Wednesday, June 04, 2008

There's No Ford In The Future For American Labor

At one time the United States had a great many automobile makes including Essex, Packard, Desoto, Franklin, Durant, DuPont and hundreds more brands. But even steel industry tycoon Henry J Kaiser proved with the failure of his Kaiser brand of automobiles that only lasted from 1947-1955, even a great deal of money was no guarantee success in the automobile business. By the mid-1960's, only General Motors, Ford, Chrysler, American Motors, Checker and Studebaker survived. After 1988, only General Motors, Ford and Chrysler survived, and Chrysler soon became a German owned firm for a number of years, leaving only two surviving American firms, GM and Ford. More and more the surviving American automobile brands are outsourcing production to labor cheap nations such as Mexico to cut costs and to phase out high paying American union wage and benefit jobs.

Being a surviving player in the automobile industry involves ever-increasing huge costs to meet consumer and government demands for high mileage, safety, design and quality. As late as 1970, a small firm like American Motors was able to design and build the Gremlin for a mere $6 milllion dollars by using much of the existing tooling technology from the $40 million dollar Hornet project. Today, totally new cars can run $1 billion dollars on up in tooling and production costs. And new technology such as hybrid or fuel cell technology has swallowed-up billions in corporate costs, sometimes with few good resulta to show for the high research costs.

While Japanese carmakers like Toyota and Honda, and South Korean brand, Hyundai have been able to make a decent profit by building automobiles generally in right-to-work states in the U.S. with few members of the UAW employed, GM and Ford have been seeking to layoff or buyout the contracts of American union workers to avoid higher labor union wage jobs, health or retirement benefits. Ford is planning to build a new small car, the Fiesta in Mexico in order to cut American labor costs. The car is already being produced by Ford in China, India, Brazil, South Africa and Venezuela in order to cut labor costs. More and more, the management vision of American automobile companies does not include using American labor. American automobile company executives tend to earn 50 times the wages of their Japanse or South Korean counterparts. Japanese and South Korean automobile CEOs are concerned about selling a lot of cars. American automobile executives are concerned with making a lot of money for themselves.

Despite a great deal of personal faults, Henry Ford Sr. built his Ford Motor Company on a vision of hiring many African Americans who moved North to avoid the even worst segregation and racism found in the South. Ford even build schools to teach these African American how to read and write, in order to create an educated workforce. Ford was instrumental in moving many Michigan area African Americans into an educated middle class, moving them up significantly from their often lower income and economic discrimination roots. And although, Henry Ford was very antiunion, and even hired thugs to physically assault those who were part of any early unionizing attempts, the Ford Motor Company did manage to create a huge class economic advancement for many. But the modern vision for American automobile companies doesn't seem to include anyone beyond a few CEOs earning a huge salary, while supposedly saving the company from economic destruction, while foreign competitors seem to prosper with far lower CEO salaries.

It seems the American automobile management vision of economic survival is now often based more and more on outsourcing of jobs to labor cheap nations, while expecting the American public to still buy the products. The Henry Ford vision to create an educated and highly paid American middle class able to afford the products it sells has given way it seems to a "Nero" complex by some automobile executives to get whatever they can before the whole thing burns down. The future of the surviving American automobile brands seems less and less to include American workers.