Detroit in Denial: Condemning the Traitors


Detroit, Mich. — Two of Michigan’s highest-profile voices — Democratic Governor Jennifer Granholm and best-selling writer/columnist Mitch Albom, weighed in Sunday for the UAW bailout. Their arguments were symbolic of a state labor culture that has completely lost touch with reality.

On Meet the Press, Gov. Granholm attacked critics of $14 billion in loans to the Detroit Three for “not acting as Americans.” Then, in an exchange with Governor Mitt Romney of Massachusetts, she introduced the canard that Japanese companies have an inherent advantage because their employees get free government health care  

Romney had mentioned that Detroit automakers ”suffer about a $2,000 per automobile cost disadvantage” due to high labor costs. Granholm parried that “one of the reasons why there is a cost disadvantage is because other countries provide health care for their citizens.” 

Well, no. Never mind that nearly 70 percent of Japanese cars sold in the U.S. are made here, by U.S. workers. As my former Detroit News colleague (now Reason Foundation fellow) Shikha Dalmia wrote in the Wall Street Journal last year, Japanese health costs are not only shouldered by companies and their employees, but they also prove the largesse of UAW health benefits.

“The (Japanese) employee plan requires a premium equal to 9.5% of a worker’s annual income,” wrote Dalmia in an exhaustively researched piece. “Employees themselves pay about 45% of the premiums from their paychecks, their employers the rest. This works out to $1,557 for an employee with an annual income of $36,500 — average wages for a blue-collar Japanese auto worker — according to figures provided by the Japanese Ministry of Health and Labor Welfare.”

“But that’s not all Japanese workers are on the hook for,” she found. “Working families also face a 30% co-pay — capped at $677 per month for a mid-income family — for medical expenses. This adds up to total out-of-pocket annual expenses of about $2,300 for every Japanese household, which is comparable to active UAW workers. . . . But relative to their income, Japanese workers bear a far bigger burden than UAW workers.

“Even that isn’t the full story. In the event of a catastrophic or chronic illness requiring prolonged hospitalization, a UAW worker faces no further expenses. A Japanese worker who hits his co-pay cap each month would be out of pocket up to $10,000 a year — about 25% of his annual pay-check and five times more than a UAW worker under similar circumstances.

“By contrast, for just 4 percent of their income, Detroit Three companies pick up the entire health-care tab for all their hourly workers for life — active, retired, dependents and, incredibly, even laid-off workers till they found other jobs. Workers were not required to pay any premiums, deductibles or co-pays-except for routine physical exams and prescription drugs.”

Meanwhile, Albom, a prolific left-wing pundit as well as author of books such as Tuesdays with Morrie, also played the traitor card in his Sunday Detroit Free Press column, aguing that “Sen. Shelby, Sen. Bob Corker, Sen. Mitch McConnell . . . at our nation’s most uncertain hour, you were willing to put our nation’s security at risk — by squashing the manufacturing base we must have in times of war. And why? So you could stand on some phony principle? Crush a union?”

For the record, the principle Corker & Co. stood on was that the UAW, in return for taxpayer dollars, agree to work for the same wages as their American, Toyota-employed peers. That is, $26-an-hour with health coverage and a 401k retirement plan — still among the most generous packages in the USA.

That’s a plot to “crush a union?”

Welcome to Planet Michigan.


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