Right now, Honda, Toyota, and Hyundai pose the toughest competition for the Detroit auto makers. And one major cause of domestic suffering is the cost of union workers. They earn far more than the workers at Asian companies earn and so significantly drive up costs. In addition, healthcare insurance premiums and pension benefits add to astronomical costs that Detroit can no longer afford to fund, especially with the decline in the sales of its products.
Unlike their U.S. counterparts, the Asian manufacturers had chosen to build plants in right-to-work states, where labor costs are low. Detroit will now do the same.
Now that Ford is offering to buy out the employment contracts of 75,000 unionized workers, it will be able to compete on a more level playing field with it Asian competitors.
In a global economy, U. S. companies need every advantage they can create. If not, they will be overwhelmed by many foreign companies that run lean and mean. What is happening at Ford, and has happened at GM, will spread beyond the auto industry and point to a time when U.S. industries will be able to go toe-to-toe with foreign companies.
