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Labor Pains

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http://www.nationalreview.com/comment/payne200511290819.asp

November 29, 2005, 8:19 a.m.
Labor Pains
Detroit needs to play by market rules.

By Henry Payne

Detroit, Michigan — Massive job cuts at General Motors, America's largest carmaker — coupled with the bankruptcy of Delphi, America's biggest autoparts maker — have provoked predictable handwringing from liberal pundits who worry that America is "losing its manufacturing base." But the wrenching change now buffeting the auto industry defies the usual press formulas. Just listen to Steve Miller a turnaround specialist who is steering Delphi's restructuring process. He exploded the myth of America's "endangered" union manufacturing jobs at his October press conference announcing Delphi's move into Chapter 11: "We cannot continue to pay $65 an hour for someone to cut the grass and remain competitive."

Grass cutting is a manufacturing job?

Miller's frank assessment of unsustainable labor contracts is a refreshing dose of candor in an industry that for too long has talked around union-labor costs in a way that is totally divorced from the realities of the U.S. labor market — much less the global labor market.

While America's national press has gleefully covered the front-office shenanigans of Republican fat cats like Enron's Ken Lay, it has entirely missed the disease eating away at the roots of American manufacturing: Behind the threat of strike, greedy Democratic union bosses have built an unsustainable entitlement-wage culture that is now crashing spectacularly in America's heartland, disrupting lives, and threatening some of America's biggest publicly traded companies.

Take grass cutting. As defined by the current United Auto Worker contract negotiated with the "Big Five" (GM, Ford, Chrysler, and top parts makers Delphi and Visteon), an auto "production worker" is a job description that covers anything from mowing grass to cleaning the toilets. In the real world, these jobs would be outsourced to $8 an hour, no-benefit wage earners, but on Planet Big Five, these jobs get the same wages as any auto line-worker: an average $26 an hour ($60,000 a year) plus benefits that bring the company's total cost per worker to a staggering $65 an hour.
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