A Little Cooperation Would Go A Long Way

In the United States, the proposed $14 billion auto sector bailout failed due to the United Auto Worker's Union was unwilling to accept a wage cut to help make the sector more profitable and fiscally responsible.

Then, the president of the Canadian Auto Worker's Union, Ken Lewenza, decided to provide the delightful snippet:

“We refuse to have the auto workers as scapegoats,” he said. “It's finger pointing.” -- The Globe and Mail

At the risk of pissing off a number of friends at home who are tied to the auto sector in Windsor, it seems to me that the unions are becoming a major obstacle to helping the people they are supposed to represent. The auto workers are not the scapegoats but many of the people I know that work in the sector have hourly wages in the range of $35/hour or even higher. Now it seems to me that a reasonable short-term cut in their wage in the region of $5-8 would not be harmful in the long-run. Like I said, this cut would be a short term solution to allow the auto companies to get their bailout monies and some time to restructure their business models so that they will be viable again in the future.

Apparently, the non-Big 3 companies (e.g. Honda, Nissan, Volkswagen) have wages quite a bit lower than those of the domestic producers. Basically, the idea would be to level these out, bringing the inflated wages down to realistic amounts. Notice that the companies with the reasonable wage levels are not the one's in major trouble!

It comes down to basic mathematics; if the unions do not start to play ball the companies will crumble. Its a simple comparison of equations,

Current Model: High wages x no hours (cuz the companies bankrupt) = no jobs/no money

Proposed Model: Slightly lower wages x regular hours = still have a job/income

Hey Unions, DO THE MATH!!

The bailout packages are just asking for a little cooperation so that these companies do not have to face the nature of free markets and collapse like they should according to their dysfunctional business models.

- blenCOWe