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:: Tuesday, November 22, 2005 ::
Automotive slump threatens sector's middle class - By Jeffrey McCracken, The Wall Street Journal
Over the past two years, new competition and higher gas prices have hammered sales of Detroit's most profitable vehicles. Auto giants started demanding that suppliers match prices offered by producers in lower-wage countries, or as Detroit dubbed it, 'the China price.' The downward price spiral has left several auto suppliers in bankruptcy and spurred painful changes at car makers.
The result: a collapse of the grand bargain between employees and employers that dates back to Henry Ford's promise of a $5 workday, paid vacations and generous health care and pensions. Back then, the auto industry helped elevate plant workers into the American middle class. Now, as it cuts wages and benefits -- not to mention jobs -- a sizable chunk of America's Midwest is being forced to step down a rung or two on the socio-economic ladder.------------------------------------------- posted 5:00 AM :: reference link ::
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