Dean Baker: Outsourcing the Bosses: The Lesson of Fiat-Chrysler

[marmar]

via AlterNet:



Outsourcing the Bosses: The Lesson of Fiat-Chrysler

By Dean Baker, AlterNet. Posted May 4, 2009.

What the new Chrysler will be getting from abroad is technology and top management.



The media coverage of the auto bailouts has focused on the need for union autoworkers to take big pay cuts, causing them to once again miss the real story. The Fiat-Chrysler deal shows that the pay problem is at the top, not the bottom. At the end of the day, the new Chrysler is still likely to be producing most of its cars in the United States. What the new company will be getting from abroad is technology and top management.

This big story was so easily missed because it runs against one of the main myths that our elites have cultivated about the US economy: that the country has a "comparative advantage" in highly skilled labor. In this story, the United States will continue to lose manufacturing and other "less-skilled" jobs as its economy becomes more concentrated in highly skilled sectors.

This story was convenient for our elites because it meant that the decline of manufacturing was a necessary, if sometimes painful, part of a natural economic progression. It also justified the growing inequality in US society that benefited not just Wall Street bankers and CEOs, but also millions of doctors, lawyers, economists, and other highly educated workers. These people took their six-figure salaries as a birthright, even as the pay of less educated workers stagnated or declined.

While this story of the US becoming a high skills center in the world economy may have been comforting to the elites, and was widely promoted by economists and the news media, there was never much truth to it. Highly skilled professionals did well in recent decades not because they succeeded in international competition, but rather because they were largely sheltered from it.

Trade agreements like NAFTA were explicitly designed to remove any barrier that made it difficult to export manufacturing goods to the United States, thereby placing US manufacturing workers directly in competition with their much lower paid counterparts in the developing world. Most of these restrictions had nothing to do with tariffs. Instead the key issues were rules protecting investment in the developing world along with limits on the ability of the US to exclude imports through safety or environmental regulations. ............(more)

The complete piece is at: http://www.alternet.org/workplace/139774/outsourcing_the_bosses%3A_the_lesson_of_fiat-chrysler/

[madrchsod]

1. fiat made 5 billion dollars while the rest of the euro assemblers were losing money

the reason why fiat turned a profit is he fired the fiat top management. he`s the right man to make Chrysler profitable.

[Mist]

2. More "too big to fail" businesses should understand that the fat is at the top, not

the assembly line. I think this is the only way many American companies can keep going. After all, it's easy to see that the overpaid execs at the top (whose crappy manangement led to failure) need to be got rid of ASAP.

[Turbineguy]

3. There's only One Rule.

It's Management.

Always.