A Detroit Problem

[FoMoJo]

I guess a lot of us can connect with the sentiment of this viewpoint from Dick Bauch, the owner of American Axle.

I've underlined some key points. 

Do you agree with what he said?

Detroit's entitlement culture withers a bright, blue dream

remember when Dick Dauch bought American Axle Manufacturing from General Motors and poured tanker truckloads of bright blue paint over what was then a dreary complex of parts plants sprawling across Hamtramck and Detroit.

Dauch, the quintessential factory man, was hell-bent on proving heavy manufacturing could still be done here, with a union work force, and with the Big 3 automakers as the customer base. That eye-catching paint job was the symbol of his hopes.

Now, 15 years later, Dauch is cutting the Detroit work force sharply and consolidating the work in Three Rivers, Mich., and Mexico. He isn't mealy-mouthed about the reasons:

"This isn't a North America problem, or a Michigan problem. It isn't a union problem. It's a Detroit problem," says Dauch, who has headed manufacturing for GM, Chrysler and Volkswagen North America. "Detroit has an entitlement culture -- 'You owe me this job.'

"Detroit can compete on quality, but it can't compete on costs. And the difference in the global economy is cost structure."

Dauch is still obviously angry over the 87-day strike by the United Auto Workers union against AAM last year in response to demands for concessions. In the end, the new contract reduced wage and benefit costs, but that was only part of the answer.

"The No. 1 disadvantage to being in Detroit is labor costs," Dauch says. "No. 2 is reliability."

Detroit has the highest absenteeism rate of any AAM facility. In Mexico, Three Rivers, Indiana and elsewhere, absenteeism is barely a blip. Many days, the Mexican plant -- also unionized -- has no workers absent.

But in Detroit, absenteeism runs at least twice as high, and on some days it can approach nearly one-third of the workforce in parts of the plant. Lines have been shut down because not enough employees show up.

"I've been working since Aug. 24, 1964, and I've taken three-and-a-half sick days," says Dauch. "I've got employees who miss two or three days a week."

Maybe that would have flown 30 years ago when Detroit was still fat and happy. But jobs are fungible today. Employers like Dauch have a fiduciary responsibility to take work where it will be done most efficiently.

It isn't just about hourly wages. Dauch's employees in Three Rivers, also UAW members, make about the same hourly rate. But they've agreed to a contract that gives the company more operating flexibility, and they show up for work.

Dauch says he hasn't given up on North America. In fact, he's opened four plants in the United States, including one in Indiana. He hasn't even given up on Detroit. He's keeping the equipment here and, if business picks up, may bring back work.

But he offers fair warning to this job-starved city. We aren't entitled to anything, least of all a job that someone someplace else is willing to do not just cheaper, but also better.

Wednesday, I listened to several autoworkers complain on the radio about union-busting corporations, unfair trade policies and the loss of middle-class manufacturing jobs.

But not one mentioned that on the same day, there were places in Dauch's now-faded blue Detroit factory where nearly one in three workers were AWOL.

[GoCougs]

Yep, if a bit obvious.

[Submariner]

We shouldn't be acting surprised.

Why should people work when they can be "permanently" disabled and get 85% on welfare?

Why should people go to work when they can freely skip because of the good ole' UAW shutting down factories if businesses object?

Much of the same crowd who objects to farming jobs overseas are also the ones who push companies to do so in the first place.  It's not just the outrageous hourly pay, but as the article pointed out, the lengths companies cannot go to stay viable.

I remember a few weeks ago reading a story about a plant that opened up somewhere in the midwest that couldn't find enough workers to operate.  When unemployment is at 10%, flashing lights go off in your head screaming "something is wrong here" it turns out that many would rather take government checks than go back to work, even if they were perfectly qualified for the job.

Welfare is a fucking joke (not in theory, but in practice) and the UAW is nauseatingly greedy, selfish and just fucking stupid.  I seriously hope the public gets fed up with their antics, and lobbies their local congressman or woman to put an end to this stupidity.  But then again, that requires voters to be informed, willing to place a god-damed call, and actually not being of the mindset that they too deserve everything handed to them on a silver plate.

[dazzleman]

The public has already put an end to the UAW, effectively, by boycotting the cars their members produce in sufficient numbers to bring the companies relying on the UAW workers to the brink of bankruptcy.

There's one thing I disagree with, and that's his characterization of the entitlement mentality as just a Detroit union problem.  I'm afraid it's broader than that, and our chronic debt problems are one manifestation of it, along with many others.

It seems to me that if people are absent from work 2-3 days per week, they ought to be fired.  No company could survive with such an unreliable work force.  I'd be interested to hear the overall absentee numbers, rather than anecdotal numbers.  But I think that strong unions do foster a mentality of entitlement to high wages for shoddy work, and they reward incompetence and mediocrity and punish or prevent innovation and excellence.  That's why industries that rely on unions are dying.