Will the last person living in Detroit, please turn out the lights. It may be a bad joke, but it is quickly become sad reality. Detroit is dying thanks to the greed, power and corruption of the labor union bosses and the politicians who did their bidding. An Investors Business Daily editorial asks:
Poor Detroit. It hasn’t had any good news for decades, and now, despite a $77 billion bailout of the auto industry, its population continues to implode. The No. 1 reason: the United Auto Workers union.
Census data released Tuesday show Detroit’s population has plunged 25% since 2000 to just 713,777 souls — the same as 100 years ago, before the auto industry’s heyday. As recently as the 1970s, Detroit had 1.8 million people.
What’s happening is no secret: Detroiters are fleeing an economic disaster, the irreversible decline of the Big Three automakers.
In his now-famous Super Bowl commercial for Chrysler, rapper Eminem drives up to a theater in a sleek new 200 model and says, “This is the Motor City. And this is what we do.” But, sadly, that’s no longer the case. Detroit’s decline has been shocking.
Sure, a lot of the blame goes to a generation of bad management. But the main reason for Detroit’s decline is the greed of the industry’s main union, the UAW, which priced the Big Three out of the market.
As recently as 2008, GM, Ford and Chrysler paid their employees on average more than $73 an hour in total compensation. The 12 foreign transplants, operating in nonunion states mostly in the South and Midwest, averaged about $42 an hour.
Guess which manufacturers are healthiest and expanding their market today? In 2008, the Big Three still made 59% of all cars in the U.S. But, according to recent estimates, their market share is now 46% — with foreign companies selling the bulk of all U.S. cars. So Detroit’s loss has been the South’s and Midwest’s gain.
Behind this is the gold-plated benefits package once guaranteed to UAW workers. We’re not against workers getting what they deserve, but total pay and benefits for a full-time worker for the Big Three until recently averaged about $140,000 a year. (more…)
