But, why do you think that GM (and Ford and DCX for that matter) make lower quality vehicles? It is because they have to cut corners to save money so that their vehicles can be even remotely priced close to Toyota/Honda/etc. due to the extremely high cost per employee.

The domestic makers are stuck paying wages that far exceed the average, they have a huge pension to pay into, and then health care (which is at least trying to get changed for retirees). Even most of the Toyota/Honda type plants here in the U.S. don’t use union employees, don’t have ridiculous pension plans to fund, so they can focus on creating a high-quality product at an affordable price.

What I found interesting in this Bloomberg article earlier today:

“Striking workers receive about $200 a week from the union while serving on the picket line, less than one fifth of a traditional weekly paycheck for a UAW assembly worker.”

If $200 a week is less than 1/5th of a normal assembly line worker’s check, that means on average, a line worker is making over $1,000/week, or over $50,000/year. It doesn’t say if that is gross or net, but it doesn’t matter. That is absurd for unskilled labor, I don’t care how much seniority you have with a company.

Of course that is only part of the problem, because as you mentioned, their bread and butter has been in SUVs and trucks, which is rapidly declining, and their innovation and profitability on the competing car market just isn’t there. But in the end, I believe that the lack in quality stems from being unable to keep costs down, which stems from having to pay your employees (executives included) far more than they should be.

But I don’t think that the union is the source of GM’s troubles, the problem is that GM makes low quality vehicles for cheap. They’ve chosen a market segment that is being eroded by foreign car companies who can produce the same cheap car for even less.

Corporate profits on average are up over 10%, while wages have only increased slightly. I don’t have a lot of sympathy for the companies in this case.

I think I saw a quotation in the boston.com article of a GM employee questioning the union leadership… I’ll have to see if I can find it.

I can understand the unions wanting the best for workers, they made the company after all, but the reality is that we are in a global ecomnomy.

There is a very good book by the raider Sir James Goldsmith called ‘The Trap’. It was written in the early nineties and discussed the affect of globalisation on domestic jobs in the US and UK.
The basic premise was that if a company can make their product cheaper elsewhere they will, if they are unable to becuase of unions or labor laws, the company will die. He was in favour of limiting globalisation.

Goldsmith said the only result from globalisation would be that we (the the western economies) would be manufacturing nothing and selling each other ‘pensions and pizzas’.

This may be going to far…but you can see his point.