Combs Spouts Off

At the UAW conference Wednesday, Sen. Hillary Clinton quit moving to the center — heck, she reversed direction! Clinton echoed remarks to the same audience by socialist Rep. Bernie Sanders and perennial nutcase Ralph Nader, and embraced the idea that the problems of the American auto industry can best be solved by massive government subsidies, protectionism, regulations, and more direction and decision-making from Washington:

"The manufacturers and the UAW have called for a Marshall Plan. Let’s marshal our forces and get it done," Clinton said. "This is truly about the future of America."

Clinton echoed some of the other major themes the UAW is pushing, such as health care reform, limits on free trade agreements and research for energy-efficient technologies. …

A "Marshall Plan" for the automobile industry — of course. How else can we rebuild all the bombed-out factories and infrastructure destroyed in the terrible war with Canada?

Oh, wait — there was no war with Canada, and there aren’t any bombed-out factories needing rebuilding. Here’s what the UAW means by a "Marshall Plan":

To stop the off-shoring of automotive jobs, the federal government should provide assistance to help auto manufacturers and auto parts companies retool and expand existing U.S. facilities to produce flexible fuel and advanced technology (hybrid, diesel, fuel cell) vehicles and their key components. In addition, to make sure there is a level playing field among all automotive companies, both domestically and internationally, this assistance should be structured so that it addresses the retiree health care costs of older automotive and other manufacturing companies. Please urge Representatives and Senators to strongly support legislation to establish this type of Marshall Plan for the U.S. automotive industry. Tell them this will create thousands of jobs for American workers and help protect the pensions and health care benefits that retirees have earned. …

Yeah, we taxpayers need to subsidize the auto industry so they can continue to provide jobs like these for UAW members:

WAYNE — Ken Pool is making good money. On weekdays, he shows up at 7 a.m. at Ford Motor Co.’s Michigan Truck Plant in Wayne, signs in, and then starts working — on a crossword puzzle. Pool hates the monotony, but the pay is good: more than $31 an hour, plus benefits.

"We just go in and play crossword puzzles, watch videos that someone brings in or read the newspaper," he says. "Otherwise, I’ve just sat."

Pool is one of more than 12,000 American autoworkers who, instead of installing windshields or bending sheet metal, spend their days counting the hours in a jobs bank set up by Detroit automakers and Delphi Corp. as part of an extraordinary job security agreement with the United Auto Workers union.

The jobs bank programs were the price the industry paid in the 1980s to win UAW support for controversial efforts to boost productivity through increased automation and more flexible manufacturing.

Controversial efforts to boost productivity. So, in exchange for union permission to become more productive, auto makers agreed to spend billions paying "workers" not to produce anything. Riiight.

Some of the 12,000 "workers" in the jobs bank program don’t even have to "show up" anywhere — if they were laid off because their plant shut down, and if there isn’t another one within a reasonable driving distance, they just sit at home doing their crossword puzzles, and their checks come in the mail. $30 an hour, 40 hours a week, plus very generous benefits — total compensation of more than $120,000 a year. Year after year. There are "workers" who’ve been doing this for well over a decade.

And the problem isn’t just paying union "workers" to do nothing. There’s also the problem of paying somewhat above-market wages to get the grass around the factory cut:

… Just listen to Steve Miller a turnaround specialist who is steering Delphi’s restructuring process. He exploded the myth of America’s "endangered" union manufacturing jobs at his October press conference announcing Delphi’s move into Chapter 11: "We cannot continue to pay $65 an hour for someone to cut the grass and remain competitive."

Grass cutting is a manufacturing job?

Miller’s frank assessment of unsustainable labor contracts is a refreshing dose of candor in an industry that for too long has talked around union-labor costs in a way that is totally divorced from the realities of the U.S. labor market–much less the global labor market.

So where does the grass cutting come in? Well, the UAW has a rather expansive definition of what’s an auto worker (emphasis added):

As defined by the current United Auto Worker contract negotiated with the "Big Five" (GM, Ford, Chrysler, and top parts makers Delphi and Visteon), an auto "production worker" is a job description that covers anything from mowing grass to cleaning the toilets. In the real world, these jobs would be outsourced to $8 an hour, no-benefit wage earners, but on Planet Big Five, these jobs get the same wages as any auto line-worker: an average $26 an hour ($60,000 a year) plus benefits that bring the company’s total cost per worker to a staggering $65 an hour.

You’re probably thinking that the UAW must realize that things can’t continue as they are. You’re probably thinking that, after GM’s jaw-dropping $8.6 billion loss for 2005, the bankruptcy of Delphi, and all the other dire news out of Detroit, UAW president Ron Gettelfinger would be explaining reality to his members and preparing them to accept a more rational contract. If so, you wouldn’t be alone — but you’d be wrong:

Gettelfinger ought to be explaining to UAW members at General Motors Corp. (and Ford Motor Co. and DaimlerChrysler AG) the hard truth — openly and plainly — that above-market wages and lavish benefits were great while they lasted, but have come to an end. Trying to hold on to them to the bitter end will only cause companies to fail and lead to massive job losses.

He could explain the unpleasant reality that reducing pay and benefits will save companies and many jobs. Resisting the inevitable is futile, since judges can and will void union contracts.

Instead, the UAW leader asserted this week that the union is done granting concessions to faltering GM, which is just coming off an $8.6 billion annual net loss and whose bonds are rated as junk.

Gettelfinger can’t do the rational thing because there are too many people in his union who won’t stand for it. Many are already upset over the minimal concessions the union made last year, and there are grass-roots organizations clamoring for a more hard-line, confrontational stance. The unabashed socialists seem to be getting louder and stronger among the UAW rank and file.

So what’s a union to do when its policies are destroying the industry, but its members won’t face reality? Why, get the federal government to help, of course! Make the nation’s taxpayers support the auto workers in the style to which they’ve become accustomed! Hillary is more than happy to support such an effort. In fact, she beat the UAW to the punch, calling for massive government involvement back in October:

"The economic consequences of the government’s failure to address these matters will be severe," wrote Clinton, whose state stands to lose thousands of jobs if bankrupt Delphi Corp. closes plants in New York.

"A summit where everything can be put on the table, including legacy costs like health care and pensions, fuel efficiency, foreign competition and trade, could yield beneficial results and solutions for our auto industry."

A government summit to solve the problems of the auto industry. Reminds me of another government summit in which Hillary Clinton played a role. Maybe she could get Ira Magaziner to help out again.

I wonder if Sen. Clinton thinks the problems of the auto industry can be solved by making the federal government the sole provider of automobiles.

Full disclosure: I own 300 shares of Ford (which is actually doing much, much better in Asia than in the U.S., a big factor in my decision). But I’d rather see the share price rise because of actual company and industry improvements than because the feds shovel money at them.

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