I Wish I Could Get Paid $65/hr to Cut the Grass

That's apparently what Delphi pays it's grass cutters, once benefits and such are factored into the equation. No wonder Delphi filed for bankruptcy, and no wonder General Motors is having to make such severe cuts in an attempt to avoid it. I'd like to think of something thoughtful to say in reaction to this information, but I'm just too flabbergasted at the notion that a forklift driver can make $103,000 a year at GM. How absurd. No forklift driver is worth that much, at least not for his forklift-driving abilities.

There are two things severely hampering American automotive companies, and I suspect the first is caused in part by the second. First of all, American car companies have not been able to adapt their product to be competetive in current market conditions. Not that they haven't tried, mind you. They've just failed miserably. I mean, who can take a look at the Ford Focus and say "Hey, that looks like a great car." The same goes for GM's remake of the El Camino. It's a piece of junk. If I were to buy a car right now, I'd just as soon buy a Toyota or a Honda. They're better cars for better money, and this brings me to my second reason American car companies are in such dire shape.

American car companies spend way too much on labor. Personally, I can't complain about this too much. My grandpa worked for GM and got a great, great pension out of it. My grandma still gets survivor benefits from it and has to pay very little for her prescriptions. However, the fact remains, American car companies pay their workers too much. Certainly people in any line of work should be fairly compensated for their work, and companies that require a significant investment of time from their workers should try to pay them enough to ensure their financial security (assuming reasonable financial stewardship on the part of the workers), but you don't have to make six figures to live comfortably. Furthermore, the more a business pays its workers, the more it has to charge for its product to be successful. This is all well and good if the price set by the market is high enough to cover the costs to the business to produce its product, but if the market price falls below this level, the success of the business is undermined. If the price falls far enough relative to the cost of production, the very existence of the business is threatened. That's what has happened to Delphi, is happening to GM, and could well happen to other American car companies.

In determining wage and benefit levels, a balance must be struck between just compensation for workers and the ability of a business to function in the market. Instead of attempting to strike this balance, the UAW has grabbed for more and more and may have fatally undermined the American automobile industry in the process.