The above image, coupled with the slogan "The Ultimate Misery" almost seems to suggest that autonomous, BMW zombie cars are out to crush the average American. Suffice it to say, that's not accurate.
The facts are as follows. After 30 years, BMW N.A. decided to close a California parts distribution center. The workers at the center are BMW employees and members of the Teamsters Local 495 union. BMW plans to "shut down" that distribution center August 31, 2011 only to re-open it the next day with "outsourced" employees. This particular facility has received prizes from BMW for its efficiency, employs 71 workers and has operated for 30 years without a work stoppage.
BMW will hand over the operational control of this distribution center to an unaffiliated third party. One the face of it, this does seem quite capricious. According to the Teamsters PR efforts, BMW made this decision to cut costs on the backs of American workers. What we don't know is what led up to this move. Presumably, the contract negotiations between the two parties broke down and BMW decided to let the contract expire. We don't know that because BMW has been very tight lipped when it comes to this issue. We do know that the Ontario site is not the only one undergoing this change. Officially, BMW wants to focus on "core competencies".
The union has been effective in shedding light on this issue. It has managed to garner the support of Senator Barbara Boxer and the Los Angeles Times. "Eroding the Middle Class" is the familiar refrain. Just as predictably, the comments to the LA Times piece are dominated by anti-union sentiment, mixed in with anti-government rants, and sprinkled with sensible economic discussions.
There are two aspects of this that are problematic for BMW. First, eliminating middle-class US jobs that include benefits is tough to reconcile for a company that has been playing up its investment in America. Second, BMW is not a financially struggling company that is saddled with union contracts that threaten to break its back. A press release dated July 7 stated the following:
"Based on the considerably improved outlook, the BMW Group now expects to achieve an even greater improvement in pre-tax earnings than originally predicted."
If a high-margin manufacturer like BMW decides that paying reasonable wages and benefits (reportedly $25/hour plus benefits) is too expensive, where does that leave the rest of the industry? The old "focusing on core competencies" argument is disingenuous. If that were the case, BMW would focus on product design and marketing and it would outsource all of its manufacturing and assembly work to third parties.
Companies cut costs where they can and that is to be expected. This country's anti-union bias is enabling the steady erosion of decently paying, manufacturing jobs. The US job market is becoming more stratified, possibly leading to a time when earning $50,000 or above is reserved for office workers with college degrees.
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