Labor Issues

Something's been troubling me lately. The discussion surrounding the possible bailout of America's largest auto manufacturers has generated a fairly standard response from commentators of a more business-friendly persuasion.
In essence, they suggest that the high wages and generous benefits packages of unionized workers are responsible for the inability of companies like General Motors to compete in the market. Forget about the fact that many American cars are built by cheap labor in places like Mexico and Brazil, that the auto industry employs far fewer worker in the United States than it once did, or that Detroit has made a lot of lousy cars for several decades now. The money paid to its workforce is what's killing the Big Three automakers, they say.
Is it true?
I am not a fan of unregulated capitalism; I tend to side with labor over business. But one thing trips me up in this debate. I remember learning, back in the '70s, that people working on assembly lines in Detroit were making 20 dollars an hour and more. For those too young to make sense of that, it may be helpful to know that making 20 buck an hour even now, in 2008, would make you richer than probably 55 to 60 percent of American workers.
In other words, auto workers were making very handsome sums of money. I'm not saying they didn't deserve it, but could it have played a significant role in the subsequent decline in the fortunes of the American auto industry (along with the fact that, at roughly the same time, Detroit began making some of the worst-built cars in history)?
Anyway, here's what I'm driving at. (Sorry.) How much do teacher unions contribute to some of the problems in public education today, from quality of instruction to school funding?
I have two observations that may or may not be germaine.
My daughter, now a fifth grader, attends on of the best funded and most well regarded public elementary schools in Portland. And yet, for three straight years, she had teachers that my wife and I regarded as far less than inspiring. Two of them were nearing the end of their careers and seemed to be doing little more than going through the motions of teaching. Could they have been demoted or dismissed? I don't know. But I doubt it, based on what I know, or think I know, about the strength of teacher unions.
The other anecdote involves something I was told a few years back by an acquaintance who is a successful Portland businessman (and an admitted conservative). At a time when local schools were facing budget shortfalls and taxpayers were about to be asked to fund a stopgap levy, this friend told me that the cost of health care for each unionized teacher in Portland was $900 a month, and that the reason the figure was so high was that teachers had insisted on a plan that didn't require them to pay any deductible whatsoever or make even a minimal copayment on doctor visits or medications.
He told me the cost to taxpayers would have been reduced by half if teachers had consented to even a modest contribution. Later, a coworker of mine, a journalist who was covering education issues at the time, essentially confirmed what I had been told.
As I said before, I consider my beliefs to be largely in accord with those of working people. Yet I question the validity of a system that costs taxpayers - and students - millions of dollars so that a relatively small number of union members can save themselves what seems like an almost insignificant amount of money.
Of course, if everything goes according to plan for me personally, I will soon benefit from the power and influence of the teachers' union. What I don't know is whether that will properly address the misgivings I have currently regarding unions and their priorities.