Monday, December 26, 2011

how germany builds twice as many autos and pays its workers twice as much - profitably...,

Forbes | In 2010, Germany produced more than 5.5 million automobiles; the U.S produced 2.7 million. At the same time, the average auto worker in Germany made $67.14 per hour in salary in benefits; the average one in the U.S. made $33.77 per hour. Yet Germany’s big three car companies—BMW, Daimler (Mercedes-Benz), and Volkswagen—are very profitable.

How can that be? The question is explored in a new article from Remapping Debate, a public policy e-journal. Its author, Kevin C. Brown, writes that “the salient difference is that, in Germany, the automakers operate within an environment that precludes a race to the bottom; in the U.S., they operate within an environment that encourages such a race.”

There are “two overlapping sets of institutions” in Germany that guarantee high wages and good working conditions for autoworkers. The first is IG Metall, the country’s equivalent of the United Automobile Workers. Virtually all Germany’s car workers are members, and though they have the right to strike, they “hardly use it, because there is an elaborate system of conflict resolution that regularly is used to come to some sort of compromise that is acceptable to all parties,” according to Horst Mund, an IG Metall executive. The second institution is the German constitution, which allows for “works councils” in every factory, where management and employees work together on matters like shop floor conditions and work life. Mund says this guarantees cooperation, “where you don’t always wear your management pin or your union pin.

Mund points out that this goes against all mainstream wisdom of the neo-liberals. We have strong unions, we have strong social security systems, we have high wages. So, if I believed what the neo-liberals are arguing, we would have to be bankrupt, but apparently this is not the case. Despite high wages . . . despite our possibility to influence companies, the economy is working well in Germany.

As Michael Maibach, president and chief executive of the European American Business Council, puts it, union-management relations in the U.S. are “adversarial,” whereas in Germany they’re “collaborative.”

Does such a happy relationship survive when German automakers set up shop in the U.S.? No. As a historian observes in the article, “BMW is a German company and it has a very German hierarchy and management system in Germany,” yet “when they are operating in Spartanburg [in South Carolina] they have become very, very easily adaptable to Spartanburg business culture.” At Volkswagen’s Chattanooga plant, the nonunionized new employees get $14.50 an hour, which rises to $19.50 after three years.

The article’s author, Kevin C. Brown, asked Claude Barfield, a scholar with the American Enterprise Institute, why the German car companies behave so differently in the U.S. He answered, “Because they can get away with it so far.”

14 comments:

Big Don said...

It sure helps to have another country provide your national defense for free...

Dale Asberry said...

#self_calming_talk

CNu said...

BD wiseacring to himself...., (possibly his Chief Feature)

One wonders if he actually believed that a Kool cigarette was like a breath of fresh air.

nanakwame said...

Their history has shaped their policy and History of Ethnicity is different here, since many of old Germany made up the South. Why the race to the bottom here has, yet, to turn this nation into events of Russia or Germany. We also have the advantage of immigration, though; sectors are fighting against bringing more poor here, and have more educated and skill ones, which will increase the whiter side of Ethnic America. Why some massmen (Gingrich) don't want to stop at 1920's but go back to an allusion of 1860. Union organizing in the South is quite a history

Dale Asberry said...

Lol, interesting how he brings it around here where he attempts to use it to create tension in his audience rather than his other haunts where it also produces the self-calming.

Big Don said...

@CNu...A micro-part of the reason your kids don't hafta deal with Joe Camel recruiting them as replacement smokers, nor y'all breathe smoke in every store,  public building/workplace, is the intense guerrilla warfare BD participated in against the tobacco industry back in the 1980's...

Again, get down on your knees...

umbrarchist said...

Big American business became more interested in brainwashing the consumers with marketing than making a good product.  That strategy was more profitable as long as it worked.  But once the idea sank into people's heads that the product that the product was garbage then that same psychology works against them.

It all comes down to the consumers not really thinking and the company psychologists taking advantage of that.  But the Laws of Physics do not care about Germany or America or economists.  So where do the economists compute and report the depreciation of all of this junk?

Dale Asberry said...

Lololololol,

Breathe deep, Little Donnie! It's as if you're walking through a bed of mint!

CNu said...

lol, TCB...,

I'm supposed to thank you for doing what you're supposed to do - and - suspend disbelief around your professed capacity for common sense in one domain when you daily and religiously exhibit a total lack in another? trigger puh-leeze....,

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