Unrelated, Different
Fred Barnes at Weekly Standard on the other American auto industry. The foreign makes built here. Not looking for handouts:
The southern auto industry mocks Detroit. The transplants make money and aren’t asking for help from Washington. The recession has curtailed car sales temporarily, causing the transplants to slow production. But they are expected to expand again once the economy recovers. Volkswagen is currently building a plant outside of Chattanooga, which will produce 150,000 cars a year. But VW, with ambitious plans to increase its American sales, obtained an environmental permit that allows it to make 512,000 autos at the site. Volkswagen, by the way, has moved its main American office from Auburn Hills, Michigan, to Herndon, Virginia.
Embarrassed by the success of the foreigners, the Big 3 carmakers and the United Auto Workers (UAW) claim the tax and other “incentives” the transplants get from state and local governments in the South are no different from the subsidies they’re seeking in Washington. But that’s not quite true. “There’s a big difference between a subsidy and an incentive,” says Michael Randle, president of Southern Business and Development and an expert on the southern auto industry. “A subsidy pays to keep jobs. An incentive pays to bring them. If you’re paying to keep them, it means somebody wants to leave.”
… No Mercedes, VW, Honda, Toyota, Hyundai (KIA’s parent), BMW, or Nissan plant in the South is unionized.
There’s a simple explanation. It’s what I call the progressive anti-unionism of the transplants. It consists of one factor: They pay well. Workers not only make far more than the prevailing wage in the rural areas where most plants are located but also considerably more than every state’s average wage. With overtime, they can earn $70,000 or more a year at some plants. Average pay and benefits: roughly $45 an hour.
Unlike the timid auto executives, politicians in the right-to-work states are quite candid in crediting the enormous appeal of their non-union status. “If you don’t have right-to-work laws, you end up like those guys [the Big 3] are today” in Detroit, Corker says. “Right to work,” says another top state official, “is a huge issue.”
…
The UAW has been able to force only three elections at the foreign-owned plants. The union lost overwhelmingly at Nissan’s Tennessee plant in 1989, failed in another election there, and lost at the Mercedes plant in Alabama.
All of which is fine. I recently bought my first Japanese car. 2007 Nissan Maxima, excellent deal on a Nissan exec’s corporate leaseback, made in that anti-union Tennessee plant. The 3.5 liter engine is great, goes like a V-8 lite, handles like a family sports car, and it’s wicked nice inside.* Some high-paid non-unionized workers did a excellent job putting this thing together. I didn’t see anything domestic I wanted. The 1998 Ford Taurus has been true, lo these 150,000-odd since I got it like-new secondhand, and it’s waiting for daughter No. 1 to turn 16 now. Ford’s newer models look like stodgy Dadmobiles and they employ way too much crappy-looking plastic in the trim. Sorry, Ford. The wife’s 2000 Grand Caravan only has 110,000 on it, and it’s getting ready to cost us a lot of money. Too bad we can’t afford a Murano right now.
But is anyone else disturbed to learn they are making a car called KIA in a place called West Point?
West Point, Georgia
… KIA has come to town. The Korean automobile manufacturer is building a huge assembly plant, which will employ 2,900 workers when it begins turning out cars a year from now. KIA suppliers will employ thousands more nearby. When KIA accepted applications last winter–only online, not in person–43,000 people applied. Just last week, a 2.5-mile, four-lane road that runs along the 2,200-acre plant site was completed. Naturally it’s called KIA Parkway.
… West Point has entered the auto industry’s alternative universe.
No kidding. Memo to Hyundai, KIA’s parent company. This is America. Get a clue.
Here’s a guy I don’t usually agree with, but John Cole at Balloon Juice may have a good idea. Seeing as Iraq is safer and probably has a brighter economic future than Detroit these days, apply the Iraq model to Detroit. Invade, kick out the Baathist thugs, or unionist thugs, whatever. Show trials for CEOs. There’s always the possiblity of an IED campaign by homegrown lefty insurgents, which could be a problem given the guerrilla chic thing. But they have a bit of a self-correcting, not to mention self-editing, history when it comes to handling explosives, and anyway, Bush’s people cracked rthe code on counterinsurgency … when the locals figure out where their best interest lies, they turn on jihadis and other deadenders. Joyner at Outside the Beltway likes it. Let’s all get on board for the big win!
Speaking of political processes, Protein Wisdom: Representation without representation.
* Bose system takes an iPod, which lets me play all my favorite Guantanamo hits loud, repetitively, until I go jihadi-nuts. Yeah, I’m having a good time.
Posted by Jules Crittenden at 10:53 am Comments (2) on Saturday, December 13, 2008
2 Responses to “Unrelated, Different”
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December 13th, 2008 at 7:02 pm
[...] Hat tip: Jules Crittenden. [...]
December 14th, 2008 at 10:10 am
The people in the southern car plants know a good thing when they see it, and they don’t want the unions to ruin it. I don’t quite understand what it is about unions that causes a work force to become self destructive, but it clearly happens.
It’s not just the compensation negotiations, which are often aimed at maximizing short term pay & benefits with no heed for the company’s future health, ability to compete, and financial strength to meet future obligations. Union rules also serve to make a plant inflexible, and make it much more costly and difficult to fix the small problems that constantly crop up. Those small problems add up, especially when you are building something as complicated as an automobile.