Auto parts maker Delphi announced today that they will ask a Federal bankruptcy judge to void their contracts with union workers in a bid to lower operating expenses. Delphi claims it can no longer pay the top dollar wages it's employees earn because it must compete with auto parts suppliers in other countries whose wages are substantially lower. The judge in the case has set a hearing date for May 12. My personal guess is that he hears the case on that date and holds off making a decision on the contracts until at least the end of June. GM has their traditional summer shutdown during the first two weeks of July and that could allow some breathing room for both sides to come to a solution.
I just completed Lou Dobbs' excellent book Exporting America: Why Corporate Greed is Shipping American Jobs Overseas. Lou takes the opinion that American corporations are abandoning the American worker for the sake of profits by sending jobs overseas. His well informed arguments examine the power corporate America currently wields in Washington and how their influence negatively impacts the average American. He examines how free trade agreements like NAFTA have not had the desired effect of creating new jobs and how international organizations like the WTO have consistently sided with other nations against the United States when complaints are brought.
The book is full of examples of American companies that have closed down factories here and sent jobs overseas. Dobbs questions this by asking if a corporation has a responsibility to the country that it is based in and which helped it succeed and thrive. The answer he gives is, of course, yes but most coporations don't see it that way.
One of his most striking points is that he is no protectionist. He does not argue that America should be isolationist and refuse to trade with any other nations. He certainly recognizes that trade with other nations allows us access to large markets for our goods. What he argues is that the trade needs to be fair.
He successfully argues that America cannot maintain a trade deficit that is three quarters of a billion dollars to the negative. This is only possible because other countries are allowed to hold worker's wages low, have no environmental laws that are parallel to the United States and are unencumbered by saftey and health regulations. On a fair and level playing field, he argues, the American worker is as productive as anyone in the world. We can't compete if we can't get in the game.
One of his most successful points is that both government and business are incredibly short sighted when it comes to this subject. Government leaders maintain the theory that workers who have their jobs outsourced will be retrained and re-educated to take newer, better paying jobs. He correctly points out that professional jobs like Radiologists, Architechts, Software Engineers and entry level Lawyers are being outsourced as well as blue collar manufacturing positions. If those people are not secure in their jobs, what will they be re-trained as? Should someone who just completed law school or received their degree in computer engineering just go back and hope their next profession works out better?
Finally, he argues the eminently logical argument that if good jobs are outsourced, like the ones at parts suppliers like Delphi, no one will be left to buy the cheap goods imported from China and other countries. Who will be left to buy cars or even shop at Wal-Mart if the middle class continues to shrink? Right now it isn't a problem because there are enough people borrowing huge sums on their credit cards buying Chinese DVD players to turn a large profit but what will happen in a decade when none of us are making good, middle class wages?
One example he turned to repeatedly is the importation of Japanese cars in the late 1970's and early 1980's. The Reagan administration reacted to Japanese car companies importing millions of cheap cars by placing a limit on the number of cars that could be imported to the United States. However, they then told them that if they invested here by building factories and hiring American workers, they could produce and sell as many cars as they wanted. That's fair trade. That is putting American workers on a level playing field.
Now please, will one of you people who voted for Bush in the last two elections please tell me why the same stance could not be taken with appliances, electronics and steel? Why does the president you voted for insist on backing trade policies that hurt Americans?
So the Delphi question will linger in the air until summer and we will all wonder if it will push GM into bankruptcy or merely push another 8,500 Americans out of work and leave thousands more making less than they did last year. All of those foreign auto parts makers could be forced to invest here if they want access to the American market. All it takes is for this administration to change it's mind and decide that it wants to help the country.
What can you do? Write your Congressman and Senator and tell him that you are watching. Click on this link to opensecrets.org and look at who your rep and senator took money from. Look who the president took money from. Forget for a few minutes that you are a Republican or Democrat and remember that you are an American and that it is your neighbor who is about to watch his job go to India.
Just do something.
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