Tuesday, November 18, 2008


I'm purposefully not catching up on what happened today in Congress with the Big 3 and their bailout until I had a chance to write about labor unions and the auto industry...

It has become a talking point of some, especially on the right, that the American auto companies have failed because of their labor unions. The Big 3, based in the midwest, are unionized, while foreign companies that manufacture in the south are not, so the thinking goes that the unions must be the cause of the American auto industry failure. Well, correlation and causation aren't the same. On a pithy note, remember that Lehman Brothers and many other financial industries managed to nosedive without unions, so apparently companies can fail for reasons other than having unionized workers.

Rather, I'd argue that American car companies failed because they made crappy cars. They were light years behind the Japanese in terms of fuel-efficient, small, city-friendly vehicles. Surprise surprise, those factors become more important and giant gas guzzlers don't sell as well. To blame unions for those poor management decisions is ridiculous.