In fairness to GM, this is something that's been a long time coming.

My father was UAW skilled trades for almost 40 years at the local transmission plant. When he started in 1968, the plant was still humming. At its peak, the plant employed over 3,000 workers. A mile down the road, another transmission plant employed 5,000 UAW represented workers. The last version of the Muncie transmission plant closed in 2006, with around 700-800 workers. Same thing at the other plant in 2009, with just under a 1,000.

When Dad started on the job, there were separate trades classifications for painters, bricklayers, and carpenters like himself. By the end, all these had been collapsed into a single skills classification. They tore down the factory in January of 2008. In March of that year I was in town doing interviews for a project that I was working on. Dad and I went down to the old local hall. I remember that at that time, there were still somewhere between 10-20 skilled trades guys who reported for jobs bank. There's no place to send these guys. The unskilled guys like my brother in law all got transfers to the Fort Wayne assembly or down to the Camaro plant at Bowling Green.

So there's a reason why the company is looking for early retirements. FYI, most union locals will encourage their older members to take buyouts to preserve employment for younger workers. With retirement, these guys have a pension that they can draw from. The younger ones lack that security.

The problem is that these concentrations of skilled workers have been one of the sources of comparative advantage for American manufacturing. The shrinking of the industrial sector has taken a particularly harsh bite here. Many of these skills were picked up on the job. Typically the process of becoming a skilled tradesperson involved a combination of time spent in the classroom and learning on the floor. The loss of factories has meant that these workers aren't being replaced. There's a bulge of older workers that has limited the opportunities for younger workers to take skilled trades jobs as the workforce shrinks. There's a day of reckoning coming soon when these guys are gone, and companies begin to realize that the institutions that trained them have been eviscerated.

When it comes to things like electricians and tool and die work, this is already a limiting factory in terms of getting wind turbine plants up and running. Turbine gearboxes share a great deal in common in terms of skillsets and capital equipment need with transmission plants. The problem is two-fold. New opportunities for "green jobs" have come too late and offer too little stability to make it worth the while for these new firms to replicate what GM, Chrysler, and Ford did. Even where they exist, these types of in house programs are of limited use. Second, there was no mechanism to move skilled workers from fields where they were in surplus to those where their skills are needed.

America is at real disadvantage compared to Europe and the East Asian countries in this respect. In Japan and Korea the predominance of large interlinked firms means that these companies are able to shift skilled workers between divisions. In Japan or Korea, the mechanism that's going to allow skilled workers to move between the auto sector and wind turbine manufacturing, for example, is that single firms operate across a number of sectors. In a very real sense, the government missed the opportunity to partner GM with a wind turbine manufacturer to achieve a similar end with regard to retooling transmission plants to build turbine gearboxes. The problem is that there is little desire in the manageriat to pursue this sort of thing. Much easier just to shift production to a low income country, than to make the minimal effort required to recognize the potential of domestic innovation. But remember it's a lack of willingness for workers to stomach have their pay slashed in half that's the problem. Not a utter lack of basic managerial competence. The Germans may provide us a better model of how to achieve the type of skill transfer that we are talking about. The combination of union oversight and cooperation between firms means that a number of firms can achieve efficiencies of scale and promote innovation because they draw from common training programs. We don't have this so we have the absurdity of inter-sectoral skills disparities.

I'm inclined to give GM a bit of a break on this one, but I think that the long term consequences of this sort of thing hurt the country dearly. GM is just displaying the common stupidity of corporate managers here. Not stirring up a special kind of stupid as they have often done in the past with regard to manufacturing methods and vehicle design.