Job cuts at the automakers grab the headlines, but one might say that the real impact around the midwest has been felt by those who work at suppliers. The ruthless cost-cutting that's being pushed down the supply chain usually ends up focusing attention on labor costs (direct and indirect), even for those products where a high labor content isn't an inherent feature of the part. The solution tends to be the same across the industry; instead of focusing on reducing labor costs through product design and process innovation, a bandaid is applied by moving production offshore. I somehow doubt that the founding fathers of this country's Industrial Revolution would be impressed. That's why I was so delighted to read the Tom Walsh column that I've linked below.

Shannon Precision Fasteners is able to pay its workers a living wage (one that would actually allow them to purchase the new vehicles that use their products), and it's heavily investing in capital equipment that provides additional jobs and provides immunity from rising costs in so-called low-cost markets. Labor costs are being held down via the use of 401(k) retirement plans and Health Savings Accounts. I'm on board with that concept, as long as the pay is sufficient to allow adequate contributions to those funds, and I have to believe that making $20/hour with some discretion as to where that money goes sure beats $9.50/hour with crappy health insurance and a pension fund that may disappear at any moment.

Share This Photo X