No. of Recommendations: 69
Many people seem to believe that unions are the downfall of American industry, in particular the car industry, and if they could just be gotten rid of, it would flourish again. A look at the situation in Germany suggests otherwise.

The German metal working sector is heavily unionized, and wages tend to be obscenely high.
A low- to mid-skilled worker working for the Daimler AG will earn as much or more per hour than a great many academics working outside unionized industries.
Yet look at the German car companies, how successful they are. There is in fact just one German car company that is not doing well, and that is Opel (a.k.a Vauxhall).
So what's different about Opel? Opel is part of GM, and had been mismanaged since the 1980s.
Opel in fact is subject to much less onerous collective bargaining agreements than VW, BMW and Daimler, but that hasn't kept its market share from dropping by half over the last 30 years.

The problem of the US car companies is not the unions, the problem is that for some reason anglo-saxon countries (the UK, too) seem to simply be worse at running companies involved in heavy manufacturing than the rest of the world.

My personal theory on why that is focuses on two factors:

1. The obsession with short-term "shareholder value" at the expense of long-term results. There's always a lot of things a company can do to make the present look pretty while hiding future costs. And US companies seem to do that a lot more than German, Japanese, Korean companies.

2. The cancerous financial sectors in the UK and in the US are draining the cream of human resources from the productive sectors. Every financial engineer is one less REAL engineer who could be doing something that actually benefits the economy instead of just shuffling paper around (or blowing up the economy).
Print the post  


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.