Some of the times it is not only management and upper management that should be blamed – workers and their leaders – in the case of the auto industry and specifically the American domestic auto industry that should be examined

Although it can well be said that upper managment in the American car industry was “clueless”  and “devoid of reality”  the case can well be made that for many years it was not the upper execs ( at the top floors dining on fine china in the executive dining rooms), were not making the decisions on auto productions – levels , standards and models .

The decision were being made either by politicans – with their demands and standards – be it safety , fuel or otherwise with the input of the unions chaneling upper management with all their demands – pay and benefits.

We all know of the $ 85 dollar an hour forklift operators, and all the benefits and costs that the automotive companies were saddled with.

If production slowed down workers were paid full bore almost not to work

You might think you were dealing with a government agency – a civil service organization

It was no wonder that “foreign “  autos even those made in the states cost less

Yet look at the qualifications of these union leaders – be it in the US or in Canada with the famous Buzz Hargrove.  What qualificiations do most of these individuals have other than they were good party ( nightime partying and drinking to either get the union appointments or to drink the auto execs under the table socially to have them agree to union requests / demands / blackmail)

Nothing is for nothing.  The costs that the car companies were saddled with had to come from somewhere. It was one giant game with the company “in bed with the union”  according to the viewpoint of the 85 $ dollar an hour fork lift drives.

What both forgot is who they were working for was the American consumer. The car that GM sold for x amount that was good value compared to the import that sold for X + 1000 dollars , should of had a sticker price relating to the actual price of the vehicle , or its constituent imported parts at the port of entry less tarrif fees , not those fees and taxes included.  Yet government was pieced off as well with increased levels of sales and import taxes collected.

Now that the unions will have a giant say as having substantial percentage of ownership of GM how are they going to blame upper management.  Its all in the viewpoint and the money you earn / take home / steal.

Original referenced viewpoint article: 

Outsourcing Top Management: The Lesson of Fiat-Chrysler
By: Dean Baker Monday May 4, 2009 8:20 pm  13
The media coverage of the auto bailouts has focused on the need for union autoworkers to take big pay cuts, causing them to once again miss the real story. The Fiat-Chrysler deal shows that the pay problem is at the top, not the bottom. At the end of the day, the new Chrysler is still likely to be producing most of its cars in the United States. What the new company will be getting from abroad is technology and top management.

This big story was so easily missed because it runs against one of the main myths that our elites have cultivated about the US economy: that the country has a “comparative advantage” in highly skilled labor. In this story, the United States will continue to lose manufacturing and other “less-skilled” jobs as its economy becomes more concentrated in highly skilled sectors.

This story was convenient for our elites because it meant that the decline of manufacturing was a necessary, if sometimes painful, part of a natural economic progression.

It also justified the growing inequality in US society that benefited not just Wall Street bankers and CEOs, but also millions of doctors, lawyers, economists, and other highly educated workers. These people took their six-figure salaries as a birthright, even as the pay of less educated workers stagnated or declined.

While this story of the US becoming a high skills center in the world economy may have been comforting to the elites, and was widely promoted by economists and the news media, there was never much truth to it. Highly skilled professionals did well in recent decades not because they succeeded in international competition, but rather because they were largely sheltered from it.

Trade agreements like NAFTA were explicitly designed to remove any barrier that made it difficult to export manufacturing goods to the United States, thereby placing US manufacturing workers directly in competition with their much lower paid counterparts in the developing world. Most of these restrictions had nothing to do with tariffs. Instead the key issues were rules protecting investment in the developing world along with limits on the ability of the US to exclude imports through safety or environmental regulations.

There has never been any similar effort to eliminate the barriers that prevent professionals from the developing world from coming to the United States and competing directly with their US counterparts as doctors or lawyers or in other highly paid professions.

The economists and the media somehow failed to notice that professionals were intentionally sheltered from international competition and instead just trumpeted them as the winners in the global economy. We were just treated to a beautiful example of this double standard when the media and the economists got all huffy about the “buy America” provision in the stimulus bill that might have protected a few manufacturing jobs in steel and other industries.

While this provision was roundly condemned and eventually watered down, the buy America provision in the Treasury’s latest bank bailout bill went completely unnoticed. This provision requires that any investment manager taking part in the program be headquartered in the United States. Even though the argument against protectionism in financial services is identical to the argument against protectionism in steel, no one bothered to make the argument when Wall Street was the beneficiary of protectionism.

The end result of this protectionism for those at the top is a bloated overpaid sector of top managers, which is what we saw at Chrysler. If we compare wages for assembly-line workers in Europe and the United States, there would not be much difference between the pay of UAW members and their counterparts in Europe. However, there would be a very large difference between the multi-million dollar pay packages of the top executives at the US companies and their European counterparts. The pay gaps persist among the more highly paid engineers and management personnel.

Therefore, it was only logical that a bailout of Chrysler would seek to take advantage of the lower cost management and design skills available at a European car company like Fiat. In Chrysler, as in other companies, the high pay packages for these people are like an anchor dragging them down in international competition. If the US is to be competitive in the 21st century, we must either bring the pay of those at the top back down to earth or we should look to follow the lead of Chrysler and contract out for these services.

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