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Disclamer: I don't necessarily agree with every opinion, or even most of the opinions, of the owners of these blogs. However I do belive that it is necessary and instructive to read and listen to opposing opinons, and just because you don't agree with someone doesn't mean that they're wrong or prevent them from writing excellent posts.

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Wednesday, March 29, 2006

The Plight of the American Auto Industry

Chicago Tribune Uncertainty on sale of GMAC

Yet more woes for the auto industry. I wish they would have said how this will affect those with loans through GMAC. It also mentions the possible UAW strike at Delphi. I don't know what the union is thinking. The American auto industry is in dire straits. Partly through poor products but also due to high costs, almost all related to labor. If they strike a Delphi, which is considering bankruptcy if wages aren't lowered, Delphi will shut down, causing GM to shut down as well. Which won't help it reach financial solvency.

Where does the UAW think its members will work if GM collapses? No other American automakers can afford to hire them. Better lower wages, more closely related to the market value of the job, than no job. The government shouldn't, and hopefully won't, step in and finance the industry - where would they get the money? At some point the union is going to have to realize that unless they allow their workers to be paid market value for their jobs (they are definatly paid well about market value - especially since the union also prevents them from doing anything - I've lived near Detroit and have friends who work in the auto industry) the jobs are going to disappear completely.

As an addendum: A friend of mine works for a company that setup and maintains networks several of their main customers are auto companies. During one of these installs, GM paid for him to fly to one of their plants, wait around for two days while 5 different unions moved the servers from the loading dock to the server room and wired them (different unions for hooking up the electricty, ethernet, etc). And then, because they couldn't get everything done, GM flew him home, paid for all of the time he was there as well as hotel, etc. and he did NOTHING. After the union finally finished setting up the servers, they had to fly him out again to actually do the installation and setup. What a huge waste. And that's what you're paying for when you buy an American car. :(

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