Discover more from The Racket News ™
In which Trump is correct, Biden is pandering, and the GOP is crabs are in a bucket
I heard there was a debate last night. A bunch of news and pundit outlets covered it, in the perfunctory manner in which Fox News broadcast it. The irrelevancy of the whole thing is summed up by Dana Perino’s breaking of the fourth wall. “It’s now obvious that if you all stay in the race, former President Donald Trump wins the nomination,” she said to the seven crabs in a bucket. “None of you have indicated that you’re dropping out.”
Perino then re-enacted “Survivor,” asking the candidates to write the name of the person who “should be voted off the island.” It’s obvious that the only candidate who mattered wasn’t on the stage.
Donald Trump was already campaigning for the general election, along with President Joe Biden, tit for tat addressing the striking UAW workers.
On Tuesday, Biden walked the picket line in Belleville, Michigan, holding a bullhorn.
“You’ve heard me say many times: Wall Street didn’t build this country,” he said. “The middle class built this country. And unions built the middle class. That’s a fact. Let’s keep going. You deserve what you’ve earned, and you’ve earned a hell of a lot more than you get paid now.”
Hmm? True? Let’s come back to that later.
It doesn’t make a damn bit of difference what you get because in two years you're all going to be out of business.
Trump repeated all the usual junk and slanders in his meandering, senseless style. But the key was that he said Biden’s electric vehicle mandates would shut down companies like the one where he spoke, and many workers who are now striking would be unemployed in that economy.
Thanks for reading The Racket News ™! Subscribe for free to receive new posts and support our work.
The timing is certainly off, but Trump’s main thrust is correct. In an echo of Barack Obama’s 2009 Michigan speech where he said “(The) hard truth is that some of the jobs that have been lost in the auto industry and elsewhere won’t be coming back,” Trump is telling the workers like it is. The difference is that Trump is promising he can change it, which he can’t.
Getting back to Biden’s play against the Wall Street executives who are reaping record profits, Biden is correct. Ford, General Motors, and Stellantis profits have soared 92% in the last 10 years. In 2023, they could reap an additional $32 billion. CEO and executive compensation at these companies is largely based on profitability and stock price targets. Meanwhile, union members agreed to wage freezes and benefit cuts in 2008 to survive the financial crisis, but don’t get to share in the boom times, the unions claim.
So the union workers want a bigger chunk. However, they are not poorly compensated by any means. The cost of labor for automakers, per unit manufactured, according to the Bureau of Labor Statistics, is up 70% since 2014. Even in 2009, auto workers were among the highest paid blue collar workers in the nation, behind only oil workers. They earned just under $40 and hour in total compensation (including benefits) back then. We’re talking over $80,000 a year (including benefits).
The current top pay rate in Detroit shops is $32/hour, or $66,560 a year. With overtime, that can easily exceed $75,000, plus benefits. What the unions want is some place at the table when it comes to EV production, which requires much less labor than internal combustion vehicles.
According to an IEEE report, upwards of 80,000 auto workers and a similar number in the auto supply chain have been laid off globally because of the shift to EVs.
Ford, for example, recently cut 3,000 highly paid salaried and contract workers as a down payment to help fund the transition to EVs. Ford CEO Jim Farley has said, employee cuts are necessary as Ford has “too many places in some places, no doubt about it. We have skills that don’t work anymore, and we have jobs that need to change.”
The battery, “gigafactory” EV industry has its own supply chain, and those plants also require workers. But the UAW has been less successful breaking into EV manufacturers such as Tesla (which offers stock options to workers, effectively bribing workers to stay non-union—not illegal). The workers in Detroit who assemble gas and diesel powered motors aren’t going to move all at once to Texas, North Carolina, or Georgia to work in battery plants at a lower pay.
The EV debate is what’s relevant right now. Trump is correct that the workers depending on their union to protect their jobs by negotiating better pay now due to big three automakers’ record profit is irrelevant in the long run. Having a seat at the table in the EV shift is what matters.
Biden is pandering to workers, just like Trump is. It’s Biden’s own plans to accelerate the EV shift that could make Trump’s “two year” timeline more relevant, and his joining on the picket line won’t save those jobs (jobs he is fine eliminating).
Trump is promising something he can’t deliver (which is his normal). But what both Trump and Biden are doing is more relevant than the seven candidates sniping at each other on stage in California were doing. They are all crabs in a bucket, content to pull each other down so nobody gets out.