"CRASH COURSE - The American Automobile Industry's Road from Glory to Disaster" by Paul Ingrassia (Amazon.com:
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Paul Ingrassia of the Wall Street Journal, who covered the American auto industry for a quarter-century and probably knows it as well as any journalist, begins this account of its spectacular collapse by describing something called the "Jobs Bank." No, I'd never heard of it either. It was established by the manufacturers and the United Auto Workers in the 1980s "to provide temporary security for hourly workers on layoff," but "by the 1990s laid-off workers could remain 'bankers,' as they were nicknamed with knowing irony, for an unlimited time, making 95 percent of their wages while not working." This in turn led to "inverse layoffs," wherein "senior workers volunteered to be laid off and thus bumped junior workers back onto the assembly line."
Ingrassia asks: "After all, why should a worker with high seniority slave away building cars when workers with lower seniority collected virtually full pay just for sitting around? Such was the logic of Detroit's dysfunction." Indeed, "dysfunction" barely begins to cover it. "Self-destructiveness" or "insanity" would come a lot closer...
I find that article to be somewhat disingenuous. For one, the Bank workers did not just "sit around," and it was not something for nothing!
When the job bank was set up BY MANAGEMENT, under the contract to which it had agreed, EVERY UAW member began paying sixty-five cents an hour into that fund. The company matched the amount, quarterly. It was paid by both sides, for all QUALIFIED WORK hours. That means even on ones vacation pay. The "Bank" workers were required to report for ALL of the work hours scheduled, or they would lose ALL of their Bank work hours wages.
IE GM laid off 100 workers and say thirty of those would became Bank workers, who had to report to work for say two weeks. Those that were laid off were paid under the contracts previous "Supplemental Unemployment Plan." The "Supplemental Unemployment Plan," was financed by BOTH Management and the UNION workers as well. "Supplemental Unemployment Plan." paid an amount ABOVE their states Unemployment plan to equal 70% of their BASE pay rate.
Bank workers were NOT eligible for payment under the "Supplemental Unemployment Plan" rules. During a shift the Bank workers were used to replace line workers during those times when scheduled workers were not available for what ever reason, eating, in the head, sick, bad weather etc.
The problem was Management and the Union never expected to have hundreds of thousands of their workers laid off. The Union gave up the Bank during new Contract talks when it became obvious there were no long enough works paying into the fund to support it.
Those harping about the UAW seem to forget Manufactures in Japan were required by the Japanese government to pay their worker, from the end of WWII up until around 1998 whether they worked or not, under their guaranteed annul wage law.
Seems to me the US Congress should look to the UAW Union as a guide, now that there are no longer enough workers working and paying FICA to support the scheduled Social Security benefits promised to those soon to be retiring baby boomers, that are going to bankrupt SS in a few short years.
As to the writers comment that the Jap made small cars and the domestics turned to making "gas guzzling trucks and SUVS," what color is the sky in his world? Every Jap manufacturer grew it market over the past fifteen years by offering trucks, SUVs, ever LARGER cars, they still do today, and they offering BIG Luxury cars as well.
The fact is EVERY manufacture foreign and domestic was responding to the market, even Honda makes a pseudo "truck," out of the Accord, to get some of the truck market. One thing for sure is he "probably knows (the auto business) as well as any journalist but they don't know very much.
For once you are correct about something. The Japanese are much smarter than Americans, they buy from their own manufactures to support their own economy. Americans are greedy, they will buy from anywhere if they can save a dollar, regardless of what happens to their own economy and the jobs of their children and grand children.
Americans are very smart, too. Who invented the automobile? OK, it was the Germans. But we have made many improvements to the automobile, invented the PC, iPhone, and made major medical advances.
Really? Industry figures show the average drive home price for an import is 20% to 30% HIGHER than the average drive home price of a similar size Domestic, with the same equipment even though the comparable import costs less to produce
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