Thursday, 11 December 2008

This has the ring of truth

Jim Kenzie:

David Cole, chair of the Center for Automotive Research in Ann Arbor Michigan, an industry consulting firm, said the other day that the domestic car industry was "being penalized for being old", echoing what I had written in the print edition of Wheels a couple of weeks ago. You can't expect workers to screw fenders onto Chevvies for 30 years and never get a raise. But if you're just off the farm in Georgia or Tennessee and somebody offers you $15 an hour to screw fenders onto Hyundais or Volkswagens, you're going to jump at the chance - and not worry about whether you will get titanium hips when you turn 65.


Until the US stops being the only industrialized country in the world to tie pensions and medical benefits to the company you work for, instead of making such things a responsibility of the society as a whole, there is always going to be a built-in disadvantage to any company that has been in business for more than 35 - 40 years.

It's new companies, not necessarily foreign companies, that benefit, as Southwest Airlines proves.

Agree or disagree, and why or why not?

1 comment:

ADHR said...

Seems right to me. I don't have the link at hand, but in the last couple days or so Ezra Klein put something up comparing the costs associated with labour at Ford (IIRC) and one of the Japanese manufacturers. The difference was striking. If you take out legacy costs -- basically healthcare and pensions for retired workers -- then US workers are making about $2/hour more than Japanese workers, which is pretty negligible.