Once Upon a Time in America: Why GM and the UAW's postwar economic vision failed

wsj opinionjournal ^ | 11 27 05 | Michael Barone

[flixxx]

Once Upon a Time in America Why GM and the UAW's postwar economic vision failed.

BY MICHAEL BARONE Sunday, November 27, 2005 12:01 a.m.

The end, or the beginning of the end, of a familiar and comfortable world: That's how General Motors' announcement last week of massive layoffs and plant closings, following the bankruptcy of Delphi last month, strikes one who grew up in the Detroit area in the two decades immediately after World War II. In that world, it was easy to imagine you were at the center of the economy. Detroit was then the fifth-largest metropolitan area, the home of the Big Three auto companies and the United Auto Workers--national institutions of the greatest importance.

[flixxx]

Barone is insightful as usual...a pleasure to read.

[sunshine state]

bump!

[bybybill]

After I become KING OF THE WORLD, Mick Barone will be required readig every day. He and Sowell are the smartest commentators in today`s America
PLEASE VOTE FOR ME AS KING CAUSE I NEED THE WORK

[Aussiebabe]

What you had in America for 65 years with the Big Three and GM was a giganitc Ponzi scheme --it is finally collapsing, as all Ponzi schemes finally do.

[jazzlite]

Yes! He educates us.

[VOA]

bump

[Eddie01]

Hi. I am GM. I am shrinking.

[Miss Marple]

Barone is not only the most astute political commentator in the country, he proves himself here to be insightful about economics and American society as a whole.

Thanks for posting this. It is well worth going to the site to read the entire article.

[Pro-Bush]

..just like how America lost television set sales to foreign competition by letting foreign companies to sell products below cost to take the US competition out of the competitive mix.

[aardvark1]

You don't vote for a king. (Monty Python)

[SamAdams76]

No. It's more like this...

The big demand in the 1970 contract negotiations was retirement for auto workers in their early 50s. The confrontational labor-management politics of the 1940s and 1950s was replaced by consensus, as Henry Ford II joined Reuther in endorsing LBJ in 1964. Reuther, a man of great energy and ability, wanted to use the UAW as an entering wedge to transform America into a Scandinavian-style welfare state...

Well I'm glad that the plan to convert America to a quasi-socialist state has failed. And if it means that once proud American corporations like GM and Delta must fail, so be it. There is a price to be paid for allowing socialism to permeate your business and they shall pay it.

As for your comment about how we "lost" the television industry, the manufacture of televisions is now either done by robots or by low-skilled labor. I don't think anybody in America aspires to be a low-paid assembly-line worker. Let those jobs go overseas and lets focus on developing new ideas and new industries.

Due to the lower cost of consumer goods (the vast bulk of which are made overseas), Americans now have a much higher standard of living than they had when these things were made here. TV repair shops have pretty much gone out of business. Why? Because it is usually cheaper to just buy a new TV when the one you have (or one of the ones you have because most Americans have multiple TVs) fails.

For all the yakity-yak about how all the jobs are moving overseas I've been hearing for the past 20 years, our unemployment rate continues to be stable and remains the lowest of the civilized world. Somehow, people are finding ways to continue being employed.

And while one might answer "Yeah, but all these jobs are in the service sector," my reply is well if all these jobs are available, then there must be a huge demand for services. Somehow, despite the fact that all our "jobs" are moving overseas, we can still apparently afford to eat out all the time, have our cars detailed, get our clothes dry-cleaned, shop and buy pretty much anything we want.

[ken5050]

GM started going downhill in the 50's when ( if you are old enough to remember) a decade of so-called "styling" revolved around how big the tail fins would be next model year..IMHO, they never recovered from that..

Ford's Edsel was their Rubicon, and Ralph Nader, when he killed the Corvair, ended any chance that GM would try something radical to survive..

[billhilly]

And Toyota makes a much better car and truck.

[gas0linealley]

"Due to the lower cost of consumer goods (the vast bulk of which are made overseas), Americans now have a much higher standard of living than they had when these things were made here."

How do you define: "standard of living"?

[KateatRFM]

Think of what you had when you were a child and think of what your children have now. That's the way I define "standard of living." We had the first 12" TV in our neighbourhood, and it was 1985 til I could afford a new colour TV, but I still had the one I bought back then until 1996 when I got the one I have now; I gave the old one to my nephew and it still works fine.

Naturally people without any education can't find the high-paying jobs that GM and Ford provided for the uneducated, but that was a false premise to begin with. And keep in mind that the "service" jobs people sneer at are not just burger-flipping; they include law, IT and xerox repair which are high-paying jobs that require skill to perform and are growing exponentially.

[gas0linealley]

The childhood memories I treasure the most are of times spent doing things with my parents, not watching the TV.

[gas0linealley]

"Naturally people without any education can't find the high-paying jobs that GM and Ford provided for the uneducated, but that was a false premise to begin with. And keep in mind that the "service" jobs people sneer at are not just burger-flipping; they include law, IT and xerox repair which are high-paying jobs that require skill to perform and are growing exponentially."

Pardon me, your subtle sarcasm went right over my head until I read it again and realized you were joking.

[chatham]

This is a wonderful article by Mr. Barone.

It should be required reading at all Union Offices and mailed to the membership regularly.

I have bought American all my life but is the People running GMC, Ford etc can't get out of their own way
they will get out of the business.
This business of fobbing off retirement costs on the Taxpayers is CRIMINAL..............

[SamAdams76]

How do you define: "standard of living"?

The level of material comfort in terms of goods and services available. It is an inarguable fact that it is far better today than it ever was. It is true that many people today are spoiled and don't appreciate it, but those are the facts.

[The Great RJ]

The Big Three automakers problems can be easily summed up as they paid the unions increasingly higher wages and benefits rather than investing in building better quality cars at an affordable price that the market actually wanted. We love our Hyundai Santa Fe...our first non US made car. The quality is far higher than any US cars we looked at and no US manufacturer offers a 10 year/100,000 mile warranty.