The United Auto Workers’ role in the auto bailout

December 7, 2008 – 3:05 am – No Comment

In a 20/20 segment titled “Gimme A Break” John Stossel said “Toyota isn’t asking for a bailout. Neither are Honda or Nissan. Yet, they all sell and build cars in America.” He says that Honda just opened a new plant and is producing MORE cars.

So why can’t the Big 3 handle it?

He puts part of the blame on The United Auto Workers union and their chief Ron Gettelfinger. First, the Honda/Toyota plants don’t have the same unions, so they don’t have to deal with the strikes. Second, “job banks” where some employees are paid 95 percent of their wages to sit. Third, Gettelfinger is hesitant to concede to a lot of changes for a bailout. This is a problem because Honda just hired 900 new employees, and they are being paid $18.41 an hour. The UAW employees are being paid $29 plus benefits. Economist Peter Morici of the University of Maryland said ,”The wage package is just too rich in Detroit, the benefits package is just too rich and the cars show it. The upholstery is not as nice. Why? Because they have to pay these high labor costs so they use cheaper materials.”

ABC News: Why the Auto Bailout Would Be a Big Mistake