Does the proposed bailout of the Big 3 automotive companies seem entirely too complicated for you? Are you tired of all the contradicting claims concerning the causes of the current crisis? Fear not, for it was all explained decades ago by a visionary film director. His name is Ron Howard.
In 1986 Mr. Howard produced one of the most underrated comedies of that decade. It's name was Gung Ho, and it told the story of a Pennsylvania town crippled by the shutdown of its automotive plant. The folks send Michael Keaton to recruit a Japanese firm to re-open it. The movie focuses on the ensuing culture clash between the blue collar workers and Japanese management.
Nestled in the film are little details pointing to the current crisis. The workers return to the assembly line without a contract. Out of desperation, they make labor concessions unheard of a decade earlier.
Of course, Gung Ho is fiction, not a documentary, but, the fact remains that the Japanese auto companies who entered the U.S. in the 1980s operate under much more favorable conditions than Detroit does. Furthermore, their contracts from the 1960s and 70s don't just cost them in terms of dollars and cents. Mickey Kaus ably explains how the Big 3 must deal with byzantine work rules that their Asian competitors are free from:
Why have unionized Detroit auto manufacturers manifestly lost out to their non-union Japanese competitors, even when it comes to building cars in the United States--to the point where Congress is presented with a choice of bailout or bankruptcy? There are some obvious culprits: shortsighted American managers, schlocky designers, an insular corporate culture. Here's another: the very structure of Wagner Act unionism. The problem isn't so much wages as work rules--internal strictures that make it hard for unionized competitors to constantly adapt and change production processes the way the Japanese do.
The Big 3 can only be saved if they are operating under the same conditions as the Japanese firms. A bailout that doesn't recognize this can't succeed. The United Auto Workers union and its Congressional allies haven't conceded this yet. They won't until they are standing over the abyss. The recently rejected $15 billion bailout would have merely postponed that moment for a few months, hence it was worthless.




