By on March 19, 2009

The Star reports that Magna International is closing its New York state New Process Gear plant after 52 percent of the plant’s union workers rejected a 20 percent wage reduction. The haircut would have pegged hourly salary at $16, and stipulated that the factory had to break even by July 1 (good luck with that). “The plant, which employs about 1,400 people, makes transfer cases to switch power from two- to four-wheel drive vehicles.” Make that made. Magna’s statement after the jump [thanks to cnyguy and Geo. Levecque for the links].

New Process Gear (NPG), a manufacturing division of Magna International Inc.’s Powertrain operating unit, announced today that the modified, tentative collective bargaining agreement put forth by UAW local leadership and NPG management has been voted down by employees of Local UAW 624.

The modified, tentative agreement was a second attempt to restore viability to the plant and provide a potential future for employees. As a result of the vote, NPG will initiate a closure plan for the site and begin transfer of operations.

“This was an extraordinary attempt by the UAW and the NPG management team to craft what could have been a truly competitive agreement,” said Tom Rucker, NPG’s general manager. “I am extremely disappointed that this agreement, which could have given NPG a real opportunity to survive, was voted down.”

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91 Comments on “Sign of the Times? UAW Votes Itself Out of a Job...”


  • avatar
    kowsnofskia

    Good. It’s about time somebody started playing hardball with the UAW.

  • avatar
    GS650G

    This sends a message that closing factories is still an option. Try that on for size.

  • avatar
    Bimmer

    Same fate awaits CAW workers if they wont agree with Chrysler and Ford demands regarding pay cut.

  • avatar
    bleach

    Ouch for that area. A few years ago unionized drivers at a freight carrier just outside Syracuse went on strike as a show of support for the clerical workers trying to organize. Strike on a Friday and then on Monday management just shut down the whole dang thing. 2000 plus jobs gone.

  • avatar
    psarhjinian

    Question: did the union know Magna was going to close the plant if they didn’t accept the cut?

    If yes, well, that’s very “cutting off your nose to spite your face”. If no, well, it’s not aboveboard on Magna’s part, but it’s not entirely surprising, either.

  • avatar
    Justin Berkowitz

    I’m not sure I understand the animosity towards workers in this case?

    They were making $40,000 a year and were asked to vote on going down to $32,000 a year.

    Even in upstate New York, $32,000 is very small money.

    Yes, some job is better than no job. So they screwed themselves out of the opportunity to work (and in upstate NY that doesn’t come along so often).

    But why the anger or attitude that they deserve it for being ‘greedy’? Is wanting to make more than $32,000 a year in the US really excessive? I can understand anger at AIG executives getting $1 million bonuses with public tax money, but this case confuses me.

  • avatar
    menno

    Eventually, with NAFTA in place, I believe the “American” auto manufacturers will shift virtually all of their auto production, including parts, to low wage Mexico.

    Ironically, so-called “foreign” companies such as Hyundai, Kia, Toyota, Honda, Nissan, Mitsubishi, BMW, Mercedes and Subaru are manufacturing automobiles in the United States.

    My wife and I pretty well have decided to replace our leased 2007 Hyundai Sonata (manufactured in Montgomery, Alabama) with a 2009 Hyundai Sonata (manufactured in Montgomery, Alabama).

    I believe Chrysler won’t survive to move Chrysler 300, Dodge Challenger and Dodge Charger rear-wheel-drive auto production out of the ex-AMC plant near Toronto (Bramalea), but if they do, I strongly suspect it’ll go to Mexico. Mexico is where the Hemi V8’s are built; why strip one plant, move it to a $16 or $20 an hour site in Michigan and ship engines from 1000 miles away when you can strip one plant, move it next door to the engine plant and pay guys 60 cents an hour?

    Anyone else remember Ross Perot? “That giant sucking sound will be the sound of jobs moving to Mexico if NAFTA passes.”

  • avatar

    Even in upstate New York, $32,000 is very small money.

    And taking a job at WalMart for minimum is infinitesimal money.

    John

  • avatar
    TEW

    @Justin Berkowitz :
    The hostility comes from the fact that 48% agreed that a pay cut is a good thing if they got to keep their job. The plant was not profitable at the current pay so why not have the workers take a pay cut to keep the plant alive.

  • avatar
    bipsieboy

    I have to agree with Mr.Berkowitz on this one. How many of TTAC’s readers would like to take a$ 8-10,000 grand haircut.$32000 is barely a living wage in upstate NY. I live in upstate NY and $600.00 a week DOES NOT go very far. Go after the AIG boneheads and not the working stiffs at NPG.

  • avatar
    jschaef481

    No animosity. Just a dose of reality. In the end, a job is not an entitlement (not yet, anyway.) A job/position must justify itself economically or it ceases to exist…

    …unless you work for the government, that is!

  • avatar
    Robert.Walter

    NAFTA? Wasn’t that the thing that was supposed to help develop latin american economies, and thus strengthen local institutions, so that ambitious individuals would feel less need to emmigrate (become an illegal immigrant) to the US because economic need was matched with local opportunity, or the failure of the goverment to serve and protect (due to no money and/or corruption) was mitigated with a rising local economic tide, and retained citizens paying taxes and demanding responsible government?

    Seems to me, at least on these two points, and probably a host of others, NAFTA has failed miserably … (more people come than ever before, so much so, that stores that catered bilingual, are now labeled bilingual, to wit Wal-Mart’s spanish-named channel, and narco-warrier activities spilled-over north of the border) …

    US pay, benefits and positions in manufacturing have been in a race to the bottom for the last 20 years … so much so, that these jobs are no longer looked upon as a solution (path to middle class lifestyle) to be desired, but a problem to be derided and scorned (by many of the people that a generation ago would have been in the desired camp) …

    Put just these two together, and you see the levelling of a wealthy society hell-bent on exporting wealth, and accomodating a flood of refugees from a failed 3rd world nation, even as it moves downward to meet it (this happens with middle class and tax-base errosion.)

    This turnabout feels to me like a kind of cancerous socio-economic canibalism… where a society begins to eat itself from the inside…

  • avatar
    guyincognito

    @ Justin Berkowitz :

    “Is wanting to make more than $32,000 a year in the US really excessive?”

    For a no skill, anyone off the street can do it, job, yes. Many teachers and nurses only make that much. The unfortunately reality is that wage is not sustainable in this global economy. I do empathize with their plight but I personally would take the lower salary and keep working while I looked for a better job.

  • avatar
    Lokki

    Nobody would LIKE to take a 20% cut in pay, but a lot of us would probably do it rather than face unemployment – at least it gives you some time to try and find a job that pays more money.

    I think that most readers here believe that the UAW (as do many other unions) has a poor track record of recognizing reality.

    Recall the quote from the longtime head of United’s pilots union, just before United went into bankruptcy?

    “We don’t want to kill the golden goose. We just want to choke it by the neck until it gives us every last egg.”

    By the way, I’m all for going after the AIG guys. They got their bonuses with my 401k money.

  • avatar
    GS650G

    AIG workers don’t make car parts so the lovely comparisons don’t apply here.

    Half a loaf is better than none at all. There is no animosity towards the workers per say, but the union that speaks for them and acts parental on their behalf should be smarter than this. Is there any doubt Union Leaders (there is an oxymoron for you) had information that this deal was a go or no go for the plant? Officially and to save face they will claim not but if they really didn’t know this was an option they have no business running a union local.

    Doesn’t matter. Magna’s plant is another casualty of the Big 2.8 mismanagement and poor product line.

  • avatar
    superbadd75

    Sign of things to come, or a wake up call for unions everywhere? Sure, a pay cut sucks, but a 20% decrease is still more than unemployment pays. $16 an hour sure as hell beats Burger King’s wages. Good luck finding a job in this economy guys. I don’t wish bad things on the union, but right now all companies are cutting costs just to stay viable, and this was not the most intelligent move they could have made.

  • avatar
    JuniorMint

    I think their tenuous grasp of economics is what’s making them hater-bait. If 52% of their ranks can’t grasp that $32,000 > $0, I’m surprised they aren’t taking more flack.

    I don’t understand how people have missed this fact: in Depression 2.0 it’s lucky just to have a job. I took a 20% pay cut this year, and my industry is doing a hell of a lot better than automotive sales. At the very least, there aren’t headlines every day saying how badly we’re doing. :p

    This sense of entitlement staggers me. I feel bad for the 48% with brain activity – how much does it suck for your moron coworkers to vote you out of a job?

  • avatar
    golf4me

    About time.

    The company does not have to tell the union anything before they vote. If they are stupid enough not to realize that they’d get shut down then they also deserve to lose their jobs. Sorry, but that’s how the cookie crumbles. Lesson here: be happy with what you have, don’t be greedy. If a company is not tying you to your workstation and whipping you into submission 12 hrs a day, you don’t need a union. You think the press these days would let a company get away with that? Let the unions die already, it’s time.

  • avatar
    gslippy

    Well, the union really stood tall and showed them!

  • avatar
    Casual Observer

    Transfer cases go in trucks and SUV’s; trucks and SUV’s cause global warming.

    Isn’t this good news? I applaud the UAW members for scoring one for the green team!

    On another note, it must suck to be one of those union employees at New Process. Your dues go to elect the Democrats who spend half their time working to give your company public money, and the other half of their time hobnobbing with the environmentalists that are working to put you out of work.

    Irony.

  • avatar
    63CorvairSpyder

    @ menno,

    Anyone else remember Ross Perot, “Giant sucking sound……..”? I sure do, I voted for him, but the mainstream painted him a kook. I never liked the broad brush of NAFTA and CAFTA but both political parties and wall street sure did and look what we have now.

    If the now “global” market calls for a factory worker to make 32K a year for the factory to stay in business, then that should be the wage.

    Here in NJ, we have cops, firemen and teachers making 100K a year and we are bankrupt while paying the second highest taxes in the country. Unfortunately it is not a factory(private business) that can be shut down.

  • avatar
    montgomery burns

    I’d like to know what kind of pay cuts the management at Magna are taking. Also as mentioned above did they make it clear they were going to close the plant without union concessions?

    Or was the plan to close all along using the union rejection for plausible deniability when they take the TARP money.

  • avatar
    Gary Numan

    I have zero sympathy for the union. Kudos to Magna for shutting it down.

    Each one of us living in the United States can either be self-employed or choose to work for someone else. If you choose to work for someone else, you also have the choice to get up and leave if you don’t like it and find another person or company to work for. Sometimes this requires moving away to another city or state. This freedom of personal choice does exist. This same freedom of choice exists for the employer too.

    I highly recommend that everyone examine the “Freedom Of Choice” Bill that is being considered in congress now and see if you agree that the name really means what it is…..

  • avatar
    adonasetb

    They voted – now they get what they voted for. They voted to reject $16 per hour and the vote carried the day – because of that vote they’re not making $16 per hour – they’re making $unemployment per hour. For those of us who didn’t have the option of voting to keep our jobs but now stand in the unemployment line I have zero sympathy for someone that had a job and elected to vote it away.

  • avatar
    Guillaume9

    @guyincognito (12:00)
    RIGHT ON!

  • avatar
    Landcrusher

    Enemy of my enemy? Nope. Magna has a bad rap among all employees and several partners as far as I can find. They are no friend of mine.

    I am glad they stood strong, but what we need is someone like Ford to do it. Ford has better credibility in this area. When Ford does it, the tide will swing, and the UAW will change if not fail.

  • avatar
    RedStapler

    It is not like the facility had all that much of a future with its existing products. All of the vanity buyers of 4LO SUVs have left the building.

    The UAW have a hard core us vs the company entitlement mindset. In this job market $32k is a lot better than the $0-15K you will find elsewhere.

    Interestingly the Teamsters recently accepted a 10% pay cut at Yellow-Roadway in exchange for a stake in the company.

  • avatar
    Gunit

    I think unions would be more willing to accept wage reductions if they saw the same thing happening at the top. Instead we see highly overpaid executives living off these workers tax money. A lot of workers see giving up wages as letting down those who fought for union rights over the past 50 years. I’m not a union booster, but I’m even more tired of hearing about ceo greed than I am union stupidity.

  • avatar
    daro31

    No one should be surprised at this, I can assure you that the union leaders and probably their area leaders in upstate New York encouraged the no vote and probably promised the membership they were right behind them for support. The unions see this type of thing as the tip of the iceburg and think they can stop other companies from offering the reduced wages by taking a stand.
    As far as the union is concerned this is the cost to make a stand and show that they cannot be rolled over and that they have principals. Pretty cheap PR as these things go.

  • avatar
    Bigsby

    More background that our Bobby left out. The workers had already taken a hair cut from $29 per hour a few years ago to end up at $20 per hour. The new deal also included the soon to be downsizing of the plant to about half the current employees by 2011. That means that half the workers would be out in short order anyway.

    Magna game plan? Raise your hands if you’ve heard this before. Suck out the last bit of value from the plant in the next few years and then close it anyway.

    The workers were asked to vote essentially on Magna management cred. Amazing that 48% voted yes. Or not so amazing since if your don’t bother to vote in these union matters it’s counted as a yes. I would speculate that the no shows couldn’t be bothered/ were already out looking for other work.

  • avatar
    Justin Berkowitz

    guyincognito :

    @ Justin Berkowitz :

    “Is wanting to make more than $32,000 a year in the US really excessive?”

    For a no skill, anyone off the street can do it, job, yes. Many teachers and nurses only make that much. The unfortunately reality is that wage is not sustainable in this global economy. I do empathize with their plight but I personally would take the lower salary and keep working while I looked for a better job.

    Were these no skill, anyone off the street jobs? I actually think it’s unreasonable that teachers and nurses are paid so little, which is part of the reason we have a shortage of nurses in the US (admittedly a decreasing problem, as the number of people with health insurance plummets every month).

    The trouble is, while economists might say the free market should set wages, the people from Slumdog Millionaire would disagree. Poverty and races to the bottom are nothing to be proud of, and nobody in those situations gets any comfort from knowing that Adam Smith (or really, the modern contorted image of Adam Smith) would approve.

  • avatar
    mitchim

    guyincognito

    Such a great point.

    I do empathize with their plight but I personally would take the lower salary and keep working while I looked for a better job.

    Some people are just born to suffer I guess. There will always be better jobs out there. Its those who aim for and actively look for them that do not have to live in the democratic socity that is the “union”.

  • avatar
    Pig_Iron

    @Bigsby : Magna game plan? Raise your hands if you’ve heard this before. Suck out the last bit of value from the plant in the next few years and then close it anyway.

    Exactly correct. Magna has been moving to Asia heavily since at least 2005. Production costs Magna 1/10th the wage in China, and design work is 1/4 the wage in India. If I knew this, I’m pretty sure the workers did too.

    They bought the plant for the product and production technology. It was always Stronach’s intention to close it, as soon as it was expedient to do so.

  • avatar
    AG

    People don’t collectively bargain to game the system, they do it because if given the chance, employers would hire mercs to kill them all if they acted up. Its ridiculous that people forget that stuff like this happened less than 80 years ago. I can think of another r-word that rhymes with “petard” to describe that kind of misanthropy.

    I don’t know if they were told the plant would be closed or not. I don’t know if the plant was just closed in retaliation. But from the article, I’d have to say that yeah, taking unemployment would be a better option than taking that big a pay cut. Now THAT would keep your options open, being paid to find another job.

  • avatar
    geeber

    Wage cuts, in and of themselves, are not guaranteed to save a company. The union and workers probably figured that this particular Magna plan is a goner regardless of what they agree to do.

    Look at GM – even if UAW members now paid for the privilege of working there, it would still be swirling the bowl…the company is too far gone at this point.

  • avatar
    NickR

    Unfortunately, the situation here is one of two options that face a very large number of people today. Take a pay cut to keep working (at your present or at a new employer…if you can find one) or lose your job outright (me!!!). I got an email from a friend the other day, who in turn was helping his neighbors try to find homes for their two 3 year old labs (together). Both of them got laid off, lost their house (and no, they didn’t get into some stunned loan arrangement or go over their heads by any reasonable measure). They have been forced to move into an apartment, and can’t keep their dogs. The point being as an employee now, you negotiate with a gun to your head…the only two choices are do you hold it while they spin the chambers or does someone else?

  • avatar
    Alcibiades

    This illustrates the problem with treating labor differently from other marketable services. With most markets, if you don’t like the price, you don’t buy or sell, as the case may be. That’s how it is for all non-unionized workers. It’s up to the employee to take the job or not. With a union, it’s different, and leads first to distortions in the market, and then to the movement of jobs elsewhere (if possible) or bankruptcy of the business. If the UAW went away, the U.S. could be competitive in auto manufacturing, I think.

  • avatar
    John Horner

    mitchim : “There will always be better jobs out there.”

    On what, pray tell, do you base that rather bold assertion? Roughly 5.5 million people in the US are officially counted as unemployed and looking for work. Millions more are working in jobs well below their skill level. What exactly are these over 5.5 million better jobs you speak of?

  • avatar
    Boston

    Welcome to the real world with all of the rest of us suckers!

    Perfectly summarized….

    ———–

    guyincognito

    Such a great point.

    “I do empathize with their plight but I personally would take the lower salary and keep working while I looked for a better job.”

    ———–

  • avatar
    psarhjinian

    Many teachers and nurses only make that much. The unfortunately reality is that wage is not sustainable in this global economy

    That’s kind of disingenuous. What’s not sustainable, apparently, is the lack of earning power. It’s not profitable to pay people, but it’s also not profitable to have no one who can buy your good either.

    That we’re asking rank-and-file to take a haircut while the wage disparity increases and the middle class vanishes is the actual question we should be asking.

    The company does not have to tell the union anything before they vote.

    Umm, yes they do. Even if they aren’t legally required to do so (and many are, it’s part of your employment contract) there’s at least a moral obligation to tell your employees that if they don’t accept the cut, then you’ll have to close.

    The “good’ and “bad” parties in this depend entirely on who was up-front. If Magna gave no notice that they were going to shutter the plant on a “No” vote, then that’s rather scummy of them. If the union executive wasn’t up-front with it’s members, then they should be hung, drawn and quartered. If the voters did this, well, my original “Nose, face, cut, spite” comment applies.

    If they are stupid enough not to realize that they’d get shut down then they also deserve to lose their jobs. Sorry, but that’s how the cookie crumbles. Lesson here: be happy with what you have, don’t be greedy.

    Oh, yes, the cry of the fat-cat: “Be happy with your pittance, because we can take it away any time we like”. That’s the kind of irresponsible economic behaviour that will, eventually, result in nationalization and revolution.

    Do you really think that people will swallow the erosion of wages indefinitely? Because that’s what comments like yours are asking them to do. A healthy, vibrant economy requires a middle class that isn’t in indentured servitude.

  • avatar
    Justin Berkowitz

    Alcibiades :

    This illustrates the problem with treating labor differently from other marketable services. With most markets, if you don’t like the price, you don’t buy or sell, as the case may be. That’s how it is for all non-unionized workers. It’s up to the employee to take the job or not. With a union, it’s different, and leads first to distortions in the market, and then to the movement of jobs elsewhere (if possible) or bankruptcy of the business.

    Isn’t this exactly how it happened here? The workers decided they didn’t like the price and didn’t take the job?

    If the UAW went away, the U.S. could be competitive in auto manufacturing, I think.

    I disagree. All the rest of the people that drove companies like GM would still be around. And their culture.

    By the way, if the UAW disappeared, wages still aren’t set by the market (by which I mean CEOs with power). Minimum wage will remain in the US (though economists would call minimum wage a distortion, also), and that means labor will always be more expensive in America than it will be in China.

  • avatar
    MidLifeCelica

    @guyincognito
    I do empathize with their plight but I personally would take the lower salary and keep working while I looked for a better job.

    This is what you or I would do, but isn’t it true that a lot of employees in these places aren’t folks with degrees and/or trades, but guys who dropped out of high school in the 60’s and have no marketable skills other than knowing how to run a Model X gear-cutting machine? This and their age are probably their biggest barriers to finding alternate employment. They can’t just switch over to being lumberjacks or doctors or whatever high-demand jobs are out there.

  • avatar
    ra_pro

    It’s mind boggling to me that so many so-called ‘best and brightest’ automatically take the position of Magna. Where is it said that Magna is telling the truth about profitability; where is it said that Magna wouldn’t ask for another pay cut few years down the road? In fact I would bet that that’s exactly what would have happened. After all their mission is to maximize profits, if they know they won the first round, they would be back sooner rather than later for another one.

    To all the smart Alecs that would rather take a pay cut than lose a job, how many pay cuts would you take before you say to hell with it, if ever?

  • avatar
    JTParts

    I know the US can’t legislate wage parity between itself and other less expensive labor markets. But what it can and should do is legislate some sort of environmental parity. Want to build batteries in India and dump toxic pollutants in the river? Great, but that’s to cost you a duty to equal the playing field to what it would cost in a regulated environment. This is one big planet and you can’t keep crapping in the backyard without the stench coming in the house sooner or later.

    As far as the union, they really showed what power they have. None.

  • avatar
    trk2

    To all the smart Alecs that would rather take a pay cut than lose a job, how many pay cuts would you take before you say to hell with it, if ever?

    The problem with your logic is that your vote not only helps decide what happens to yourself, but also what happens to all your co-workers. Fine, say “hell with it” and just walk away from the job. But by voting not to accept a pay cut, you’re taking jobs and choices away from your co-workers who still want to work at the lower wage.

  • avatar
    psarhjinian

    Great, but that’s to cost you a duty to equal the playing field to what it would cost in a regulated environment

    Good luck with that.

    Between the WTO complaints and the rampant corporate lobbying it’ll never fly. We’ve had this debate in Canada for years, ironically surrounding more lax environmental and social safety systems in the US (and, to a lesser degree, Mexico), and it’s gotten us exactly nowhere because, quite frankly, big money calls the shots, and if big money wants to trade freely with China without being encumbered by any kind of social responsibility, they’ll do it.

  • avatar
    mel23

    I can assure you that the union leaders and probably their area leaders in upstate New York encouraged the no vote and probably promised the membership they were right behind them for support.

    Huh? You can assure us that probably?

    if big money wants to trade freely with China without being encumbered by any kind of social responsibility, they’ll do it.

    Under normal circumstances, I agree. But let the unwashed willfully ignorant masses wake up and things can change. This little economic downturn is waking people up, if only for a short period. What it takes is to put the fear of god, or defeat, into the elected types.

  • avatar
    CarShark

    @ra_pro:

    And you know this how? Because of your Magic 8 Ball?

    As for the amount of pay cuts, probably however many it took for me to find a better job. Y’see, that’s what you can do when you have marketable skills, even in a downturn. Don’t have any? Too bad. Not my fault that I was getting an education while you were living large with guaranteed pay and bennies above what the market will bear.

    What I don’t understand from the “free market doesn’t work” scythe-bearers is this: If not the free market, then what? Inefficient, social agenda-driven government? Complete co-opting of production so things stay “fair”? Capitalism remains the best way of going about things. No financial system created could have kept on keepin’ on when so many people (borrowers, mortgage originators, lenders, banks, investment banks, politicians, etc.) were ALL acting so stupid ALL at the same time.

    What killed things was not just greed (though it was a HUGE part of it), but also the growing entitlement belief in this country. People thought that they deserved to own a house, even though their credit score looked more like a bowling score. People running financial institutions thought (and still think) they deserved to keep their jobs and bonuses no matter how well they did (or didn’t do). And now these workers were deluded into thinking that they deserved to keep their redundant jobs in the middle of a recession. I can’t even bring myself to feel sorry for the 48% who apparently have a brain in their heads, because they should have known that this is what happens when you to take the important decision of employment out of your own hands and put it into the collective’s pincers.

    What will keep this from happening again? Not regulation, because unless all countries do everything at the same time, the capital will just go where it’s least restricted. Everyone knows that, so there will be continued gaming of the system until someone gets the edge. The U.S. won’t have much chance of being that country so long as so many foreign countries own so much of our debt. They’re the ones with leverage.

    No, what will keep this from happening again is what we’ve been trying to avoid: people need to face the consequences. People won’t manage their money so poorly in the future if they have to live with a foreclosure or bankruptcy on their credit report for several years. Financial institutions will be more prudent from now on if the culprits started getting identified and sacked. This obsession with blunting the correction and keeping house values inflated (especially in CA, NV, AZ and FL) to protect the unwise and spending buku bucks on pet projects and infrastructure projects (which will likely end up overbudget, anyways) strikes me as pandering for votes.

  • avatar
    Luther

    Unbelievable.

    I didn’t know anyone lived in The People’s Republic of Syracuse anymore.

  • avatar
    63CorvairSpyder

    @ CarShark,

    Excellent post, no way I could have said it better.

  • avatar
    Greg Locock

    guyincognito :

    @ Justin Berkowitz :

    “Is wanting to make more than $32,000 a year in the US really excessive?”

    For a no skill, anyone off the street can do it, job, yes.”

    Bet you’ve never worked in a gearbox plant.

  • avatar
    Justin Berkowitz

    CarShark :

    As for the amount of pay cuts, probably however many it took for me to find a better job. Y’see, that’s what you can do when you have marketable skills, even in a downturn. Don’t have any? Too bad. Not my fault that I was getting an education while you were living large with guaranteed pay and bennies above what the market will bear.

    No one is asking you to say it’s “your fault” that they are out of a job and have no prospects right now. But to say they deserve what’s coming to them strikes me as deeply unfair. No, not all poor and disadvantaged people deserve to be poor and disadvantaged.

    Not everyone is able to get an education or get what you call “marketable skills.” Some people are born into poor communities with bad schools. Others don’t have the ability to go to college because they need to get a job immediately to support their family. There was a time that being a skilled laborer was a marketable skill in the US.

    By the way, there are millions fewer jobs in the US in the past few months. Even if you have marketable skills, it’s tough to get a job. I’m a lawyer and I’m out of work.

    What I don’t understand from the “free market doesn’t work” scythe-bearers is this: If not the free market, then what?

    Despite what Sarah Palin would like us to believe, there are more than just “Communists” and “Capitalists” in the world.

    You can still support free market principles without being in favor of violent unbridled capitalism. In fact, capitalism doesn’t work without any regulation — you wind up with monopolies and warlords.

    I can’t even bring myself to feel sorry for the 48% who apparently have a brain in their heads, because they should have known that this is what happens when you to take the important decision of employment out of your own hands and put it into the collective’s pincers.

    Wow.

    No, what will keep this from happening again is what we’ve been trying to avoid: people need to face the consequences.

    I agree with you in principle. People need to take responsibility for their actions. The problem is that it’s a two-way street. And I don’t see CEOs willing to face the consequence that they can’t all draw multimillion-dollar salaries anymore when the economy is imploding.

    Look at AIG, which in spite of a bailout, in spite of huge public outcry after their taxpayer-funded resort vacation, still paid their execs millions in bonuses. When do they face the consequences? They won’t. Nor will all the other people with power and money in the U.S.

    The reality is that the request is for people without power and without a voice are being told they have to take the haircut. On salaries, on jobs, on benefits. The rich and powerful in the US don’t have to face the consequences. And those that aspire to be in that group will defend them.

  • avatar
    golf4me

    psarhjinian, please don’t take this the wrong way, but can I ask you something? Where are you from and what are your politics. I’m only asking because what you write sounds just like Karl Marx. In a way, it’s a compliment, even though I don’t agree with you, your points are well written, like propoganda leaflets!

    Back on the subject, basically you guys that are pro-union keep looking back 80 years to rationalize the union’s existence. C’mon, do you think with today’s press that any company is going to get away with anything that’s worth unionizing for? Really? In the day and age where getting a bonus is now the equivalent of a Scarlet Letter?

    Think about it. If anyone were “abused” in a factory, they’d go to the media, said media would do an expose, that would pressure the regulators into action. Whistleblower gets millions in an out of court settlement too. The way I look at it the union is actually standing in way of some folks being able to get a potential payday!

  • avatar
    guyincognito

    @ Justin Berkowitz:

    “Were these no skill, anyone off the street jobs?”

    Ok, I didn’t work there so I can’t say with certainty, but the majority of automotive jobs are required to be poka yoked. Are they easy? No. Does this mean that union workers don’t work hard? No. But due to safety standards, union work rules, and the reality that the beginning of a shift it is a mad scramble to staff the line, most jobs have to be able to be done by any given worker at any given time. It literally has to be impossible to do it wrong.

  • avatar
    golden2husky

    Back on the subject, basically you guys that are pro-union keep looking back 80 years to rationalize the union’s existence. C’mon, do you think with today’s press that any company is going to get away with anything that’s worth unionizing for? Really? In the day and age where getting a bonus is now the equivalent of a Scarlet Letter?…

    Uh, yeah. Very few people would disagree with the statement that the unions became too powerful in the past, but the pendulum is rapidly swing back – hard. New Process forced cuts in pay before, then they wanted more while damn well knowing that they were going to shrink the workforce in half. Lets be real; closure was coming no matter what. Where was management’s sacrifice? Nowhere. While a logical argument could be made for working at a lower wage and while trying to find another job, a parting f you sends a good message.

    I am not a union sympathizer, nor am I in manufacturing, but the glee that some of you have as America’s manufacturing goes down the crapper amazes me. I am willing to bet that none of you work for such a piddling wage, so the view from the ivory tower must be quite different. I just don’t see how anybody can survive on $40K a year. America will not function with being only a service based economy. The middle class is evaporating and this should be sending warning bells off in your head. Instead, you want to pass the champagne. How sad. Sooner or later, this economy will get to you or somebody you care about. When it does, you’ll remove the “NAFTA we HAVTA” sticker off your car.

  • avatar
    CarShark

    Not everyone is able to get an education or get what you call “marketable skills.” Some people are born into poor communities with bad schools. Others don’t have the ability to go to college because they need to get a job immediately to support their family.

    Yet others do. Some work AND go to school. Yeah, I know. What a concept. Expecting more than the minimum from a human being. Still others take the time to learn outside of their terrrrible schools and still excel. What’s the difference? Some actually recognize that they can overcome any adversity with hard work and perseverance and then do so. Stop making excuses.

    There was a time that being a skilled laborer was a marketable skill in the US.

    Point being? That time has long since passed. Those that have adjusted are at the advantage. Those that haven’t will suffer. As it should be.

    The rich and powerful in the US don’t have to face the consequences. And those that aspire to be in that group will defend them.

    At no point in time did I defend their atrocities. I called them out just the same. In fact, I would not be surprised if at least one of the executives from the financial institutions faced fraud charges, even if it’s just a show trial.

    I just don’t see how anybody can survive on $40K a year.

    That’s what the work is worth. End of discussion. No one is entitled to what they deem a “living wage”. That is just another liberal talking point.

  • avatar
    lw

    So I’ve read the comments and I’m thinking the point was missed…

    “The plant, which employs about 1,400 people, makes transfer cases to switch power from two- to four-wheel drive vehicles.”

    There are two possibilities and a very simple way to prove which one is correct.

    Option #1 – Management and/or the Union are greedy morons that couldn’t agree how to split the profits.

    Option #2 – There were no profits and no realistic hope of profits so 52% of the Union members and the management were tired of pretending.

    How do you pick the right one? Very simple.. Option #1 is the right choice if there is a severe shortage of transfer cases and another plant reaps the profits.

    No shortage? That would be option #2.

  • avatar
    NickR

    C’mon, do you think with today’s press that any company is going to get away with anything that’s worth unionizing for? Really?

    Absolutely they can get with it…I could write paragraphs about the safety and environmental sins I have seen companies commit and get away with…even when they are reported.

  • avatar
    CommanderFish

    Menno:

    I doubt the LX platform would go to Mexico. They currently make the class 2-5 Rams there, and that’s one of the few market segments that Chrysler is actually doing well in. Not to mention that the LX cars are unibody, not BoF, so retooling there would require… A lot of work.

    There’s an empty minivan plant in St. Louis, and also another Ram plant that I think is pretty close to being shut down. There’s also the Durango/Aspen plant in Newark, DE. If push comes to shove, it would probably end up in one of those plants.

  • avatar
    visualry

    Executive pay for 2007, magna international, according to an plastics industry paper, these two ranked #1 and #2 in the US and Canada for executive in the plastics industry:

    1 Siegfried Wolf
    Co-CEO Magna International Inc.
    Transportation $9,788,805

    2 Donald J. Walkerb
    Co-CEO Magna International Inc.
    Transportation $9,406,36

    and #4 is…
    4 Mark Hogan
    President Magna International Inc.
    Transportation $7,078,500

    and #6 is….
    6 Tommy Skudutis
    COO, exteriors & interiors Magna International Inc.
    Transportation $6,201,840

    and #10 is:
    10 Belinda Stronachf
    Executive Vice Chairman Magna International Inc.
    Transportation $4,331,330.

    The parent company seems not to have a problem keeping the executives amongst the top paid.

    http://www.plasticsnews.com/rankings/executive-pay.html

  • avatar
    50merc

    The NPG plant is in New York, so I’m sure the UAW is the exclusive bargaining agent for the plant’s workers, and all the workers have to be UAW members (well, at least have to pay the dues). The union contract is all or nothing, in several ways.

    If New York became a so-called “right to work” state, here’s what could have happened:
    — approximately 672 workers accepted the $16/hour offered, and kept working until something better comes along.
    — approximately 728 workers quit, to seek jobs at places that would pay their idea of a “fair” wage.
    — approximately 7,280 people who either are now working for significantly less than $16/hour or are unemployed immediately filled out application forms at NPG’s personnel office.

  • avatar
    Justin Berkowitz

    CarShark:

    Those that have adjusted are at the advantage. Those that haven’t will suffer. As it should be.

    People should suffer for not adjusting to changes in the global economy?

    I’m done. We’re clearly too far apart to continue this discussion.

  • avatar
    Landcrusher

    Big money isn’t what buys chinese goods, it’s rational money. If Wal Mart buys from China, and the little money buys from Wal Mart, what’s the difference?

    Interesting comment about using the media, rather than the unions, to expose and stop workplace abuse. Had the media actually been doing their jobs as they profess they do and should, and had not instead made up stuff to report on, they would still be around to protect the little guy for real. They could have likely been a force to reform the unions, but they instead, have been complicit in the unions becoming a drain on business rather than a check to protect the workers and community. No one believes them, or the unions anymore.

    Another funny thing, in case this wasn’t pointed out. It sounds like the half of the workers willing to work for 16 an hour are exactly the number the company really needs. Maybe they actually offered a market wage, and the union is just ruining it for everyone.

  • avatar
    Landcrusher

    Justin,
    Not everyone has all the advantages everyone else does. True, the world is not perfect, and neither is a free economy. The reality is that if you don’t push everyone to do the right things, then a lot more of them fail than would have otherwise.

    We may not be able to make as many poor children into successes as we do middle class kids with a free market, but we can make more of them successes than we will with socialism. Ask the folks in the French ghettos which they think is more fair.

    Let’s stay focused on the things that are really unjust, and use tough love on the disadvantaged to get them up as many rungs on the ladder we can. No one wants the late 19th century system, and that wasn’t really a free market either. People in this country aren’t forced to risk their lives and health to earn enough money for food. That’s just not the way it is. People need to fear being unhappy for economic failure, but not dying due to economic failure. Now all we need to do is have an honest discussion about how much money makes the difference.

  • avatar
    jimmy2x

    CarShark :
    March 19th, 2009 at 8:32 pm

    Not everyone is able to get an education …

    Yet others do. Some work AND go to school. Yeah, I know. What a concept. Expecting more than the minimum from a human being. Still others take the time to learn outside of their terrrrible schools and still excel. What’s the difference? Some actually recognize that they can overcome any adversity with hard work and perseverance and then do so. Stop making excuses.

    As a 20 year USN veteran, I am hardly a bleeding heart liberal, but your arrogance is appalling. Only the truly extraordinary manage to pull themselves out of poverty and institutionalized ignorance. Most people are not extraordinary.

    Those of us who were fortunate enough to be born into families where the value of education and hard work were ingrained, certainly had a leg up on those people who were not so lucky.

    For the rest of the poor bastards, just what do you suggest we do about them? Just write them off and say tough sh**?

    “Are there no prisons? Are there no workhouses?”

  • avatar
    johnny ro

    If anyone wants to read a large number of vile hatred comments go to Rochester Democrat and Chronicle and pick up the blog on this topic. Among posters there, 1/4 to 1/2 of them spew hatred towards the company and non-unioners and the rest of world. Others are mad the other way, apparently people who wanted out could have voted yes, then taken a standing buyout offer and walked away, leaving jobs intact behind. A few are in sadness zone. All recognize a $29 per hour high school educated worker suddenly out on the streets of central NY, with no modern skills, well, is in trouble.

    For a deep incompetence story review NVG senior management prior to Magna acquisition. NVG could have been the pillar of Syracuse, buying Magna, could have made Syracuse the worldwide HQ of a automotive parts business, but thats not how it worked out.

    I’m very sad, wish they kept those jobs in Syracuse even at $16. They would be getting OT and benefits.

    I have relative who is a project manager there, his current post is at risk but each of his customers has a virtual standing offer for him to come to them, mostly in Europe. He is a high performing college educated engineer, like each and every one of his NVG colleagues I ever met. He does not want to have to move though.

  • avatar
    CarShark

    For the rest of the poor bastards, just what do you suggest we do about them? Just write them off and say tough sh**?

    Essentially, yes. Some people will fail. That’s unavoidable and unfortunate. But punishing those that succeed to pay their way won’t help either cause.

  • avatar
    urS4red

    The March 18th Syracuse Post Standard stated that “[t]he company had told the union that it would begin an accelerated closing of the plant if workers rejected the agreement.”

    The Post Standard also stated that “[o]ne of the things that many workers are counting on to soften the blow of losing their jobs is federal Trade Adjustment Assistance aid. The U.S. Department of Labor has found that workers at New Process Gear lost their jobs due to foreign competition. The designation means that they are now eligible to receive funding for training, and up to two years of additional unemployment benefits while they receive training.”

    Unfortunately, I have had to be part of closing 3 factories in upstate New York. (Ethan Allen furniture is mostly made in China now. Happily, I am no longer with the company and was not around for the next 8 plant closings.) Two were union plants and one was a nonunion plant. TAA is not a bad program, but the workers would have been better off taking a pay cut at least until they could find other jobs. Once a plant starts shrinking, because offshore production is more economical, it will inevitably close.

    In many industries, union representation is irrelevant to plant closings. Textiles, apparel, furniture, auto parts, etc. have seen union and nonunion plants close.

    I am not a blue collar worker, but have some understanding of the pain of a factory closing. It is the closest thing to collective death that I have ever seen.

    God Bless Syracuse and upstate New York.

  • avatar
    Justin Berkowitz

    urS4red :
    God Bless Syracuse and upstate New York.

    Absolutely. Union or not, life has fallen apart across NY state north of the City.

  • avatar
    urS4red

    Justin Berkowitz :
    I’m not sure I understand the animosity towards workers in this case.

    Bob Herbert in the New York Times on December 22, 2008 said it better than I could…

    “We need some perspective here. It is becoming an article of faith in the discussions over an auto industry rescue, that unionized autoworkers should be taken off of their high horses and shoved into a deal in which they would not make significantly more in wages and benefits than comparable workers at Japanese carmakers like Toyota.

    That’s fine if it’s agreed to by the autoworkers themselves in the context of an industry bailout at a time when the country is in the midst of a financial emergency. But it stinks to high heaven as something we should be aspiring to.

    The economic downturn, however severe, should not be used as an excuse to send American workers on a race to the bottom, where previously middle-class occupations take a sweatshop’s approach to pay and benefits.

    The U.A.W. has been criticized because its retired workers have had generous pensions and health coverage. There’s a horror! I suppose it would have been better if, after 30 or 35 years on the assembly line, those retirees had been considerate enough to die prematurely in poverty, unable to pay for the medical services that could have saved them.

  • avatar
    mitchim

    @John Horner

    mitchim : “There will always be better jobs out there.”

    On what, pray tell, do you base that rather bold assertion?

    Is this a bold statment? I am not an American but living in Alberta, Canada we have been fairing better. No one can convince me that even in a down turn in the economy that there is “zero” better paying jobs that the one you may currently have. One may have to move, work more hours (which results in more $)its all relitave. It is the people that choose to have a high debt load service that will suffer the most. When you can choose to work or not and “CONTROL YOUR DEBT” there will always be people that will stay a float.

  • avatar
    NickR

    Absolutely. Union or not, life has fallen apart across NY state north of the City.

    That’s a shame. I travelled to this area frequently in my formative years and always found it to be very pleasant, including the people.

    I am of two minds about this whole situation…I am not a fan of the UAW by any stretch but yes $40,000 is not much, and $32,000 is a shitty wage. It would be hard not to want to take a stand. It might backfire though…as it did for these guys.

  • avatar

    I think most people miss the point that it was not the UAW that rejected the deal. It was the actual workers. Any contract must be approved by the workers. Typically any contract put forward to a vote is backed by the union. If it wasn’t backed by the union it wouldn’t have been put to a vote. Typically senior workers who are either close to or can already retire refuse to take cuts while younger junior workers will vote for a pay cut to save their jobs. Where I work (union non automotive) this one guy was complaining to me that he didn’t like that management was having us do another job that we don’t normally do for a few hours every day. I told him thats because you are the senior man. You are the last person that they lay off. He was hired in 1963 as of 2003 he could have retired at 80% pay. He gets no additional retirement for working past 40 years. He refuses to retire. Thats the problem.

  • avatar
    psarhjinian

    psarhjinian, please don’t take this the wrong way, but can I ask you something? Where are you from and what are your politics. I’m only asking because what you write sounds just like Karl Marx.

    I’m a second-generation Canadian. And yes, by American standards I’m very, very left of centre. And believe me, you’re actually getting the more moderate version vis a vis myself about fifteen years ago. I’m not “really” a Marxist, by objective standards. I just play one on TV.

    Everyone becomes more of a Nazi as they grow up. I just started a little bit more to the left of most people.

  • avatar
    King Bojack

    It’s shocking how people are almost applauding job loss in America. Thousands of people out of work! It’s awesome right! I can’t wait until America is full of failed dreams and hungry children!

  • avatar
    geeber

    Justin Berkowitz: In fact, capitalism doesn’t work without any regulation — you wind up with monopolies and warlords.

    Monopolies and warloads can only maintain their position with government backing, in which case, we don’t have pure capitalism anymore.

    Look at GM – for years, the complaint was that it was effectively monopolizing the U.S. auto market. And, to some extent, this was true, because Ford, Chrysler and AMC followed GM’s lead on pricing, style, features and content.

    But eventually new competitors entered the U.S. market, exploited GM’s arrogance, and undermined the company.

    Now GM’s apologists wail that the government didn’t do enough to “protect” GM (i.e, forbid Americans from buying Toyotas and Hondas, or at least slap tariffs on them to make them uncompetitive). And they want goverment aid to keep GM in business.

    That doesn’t sound like pure free-market capitalism to me…

    jimmy2x: Those of us who were fortunate enough to be born into families where the value of education and hard work were ingrained, certainly had a leg up on those people who were not so lucky.

    For the rest of the poor bastards, just what do you suggest we do about them? Just write them off and say tough sh**?

    Both my wife and I have worked with the truly poor (i.e., people who have been on welfare for years, or have come from families that relied on welfare). The bottom line is that you can’t help those who aren’t interested in helping themselves. You can help them SURVIVE, but that’s about it.

    Being poor isn’t just about income (or lack of it). It involves attitudes and mindsets about use of money, planning for the future, the importance of education and willingness to delay gratification.

    Government aid won’t change these attitudes.

  • avatar
    Morea

    Applying geeber’s quote to GM with some editing:

    Being poor bankrupt isn’t just about income (or lack of it). It involves attitudes and mindsets about use of money, planning for the future, the importance of education product development and willingness to delay gratification short term sales at the expense of long term strategy.

  • avatar
    geeber

    Morea,

    You’ll get no argument from me on that reworked paragraph.

  • avatar
    psarhjinian

    Monopolies and warloads can only maintain their position with government backing, in which case, we don’t have pure capitalism anymore.

    Yes, because the warlords and monopolies are the government. “Backing” is a rather disingenuous term.

    Free-marketers seem to miss this point: if you concentrate wealth, you concentrate power. Once you start concentrating power, your free market does not exist. The more you allow wealth and power to concentrate, the less free your market becomes.

    That’s the way society works, and why we have regulation and law to stop, or at least slow, that concentration.

  • avatar
    CarShark

    So, psar, who’s to say when a company’s too powerful or “too big to fail”? How could you possibly tell?

    Competition is the best way to break up concentration of power. You can’t prevent that indefinitely without breaking someone’s laws.

  • avatar
    Landcrusher

    Sherman,
    Did the people miss the point, or did they just not make an unneccessary distinction? In this case, the workers ARE the UAW. Sometimes we seperate the leadership and workers and then refer to the leadership as the UAW, but that doesn’t, in my mind, excuse the workers for what happens with their support.

    psar,
    Many of us capitalists do not see monopolies as free markets. My favorite example is life saving medical treatments. What’s the fair market value? We can never know, because if one side in a transaction has undue pressure to take the deal, the market will not produce the necessary price information which is key to capitalism working.

    IOW, Justin is basically correct, you can’t have a free market without some regulation and enforcement because it won’t be free for long. That doesn’t mean that in many cases it’s not the fault of government when a market breaking event occurs. Very often, the government creates the conditions for monopolies and oligopolies with bad regulation, or poor enforcement. Even when bribery occurs, it’s government’s fault.

    Saying that big money IS the government does not make big money the problem. There will always be crooks, the key is to not allow government to become their tool. When you give government too much power, that’s when the crooks all start using it for their ends. Look to all the problems in your national capitol for more info.

    :)

  • avatar
    Lokki

    …if you concentrate wealth, you concentrate power. Once you start concentrating power, your free market does not exist.

    Sounds like what happens when the government starts over-regulating.

    All the power and wealth is concentrated in the government, and it doles it out as it sees fit.

    The federal government has way too much power over the states right now…

  • avatar
    geeber

    psharjinian: Yes, because the warlords and monopolies are the government. “Backing” is a rather disingenuous term.

    GM was never “the government,” and neither was Standard Oil. They ruled their respective markets, but that is not the same thing as saying that they were “the government.” And neither are plenty of warlords.

    psharjinian: Free-marketers seem to miss this point: if you concentrate wealth, you concentrate power. Once you start concentrating power, your free market does not exist. The more you allow wealth and power to concentrate, the less free your market becomes.

    No, power is usually concentrated BECAUSE of govermment action (i.e, government erecting barriers to new companies that wish to enter the market, or enacting regulations that favor incumbent companies).

    The more you allow the market to remain truly free, the LESS likely you are to have a concentration of power with one entity. Eventually a competitor will figure out how to crack the market by building a better mousetrap.

  • avatar
    Justin Berkowitz

    Lokki :
    The federal government has way too much power over the states right now…
    This really seems to be a distinction without a difference lately. I’m not saying the Fed is better, I’m just saying it doesn’t really matter. Plenty of horrible laws come out of state governments, which if anything are more easily corrupted than the federal government.

    Case in point — a lot of people on TTAC were ticked off when Obama’s administration said auto emissions were up to the states to regulate (instead of the Federal government). Here’s the post.

  • avatar
    Justin Berkowitz

    geeber:

    The more you allow the market to remain truly free, the LESS likely you are to have a concentration of power with one entity. Eventually a competitor will figure out how to crack the market by building a better mousetrap.

    Do you believe in intellectual property rights? Patents, for example?

    The real problem with your claim in any case is the word “eventually.” For example, let’s get rid of the FDA. The market will regulate itself because people won’t buy food and drugs from companies that sell poison. They’ll know which companies sell poison because some people will die first. Unless the company controls major media outlets, too?

    Market adjustment is violent and in liberatarian theory, tends to require some people to get absolutely creamed.

    Again, nobody here is arguing for some kind of fascist-socialist totalitarian government. But I think to argue for anarchical capitalism is equally flawed.

  • avatar
    geeber

    Justin Berkowitz: Do you believe in intellectual property rights? Patents, for example?

    The point was that it is GOVERNMENT action that tends to support monopolies or concentrations of power. Since patents are a creation of government, and help concentrate power (the government is basically ensuring that said company or individual retains complete rights to an invention), that example tends to prove our point.

    Whether patents are beneficial or harmful to society at large is an entirely different debate.

    Justin Berkowitz: The real problem with your claim in any case is the word “eventually.” For example, let’s get rid of the FDA. The market will regulate itself because people won’t buy food and drugs from companies that sell poison. They’ll know which companies sell poison because some people will die first. Unless the company controls major media outlets, too?

    The discussion is over whether a company can gain monopoly power in its particular segment, not product safety. These are two entirely different discussions. It doesn’t automatically follow that a monopoly will make an unsafe product. It is more than likely, however, that a monopoly will have less incentive to adopt improvements or innovations, but that tends to create an opening for potential competitors over the long haul.

    Control over major media is less of a problem today than ever before. Anyone with a computer can set up a blog and begin writing…information is shared faster than ever before, WITHOUT being filtered by a major network or newspaper.

    Today, there is more exposure to different viewpoints than ever before. As someone in his 40s, I can’t remember a time when the “mainstream media” had LESS influence over stories and topics than they do today.

    Justin Berkowitz: Market adjustment is violent and in liberatarian theory, tends to require some people to get absolutely creamed.

    People will can get creamed without allowing libertarian theory to run wild.

    If the federal government bans the importation of Toyotas, Hondas, Nissans and Hyundais, and shuts down their American factories to protect GM, Ford and Chrysler, their workers, executives and dealers (not to mention the sales reps and mechanics who work at the dealers) will get creamed.

    But that is hardly libertarianism or the free market at work.

  • avatar
    Justin Berkowitz

    geeber :
    The point was that it is GOVERNMENT action that tends to support monopolies or concentrations of power. Since patents are a creation of government, and help concentrate power (the government is basically ensuring that said company or individual retains complete rights to an invention), that example tends to prove our point.

    That’s a circular argument. Government creates monopolies. Patents are created by the government. Therefore, the government creates monopolies.

    The discussion is over whether a company can gain monopoly power in its particular segment, not product safety. These are two entirely different discussions. It doesn’t automatically follow that a monopoly will make an unsafe product. It is more than likely, however, that a monopoly will have less incentive to adopt improvements or innovations, but that tends to create an opening for potential competitors over the long haul.

    My example about the FDA was offered to demonstrate the problem with the types of transitions pointed to as a good thing in libertarian economic philosophy. The problem with “eventually” changes take place or as you say “over the long haul.” In the meantime, people get screwed. That was my point in mentioning product safety.

    Re: Monopolies, though — Sure government can create some conditions to make monopolies more likely. They also don’t have to. But it seems to me that under libertarian circumstances, we don’t get to vote executives out of their offices. Instead, we wait for what you call “the long haul” for someone to come along with a better product — and be able to actually offer it in the market and compete. What about in the meantime?

    Control over major media is less of a problem today than ever before. Anyone with a computer can set up a blog and begin writing…information is shared faster than ever before, WITHOUT being filtered by a major network or newspaper.

    I think you really shoot yourself in the foot with this one. In a libertarian free market society, there doesn’t have to be any net neutrality. That’s a government creation and enforcement.

    So can’t the ISPs just block websites they don’t like? Maybe the ISP contracts with Firms to block any websites that criticize those Firms. Eventually maybe a non-blocking ISP starts up. (There’s that word ‘eventually’ again). Or maybe they just claim not to block websites, and people have no idea for a while what they’re missing.

    You can call your friend on the phone to tell them, right? Oh, sorry, phone calls are tapped by the phone company. Anyone that criticizes their client Firms gets their phone service terminated.

    Abusive companies in a libertarian economy can do just about anything as coercive as the government can to the economy. As you say, eventually things may change. What about in the meantime? Everybody suffers the consequences.

    As I’ve said before, I’m not advocating for some kind of totalitarian society. Nor am I saying that governments as institutions are infallible (in fact, they’re wrong a lot of the time).

    All I’m saying is that unbridled ‘markets’ have the potential to bring an equal number of problems as an unbridled government. I can’t imagine why anyone would want either.

  • avatar
    cnyguy

    @50merc:

    The NPG plant is in New York, so I’m sure the UAW is the exclusive bargaining agent for the plant’s workers, and all the workers have to be UAW members (well, at least have to pay the dues). The union contract is all or nothing, in several ways.

    If New York became a so-called “right to work” state, here’s what could have happened:

    New York is a right-to-work state, however collective bargaining still trumps all.

    In the early 1990’s I worked at the Magna plant as an outside contractor. The union control is incredible- I waited an hour for an union electrician to reset a circuit breaker. I was going to reset it myself and was told I would be escorted to the gate if I did. So we all sat around and drank coffee waiting…

  • avatar
    lw

    Wow the closing of one plant evokes a flurry of comments ranging from Union work rules to outright class warfare.

    Guys.. Chill out…

    They are all either greedy morons (UAW and Mgmt) or we have enough transfer cases to last for a long long time and they had no hope of ever turning a profit.

    I just checked… Plenty of transfer cases for sale… Many places even offer free shipping…

    Don’t fall for the class warfare BS…

    Life is what happens when your making plans. – John Lennon

  • avatar
    geeber

    Justin Berkowitz: That’s a circular argument. Government creates monopolies. Patents are created by the government. Therefore, the government creates monopolies.

    No, if patents are granted by government, then that is one way that governments can create a monopoly. As I said, by bringing up patents, you proved our point.

    Justin Berkowitz: My example about the FDA was offered to demonstrate the problem with the types of transitions pointed to as a good thing in libertarian economic philosophy. The problem with “eventually” changes take place or as you say “over the long haul.” In the meantime, people get screwed. That was my point in mentioning product safety.

    And the proof that government, after sanctioning a monopoly, will act any faster if problems occur, is found where…?

    If anything, government is now invested in the monopoly’s continued success – the mantra will be we need the monopoly’s jobs, tax dollars, etc. – so it has no more incentive to uncover problems than the company or organization itself does.

    Justin Berkowitz: Re: Monopolies, though — Sure government can create some conditions to make monopolies more likely. They also don’t have to.

    And neither does a true free market. I see no proof that a truly free market will ultimately result in a monopoly. That was a theory tossed out by some posters.

    Justin Berkowitz: But it seems to me that under libertarian circumstances, we don’t get to vote executives out of their offices.

    We don’t have to. If other competitors are allowed to enter the market – which only government can prevent – we will buy their products instead. That is called “voting with purchasing dollars.” This is how the Big Three’s monopoly came to an end…

    Justin Berkowitz: Instead, we wait for what you call “the long haul” for someone to come along with a better product — and be able to actually offer it in the market and compete. What about in the meantime?

    And, as I said before, proof that the government will faster act to end a monopoly that it has sanctioned is found where…?

    Justin Berkowitz: I think you really shoot yourself in the foot with this one. In a libertarian free market society, there doesn’t have to be any net neutrality. That’s a government creation and enforcement.

    I never said that the Internet is neutral. (Media neutrality, by the way, is a myth.) And the idea that government will enforce effectively neutrality, or that it can be truly impartial, is naive, at best.

    On the internet, we can get information from SEVERAL sources and judge it for ourselves. And since most weblog masters are upfront about their biases – unlike the mainstream media – we can judge for ourselves their “angle” or slant in reporting news, or commenting on other news stories.

    Justin Berkowitz: So can’t the ISPs just block websites they don’t like? Maybe the ISP contracts with Firms to block any websites that criticize those Firms. Eventually maybe a non-blocking ISP starts up. (There’s that word ‘eventually’ again). Or maybe they just claim not to block websites, and people have no idea for a while what they’re missing.

    And it’s extremely difficult to do this, because of the fluidity of the web and the difficulty of any particular company gaining that much power. Although I could see GOVERNMENT doing this.

    Justin Berkowitz: You can call your friend on the phone to tell them, right? Oh, sorry, phone calls are tapped by the phone company. Anyone that criticizes their client Firms gets their phone service terminated.

    You do realize that traditional landline phone service is provided by a government-sanctioned monopoly in every state in the union…? That’s hardly an example of the free market run amok.

    And no cellular phone service provider has reached monopoly status, nor is it likely to.

    Justin Berkowitz: Abusive companies in a libertarian economy can do just about anything as coercive as the government can to the economy. As you say, eventually things may change. What about in the meantime? Everybody suffers the consequences.

    Abusive companies can’t have you thrown in jail, or take your tax returns, or fine you. Unless, of course, they have government acting on their behalf. Which further proves my point.

  • avatar
    joeaverage

    Justin Berkowitz : not everyone is able to get an education or get what you call “marketable skills.” Some people are born into poor communities with bad schools. Others don’t have the ability to go to college because they need to get a job immediately to support their family. There was a time that being a skilled laborer was a marketable skill in the US.

    Well I’d concede that there are some people who are born with less smarts than typical college students and so their life options are very limited. Of course I have seen plenty of examples of people who sit on their *** claiming something is wrong with them. HOWEVER here are far too many of these people making excuses for the way their lives have turned out. Too many (any number is too many) expecting the world to provide for them.

    This is why I think we are in trouble here in America – less value (?) put on careful choices, personal responsibility and making the most of a person’s education opportunities.

    Too many folks making bad choices over and over again. Opportunity costs… Costs of their choices (cars, clothes, entertainment, etc) eliminating any budget they might otherwise reserve for school or the collatoral costs of going to school.

    ANYBODY in this country can go to school if they want to. All it takes is careful (not hard me thinks) choices. Don’t run with the wrong crew. Don’t get arrested. Don’t get your girlfriend pregnant, don’t waste your cash on dumb stuff, etc. Then go join the military. Work hard. Opt into the GI Bill or do so well that the military will send you through OCS.

    That is a version of how I did it. High school grad. Joined the USN, gave them six years, stayed out of trouble, saved some of my $15K per year pay, got out with some tools and a $3K car and worked ~$8 an hour jobs (sometimes working AND mowing yards AND going to class) while going to college, collected my GI Bill, and eventually graduated from college with a good engineering job connected to the auto industry. Left that for a better job to get away from the auto industry before it failed (thanks for the warning TTAC) and I was out of a job. Several former coworkers from that company got laid off recently so I dodged a bullet…

    Also – pick a good wife that is reliable. Mine has worked just as hard as I have to provide an income. Divorces are expensive I hear.

    People have a weird set of priorities these days. We’re all paying for it now (literally). Maybe people have ALWAYS had weird priorities and we are just now more connected than ever before. Dunno ‘but that part.

    Plenty of other people here making very valid points.

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