Nothing is as ridiculous to me as hearing a talking head on TV claim that UAW has made significant concessions. I call shenanigans. What UAW calls a concession is that there will be a 50% pay cut and significant benefit reductions for new hires… starting next year. Workers will still get paid a full salary to not work. The auto industry is shrinking, not expanding. New hires are not the problem with labor costs. Costs are too high for present hires. There will be very little cost savings realized from the cuts to new hires simply because there will be very few new hires. Michigan has 9.5% unemployment. It’s not like people don’t want jobs.

Unless current workers agree to take a 30% pay cut and eliminate the requirement for full pay when not working, I don’t think there can possibly be enough savings in labor costs to expect survival. The cash burn rate is too high. Remember, these companies are competitive in other markets. It’s only the US where they are complete failures. The biggest variable is labor costs.

Incidentally, I have a buddy that wanted to learn German. He moved to Germany and got a job at the BMW assembly plant. This was a summer job, so the training portion of the job was brief. He said a majority of the workers on the line with him were similarly un-skilled. Certainly there are skilled laborers involved in the process, but when a college student looking for a summer job can be effective, you’ve got a hard time justifying current pay rates. The training process is not complicated for a majority of the workers. I don’t know what the Big 3 have done to their process to make every job require a skilled union worker at a cost greater than all of the competition, but something is broken.