Morici V the Big 3 – 2nd round

A few days after I posted my Morici V the Big 3 piece, I came across a article by the Edward McClelland, in, which he persuasively argues that the Big Three American car-makers‘ call for government funds to bail them out should given a more sympathetic hearing by the politicians.

As politicians hurl abuse at Big Three executives for building gas guzzlers, here’s a snap back at Washington: If you’d passed a universal healthcare plan, Detroit wouldn’t have had to pay such steep premiums for its workers, leaving more money for innovative research in small cars and fuel efficiency.

Henry Ford liked to boast that he invented the modern era. But he also invented the middle class, when he began paying his workers $5 a day, unheard-of money in an era of cheap immigrant labor. Ford was no liberal, but he figured if he paid his workers well, they’d be able to afford Model As. Thus began a century-long spiral of bigger wages, and bigger cars, that has finally brought the American auto industry to the brink of bankruptcy. Last year, GM — the largest private purchaser of healthcare in the U.S. — spent $4.75 billion a year on retirees’ medical coverage. That included full benefits for families of workers who took their place on the assembly line right out of high school, and took the 30-and-out before they turned 50. It’s one reason the company is $48 billion in debt.

There’s no doubt that The Big Three have had a tough time getting over the era when gas was 24 cents a gallon and Vince Taylor and His Playboys were howling “Brand New Cadillac.” But they kept building that huge iron because it was the only way to maintain another legacy of the 20th century, the idea that blue-collar workers should live as well as white-collar workers.

I don’t think that Morici is wrong in wanting the Big Three to solve their own problems without funding from the government, but it’s worth noting that when he advocates “new labor agreement that brings wages and benefits absolutely in line with those at the most competitive transplant factories”, what he’s in effect  advocating is that the workforce be stripped of many of the benefits it may very well feel should be extended to others rather than taken away from them.


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