Laying Hands on Gold

As late as 2006, the average line worker in the Big Three/United Auto Workers auto industry was pulling down about $74 per hour in wages and costs of benefits for themselves and retirees. That's around three times the national average in the private sector. At yesterday's service at Detroit's Greater Grace Temple, in the shadow of SUVs parked at the altar, the Reverend Charles Ellis prayed for "bread" in the form of a government bailout to save the industry. All I could think of was Charlton Heston hurling the Ten Commandments at that golden calf back in 1954 when I was seven. (Cecil B. DeMille's "The Ten Commandments" is monumental; it's filled with classic special effects.)

I suppose if you're worth $153,000 a year making SUVs, those vehicles really are made of gold. And you'd think any industry capable of compensating workers like that must be rolling in dough. They're not. In fact, they're approaching bankruptcy. The reason is simple: after decades of opportunities to build a better product - and they are getting better - Detroit cannot compete with the other American auto industry called Toyota, Nissan, Honda, Hyundai, BMW, and Mercedes. With a reliable, efficient, and stylish product, these automakers now account for more than 50% of industry sales in the United States. And they're making money. Here's something else: the line workers - happy at what they do - are compensated at about half of what those Detroit workers make.

So the big question here is simply, "Are we really bailing out an industry or are we bailing out an unprofitable segment of an industry that happens to be in Detroit?" My feeling is, and has been for many years now, that the American auto industry is doing fine. It's the Detroit model, an instant gratification love fest between management and its union that doesn't work. Fixing the problem starts with a realization on the part of all Big Three players that they are a failed and unsustainable model. If the Big Three were, indeed, doing well, Detroit would not look like an American Chernobyl. When you're broke, the private jets need to go, along with 73 bucks an hour total compensation for work on the line, the job security program that pays workers almost a full wage to show up and do nothing is out, and the cradle to grave health insurance that costs workers about $200 a year needs to change.

Helping workers and their families while weening the industry from its suicidal business practices will require time, patience, and a careful plan. I like the idea of a radical paradigm shift supported by a loan with airtight oversight or a closely managed bankruptcy. Whatever we do must support a capitalist model. Any drift towards nationalizing the industry and the taxpayers, like Moses those many years ago, will be hurling.