GM Sells Finance Arm for $14 Billion

[Mallard]

While I agree that the union needs to be dissolved, I don't think you will see that happen. It's too deeply engrained with the workers and there are no laws that state people can't form unions. Every few years the UAW trys to get into other plants, like Honda, but the workers always vote it down. The company does a good job of keeping their employees happier with the union out. Every UAW facility I have ever seen has a deep resentment between the union and non-union workers. The union operates with an attitude that the company is always out to screw the workers. Even now, when they're going bankrupt, they refuse to make any concessions. Sadly, I believe that if the union contracts were dissolved between Delphi and the UAW (we'll see on May 10th) that the union would still be around. Heavy reform is the answer in order to eliminate so many of the redundant jobs and high wages. A union can still operate and be efficient, but not how it stands now.

No matter how you look at it there will always be a market in the US for blue collar jobs. Not everyone has the option to go to college. Manufacturing is a large segment of our GDP and it needs to remain that way. We're talking about over 60,000 people being laid off between Ford and Delphi alone. This is happening all across the country in every business. NVP5 -- You keep saying that the US is an Information Economy, but a large portion of the US economy is industrial. The entire industrial segment is laying off workers and sending everything to China. It's already happened to most of the steel industry.

ZoomVT - what I suggested would not mean keeping blue collar jobs at the cost of the tax payers. Taxing imported manufactured goods harder would mean the companies would be paying out. If all the blue coller jobs in the US disappear a large number of people will remain jobless and draw off the welfare system. This would mean higher taxes.

 

[NVP5White]

ZoomVT - what I suggested would not mean keeping blue collar jobs at the cost of the tax payers. Taxing imported manufactured goods harder would mean the companies would be paying out. If all the blue coller jobs in the US disappear a large number of people will remain jobless and draw off the welfare system. This would mean higher taxes.

One of the key fallacies of your argument is that tariffs are a zero-cost strategy. They are not because if GM is protected from open competition and UAW workers are allowed to stay on at artificially high wages, then those costs will be passed along to consumers. Without competition from Toyota, Honda, etc, GM would be able to raise its prices and pass along the additional labor costs to the consumer. While it is not the government using taxes to fund GM, it is the tax payer who pays the price.

 

[Mallard]

Well there would still be price competiton because Nissan, Honda, Toyota, Hyundai/Kia, etc. produce cars in the US. The UAW would still have to make concessions in order for the American companies to compete.

What tariffs would mainly do is prevent a large number of blue collar jobs from being sent overseas. This may hurt the growth of China's exports, but they are already the fastest growing market in the world so I doubt they'll have any troubles in the near future. This also wouldn't prevent all jobs from leaving the US. Currently some companies use the loophole of stamping bodies in other countries, shipping the parts to the US, and assembling the pieces here. GM is actually going to do this in China. It also won't keep white collar jobs from leaving. A lot of computer and technical jobs have already been sent to places like India and Eastern European countries are gainin steam.

What I propose would stop a fair amount of jobs from being sent outside the US, boost the gross domestic product, and employ lots of people that will in turn have disposable incomes and buy more goods. It's not a cure all, but a way to slow the bleeding. The market can't absorb that many people losing their jobs at once. It will take some time to recover.