Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 28
"In the case of GM, they need to do a couple of things to hold the ship together. They need to adjust their labor costs (read: break the unions). This is not going to be easy, if not impossible. It seems to me, that the unions have the choice of taking drastically less compensation or shutting down the company. I think that the unions tend to choose the latter. They don't care about anything other than their jobs. Hey, I don't care about anything other than MY job so I'm not one to be critical." - Johnny1Cash

It seems to me that the unions have outlived their usefulness and GM, Ford and Delphi prove it. Unions were sold to the workers when working conditions were poor, wages were too low and when there was money in profits available to pay for another level of bureaucracy. And, of course, that was all that a union was...another set of mouths to feed between the top and the bottom of the business. In other words, business found a way to afford the unions because they were forced to do it.

I believe that unions no longer can be afforded. Why do we need a group that continually fights for less work and more money? Or, they demand better benefits while the workers can do no more productive work. Then when the business wants to use robots to cut labor costs, the union calls for a strike to defeat the robots. It is the antithesis of Capitalism and always has been. It just took about 80 years to prove it, but that shows the strength of Capitalism to survive hardships.

The Unions were forced onto business and business still survived. They found ways to compensate, mainly by raising prices to the consumer. Who else was going to pay for the increased cost of another level of bureaucracy plus increased wages and benefits? The only resort was to pass the cost on to the customers. That was before we had competition from Japan, Germany, Korea and now China. Our high cost of labor plays right into their hands.

The unions complain about exporting jobs, but they are the major cause of the job losses. If America wants the jobs, we have to find a way to be more competitive. Meanwhile, the Capitalists still know how to make money...they buy at a price that allows them to make a profit.

It's really funny if we think about it. The unions looked at the huge corporate profits in the early days of the industrial revolution and demanded more of that profit for their workers. They were so successful at diverting profits to the worker that the workers are now losing their jobs.

So, which is more important? The job or the profits? I hope we have found the answer. Capitalism cannot exist without profits and jobs exist because of capitalism. Let's not forget what made us the most powerful country on Earth.

Philip Morris had the same problem in 1995 that caused the unions to exist in the first place. Philip Morris makes too much profit. That attracts all sorts of negative influences. Look at the horde of lawyers who flocked around our company. You can bet your last dime that they would not be here if the profits were not so good.

Our profits make the game possible. What is interesting to me is the politics of the unions and the trial lawyers. Both groups are strong Democrats and they use their new-found profits to fund the Democratic Party. They owe their jobs to their ability to get business to pay them for non-productive work. I do not see how America can afford to let them continue doing this and survive. Their profit is our loss. But, our profit is what is good for America...not theirs. At least, that is what I think.

To invest in Ford, GM or Delphi, you have to believe that the unions can be ousted. I have never understood why anyone would want to join a union, but there are lots of people who apparently think their life is better because of their union. But, the question is the same, "Which is more important, the jobs or the profits?" We cannot have both any longer in the automobile industry.

Back in 2000, I invested heavily in Philip Morris because I believed that the trial lawyers were wrong and that sanity would rule the day. Smokers smoke because they like it...not because any cigarette maker forced them to smoke or deceived them into smoking. The trial lawyer's story made no sense to me. But, I had faith in the legal system to sort this out in Philip Morris' favor. Thank goodness I was correct.

I am not as sure about the auto makers. This seems like a much tougher battle for them. The unions are embedded in the company and they will be hard to get out. They are like a cancer that has grown over time. The operation may be coming too late. The patient may already be too far gone.
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.