Now that the long national nightmare of the writers’ strike has come to a close — did anybody notice? — we may at last turn our attention to another unhappy and increasingly irrelevant union workforce being challenged by Korean imports: the UAW strike.
What “Squid Game” is to Hollywood writers, the Hyundai sedan is to the US auto industry — a product that has the bosses wondering what, exactly, they are getting for those inflated union wages at home.
The thing is: Detroit doesn’t matter. Not very much, not in the big picture.
We still talk about the “Big 3” domestic automakers, which is wrong in two ways: There aren’t three of them, and they aren’t that big.
Stellantis, the company that owns the Dodge, Ram, and Jeep brands, is not a US company, having been absorbed by a Netherlands-based firm more than a decade ago. (That’s what we get for two Chrysler bailouts!)
Ford is the larger of the two remaining members of the “Big 3.”
However, it no longer is among the 100 largest US companies, or even among the 150 largest — with a market capitalization of a little less than $50 billion, it is a good deal larger than General Motors ($33 billion), but only about half the size of Starbucks and less valuable than the company that makes Monster energy drinks.
More to the point, Ford and General Motors combined are worth about 10% of the nearly $800 billion valuation of Tesla, which is not currently suffering from a strike: Elon Musk may be a goofy social-media troll, but he isn’t fooling enough to make his business hostage to the UAW.
Tesla operates the most productive car factory in the United States, its plant in Fremont, Calif. Among the other US factories that produce the most cars and trucks — as opposed to the ones that produce the most headlines — most are owned by non-US companies and operate in right-to-work states.
Michigan repealed its right-to-work law earlier this year.
The No. 1 car factory is Tesla’s operation in California, the No. 2 car factory in the United States is Toyota’s operation in Kentucky, No. 3 is BMW’s plant in South Carolina, and No. 4 is Toyota again, operating in Princeton, Ind.
Rounding out the Top 5 is Ford, which makes its highly profitable Super Duty trucks and Expedition SUVs in right-to-work Kentucky.
Toyota likes to remind pickup shoppers that its Tundra trucks are made in Texas.
Mercedes-Benz makes many of its most profitable products for the US market — including its $200,000 Mercedes-Maybach GLS SUV — in Tuscaloosa County, Ala.
But, for some reason, we still talk a lot about Detroit and the so-called Big 3.
In reality, the bestselling sedan in the United States is the Toyota Camry.
The Malibu is the only sedan made by Chevrolet today.
Ford, meanwhile, no longer makes any sedan for the US market or any regular passenger cars other than the Mustang, having decided to sell only trucks and SUVs in the land where Henry Ford invented the modern automobile industry.
And here is a reality check: The biggest auto-exporting state isn’t Michigan — it is South Carolina.
It has been long since automakers were top drivers of the US economy.
The companies that contribute the most to the US economy today are mostly in technology, finance, and health care: Apple, Microsoft, Eli Lilly, NVIDIA, and Berkshire Hathaway.
The UAW is a relic of a time in which brawn — men turning wrenches and lifting things — was a critical economic input.
That is no longer the case, which is why the largest private-sector employers in the United States are not manufacturers but shops and fleets: Walmart, Amazon, Home Depot, FedEx, Target, Kroger, and UPS.
The increasing automation of warehouse and delivery work is going to eat into those jobs, too, and no amount of Luddism is going to stop that.
Happily, there are sectors of the US economy that are positively thriving.
If politicians really cared about the overall prosperity of the American people, then they would pay attention to the interests of the firms that actually create the wealth and the jobs rather than declaring war on highly productive companies such as Apple and Alphabet.
Instead of doing the smart thing, the people in Washington act as though we were still in the Eisenhower years, turning wrenches.
Joe Biden is an economically ignorant sentimentalist who likes to say that “unions built the middle class,” but that is, as a matter of fact, not true: There never has been a time in American history when the majority of workers were unionized, and the artificially high wages and generous benefits of union jobs are paid for with reduced wages and benefits for workers elsewhere in the economy.
That shouldn’t come as a huge surprise: Unions are monopolies — they enjoy a legal privilege from the government to be the sole provider of labor in a particular market — and they display precisely those economic pathologies associated with other monopolies, i.e., they harm consumers by charging prices above the competitive market rate.
Nobody likes doing business with a monopoly.
So, in the long run, production shifts to areas where the monopoly can’t reach (as in offshoring manufacturing work) or to places where the monopoly’s effects are reduced (as in the shift to right-to-work states).
Again, this is all predictable: In 1950, Detroit had 1.9 million people and almost 300,000 manufacturing jobs; today, Detroit has 632,464 people and about 23,000 manufacturing jobs.
Ironically, Detroit has more workers struggling with a lack of access to an automobile than it has workers making automobiles.
If unions are building the middle class, they aren’t doing it in Detroit.
On the other hand, Apple paid about as much in corporate taxes in 2022 as General Motors made in total profit that year.
There is a reason Toyota thrives in Texas while General Motors had to be propped up with government bailouts.
You can only evade market realities for so long.
UAW’s business model does not have a future.
The big remaining question is whether they will take what’s left of the “Big 3” down with them.
Kevin D. Williamson is a national correspondent for The Dispatch.
This story originally appeared on NYPost
