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December 30th, 2008
01:15 PM ET

Why Detroit has an especially bad union problem

Flags fly outside of the General Motors Corporation in Detroit, Michigan.

Flags fly outside of the General Motors Corporation in Detroit, Michigan.

Logan Robinson
The Wall Street Journal

It's easy to blame the problems of the Detroit Three on their CEOs. Yet the three leaders come from different business backgrounds, with only Rick Wagoner at GM an industry man. Alan Mulally was a star at Boeing and has only two years at Ford. Robert Nardelli comes from General Electric by way of retailing (Home Depot), and has only about a year at Chrysler.

How is it that successful executives become so unsuccessful as soon as they move to Detroit? Also, how can we explain that whenever GM, Ford and Chrysler leave our shores, they compete well in foreign markets as varied as Europe, South America and China? What makes them viable competitors as soon as they cross the border?

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Filed under: auto bailout • Bailout Turmoil • Economy
soundoff (9 Responses)
  1. JC-Los Angeles

    The horrid auto industry executives would be worthless, over paid hacks in any state that they resided.

    These hacks, like endless leaders, executives and politicians, are all mainlined into positions of power through connections, birth, marriage or association.

    Some have had the benefit of receiving accolades at previous places of employment which has more to do with timing than vision.

    When America decides to embrace leaders that have experience, skills, vision and leadership rather than connections, only then will our nation rebound.

    December 30, 2008 at 6:12 pm |
  2. GF, Los Angeles

    Throw the Teacher's Unions into this whole mess as well. More than 50% of our taxes fund schools in CA yet schools are still in disrepair, students still do not have or use outdated books and 50% of high school students drop out anyway! Where is the money going?! Why does each election always have a proposition to give schools even more money i.e. more taxes? All of these unions are thugs!

    December 30, 2008 at 6:04 pm |
  3. A.M. Deist

    It is amazing that everyone seems intent on thinking that the auto industry is the only problem we have in America. Someone ought to wake Americans up to the fact that ninety percent of every company on the three stock exchanges are operating with deficit financing. Why do you think there was such a great concern about banks being able to give loans so companies could make payroll. If our country requires every person and every company to be spending someone else's money to keep from going under, we have reached the point where there is no solution but for capitalism to fail.

    December 30, 2008 at 5:50 pm |
  4. Annie Kate

    The non-unionized auto workers at other plants seem to be making a good living without the union – just 3 or 4 dollars less an hour than the union workers get. In the big picture taking a salary cut of 3 to 4 dollars an hour is a lot more productive than standing fast and losing it all. The union needs to step up and do its part to save the auto makers too and they need to realize that some changes must be done for the good of all and not on a quid pro quo basis. If they don't there may not be anything left for them to unionize.

    December 30, 2008 at 5:08 pm |
  5. earle,florida

    I wish someone would investigate the past government administrations"Transportation Secretary's" for their oversight of this industry! I'd also like to put the "BOD's" under (both present,and,past) the magnifying glass! They blame the unions,why? The governments intervention with clean air laws,mileage standards, saftey standards,etc. and the list goes on, could in themselves stall, or bankrupt any viable start-up company,never mind the goliaths! It seems to me that the latter-day auto-industry has been designed for failure? You know, if you correlate gas prices with economic cycles, there really is no one to blame except congress? My guess would be to pin the tail on the "Donkey",...

    December 30, 2008 at 4:53 pm |
  6. Dulcie - Denver

    Yes, yes, YES! Absolutely.

    No one seems to remember that the Steelworker's Union had a great deal to do with the demise of the Steel industry in what's now known as the Rust Belt. Unions do serve a purpose and can be useful, but when it becomes more profitable to import something as cumbersome as steel rather than to produce it locally, there's a serious problem. The same is true with the auto industry. And tariff's aren't the answer. Certainly not in today's global economy.

    Does anyone remember the movie, 'Gung Ho' with Michael Keeton? It may have been a bit cheesy, but it had a good lesson to it. Manufacturers have to be competitive in all respects.

    December 30, 2008 at 4:04 pm |
  7. xtina, chicago IL

    In what industries can you get automatic pay raises regardless of merit? Both the auto industry and the teachers' unions are more concerned about benefits for their members than quality work.

    December 30, 2008 at 4:02 pm |
  8. Mike, Syracuse NY

    Amen Logan. The UAW is a thug who's time is past. Only by allowing the Big Three to go into bankruptcy is there a chance to break the death grip the unions have on them. A bad economy is the perfect time too. The unions can strike, and every job could be filled by people willing to work within a week.

    December 30, 2008 at 3:12 pm |
  9. Elise

    Thank you! Thank you Thank you! I have been screaming this for years! The Unions may have been a good idea at one time. But it this is why the great city of Detroit is failing, and why Michigan has been in recession for years. I remember when the factories in Flint shut down... It was an awful time... and it just keeps getting worse.

    December 30, 2008 at 2:47 pm |