Unions Woes ... cont

I've been pondering the disucssion here

Looney Dunes: Unions Woes

Besides a great big kudos to Mike for hitting the nail on the head, I have some (overly simplistic) thoughts:

Broader perspective

Without supporting documentation, only from memory and prior context

1) US came out of WW2 with
a) no economic competition
b) pent up domestic demand for durable goods, esp. cars.
c) likely also was the exposure of troops to world travel as well as mechanical training. Compared to WW1, WW2 (aka World War part duex) was a mechanized affair, and fought over Oil (Japan after SE Asian - Royal Dutch Shell) and Germans after the Caspian.
d) The postwar Eisenhower Administration embarked on building of the Interstate Highway System. Both for National Defense (move troops and material) and public works (fear of renewed depression) reasons.
Now we had places to drive …

2) with the above in mind, Detroit could build anything and sell it.
Likely this was true of many other operations, from homebuilders to appliance mfgs.

Therefore, security of production was paramount.

3) there was competition, but a social model.
a) Socialism/Communism was the competing model, as it had been through the depression.
b) How to keep the workers happy ... give them a stake, other than equity (the German Model).

4) related : Japan and Germany (most of Europe) were not economic competition, rather, they were to be rebuilt, ward off Socialism/Communism and were allowed to provide cheap goods to the American Worker.
Japan in particular was remodeled, the social structure built to be an
"unsinkable aircraft carrier" off the coast of Asia.
Germany had been partitioned, and would not be a factor in European politics for 50years.
Manipulated currency and trade imbalances were tolerated.

5) meanwhile, in the US, we moved through an era that "big business" knew best. Engine Charlie Wilson, the era of conglomerates, the Harold Geneen's (ITT) and the like.
Threats of strikes (Iron & Steel, Coal) were headed off with either Federal intervention or higher wage settlements.
Pay off the workers, keep producing.

It wasn't until much later that we ran through the pent up demand, got into the 60's with developing disillusion with the "Wiz-kids" (McNamera etc.) and faced the Club of Rome "we're all doomed"... which was followed by the first (for the boomer generation) “Oil Shock”

Moving into the 80’s, GM was managed by “bean counters” who saw the model not as production, but as sales and esp. finance.

It appeared to be more profitable to finance the rolling stock than to find ways to build it (manufacturing techniques and smart buying of components).

With high interest rates and a declining trend in rates, you can make good money lending long, borrowing short. Financing, either via loans or leases, while your cost of funds continued to decline is great … to a point.

Rates cannot decline forever, eventually they approach zero, then the game is up. Especially if you are a manufacturer, with large installed base and plant, labor and equipment overhead, in other words, if you are not a Bank.

Then we discovered deregulation, small is better, flexibility and innovation.

Top it off with the collapse of the "other model" (Soviet Union) and we know of what has happened with 2-3Billion workers/consumers entering the market.
Structures build in the 50's don't apply to the new world model.