Posted by
FeargalX on Saturday, November 29, 2008 11:04:22 PM
Many Republicans (and so-called conservatives) point out that the reason that U.S. auto companies are going under is due to: (1) unions and (2) the high pay of the American worker.
The labor packages for American workers (the new hirees) have radically changed over the past 5 years. Today, new workers are not eligible for a defined benefit pension, and they only earn about $30,000 per year (in some states that amounts to less than double minimum wage.
Most Republicans are totally ignorant as to what "other companies" are doing and paying their workers.
In the past few years, the U.S. dollar has fallen against the Euro and the Pound Sterling. At the beginning of the Euro, the dollar was worth more than the Euro. The Euro has nearly doubled in value against the dollar during the past 6 years or so.
Thus, in absolute dollars wages are higher in European countries than they are in the U.S. Based upon this fact, European auto manufactuers must be in much worse condition than American companies, right? Nope.
Peugeot Citroen (of France) is not losing money. In fact, in 2007 Peugeot earned in net profit over $1,000,000,000.
Renault S.A. (of France) is also not losing money. In fact, their earnings in 2007 were in excess of $3,000,000,000. Renault also effectively controls the Japanese auto company Nissan (Renault owns 44% of Nissan).
Since many Republicans emotionally hate the French (remember "freedom fries") so this might not be a good example. So, let's take a look at Volkswagen. High wages once again -- higher than American workers (those in Germany) -- Volkswagen had a net earnings in 2007 in excess of $2,000,000,000.
Daimler AG (makers of Mercedes) is also had a profit in 2007. BMW's profit in 2007 was more than $4,000,000,000.
Even FIAT had an net income in 2007.
Here is what has crushed the companies (in large part). Our health care costs coupled with the concept that business rather than government should assume the costs of health care.
The facts are what they are -- and there is no reason that our companies cannot profit once again. Due to simple ignorance, our auto companies might go down the tubes.
Critical thinking is missing from many conservative media outlets (unfortunately -- too many of them would prefer to have faith in something rather than looking up facts and using analytical skills).
So, how is this the "fault" of the unions? The wages are what they are -- and they are less in raw terms than in European countries.