Tuesday, January 24, 2006

No longer a free market

Oregon AFL-CIO wants large companies to pay for health coverage
Taking aim at the world's largest retailer, the Oregon AFL-CIO plans to file a ballot measure this week to force Wal-Mart and other large Oregon employers to spend more money on health insurance programs for their employees.

The proposed initiative, patterned after a new Maryland law, is part of a nationwide effort by labor unions in about 30 states to try to extend health insurance to more people who currently lack coverage even though they have jobs.

The idea is to make sure that a company like Wal-Mart pays its "fair share" in providing health coverage to workers, Chamberlain said.

And all of this is said the day after Ford announces 30,000 job cuts because of Union mandates. This is so wrong I'm not even sure where to begin.

A company doesn't exist to provide health care, a company exists to make money. That being said, Wal-Mart does go above and beyond the call of duty with their social responsibility.

In 2004, Wal-Mart Stores and SAM'S CLUB gave $1,222,500 to local causes and organizations in the communities they serve in the state of Oregon. In addition, many charities and organizations received in-kind donations and additional funds raised through stores, CLUBS and distribution centers in the amount of $1,074,538, for a grand total of $2,297,038 contributed through Wal-Mart's presence across the state.

And their business paid more than $14.7 million in state and local taxes in the state of Oregon in 2004.

When Unions and government stop dictating to the market and let the market start dictating price and wage again then we will see a resurgence in the number of successful American businesses. Until then we will continue to see companies like Ford and the airlines struggle.


Jon said...

Daniel, I dunno about Ford. I think Ford's biggest problem is they can't sell enough cars. People have quit buying American cars because they are not worth what you are paying for them. Quality sucks, and most are only worth 70-80k miles before they become a money pit.
I was a "buy American" guy too, but this time around I bought a Nissan SUV because I couldnt justify the cost vs. quality of American vehicles. (Although my Nissan was actually manufactured in the US, the design is superior to anything designed by a domestic manuf.)
I dont like unions either, but I dont think that's Ford's biggest problem. Maybe some new blood in the design dept, and a kick in the pants to the design dept would help.

Jon said...

oops...should have been "a kick in the pants to the quality dept"

The Manly Ferry said...

I'm no fan of Wal*Mart and I view their charitable donations for what they are - PR stunts. I don't think they're all that swell to their employees, to whom they've been caught doing some horrible crap. I don't like the way the homogenize products and culture and I really hate the way the pander to their customers by banning "naughty" materials.

Still, the crucial thing to understand among all the anti-Wal*Mart hype: they're not really unique in how they treat their employees; in fact, they're better than the industry standard on a few points.

So, yeah, I'm no fan and I don't shop there, but I get why other people do. It's frickin' cheap and one-stop. I've got no business being on a high-horse anyway - not when I'm shopping at WinCo and Target.

In any case, healthcare is a mess, but I don't see imposing these rules on Wal*Mart as the solution, nor do I see much good in the employer-funded model.

CapitalistPig said...

Ford and GM spend more per car on healthcare than they do on the metal that goes into the car.

Chris McMullen said...

I'm convinced Ford and GM are hobbled by the Unions. Payroll and bennies cut into every phase of automobile design, engineering and manufacturing. Just another example how unions are ruining this country.

Here in Oregon, we have it pretty good. Unions on the east coast blatantly threaten and intimidate non-union managers and co-workers.

It's time to start investigating and prosecuting theses thugs. Is there any Republican who has the cajones to do this?

CapitalistPig said...

I guess I'm one of those business owners who isn't paying their "fair share" since I don't offer my employees healthcare. Instead I compensate my employees (who are all healthy young men without families, and so have very little need for healthcare) the way they actually want to be compensated, that is with extremely high salaries and other perks that they actually want like free ceullular phones/service, free computers, and flexible work hours.

When will people realize that you can't get something for nothing. If your employer pays for your healthcare, that means the money is coming from some other type of compensation they would otherwise be giving you.

Tim Lewis said...

Unions are poison.

Anonymous said...

Unions just can't seem to keep their hands out of the employer's (and, ultimately, the consumer's) pockets.

A frequent justification for the continued existence of unions is that "you get what you pay for." That "union workers" are better skilled, better trained and provide more value.

If that's really the case, then they should have absolutely no problem competing on their superior skills in the open marketplace, right?

Instead, unions play the "hold-up" game and rob employers and consumers of their hard-earned money by receiving a higher-than-market wage.

Makes me sick.

Gunslinger said...

The dollar ammount that healthcare and union dues add on to EVERY SINGLE UNIT that GM makes: $2350.00

Ford's problem... The great great grandaughter of Ford is in a seat of power, and she does not like the performance based cars they are making. (it was her idea to only make the GT a 3 year run) She thinks the way of the future for Ford is euro-based econo cars. She is about ten years late to that fight. U.S. Automakers need to focus on what they do best, and exploit that market. Make full size, rear drive, V-8 cars and trucks, and make them above and beyond the market's expectations.

Anonymous said...

Many Businesses and Unions suffer from the "what have you done for me lately" issue, and the "growth" issue.

Once, unions were good to have - got safety in the work place, much quicker than would have heppened otherwise.

But now what?

If I were an employer with a union work force - I would expect the union to ensure 100% attendance ( if somone has a sick day or vacation, the union would have to provide another qualified worker ) and I would expect the union to pay for benefits.

I'd pay the union, they'd pay how they felt was best.

Don't think that could happen? Look at temp agencies.

Unions, especially public and utility unions, are to the point where their main mission is self preservation. Wanna be a teacher - have to meet the union requirements.

What % of the non-government, non-utility work force is union?
Why is that number dropping, if they are so good ?

Greg said...

Having been in the car business (both foreign and domestic) for a couple decades plus, I can tell you, in the 80's we built some crap but the American auto manufacturers have done a stellar job of playing catch up.

Where they have fallen on their collective faces is, they have played down the need for

The Foreign manufacturers have on the other hand stressed maintenance and backed it up with regular mailings to remind owners to take care of their cars. Most foreign car owners (that bought new) have been brainwashed to the point that they can tell you precisely what should be done at 5000 miles, 10000 miles, 15000 miles, 30,000 miles, and so on. This gives the allusion that foreign cars are better built which is not the case, they are better maintained.

I drive an 11-year-old Chevrolet pick up that gets used. I service it using a maintenance schedule / routine that was designed by Subaru I follow to the letter. The truck has 100,000K+ on the clock and it runs and drives like it did when it was brand new.

Don’t be afraid to buy American. Just take care of it once you do.

Tim Lewis said...

People are still buying into the illusion that foreign cars are somehow better than American cars. My parents had (emphasis on had) a Nissan sedan and a Ford truck (which they still drive) which they bought around the same time several years ago. The Nissan was a piece of crap from day one.

Gunslinger said...

We had a 89 jeep cherokee that had 325,000 miles on it when we sold it (running) to some guys who wanted to cut it up as a tough truck. We did oil every 3K olugs and wires every 30, and all of the other stuff. The only thing that ever broke on it, was the clutch slave cylinder. (from abuse)

I am currently driving a 92 pontiac Grand Prix with 208K miles and counting. I blew the engine with overrevving it, and the transmission crapped out from abuse at about the 160K mark. It looks almost as nice as it did new, and everything still works on it except the internal hood latch.

I had a Dodge Aspen with a gajillion miles that wouldn't die, so I gave it to my fire department and we cut it up and burned it.

I could go on. American cars may be built a little more shoddily, but they are also building twice, and in some cases three times as many cars as asian auto makers. Easier to get your QA/QC straight when you are only producing half or less the quantity of one of the big three.

Joe Berenguer said...

Hi Blogger!I like your blog! Keep up the
good work, you are providing a great resource on the Internet here!
If you have a moment, please take a look at my site:
used volvo car dealers
It pretty much covers used volvo car dealers related issues.
Best regards!