Newly elected Senator Bob Corker attempted to reign in the expenses of the Big 3 to achieve long term stability.  Specifically, Corker proposed bringing the Big 3 labor costs more in line with their competition.  Currently the Big 3 spend $70-75/hr in total compensation of it’s workers.  Honda, Toyota and the like only spend $44-48/hr.  Corker proposed lowering benefits to $62/hr by 2010, but the UAW refused to even split the difference.  And those numbers don’t even account for the 700,000 retirees continuing to receive full pay for zero productivity.  The pension plans of the Big 3 add another $31/hr expense to the balance sheet.

One doesn’t have to be a math wiz to see why there is a problem. In 2007 GM with $104/hr in current and former labor costs sold 9.37 million cars but lost $28 billion.  Meanwhile, Toyota with $48/hr in current and former labor costs made a $17 billion profit selling the same 9.37 million cars.  To put these labor costs in perspective, the national average in the private sector for pay plus benefits is $25-27.

Now I know that a lot of people think its unfair to change the pension for people after the fact, and -well- it is.  Unfortunately, if your pension costs drive the company out of business, your benefits drop to ZERO.  It sucks. It’s unfair.  It’s called life. The fact is that both current and former employees of the big 3 are going to need to cut back on their benefits if the companies are to survive.  Here’s one way to lessen the pain: fire your union.  You could drop your pay by your dues and not even see a difference and they are the ones that got you here in the first place.

The sad fact is that the bailout – in a not sane form will eventually be approved.  Because this bailout is as much about the auto industry as it is about the Union Machine.  If all the union companies fail while nonunion ones profit – people might realize that the days where unions were actually needed ended decades ago.  The only people really benefitting from unions are union officials and Democratic campaigns.  Unions paid in $400 Million to Obama alone.  So even if this doesn’t get approved now – it will next month.