The Beatings Will Continue (Until Morale Improves)

In a couple of examples of how to exactly not improve things, two CEO’s have walked the plank.  First out was Rick Wagoner from GM. Pushed or jumped doesn’t actually matter, Wagoner is gone from GM.  Over at Air Canada, Monte Brewer, the CEO is gone, the airline wobbling around the cusp of bankruptcy.  Again.

Union bashing is going to be listed as an Olympic sport in the auto industry shortly, then in the airline business, as the numbers get jiggered, smoke and mirrors predominating.  The numbers being tossed around regarding what union folks make in the car business are so absurd as to be almost laughable, if it weren’t that people with axes to grind, actually believe them.

First off, union members at GM do not make $78 an hour.  That number is the total cost of having an employee, unionized or not.  The rule of thumb is take the maximum hourly wage and double it. 

That’s the cost of the wages, as well as support services like HR, management, payroll, water, toilets, lights, administration, interest payments and earnings, operating expenses, depreciation, withholding taxes, Employment insurance premiums, mandatory health care premiums and all the other expenses that go into having a business with more than one employee. 

The business (like GM, or Air Canada) gets to deduct all those expenses from their pre-tax income to reduce the corporate taxes, which is conveniently overlooked in the name of shareholder value. 

According to some industry spokesmeat, Toyota, a non-union automaker, have employee costs around $50 per head.  Which might even be true, if you don’t add all the the usual costs associated with having an employee.  Sure sounds like those damnable unions have hamstrung GM and Chrysler, right? 

No, it’s a paper shuffle comparing apples to wood chips, to justify GM and Chrysler demanding a $28 dollar cut in wages from those lazy union sluggards.  I’m being ironic here, don’t get angry.

The same paper game is going to be played shortly at Air Canada, as the national flag carrier is about to go into the toilet for the second time in five years.  The argument is going to be labour costs again.  Those dirtbag union members and lazy high-paid pilots are just crushing our nuts, while over at Westjet, their cost per seat mile is so much lower, as they don’t have unions. 

Funny how it will sound exactly the same as the GM vs.. Toyota cost argument, comparing apples to wood chips again. 

Which leads to the real story:  The end of unions.  Which would be a posting later in the week.