SOUNDING OFF:

Why haven’t we heard from the Democratic- controlled Congress, the chief executives of the Detroit 3 or the media the real reason the Detroit 3 are in such trouble, and what they will do with any money they get from the government?

Because the root of their problem is the United Auto Workers, and all three are afraid to take on the union. Why do you think the UAW head was sitting alongside the Detroit 3 executives at recent Congressional hearings?

The quality of Detroit 3 cars and trucks is equal to, if not better than, those made by the transplant manufacturers. In the ’80s and ’90s, transplant quality was considerably better than the Detroit 3, but that is not the case today. This view is supported by J.D., Power, Edmunds Inc. and consumer reports. Quality is not the issue. The main reason the Detroit 3 do not have the market share the transplant manufacturers have is due to the labor costs and restrictive work rules with which the UAW has saddled the domestic auto industry. Detroit 3 management is not blameless in this area; it allowed it to occur, but has been held hostage by the unions for the past 50 years. Before transplants, the auto industry just passed these costs along to the consumer.

With blue collar labor costs at $70+ an hour, including broad healthcare benefits and excessive retirement benefits, in addition to work rules that restrict the flexibility of the Detroit 3, it is no wonder they cannot compete in today’s market. As a result of these union-imposed requirements, the Detroit 3 are unable to make the necessary changes to their manufacturing process that are necessary to survive, let alone profit.

In 2001, Ford built a plant in Brazil that is more automated and flexible than any in the U.S. This plant is so flexible that it can produce five different auto platforms at the same time. The entire workforce, including management, wear the same uniform and dine in the same dining room, where they are encouraged to discuss ideas for improvement with each other. Sub-assembly suppliers assemble their products on site, and provide them to the production line when needed. This is probably the most efficient auto plant worldwide.

The UAW would never allow such a plant to be built in the U.S. Because of the UAW, the Detroit 3 will fail no matter how much money is pumped into them. To survive, the domestic auto industry will be forced to move production off shore, where they will be able to complete with other international auto makers.

The only way to reverse this is to materially restructure (or end) the relationship between the UAW and the Detroit 3. Given the current situation, any bailout granted by the government (us) will end up benefiting the UAW, not the Detroit 3. We, the taxpayers, will end up subsidizing the salaries and benefits of union workers unless major changes are required.

ROBERT JOHNSON lives in Costa Mesa.