Wednesday, December 2, 2009

Why the "Big 3" is now the "Detroit 3"

This article was intended to make us feel sorry for people displaced in the current economy. To a degree, I do. In my career, I've been on every side of a layoff. I've survived a layoff, I've been laid off, and I've had to choose who to let go. None of them are pleasant. Being laid off can completely destroy self-confidence for years. Laying someone off and knowing they don't find a job for a year can cripple you with guilt. It's bad on all sides.

What this article really told me was why GM needed a federal bailout. They were paying $100,000 a year to a heavy machine operator. A guy who had nothing but a high school diploma and 26 years experience. Ten years ago when a fork lift driver made a $1 million endownment to the University of Detroit, I had the same concern about GM's viability, and its relationship with the union.

In a union job, 26 years experience meant overtime, seniority bonuses, annual raises, etc. It also meant a company that could not be competitive with countries, like Indonesia, that can pay mere fractions of that amount for the same skill set. Unions have destroyed our urban industrial complex. That's who you blame for the mess in the US.

Unions in other countries are reasonable. In Japan, when mass transit drivers were upset and wanted to negotiate their contract, they didn't strike. Their form of civil disobedience was to simultaneously blow the horns of their trains at the same time for seven minutes. No work stoppages. No strikes. The unions partner with the businesses and know if there is no revenue, there is no money, and no one wins.

Back to the poor sap who is working several fast-food jobs to make ends meet. He should sue his union. He should sue them for taking a protectionist stance that protected their revenue stream (his dues), but not his job. He should sue them to fund his retraining now that the job he was paying them to protect is gone.

Ultimately, he also needs to look inwards. The best protection from a recession is an education. If you want job security, don't pay a union for it, pay a university or community college. Job security comes from in-demand skills. Job security comes from a constant, driving curiosity that continuously improves your skills and increases your value over time. Fungible skills are the cornerstone of economic viability.

Don't blame CEO's making tough decisions to keep their company viable. Don't blame investment bankers doing what they are paid to do - take risks in pursuit of high returns. Blaming others just gives you an excuse to be bitter and do nothing.

Take a positive approach. Do what so many people I know, including myself, have done when they have lost their jobs. Learn a new skill. Educate yourself. Stop worrying about what you used to have and focus on what you can have. Make your avocation your vocation.

Most of all, stop complaining. It never solves anything and just makes everyone around you miserable.

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