The Auto Industry Wal-Martizes
A fellow progressive diarist at the liberal blog website The Daily Kos gloated last week about the financial peril of General Motors. In his eyes, GM was getting a dose of poetic justice after years of bad management, subpar vehicle quality, and overproduction of gas-guzzlings SUV's. Purchasing Toyotas and Hondas was this guy's delusional way of "sticking it to the man," and he viewed GM's recent round of layoffs as validation of his pseudo-populist revolt.
As is the case with much of the suburban-bred yuppie-esque "new left", the Democratic Party's core constituency of blue-collar workers isn't even on this guy's radar screen. The elimination of 30,000 union jobs at GM was cause for his celebration, even though it represents another stake through the heart of the political party that he claims to have allegiance to. Without the financial and ground support of what's left of organized labor (and particularly the United Auto Workers), the Democratic Party's ability to win elections will be even more impaired that it is now, yet this guy can't make the connection even after reports of 30,000 layoffs makes the headlines, let alone when he's buying his non-union import at the Honda dealership.
The dynamics of the auto industry have become more complicated in the last decade. Japanese automakers have found a cost-effective way to endear themselves to the American marketplace: manufacturing their cars here. As a business strategy, it's incredibly shrewd in every sense. Just as the Japanese business climate was becoming ossified in the early 1990's, the American business climate was becoming increasingly friendly, and no place more than the American South where Toyota, Honda and Nissan have constructed all of their new plants in the last decades. These companies were showered with so much corporate welfare from the states where they located that the automakers themselves have little personal investment cost. And despite the fact that they could get away with paying a lower wage level in this part of the country, the automakers decided to pay average wages only 10-15% less than what UAW workers make. Did they do this out of the goodness of their hearts? Hardly. The high wages are meant to be a disincentive for their conservative Southern workforce to become members of the UAW.
And the disincentive has worked. Workers have consistently voted down efforts to unionize, perfectly content to piggyback on the sacrifices of autoworkers past who raised the industry wage level to what it is. So for the short-term, Toyota and Honda have lower labor costs and considerably lower benefit costs, particularly the uber-generous "retiree health benefits" that GM foolishly signed onto during its 1950s and 1960s heyday which are now acting as an anvil around its neck. This, in turn, allows Toyota and Honda to produce cars of equitable or higher quality and sell them for less money than GM. With all that in mind, it was only a matter of time until Toyota and Honda's Wal-Martesque business strategy caught up to GM....and that time is now here. But what other consequences can we expect from this realignment of the auto industry?
Well, nothing good. The UAW will shrivel to the point of near dissolution, vaporizing a chief ally of the Democratic Party and allowing a progressive insurgency at home to drift even further out of reach; a non-union Southern-based auto industry whose Republican-voting workforce will lack the collective bargaining capacity to quell significant wage concessions that will inevitably occur due to global market forces and the decapitation of the UAW, which has propped them up for years by proxy; and ultimately, the same race-to-the-bottom, union-busting mentality that will eventually turn today's high-paying auto jobs into tomorrow's "jobs Americans won't do," filled by $7-an-hour immigrants with "guest worker" visas. Sound crazy? I suspect not if you're of the founders of Iowa Beef Processing, who engineered the same kind of coup in the meatpacking industry a generation ago.
In my response to the diarist lauding the financial hurt of GM and insisting that everybody should follow his lead and buy Hondas, I asked him why he doesn't just eliminate the middleman and contribute to the Republican Party directly. By directing one's automobile budget to the right-to-work-law South instead of the Rust Belt North, it doesn't take a rocket scientist to realize which side of the red-blue divide wil be victorious. He fired back with the expected drivel of "cost-efficiency ruling the day" and "not being willing to buy an inferior product to benefit unions." And that's where it struck me. If Daily Kos diarists can't be bothered to put forth a little energy and/or sacrifice to save what's left of the American working class from it's impending genocide, who will? If the instant gratification of saving $200 per year because of the improved fuel-efficiency of a Honda is more important than helping hundreds of thousands of American autoworkers save their jobs and aid progressive Democratic causes, then what future does the "other America" that works with its hands have to live above the poverty line?
There are so many issues where I've convinced myself that if people either thought through their positions better or were sufficiently informed of the likely consequences of their actions, enough of us would respond in kind to correct the situation. But when I look at a turn lane full of Hondas and Toyotas heading for the Wal-Mart SuperCenter, it becomes harder not to accept the inevitably of a bloody defeat for most of the people in my hometown and everywhere else in blue collar America.
As is the case with much of the suburban-bred yuppie-esque "new left", the Democratic Party's core constituency of blue-collar workers isn't even on this guy's radar screen. The elimination of 30,000 union jobs at GM was cause for his celebration, even though it represents another stake through the heart of the political party that he claims to have allegiance to. Without the financial and ground support of what's left of organized labor (and particularly the United Auto Workers), the Democratic Party's ability to win elections will be even more impaired that it is now, yet this guy can't make the connection even after reports of 30,000 layoffs makes the headlines, let alone when he's buying his non-union import at the Honda dealership.
The dynamics of the auto industry have become more complicated in the last decade. Japanese automakers have found a cost-effective way to endear themselves to the American marketplace: manufacturing their cars here. As a business strategy, it's incredibly shrewd in every sense. Just as the Japanese business climate was becoming ossified in the early 1990's, the American business climate was becoming increasingly friendly, and no place more than the American South where Toyota, Honda and Nissan have constructed all of their new plants in the last decades. These companies were showered with so much corporate welfare from the states where they located that the automakers themselves have little personal investment cost. And despite the fact that they could get away with paying a lower wage level in this part of the country, the automakers decided to pay average wages only 10-15% less than what UAW workers make. Did they do this out of the goodness of their hearts? Hardly. The high wages are meant to be a disincentive for their conservative Southern workforce to become members of the UAW.
And the disincentive has worked. Workers have consistently voted down efforts to unionize, perfectly content to piggyback on the sacrifices of autoworkers past who raised the industry wage level to what it is. So for the short-term, Toyota and Honda have lower labor costs and considerably lower benefit costs, particularly the uber-generous "retiree health benefits" that GM foolishly signed onto during its 1950s and 1960s heyday which are now acting as an anvil around its neck. This, in turn, allows Toyota and Honda to produce cars of equitable or higher quality and sell them for less money than GM. With all that in mind, it was only a matter of time until Toyota and Honda's Wal-Martesque business strategy caught up to GM....and that time is now here. But what other consequences can we expect from this realignment of the auto industry?
Well, nothing good. The UAW will shrivel to the point of near dissolution, vaporizing a chief ally of the Democratic Party and allowing a progressive insurgency at home to drift even further out of reach; a non-union Southern-based auto industry whose Republican-voting workforce will lack the collective bargaining capacity to quell significant wage concessions that will inevitably occur due to global market forces and the decapitation of the UAW, which has propped them up for years by proxy; and ultimately, the same race-to-the-bottom, union-busting mentality that will eventually turn today's high-paying auto jobs into tomorrow's "jobs Americans won't do," filled by $7-an-hour immigrants with "guest worker" visas. Sound crazy? I suspect not if you're of the founders of Iowa Beef Processing, who engineered the same kind of coup in the meatpacking industry a generation ago.
In my response to the diarist lauding the financial hurt of GM and insisting that everybody should follow his lead and buy Hondas, I asked him why he doesn't just eliminate the middleman and contribute to the Republican Party directly. By directing one's automobile budget to the right-to-work-law South instead of the Rust Belt North, it doesn't take a rocket scientist to realize which side of the red-blue divide wil be victorious. He fired back with the expected drivel of "cost-efficiency ruling the day" and "not being willing to buy an inferior product to benefit unions." And that's where it struck me. If Daily Kos diarists can't be bothered to put forth a little energy and/or sacrifice to save what's left of the American working class from it's impending genocide, who will? If the instant gratification of saving $200 per year because of the improved fuel-efficiency of a Honda is more important than helping hundreds of thousands of American autoworkers save their jobs and aid progressive Democratic causes, then what future does the "other America" that works with its hands have to live above the poverty line?
There are so many issues where I've convinced myself that if people either thought through their positions better or were sufficiently informed of the likely consequences of their actions, enough of us would respond in kind to correct the situation. But when I look at a turn lane full of Hondas and Toyotas heading for the Wal-Mart SuperCenter, it becomes harder not to accept the inevitably of a bloody defeat for most of the people in my hometown and everywhere else in blue collar America.
posted by Mark at 7:06 PM
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