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Doomed

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The plague of unions has doomed the Detroit automakers. This capitalist-crippling albatross has done more the hinder the profitability of US automakers than anything else.

With the advent of the 40-hour work week, overtime and safety rules, the once-useful unions have outlived their usefulness. They do nothing but extort artificially high wages from the very entity that has provided their members with employment. One solution to this problem is to get rid of the closed-shop laws that some states have. These laws require union membership as a condition of employment. Another way to close down the union shops and move to states or countries that are open to free-market economics.

With the pending onslaught of Chinese-made cars, the automobile market will become even more competitive. Add to this the ultra-efficient Japanese and Korean automakers and Detroit will continue to its decline into the dust bin of automotive history.

The pro-union side always props up strawman arguments about 'high executive salaries' but these are nothing compared to the collective pay that union members receive. In fact, a 9-25-2007 CNS.com news article indicated that the average pay for a GM autoworker, including health care benefits, came to just over $152,000 a year. The base hourly wage, without benefits, was $39.00 an hour. Multiply this by 73,000 union workers and expenses add up fast.

No business can stay competitive with a union demanding higher-than-market wages. This results in higher costs passed onto the consumer and lower profits for the companies stock holders. This is why Detroit is doomed.

Learn more about this author, Tom Sutcliff.
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