The
news that the union bosses at the United Auto Workers have agreed to eliminate the "jobs bank" program at the Big (Now Little) Three automakers is evidence of two things. The first is that stupid, uneconomic policies eventually must answer to reality and the iron laws of economics. The second is that although uneconomic schemes are ultimately accountable to economic reality, they can persist for a
looooong time (the jobs bank dates from 1984, the Soviet Union lasted for 75 years). I put the blame for the second phenomenon squarely on the backs of corporate management. Too often management knows full well the ultimate consequences of bad policy but, for a variety of reasons, convince themselves that they can live with it. This is a big mistake. Over time, the bad policy destroys the health of a franchise and when you are forced to address the problem, time has allowed the the connection between root cause and problem to become tenuous. To wit, it is hardly a unanimous opinion that the jobs bank and uncompetitive wages are the core problem at the Detroit 3, because the media has told folks for years that Detroit's problem is that they don't make something like the Toyota Prius. This is nonsense on stilts, but time has eroded the link between the stupidity of paying people not to work and Detroit's problems, and allowed for alternative theories to embed into the public consciousness (btw, Toyota losses money on the Prius).
The remedy is to link bad policy with its consequences immediately so that cause and effect are undeniably associated, and the ultimate damage to the franchise is avoided. With several bad policies on the wishlist of our left-wing controlled government, here are a few strategic moves that managements should consider if these policies become the law of the land.
Card Check - If "card check" becomes law and a majority of workers at your store or factory sign cards to certify a union, close the store or shut down the factory. Don't intimidate your workers or threaten or do anything underhanded, just announce plans to shut it down as a rational response to potential unionization. It will hurt the bottom line and be onerous, but ask your shareholders if they want to be the next Detroit. There are plenty of 'right to work' states to do business in, let alone foreign countries. Nobody has a right to any job
over another human being.
Climate Change Legislation - Calculate the cost of compliance with any climate change legislation on a per unit basis and make that cost transparent to your customers. A half of a penny on every can of Pepsi or $100 on every new car...whatever it is, put it
right there on the package. Let the buying public know that climate change legislation costs them on everything, everytime they buy.
Universal Healthcare - Take the increased costs out of cash wages and show the numbers to all of your employees. Stuff a leaflet in every paycheck that says, "Universal healthcare mandates costs us $X per employee over our previous healthcare arrangements, thus your cash wages have been reduced or your potential raise been scaled back by an equivalent amount. Please note you are earning the same but your compensation comes more in the form of healthcare than cash remuneration."
