Back in November, when aid to the American auto industry was initially being debated in Congress, Fox News took to characterizing the auto industry’s troubles as solely the fault of the United Auto Workers (UAW) union. “You retire and you get health care for life? Since when? I mean, no wonder the Big Three are broke,” Fox News anchor Gregg Jarrett scoffed.
With the auto makers plans for viability due to Congress today, Fox is back at it, arguing that if the UAW doesn’t make more concessions, then the companies’ plans should be rejected. Anchor Steve Doocy asked “if the United Auto Workers union does not make substantial concessions, should we continue to give the auto companies all that dough?” Watch a compilation:
The notion that the UAW hasn’t made any concessions is as absurd now as it was in November. The UAW has already agreed to suspend its Jobs Bank, delay automaker payments to a retiree health care fund, and the union has implemented a plan to permanently shift retiree health costs into a UAW trust fund in 2010.
The union also initiated a two-tier wage system, under which “new hires receive $14 an hour, about half the wage of current workers, as well as less-extensive benefits.” Part of the restructuring plan is offering buyouts to older workers, in order to hire more “tier two workers” at a lower cost.
Simply put, there is very little left that the union can feasibly cut. As David Madland wrote in the LA Times, “labor costs are less than 10% of the cost of a car; the other 90% goes toward research and development of new product lines, parts, advertising, marketing and management overhead”:
Surely this 90% is more likely to be a source of poor competitiveness, especially because, according to data from the latest Harbour Report, an annual study of manufacturing efficiency, nine out of the 10 most efficient auto assembly plants in North America are union plants, represented by either the UAW or the Canadian Auto Workers.
Obviously, the auto companies need to address some of the long-term problems in their outdated business models. However, the answer does not lie with the solutions prescribed by Fox, which seems to think that “there is something unholy about workers realizing some of the profits they help create.”