Did unions kill GM and Ford?

A common theme among defenders of auto unions is that bad management decisions, not union pressure, made GM and Ford uncompetitive. Chief among those bad decisions was the decision to focus on big SUVs and trucks, a decision which is now costing American car companies heavily.

But check out this article. Note that SUVs and trucks make about $10,000 of profit per vehicle sold, while cars make mere $100s. The auto companies needed those kind of margins to cover the huge health care and pension costs imposed on them by union bargaining. Competing with Toyota in the market for small, efficient cars simply wasn't an option.

Keep in mind that GM and Ford's main competition doesn't come from cars shipped across the sea from Japan; it comes from Japanese-owned factories right here in the U.S. American car manufacturing is actually flourishing, in places where factories are not unionized. It's just hard to look at this fact and conclude that unions haven't killed GM and Ford.

Now, I think unions have done a lot of good for American workers in the past, and I think they can play a positive and important role in labor-management relations. But when unions go wrong, whole industries can die. And much as I don't want to lay the blame for the death of America's most important manufacturing industry at the feet of unions, it just seems to be the reality of the competitive global marketplace in which we find ourselves today.