Tuesday, December 16, 2008

Conservative Columnist Kristol: Labor Only 10% Of Car Costs

Now even conservative columnist William Kristol is expressing skepticism about Southern Republican Senators' arguments that the United Auto Industry workers are behind the Big Three's troubles:

Last week, Senate Republicans picked a fight with the U.A.W. on union pay scales — despite the fact that it’s the legacy benefits for retirees, not pay for current workers, that’s really hurting Detroit, and despite the additional fact that, in any case, labor amounts to only about 10 percent of the cost of a car. But the Republicans were fighting Big Labor! They were standing firm against bailouts! Some of the same conservatives who (correctly, in my view) made the case for $700 billion for Wall Street pitched a fit over $14 billion in loans for the automakers.

So Senate Republicans chose to threaten to filibuster the House-passed legislation embodying the George Bush-Nancy Pelosi deal. The bill would have allowed President Bush to name a car czar, who could have begun to force concessions from all sides. It also would have averted for now a collapse of the auto industry, and shifted difficult decisions to the Obama administration.

Instead, Bush will now probably have to use the financial rescue funds to save G.M. — instead of being able to draw from sums previously authorized for the green transformation of the auto industry, a fight he had won in the negotiations with Pelosi. And Senate Republicans now run the risk of being portrayed as Marie Antoinettes with Southern accents.

Whichever party can liberate itself from its well-worn rut to propose policies that help both American businesses and workers has a great opportunity. That party’s leaders could begin by offering management and labor at the Big Three a little more sympathy, and heaping upon them a little less calumny...

I agree with Kristol (four words I don't write too often) that labor costs are not breaking the back of the auto industry and that the Southern Republican Senators are playing a destructive, obstructionist role. They include Jim DeMint, Lindsey Graham, Mitch McConnell, Richard Shelby and Bob Corker, all of whom host foreign car manufacturers in their own states. And yes, there is certainly a disparity between what at least some of them are willing to do for Wall Street and not willing to do for Detroit. I don't agree, though, with the statement that retirees are "really hurting Detroit"–again, their costs are a part of what amounts to just 10% of the cost of a car.

In any event, Kristol, not exactly a stalwart supporter of the labor movement, is one more voice pointing out how fraudulent the complaints are against the auto workers.

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