Bush bends, UAW wins big … automakers still bankrupt.

Excerpted from IBD, “Rewarding Failure”, December 12, 2008

The proposed $15 billion bailout of the Big Three failed in the Senate for one major reason: Some lawmakers stood up to the unions. But their stand may be moot, since automakers may get the money anyway, even though the idea is wildly unpopular among voters

In addition to major restructuring by the automakers, GOP senators insisted on givebacks by the United Auto Workers. The UAW responded with a resolute “No.” 

Gold-plated union contracts are a big reason for U.S. automakers’ woes (though managerial incompetence at the Big Three also played a role). The average Big Three worker made $73.26 an hour in 2006; the average worker at a foreign transplant, $44.20.

Last year, Toyota made 9.37 million vehicles. GM, virtually the same number. Yet, Toyota made a profit of $38.7 billion on its global operations, or $1,874 per car, while GM lost $38.7 billion, or $4,055 a car, almost entirely due to its operations in the U.S.

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One Response to “Bush bends, UAW wins big … automakers still bankrupt.”

  1. MM Says:

    more on the unintended consequenses of a bail out, as recently proposed…don’t do it! http://online.wsj.com/article/SB122930619824905775.html?mod=article-outset-box#articleTabs%3Darticle

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