One hears a lot about cause and cure for economic ailments these days. My take on this is based on a Milton Friedmanish view of the effect of the (broader) money supply
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At least with the auto industry, it is a problem of their own making - namely, their inability to properly negotiate with the labor unions. They spend so much on labor costs that they simply cannot sell the cars to break even -- case in point, Ford loses something like $1500 on most of the cars that it sells.
In my experience, UAW is absolutely absurd with its demands - and they've got a stranglehold grasp on all unionized supply tiers for the American auto industry. For instance, when I worked at the wheel factory, UAW struck because they didn't get a 10% wage increase (the white collars got a 3% wage increase, barely over inflation) and because the company wanted to put a stop to the ability of workers to, as long as they call in, not come to work in excess of 100 days per year. As long as they called in, the previous contract allowed them to miss up to 175 days per year -- keeping in mind, there are only 250 work days per year (since the union jobs were all 40 hrs/wk in 8 hr shifts, with 10 guaranteed holidays and 1-5 weeks off,
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In my experience, UAW is absolutely absurd with its demands - and they've got a stranglehold grasp on all unionized supply tiers for the American auto industry. For instance, when I worked at the wheel factory, UAW struck because they didn't get a 10% wage increase (the white collars got a 3% wage increase, barely over inflation) and because the company wanted to put a stop to the ability of workers to, as long as they call in, not come to work in excess of 100 days per year. As long as they called in, the previous contract allowed them to miss up to 175 days per year -- keeping in mind, there are only 250 work days per year (since the union jobs were all 40 hrs/wk in 8 hr shifts, with 10 guaranteed holidays and 1-5 weeks off, ( ... )
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