An editorial and a column published in The Washington Times included the false claim that U.S. autoworkers earn an average of $70 an hour or more in wages and benefits. In fact, according to General Motors, the figure is based not only on current workers' hourly wages and benefits, such as health care and retirement, but also retirement and health-care benefits that U.S. automakers are providing for current retirees.
In a December 3 column published in The Washington Times, syndicated columnist Jack Kelly falsely claimed that "GM, Ford and Chrysler pay their employees an average of $73 an hour." Similarly, in a December 1 editorial, the Times wrote: "As Washington Times reporter David M. Dickson recently reported [in a November 24 article]: 'Before contract negotiations between the UAW [United Auto Workers] and General Motors commenced last year, UAW workers earned between $70 and $75 per hour in wages and benefits.' " In fact, according to General Motors, which reportedly puts its current hourly labor costs at $69, this figure is based not only on the cost to the auto companies of current workers' hourly wages and benefits, such as health care and retirement, but also of retirement and health-care benefits that U.S. automakers are providing for current retirees, as Media Matters for America has noted.
As Media Matters documented, on November 28, the Times published an op-ed by Heritage Foundation president Ed Feulner in which Feulner falsely claimed that "UAW employees earn three times as much as an average blue collar worker makes - $75 per hour on average in wages and benefits." Numerous other media figures have also advanced the falsehood that autoworkers earn $70 or more per hour in wages and benefits, some using it to blame autoworkers for the domestic auto industry's financial straits.
From Kelly's December 3 column:
Soaring gasoline prices in the summer and the stock market crash in the fall have made their illness acute, but the "Big Three" have been losing money for years. The chief reason is their higher labor costs make their cars about $2,000 more expensive than comparable foreign models.
General Motors (19 percent) and Toyota (18 percent) have about the same share of the U.S. car market. But Toyota has enormous efficiency advantages. GM has eight product lines, Toyota three. GM has 7,000 dealers, Toyota, 1,500. Toyota pays its workers in the United States an average of $48 an hour. GM, Ford and Chrysler pay their employees an average of $73 an hour. For GM to have a chance to become competitive, it must cut its product line at least 50 percent, its dealer network at least 50 percent, and its labor costs at least 30 percent.
But any bailout that's acceptable to the United Auto Workers - and thus to the Democrats in Congress - will be designed to avoid the pain such cutbacks would inflict.
The current environment for auto sales is toxic, and is likely to remain so for at least a year. This means ever more and ever larger subsidies will be required to keep the doors of the Big Three open. Eventually taxpayers will run out of patience, or milk. To avoid discomfort now, we court catastrophe a short distance down the road.
If the Big Three sought Chapter 11 bankruptcy protection now, one strong company could emerge from the wreckage. Surely the United States would be better served by having one healthy car company instead of three terminally ill ones. But good sense, alas, rarely makes political sense.
From the Washington Times' December 1 editorial:
The American auto industry's "Big Three"(Chrysler, General Motors and Ford) have asked Congress to help their failing companies with a $25 billion cash injection. The loan - unlike the other $25 billion offered, which they did not use - would be made on an emergency basis to help keep operations open. Essentially, automakers were being asked to revamp facilities on their own dime and then be paid back by the Department of Energy. Much of the Big Three's financial problems stem from the irresponsible contracts its members have signed with the United Auto Workers (UAW).
As Washington Times reporter David M. Dickson recently reported: "Before contract negotiations between the UAW and General Motors commenced last year, UAW workers earned between $70 and $75 per hour in wages and benefits. International firms paid their nonunion workers about $45 per hour in wages and benefits. The hourly cost differential was between $25 and $30."
That disparity will be reduced over time as the new contract is implemented- [with wages leveling off to] an average of $40-45 an hour at GM. Quite clearly, union autoworkers have enjoyed salaries that are far beyond what their companies can afford, especially as sales have slowed by 10 percent during the economic downturn this year. It is important to note that foreign automakers have fared better by placing their plants in right-to-work states, as opposed to states with compulsory unionism like Michigan.