Where Conspiracy and Reality Collide

As the big US auto companies go to the government with their hats in their hands I hear the Republican chorus begins their timeless mantra “It’s all the Unions fault!  Unions keep us from being competitive!  Etc. etc. etc..

At the risk of sounding like a “Conspiracy Nut” I am going to forgo the usual patience with this line of utter nonsense and cut to the chase.  BUSTING unions is the root of the US auto industries problems. That and good old fashioned American short-sighted, stock-price-obsessed bad management.

Let’s start at the beginning.  After world war two, the US middle class reached the height of its power. This was a direct result of Socialism, and nothing else.  Everyone was put to work and corporations were prosecuted for profiteering if they charged too much for anything. It was effectively a socialist economy for several years and it created a new and enriched middle class.  It is the ultimate irony that the very era Conservatives herald as the golden era of American prosperity and family values — the 50’s —  was only able to support single worker families because of Socialism,  the very political system Conservatives and free market devotees  insist will destroy our country.  But I digress..

So along with this powerful middle class came powerful unions, and big international business concerns didn’t like those pesky organizers forcing them to treat their workers right, (remember, just a decades or two before WW2,  workers worked 6+ day weeks and children were commonly employed) so what did they do?  They invested in Japan and Germany. After World War 2, Japan and Germany were completely rebuilt anew;  but where did these devastate economies get their money?  US and European banks and companies as well as the US government. It has been suggested in the fringe that the name SONY (having no Japanese word or acronym obvious as a source) stands for Standard Oil of New York. If so, the elite of international industry have a sense of humor..

So what did they focus the reconstruction investment on? Automated production facilities. Robots. High Tech Metallurgy. Etc.., and then these countries proceeded to begin to kick the antiquated US auto industries’ hindquarters with better cars.  By the 1980’s the difference in quality was so significant, that Japan literally captured 50% of the US market in only 10 years. Why? Because their new, high- technology production lines were simply better (ie. they made less mistakes) than the outdated US operations, and the raw materials were better.   So what is there to gain by creating a new, more streamlined competitor?  It is arguable that they were rebuilt with the express purpose of creating such extreme competition for the US manufacturing industries that they would crush the US Labor Unions for good, and give the US companies a good kick in the (insert expletive), and take us back to turn-of-the-century, Asian-esq, investor friendly labor and environmental standards. And all the while the International Industrial Elite make money off both sides..

As George Soros clearly describes in his amazing book “The Crisis of Global Capitalism”, there is a fundamental flaw in the new International Free Market. “Free Markets” absolutely require oversight and regulation to operate for the greater good. Our recent mortgage crash has proven this beyond question.  But an International Market cannot be properly controlled when regulated on a National level.. Companies simply MOVE to better regulatory climes.. But this will be the subject of future essays, and again I digress..

So in the late 80’s the US Auto industry had a surprising stroke of genius. They finally got the message through to the American public that buying Japanese cars — even if they were better — was destroying our country and our way of life, and the “Buy American” movement took hold. In just a few years, the Japanese, seeing their hard won market share steadily eroding, again demonstrated their consistently superior strategic thinking and moved all the assembly of their cars destined for the American market to the U.S.  They bought troubled U.S. plants and gave Americans jobs, and the “Buy American” movement fizzled as quickly as it started..

Now one might think that this story would suggest that US auto workers are demonstrably inferior to the more modern Japanese operations, but since 2000 the quality gap has all but disappeared. Yes, I think most would agree that Japanese cars are still slightly better on average, but they are also MORE EXPENSIVE, and while people are still willing to pay more for them, the value gap has really disappeared. The US Auto workers, with less sophisticated (although substantially modernized) technology manage to produce comparable automobiles to the Japanese and they do it economically.  So why is the US auto industry failing NOW?  One reason.. BAD CHOICES by their short-sighted, short-term, bottom-line fixated management.  (this endemic U.S. corporate mindset is not unique to the Auto industry. BTW..)

The US auto companies have followed the Japanese and German lead for decades, and the only time they have actually succeeded in creating a trend was the SUV, the incredibly stupid idea of putting every Nordstrom’s shopping, latte swilling yuppie in a gas guzzling, 5000 pound TRUCK. And it worked for a while, but drunk on their success they failed to see that gas prices were going to go up and the era of the truck could not last..  I have a dear friend who in a drunken rant several years ago said one of the most prophetic statements, and one I will never forget. He said, “You know what’s wrong with America today? “There’s too many people driving TRUCKS.. with NOTHING IN THE BACK!” (Emphasis added to indicate when his voice rose to a yell) A modern prophet indeed..

So now the big 3 are going under, but it is not because of the Unions. The U.S auto industry has managed quite well to compete for value with their better equipped, high-tech Japanese and German invaders, even given the fact that those countries buy no cars from the US.  NADA. Not because U.S. cars are inferior, but because they are nationalistic in the extreme, and practice unchecked import restrictions and impediments.  Yet the US refuses to joust on the field of balance of trade.  Again we must ask…Why?  Clearly, it ultimately serves the agenda of our “Captains of Industry.”

You see the Military Industrial Complex, you know, the supposed conspiracy theory the last true Republican, President Dwight D. Eisenhower warned us about, cannot continue to pump wealth from the working class up to the investor class when there are healthy unions forcing them to consider the welfare of their worker bees.

While this is just one facet in the great economic puzzle; like the proverbial canary in the coal mine, the death of U.S. unions will spell the end of the American lifestyle as we know it.  Unless our country begins to cater its policies to support and strengthen the working class, this country will decay to a level we can now only imagine.  Until Corporations are forced to place the welfare of their workers above the bottom line, (because in the long term it is also better business,) Labor Unions will be a necessary regulatory system enforced by the employees themselves, and an anchor of civility and prosperity in American life.

And just in case you were wondering, I have never been a member of a Labor Union.

~ by Eric Harrington on April 5, 2016.

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