Read the Beforeitsnews.com story here. Advertise at Before It's News here.
Profile image
By The Ayn Rand Center (Reporter)
Contributor profile | More stories
Story Views
Now:
Last hour:
Last 24 hours:
Total:

Explaining General Motors’ Bankruptcy: Did GM Give In To The United Auto Workers Too Much?

% of readers think this story is Fact. Add your two cents.


Before being bailed out by the government and derided as “government motors”, General Motors (GM) was once a proud symbol of American industry. It used to be one of the largest employers in the country and it was the first company to ever make more than one billion dollars in a single year. How does such an industrial powerhouse come crashing down by 2008?

One relevant factor is the company’s complex relationship with the United Auto Workers (UAW).

First, it is worth noting that the UAW and GM have agreed to some very Kafkaesque and costly working conditions. According to some estimates, the average wage (including benefits) of a typical UAW worker at a GM plant was $73 per hour compared to the $44 per hour that a typical counterpart makes at a Toyota plant in the U.S. Thus, by labor costs alone, GM was at a severe competitive disadvantage compared to its competitors.

But this is just the tip of the iceberg. Here are some examples of additional self-defeating relationships that GM had with the UAW:

  • In 1984, GM created a “Jobs Bank”, where surplus workers, rather than getting laid off, would receive 95% of their full salaries and benefits while the company waited to reassign them to a different post. In theory, this was intended to be a work protection program where trained workers would wait temporarily until being transferred. In practice, “bankers” would remain in the bank for months, if not years, while they got paid to watch movies, play cards, darts, and just pass the time on a daily basis. More senior employees would pull strings to get “laid off” so they could replace a junior employee in the bank and finish their remaining few years “working” there before retiring with full benefits. Soon, the bank would contain thousands of employees at any given time. At one point, even an entire workforce from a factory in Oklahoma City sojourned in the Jobs Bank.
  • When Delphi—a domestic auto parts manufacturer that is also primarily unionized by the UAW—was nearing bankruptcy, the UAW pressured GM into continuing to purchase supplies from Delphi instead of from overseas manufacturers so as to keep them in business. Astoundingly, this led to a relationship where GM was purchasing spark plugs for $1.70 per unit even though they could acquire them for $1.05 per unit from China. Even more astoundingly, it cost Delphi $2.05 to manufacture each spark plug, so this was an ongoing lose-lose relationship.
  • As with many unionized manufacturers, GM had a number of strict work rules and defined job categories, which restricted the kinds of activities employees were authorized to do. In practice, these rules led to egregious inefficiencies in the name of preserving union jobs. For example, an employee overseeing the flow of components on an assembly line would not be permitted to turn on a circuit breaker, if a breaker tripped in one of the assembly robots; he would have to wait for an authorized electrician to flip the switch. Of course, assembly lines could shut down while waiting for the electrician to arrive, costing the plant thousands of dollars per minute.

What explains why a corporation would ever agree to such measures? I will take that up in a future blog post.


Source:


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world. Anyone can join. Anyone can contribute. Anyone can become informed about their world. "United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.


LION'S MANE PRODUCT


Try Our Lion’s Mane WHOLE MIND Nootropic Blend 60 Capsules


Mushrooms are having a moment. One fabulous fungus in particular, lion’s mane, may help improve memory, depression and anxiety symptoms. They are also an excellent source of nutrients that show promise as a therapy for dementia, and other neurodegenerative diseases. If you’re living with anxiety or depression, you may be curious about all the therapy options out there — including the natural ones.Our Lion’s Mane WHOLE MIND Nootropic Blend has been formulated to utilize the potency of Lion’s mane but also include the benefits of four other Highly Beneficial Mushrooms. Synergistically, they work together to Build your health through improving cognitive function and immunity regardless of your age. Our Nootropic not only improves your Cognitive Function and Activates your Immune System, but it benefits growth of Essential Gut Flora, further enhancing your Vitality.



Our Formula includes: Lion’s Mane Mushrooms which Increase Brain Power through nerve growth, lessen anxiety, reduce depression, and improve concentration. Its an excellent adaptogen, promotes sleep and improves immunity. Shiitake Mushrooms which Fight cancer cells and infectious disease, boost the immune system, promotes brain function, and serves as a source of B vitamins. Maitake Mushrooms which regulate blood sugar levels of diabetics, reduce hypertension and boosts the immune system. Reishi Mushrooms which Fight inflammation, liver disease, fatigue, tumor growth and cancer. They Improve skin disorders and soothes digestive problems, stomach ulcers and leaky gut syndrome. Chaga Mushrooms which have anti-aging effects, boost immune function, improve stamina and athletic performance, even act as a natural aphrodisiac, fighting diabetes and improving liver function. Try Our Lion’s Mane WHOLE MIND Nootropic Blend 60 Capsules Today. Be 100% Satisfied or Receive a Full Money Back Guarantee. Order Yours Today by Following This Link.


Report abuse

    Comments

    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    MOST RECENT
    Load more ...

    SignUp

    Login

    Newsletter

    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.