Mexico gains auto union, government jobs opening

Shad Kraftson, Distribution Reporter

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U.S. Auto Outsourcing

Infographic by Shad Kraftson

American auto jobs are getting moved to Mexico and China. Thanks to the United Auto Workers, the government and the car companies, this should not come as a surprise.  Look for more outsourcing in the future.

It is hard to agree with 2016 Presidential Candidate Donald Trump on much, but he was right when he said “our companies are moving into Mexico more than almost any other place right now. We are losing our industry. We’re losing our business to Mexico.” General Motors, Chrysler and Ford are all beginning to produce cars in Mexico and bring them to the United States tariff free.

We bailed out Detroit during the recession and they thank us by moving their factories to another country. The union (United Auto Workers) demands higher wages for their employees and so when cheaper labor can be found elsewhere, we lose the jobs.

At the local level, Ford closed Minnesota’s only auto plant in 2011. Where does this end?

In a different world, one in which the Big Three were not legally bound to deal with the UAW at all U.S. plants, and thus did not face a binary choice between paying UAW wages or moving abroad, the car-makers would at least have had the option of hiring Americans to build smaller cars at some wage between union scale and Mexican rates”

— Charles Lane

The Washington Post reporter Charles Lane wrote, “faced with the above realities, and eager to exploit the industry’s flush condition while it lasts, the UAW essentially decided to protect as many jobs for its members as possible at the highest wages possible.”

What about the jobs that were not protected by the agreement? Those jobs are gone. America is a capitalist nation and maybe this would not be a problem if the government treated it as such. When the government and the union set the wages for employees, it is no wonder why we are losing jobs. Labor in Mexico costs less than $10 per hour and here in the United States people want a $15 minimum wage.

When wages are less in foreign nations, it makes sense that more people are buying foreign cars. According to auto website Edmunds.com, in 1991 72 percent of cars purchased in the US were domestic brands. In 2014 that number fell to a meager 46 percent.

A free market and the ability to drive foreign cars are important, but the future of American car companies is too. If we lose our auto industry, imagine what other industries we could lose. European companies have plants in the South which do not have to work with the union. Those companies are very successful and have no plans to move production to Mexico.

“In a different world, one in which the Big Three were not legally bound to deal with the UAW at all U.S. plants, and thus did not face a binary choice between paying UAW wages or moving abroad, the car-makers would at least have had the option of hiring Americans to build smaller cars at some wage between union scale and Mexican rates,” Lane said.

It can be argued that Americans should not work at Mexican’s rates. That may be true, but factory workers do not need to make a fortune. Fairness and Accuracy In Reporting writer Dean Baker attacked the Washington Post’s article citing flaws in logic. Baker sarcastically said, “Charles Lane and the Washington Post are outraged that auto workers can earn $28 an hour.” Paying a reasonable price to employees is important, but keeping those jobs and cars in the United States takes priority. If the choice is $28 an hour, do not be surprised when we no longer have any car factories.

The shift of jobs to Mexico is already happening. Congress and the American people need to fight harder to keep jobs in the United States even if it means paying factory workers a little less. Paying employees what the union wants will be the end of the auto industry in America.

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