These are tough times for labor, as indicated by the bailout deal being offered to US automakers by the government which requires major concessions from the unions including a reduction in their hourly pay so that their wages are the same as the wages for Nissan, Toyota and Honda. This post by Kevin Drum has a chart showing that the difference in wages is about $3 an hour — $29 for Ford, and $26 for the Japanese makers in the US. The bigger concessions will need to come from wage-related costs, benefits, and legacy costs.
My husband’s family is from Michigan — many of them worked for the GM plants. It’s hard not to feel afraid for the Michigan people and their economy when Chrysler announced that it will cease paying union workers for four weeks in January, leaving people to rely on unemployment payments and some supplementary payments from Chrysler. I don’t know about you, but January is when the big credit card bill comes due from the holidays, and even with belt-tightening, it would be hard to take a pay loss at that time. It means more debt for ordinary people.
On the brighter side, at least they are not announcing that they are closing down for good. It is disappointing, though, to hear that the new factory for building the Pontiac Volt is going to cease development – this was to be their entree into the electric car market.
The most shocking stat I’ve heard in a while: Chrysler sales dropped by 47% last month.