Giving the UAW control of Chrysler is like...
...giving sharks control of the fisheries?
Struggling to find a good metaphor here. Labor costs is what has destroyed the competitive ability of Detroit!
Let's say you owned a house. But the house had termites. You couldn't afford to make your payments on the house because you constantly had to pay for termite damage. You also couldn't kill the termites, because the termites were making massive political donations and had aggressive lobbyists. So eventually your house was given over to a consortium consisting of one of your neighbors, and the council of termites.
Why is this happening? Oh yeah, because Obama thinks that being a professor of constitutional law gives him the expertise to personally control every part of the economy.
posted by Steven at 6:51 PM
2 Comments:
Labor costs certainly are one of the things that lead to Chrysler doing poorly. But saying that labor costs are the thing that destroyed Detroit's ability to compete is like saying that the cause of the Civil War was disputes over textiles manufacturing. Certainly, labor costs played a role, but the fact that Detroit's production costs were higher wasn't the only factor in its downfall.
If Toyota put super-cheap but extremely low-quality cars on the market, the Big Three wouldn't have had anything to worry about. Alternatively, if American car companies had produced slightly more expensive but far better vehicles, they'd have been fine. Chrysler's downfall was a result of putting out automobiles that were both low quality and expensive. Add in an extremely boring product line (I defy you to name a single Chrysler product that is in any way exciting or cool), needless model repeats (how many Jeep models are there that are exactly the same thing?), and a complete inability to foresee the downfall of the SUV and the rise of high-MPG vehicles (no American car that I can think of off the top of my head gets even two-thirds the gas mileage of a Prius), and you've got a recipe for disaster.
The UAW might have added to that, but blaming them entirely is extremely unfair.
8:02 PM
Labor costs diverted resources from research and development, especially the development of new models. The quality of their product suffered because they were unable to adequately fund research and development.
I am not assigning all the blame for downfall of the company on the UAW, despite my dramatic metaphor. Just commenting on the fact that the only vested interests that Obama considered were the unions.
9:19 PM
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