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Media Misleading Public About Auto Bailout
Posted by dzhuang on November 25, 2008
The most frustrating thing to me is that the same force that helped sweep Obama into office is going to be the same force that’s going to keep the Big 3 from receiving enough federal assistance. I would love to examine the press coverage on the auto industry, divide up the stories in terms of negative and positive, and then count up the number of stories in each stack. I guarantee you there would be an unequivocal bias towards the negative.
I do not have the rationale behind the headlines you hear flashing across the tv screens–”GM pays workers $70/hour” and “Bankruptcy is the best option”–but I do know the stories are not grounded in facts. Instead, they are based upon misconceptions exploited by the media to make the best story possible. So, alright, I will concede that I was wrong in my prior post to state that it was irrelevant that auto executives took 3 separate private jets to get to Washington. Thomas Friedman changed my mind in his latest opinion piece, “We Found the W.M.D.” A bold warning to Americans that an impending economic crisis is not out of the picture, Friedman calls on us all individually to sacrifice and calls on president-elect Obama to lead us through this new era of hardship. The executives in traveling to Washington in style and riches, he argues, is a prominent example of American waste that can and must be eliminated if we are to overcome the next stage of the crisis.
However, the focus of this post is to reveal to you the facts of the matter that are growing more and more difficult to reach. I told you why the auto bailout is crucial to survival of the industry but I want to clear up some more misconceptions. The figure that GM and other automakers pay their workers $70 is completely ridiculous. According to the Center For Automotive Research, the average wages at Ford, Chrysler and GM are actually $28/hour. In comparison to the average wages of workers in the factories of foreign companies in the United States of $20-$24/hour, there is not much difference. The American average adds up to around $60,000/year salary while the foreign average adds up to about $52,000/year.
So how did analysts come up with $70/hour? Well it was the addition of $42/hour of benefits! But that would mean the benefits workers receive top their wages. More than a little ordinary, in my humble opinion. The International Motor Vehicle Program states that the average worker actually receives $10/hour, so where did the other $32/hour of benefits come from? The cost of retirees, of course! While the “legacy costs” of the retirees are burdensome costs, it is completely misleading to stamp the “average wages” of workers with $70/hour.
Take the articles you read on the auto bailout with a grain of salt. Our auto industry has its problems but is not the wasteful, egregious mess of a monster it’s spun to be.
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Bruce McIntire said
Great post. I will read your posts frequently. Added you to the RSS reader.
» Media Misleading Public About Auto Bailout « Michigan Youth … said
[...] Thomas Friedman changed my mind in his latest opinion piece, “We Found the W.M.D.” A bold warning to Americans that an impending economic crisis is not out of the picture, Friedman calls on us all individually to sacrifice and calls on … More [...]
303 said
Citi Financial
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? American…
brettt37 said
couldnt agree more, the media is being ridiculous about this.
mediareformer said
I find it interesting that the mainstream media fails to enlighten anyone on the poverty wages the Big 3 pays to workers in Mexican factories. Just as prior to NAFTA, Mexican factories continue to be surrounded by slums.
The fact that auto executives arrived in DC via private jets is just one example of wasteful spending. As a fan of auto racing, I have difficulty in writing what I’m about to write but; How much revenue does the big 3 spend sponsoring NASCAR?
One would believe that prior to asking for government handouts, private jets would be sold, advertising budgets trimmed, and more than one government would be asked for assistance. The big 3 employ workers in Mexico, Canada and the U.S.A…
My take on this and other media corruption issues can be found at: http://www.freedomfromthepress.net/wordpress
brettt37 said
thats actually a valid point, nobody ever considers the third world wage slaves that the Big Three keeps.
but, i don’t think they need to sell the jets. Its an integral part of any major corporation to keep a private jet for convenience purposes. Also, its rather hypocritical for lawmakers who fly from place to place on taxpayer-funded planes to complain about that.
And the governments of Canada and Mexico won’t bail anyone out, they can always find more foreign companies willing to build things there.
Doug said
The U.S. auto industry is a joke and they knew for decades their products were inferior to what the Japanese and Europeans were producing. I wrote Ford CEO Jacque Nasser 8 letters in the early 2000s asking him to defend his POS product. Ford never responded at all. Later I wrote two different Japanese auto execs about issues with their products and they not only reponded, they stood behind their products and made me feel like an important customer. They earned my hard-earned money and respect. The U.S. auto industry never did that or cared to. They can crash and burn for all I care. Unions are a joke too. Moden day blackmail is all they do.