The North American auto industry is in dire straits. The economic situation is so difficult for them that they have been forced to go to their workers unions and ask for reductions in salary and benefits. In fact, these reductions are a condition of the U.S. federal government emergency loans. So it is with great relief that I have found in today’s news an update: Ford has managed to negotiate a reduction in the average hourly wage (including benefits) of their UAW employees down to the barely survivable level of $55 an hour.
The auto industry is suffering. The U.S. auto industry, all three main manufacturers, are all on the verge of bankruptcy. Sales have dropped 15% in 2008, and another 15-20% is expected in 2009. There is no doubt that the problems have been building for decades, with fat-cat auto executives selling Hummers and Quad cab pickups to the lazy and rather ignorant Joe Sixpack customer. Whatever the cause, the whole industry stands on the edge of the abyss: in a couple of years, there could be no “made in America” cars whatsoever.
A part of the conditions for the U.S. government bailout was that automakers have to reach agreements with their unions to cut wages and reduce staffing levels. Yet the unions say “we won’t take cuts!”