On 12/26/2011 8:46 AM, Ed Huntress wrote:
....

My point in posting that is actually a long, continuing discussion
we've had here on RCM, in which some people have claimed that we pay
too much (because of unions, in the usual narrative) and that's why we
can't compete in exports. As the Forbes story shows, this is nonsense.

I reported on production and trade for _American Machinist_ and other
magazines, dating back to the mid-'70s, and this is something I've
watched for decades. Exposed to a little research, it's clearly a
bunch of ideological nonsense. You'll hear small businessmen, like Tom
Gardner, bash unions here all the time, complaining that they've
driven up costs so that US companies can't compete.

A little sunshine shows that their problem lies elsewhere.

Well, it's not so much the current hourly salary altho that's a
contributor to overall cost per vehicle, of course. It's the total
combined cost of present plus previous labor-related costs--the
accumulated pension and medical benefits accrued that are in most other
countries far more heavily government-subsidized so the costs aren't
directly carried by the companies that skews the comparison.

The reorginzation of Chrysler and GM plus the similar concessions won by
Ford under threat of "we, too, unless" and a little better starting
position has rolled back quite a lot of that and now they're actually
building vehicles at a comparative cost that still is profitable.

There's also, of course, the difference in plant infrastructure in that
both Germany and the eastern countries began w/ all new (and heavily
subsidized by the US in reconstruction) at the time facilities while the
US simply kept on w/ their existing. Over the period from the early
post-war years until the beginning of the Japanese invasion that
differential in facilities gradually worsened to the point it was a
major deficit in the US that has had to be overcome.

As everything else, it's a far more complicated analysis than simply
looking at any one part of the equation.

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