Rt.66: Have you ever read one of the GM, Chrysler or Ford collective bargaining agreements? I’m not asking to be snide, I’m asking because I’m curious.
It was possible to go to work at a GM plant right out of high school (18 years old) and retire with a full pension and benefits (including an awesome health plan) at 48 years of age.
Now look at that from an actuarial standpoint. If, say, the average life expectancy is 68 years old for an American male (and I’m just using that number for simplicity), then GM is now carrying a partially burdened (meaning they’re not paying a full salary, but continuing to pay pension and benefits) retiree for up to 20 years.
This is the scenario I meant when I talked about short-sighted thinking amongst the unions. The unions were fully aware of the “tail” that GM was carrying and that the tail was growing longer and, more importantly, “wider” (meaning there were not only issues with direct costs of maintaining it, but also unfunded pension liability issues), but chose to continue down what amounted to a blind alley and a dead end.
Again, not trying to demonize labor, but they were completely and KNOWINGLY complicit in this mess. And, this mess has nothing to do with foreign competition or unfair labor practices. This is a mess of labor’s own creation and management’s duplicity.
