Alexander Wissel, Editor in Chief, Investment U
Listening to the reports that keep coming out of “talks” with General Motors ownership groups: bondholders, government officials, and just about everyone else it seems. We are struck by the notion that somehow the UAW thinks that this wasn’t their fault.
With the dysfunction between management and workers at GM and Chrysler, no one saw the slippage – no one noticed the problems. No one took ownership of them.
No snowflake ever thinks it caused the avalanche…
With unions bloating the budgets, overtaxing the finances and putting out sub-par products, innovation at American automakers fell by the wayside while thousands of union snowflakes sat by and watched it happen.
Let’s face it; the unions have been parasites to our automotive industry. They have slowly bled these once great and proud companies to death. And only now that they see their hosts about to die – and looking at the losses of millions in union dues – are we seeing any movement from these slugs.
Unfortunately the movement consists of strong-arming the government to protect “American jobs.”
And the loss of those jobs is unfortunate. Many of these factory employees have little marketable skills other than building vehicles. And even if the skills were marketable, where would they go?
Most are in small towns where “the plant” is the biggest and only major employer. And sadly the towns around them never diversified enough to become more than a one factory town.
The fact of the matter is that it will be painful for the economy to absorb the losses of hundreds of thousands of jobs from the bankruptcies of Chrysler and General Motors.
Even still, it’s a distasteful medicine that must be taken in order for the United States to move into the future.
There was a time when unions were the only entity that looked out for workers. Without OSHA and without government protection, employers rode roughshod over their workers. Unions were needed to balance out the equation.
But that was close to one hundred years ago… times have changed.
And at some point in the union/host company relationship, the system broke down. The employees started answering to their union instead of their company. The workers worried more about their benefits than the fact the products they produced weren’t that great.
Over the past 50 years unions have become little more than spoiled children asking for more and pitching fits when they don’t get their way. Unfortunately, this has affected the auto industry worst of all.
And with GM and Chrysler we can look up and down the management structure to find fault. Bloated union pay packages are just as disgusting as bloated executive compensation – neither one deserves what they are being paid.
It’s sad that employees have felt entitled to high hourly wages and benefits that average hourly employees don’t get. They’ve felt slighted when a company decides to outsource their positions, or upgrade to robotics. And the unions have weighed heavy concessions from their hosts when they did.
If you think about it, we’re all replaceable.
Very few people are so rare or so gifted that they can’t be replaced. None of these employees are really special, or irreplaceable – and the easier you are to replace, the less you should make.
Instead of forcing more concessions out of these companies and getting upset that jobs were going overseas, American workers should have been looking for ways we could be more productive, more cost effective and more valuable as employees.
I firmly believe that American workers are some of the greatest workers in the world. But not for reasons you’d think. It’s not because we work longer, stronger, faster, or better than anyone internationally.
It’s because we are all entrepreneurs, and we can all find better ways for our companies to profit more – whether we own them or not. That’s how we protect our jobs and that’s how you become irreplaceable.
That’s how we will maintain our economic independence – not through protectionism or trade tariffs.
My optimistic spirit looks at the hundreds of thousands that could lose their jobs and sees many who would look at themselves in the mirror and say, “I can do better.”
These are the people that will build new business models for the next one hundred years – the next Google, the next Microsoft, and the next great American automaker. These individuals are the phoenix’ that will rise from the ashes of the automakers.
They will start over and get it right.
It’s the greatest part of our capitalist system and the American spirit.
We’re now seeing the logical result of a failed business model made worse by a union stranglehold. The bankruptcy for GM isn’t going to be pretty, we’re not going to like it, and everyone ultimately will pay for the mistakes and missteps here.
There will be no winners, only losers.
Editor’s Note: The views and opinions expressed above are the positions of this writer and do not necessarily represent the views and opinions of Investment U or The Oxford Club.
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