Quote:
Originally Posted by Jeff Higgins
The unions and the workers they represent are made out to be the villains in about the largest collapse of American business ever seen. Their "excesses" are roundly derided. Are they really to blame?
Today, we find that the average salary (including all "bonuses" - which are now contractual obligations rather than performance based) of a Fortune 500 CEO is over 300 times that of their average employee. There are now nine levels of management between me, a working engineer, and the CEO of my company.
So who is really milking corporate America? Whose greed is leading to its collapse? There is obviously a lot of blame to share. I just hate to see the majority of it placed at the feet of the American worker.
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Are the unions really to blame? I guess it depends on what you mean by "blame." I guess no one can blame them for bargaining for the highest salaries and most benefits for their workers. And using their considerable leverage to get it.
But if what they can manage to get, say, GM to agree to adds so much to each car that GM can no longer be competitive in the marketplace, it can end up being a major contribution to the death of the company.
Are the salaries of the CEO's to blame? Well, as to just the CEO's, the answer is no. While I agree that the Big 3 CEO salaries are way too high, esp. considering their performance, the salaries are insignificant to the companies' bottom lines.
From what I could find:
"Although General Motors', Ford's and Chrysler's combined losses totaled $7.5 billion last year, their top executives were together paid $5.3 million. Their counterparts at Toyota, Nissan and Honda collectively made $1.8 million."
That 3 million dollars or so certainly has done nothing to put the Big 3 at a competitive disadvantage.
The oft-cited $1500 that must be added to each car to pay for worker's (present and past) health care costs, however, is a tremendous competitive disadvantage for GM. Esp. when Toyota's number is something like $100 or so. With the millions of units sold, and the small margin per unit, 1500 per is huge.
And that doesn't include the above market salaries of millions of workers, other benefits, etc.
I agree, though, that there are of course a lot of causes/reasons for the failure of the American auto industry. That would include pay that is too high all around (workers and execs alike), the making of generally crappy cars, very poor product planning, and countless other issues. But certainly, the unions' "overeffectiveness" on behalf of their workers over the years is a significant factor. The "legacy costs" alone have ended up being a tremendous debilitating force on the automakers.