As the Senate prepares to debate the proposed $25 billion bailout bill for the Big Three Detroit automakers, it’s worth pointing out — as many times as possible — just what this money might be going to pay for. First, as Larry Kudlow, points out, there are uncompetitive salaries.
Here’s a stat from my friend, blogger Mark Perry: Total compensation per hour for the big-three carmakers is $73.20. That’s a 52 percent differential from Toyota’s (Detroit South) $48 compensation (wages + health and retirement benefits). In fact, the oversized UAW-driven pay package for Detroit is 132 percent higher than that of the entire manufacturing sector of the U.S., which comes in at $31.59.
Yet that’s not all. As The Wall Street Journal‘s Paul Ingrassia notes, Detroit doesn’t need more money, but radical change, including getting rid of union contracts, which, as he noted on NPR this week, include burdensome work rules. Here’s one example he cites in his Journal op ed:
A few years ago the UAW even waged a spirited fight to protect the “right” of workers to smoke on the assembly line, something that simply isn’t allowed at, say, Honda’s U.S. factories. Aside from the obvious health risk, what about cigarette ashes falling onto those fine leather seats being bolted into the cars? Why was this even an issue?
In what other industry would this even be tolerated?
Yet even that is not all — then there is the UAW “Jobs Bank,” which keeps allegedly laid-off auto workers on at full salary and not working. This is beyond Soviet. In the former Communist bloc, people had a saying: “We pretend to work and they pretend to pay us.” Not even pretending to work and getting paid for real beats that every time.
If Detroit deserves anything, it’s a Lada plant.