY SHOULDN'T HAVE TO FIX IT!!!!!!!!!" Let them go bankrupt. The economy will fix itself and we will all be better off. We survived the loss of Studebaker, Hudson, etc. We can survive without GM.
11-17-2008 @ 11:17AM
Paul Koch said...
Why dot all you cry babys STOP already????? It is not my fault you did not get a job with a pension ... health care on retirement ... Yas got sucked in on your 401 k,s now look what yas got....
I worked 29 years for my pension and health care... it was part of my wage...
By the way my wage was not $77 per hr... like some of you think.... My wage was $22.57 per hour so I dont see where yas get that $77 from ....If your pi$$ed off about the auto workers... I say TOUGH SH1T YOU MADE YOUR BED NOW DONT TAKE MINE
11-17-2008 @ 3:52PM
vinn boom bah said...
Sure is a lot of mis-informed anti-union rhetoric in these comments. Most of it is total bs. First of all, union is not 25% of a car cost, nor do they make 100 times the consumer (I wish), nor are union members thugs. That's just a bunch of horse manure from a bunch of people who don't know any better and have no factual basis for anything that spews from their orifice.
However, some facts are true. The big 3 did let quality and design stall in the past, but now they (Ford in particular) are on par with Toyota and Honda as far as quality. Their new designs are eye catching and their quality is terrific. How long will it take for the public perception to realize this, i do not know. But anyone reading JD Powers or Consumer reports or governmental safety test results would know this, and much , if not all of it, was driven by the unions. Some of the Toyota and Mitsuibuishi plants here in the US are unionized, as well as all of Toyota's Japanese plants back home, theonly difference between Japan and there plants in the US is that no one can afford to retire from the US plants, as they provide a very un-American pension and no regard for worker safety. The people who point at the unions to blame are ignorant and misinformed.
11-17-2008 @ 4:52PM
frank said...
gettlefinger is an idiot, just another uaw thief, auto workers are overpaid for what they do and benes they get. 15.00 an hr would be plenty!!!! ceo's should get 0 dollars in perks!!!! do away with 2/3 of the line, no buick, pontiac, chev trucks, or any suv's, nothing over 150 hp in any line!!, profits would go 10 fold, foreign cars would would be ---foreign (same with ford & chrysler.
11-19-2008 @ 1:39PM
Justin said...
I'll never buy a union made product again. The time of making any sort of reasonable wage to bolt down an engine block is long over. As long as the UAW is present at the big three, extorting unbelieveable concessions from the auto makers, no matter how good the product, I'll not buy it. Some of the stuff they have set up, like the GM "Job Bank" is unreal.. Get rid of these clowns, replace them with guys for 10 bucks an hour.
I really don't feel any sort of empathy for these guys. Yea, you got out of high school, your dad worked at GM.. whatever. Educate yourself, get a real job, or suffer the consequences.
At least it looks like they finally will suffer the consequences. I'm totally against any bailout that does not include chapter 11 restructuring that eliminates the labor contracts signed with the UAW.
Godspeed..