Tuesday, January 24, 2006

Ford Layoffs

Listening to the news this morning one of the topics was Ford Motor's layoff. They went on to explain Ford's program for "terminated employees."

In discussing the places these employees might look for new work, they listed Healthcare (due to the aging of 'Boomers'), Construction (Katrina and Rita aftermath) and Foreign Car Assembly in the U.S. as prime segments for pursuing reemployment. They indicated that 40% of the cars currently sold in the U.S. are foreign. However, a drawback to working at these foreign assembly plants was that the laid off employee could take as much as a 20% pay cut. Foreign manufacturers U. S. assembly wages apparently aren't as high as those of American producers.

A thought then occurred. Is it possible that this disparity in wages, presumed to be at least in some part due to Union collective bargaining practices, could be what caused Ford to need to lay off these workers?

Economics say that most spending decisions are based on cost and perceived value. American vehicles are generally no longer considered to be as good a bargain as imports. Import quality and accessory packages now equal or exceed those of domestic brands, frequently at more attractive pricing. Ergo, what's the reason to "Buy American?" Is the Auto Workers Union (which has aggressivly pursued securing benefits for their members) the reason Ford felt the need to make cuts to remain in business and be competitive? If so, then the Union Stewards appointed and paid to represent the workers are in actuality responsible for costing them their jobs. I don't believe that these foreign plants have the same Union issues that the American ones do. Otherwise, why wouldn't foreign plants be at the same wage scale?

Where I'm going with this thought is that one should always be careful: "Not to kill the goose that lays the golden egg."


At 9:45 AM, Blogger Marshall said...

Having worked in downtown Detroit and lived in the Detroit area, I can echo the questions as to whether the union has best served members. Mind you, I grew up in coal country, and can see good reasons for collective bargaining and collective action. Still there has to be some sensitivity to the larger market and context.

That said, my experience of Detroit was that everyone there was looking for a reason to fight. They could argue union vs. management, or rich vs. poor, or city vs. suburbs, or black vs. white; but mostly these were simply convenient reasons to fight. I fear sometimes union leaders saw having the fight as more important than the results of the fight. It didn't always serve the worker on the line.


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