Can't convince Congress to give you money by begging, then try the guilt trip:
http://www.youtube.com/watch?v=lJc6yo1wjSg
No more bailouts. Let this industry go the way of the Do-Do.
Looks fairly straightforward to me. The autoworkers show up, do their assigned jobs, and go home. They don't decide what kind of cars or trucks to build or do any of the engineering that goes into those products. They don't do the marketing. They don't make the business decisions.
But if the industry doesn't get the loans (loans - not outright cash like the banking businesses) those jobs will go away along with health care and pensions. And who will pick up the tab for them? Most likely the taxpayers. The manufacturing capacity will undoubtedly be bought up by a competitor, most likely a foreign one. The union contracts that provide for those workers and their families will be gone.
In any business you can always find a way to do the work for less if you're willing to accept the consequences. In my business, the perfect example was Value Jet.
Value Jet (//%22http://en.wikipedia.org/wiki/ValuJet_Flight_592%22)
quote:
Originally posted by Ed W
Looks fairly straightforward to me. The autoworkers show up, do their assigned jobs, and go home. They don't decide what kind of cars or trucks to build or do any of the engineering that goes into those products. They don't do the marketing. They don't make the business decisions.
But if the industry doesn't get the loans (loans - not outright cash like the banking businesses) those jobs will go away along with health care and pensions. And who will pick up the tab for them? Most likely the taxpayers. The manufacturing capacity will undoubtedly be bought up by a competitor, most likely a foreign one. The union contracts that provide for those workers and their families will be gone.
In any business you can always find a way to do the work for less if you're willing to accept the consequences. In my business, the perfect example was Value Jet.
Value Jet (//%22http://en.wikipedia.org/wiki/ValuJet_Flight_592%22)
Oh that's right Ed. It's management's fault. The UAW has done nothing to contribute to the failure of this industry. Let the Big 3 and the UAW fail.
Do you not like bailouts at all, or do you just not like THIS bailout?
Guido, the unions are making a helluva lot more concessions than YOU ever would...
If we had single payer instead of forcing my grandpa to walk the picket line for health benefits, our workers and auto industry would be on a level playing field...
God forbid you give a rat's donkey about that.
And who has taught us for DECADES about the evils of "protectionism"???
The so-called liberal media, that's who.
I hope to god someday your job gets outsourced to India, then you're asked to vote to chip in tax monies to George Kaiser to beautify the river.
I would be among the last to turn down a pay raise. I have also participated in a 25% pay cut to try to save a company. I was let go a few months later and the company ultimately failed.
Unions certainly have a place where management is not good and/or individual workers cannot stand out to obtain advancement or pay raises based on their merit or productivity. In a well run place, unions are not needed. So much for the ideals.
Unions are nothing more than a big business of getting benefits and pay increases for their members. They were certainly a necessity in the late 1800s and much of the 1900s. In some cases, unions have killed the goose that layed the golden eggs. That is one of the laws of unintended results.
I will not defend the gazillion $ salaries of the big wigs but there is enough expense blame to go around for all.
Reorganization bankruptcy could be a good chance to get labor costs in line with reality. It must also include the management side. That is an issue for the share holders of a publicly owned corporation. Not as easy as it sounds, I know.
quote:
Originally posted by USRufnex
Guido, the unions are making a helluva lot more concessions than YOU ever would...
If we had single payer instead of forcing my grandpa to walk the picket line for health benefits, our workers and auto industry would be on a level playing field...
God forbid you give a rat's donkey about that.
And who has taught us for DECADES about the evils of "protectionism"???
The so-called liberal media, that's who.
I hope to god someday your job gets outsourced to India, then you're asked to vote to chip in tax monies to George Kaiser to beautify the river.
Hey soccer punk, who asked you anything? You continue to be a whiny dude. The sole point I was making is that it was not only management that played a part in the industry's failure.
Oh, and about my job being out sourced, ain't goin' to happen as long as we have a 6th amendment and people continue to sue each other.
quote:
Originally posted by we vs us
Do you not like bailouts at all, or do you just not like THIS bailout?
All bail outs. If businesses are failing, let them fail. Seriously, will the government bail you and I out if we are financially irresponsible?
quote:
Originally posted by guido911
[Seriously, will the government bail you and I out if we are financially irresponsible?
Welfare payments?
quote:
Originally posted by Red Arrow
quote:
Originally posted by guido911
[Seriously, will the government bail you and I out if we are financially irresponsible?
Welfare payments?
I stand informed. Thanks.
quote:
Originally posted by guido911
quote:
Originally posted by USRufnex
Guido, the unions are making a helluva lot more concessions than YOU ever would...
If we had single payer instead of forcing my grandpa to walk the picket line for health benefits, our workers and auto industry would be on a level playing field...
God forbid you give a rat's donkey about that.
And who has taught us for DECADES about the evils of "protectionism"???
The so-called liberal media, that's who.
I hope to god someday your job gets outsourced to India, then you're asked to vote to chip in tax monies to George Kaiser to beautify the river.
Hey soccer punk, who asked you anything? You continue to be a whiny dude. The sole point I was making is that it was not only management that played a part in the industry's failure.
Oh, and about my job being out sourced, ain't goin' to happen as long as we have a 6th amendment and people continue to sue each other.
Wow, the ad hominem master returns.
[:O]
quote:
Originally posted by guido911
Oh that's right Ed. It's management's fault. The UAW has done nothing to contribute to the failure of this industry...
I'm astonished that you agreed. It's a given that supervision has the unabridged right to mismanage the company in any way they wish, and that the union has no say in the process.
quote:
Originally posted by guido911
Can't convince Congress to give you money by begging, then try the guilt trip:
http://www.youtube.com/watch?v=lJc6yo1wjSg
No more bailouts. Let this industry go the way of the Do-Do.
Yes, a loan is such a terrible thing.
BTW, bankruptcy isn't really an option unless they can arrange DIP financing, which they can't given the current lending climate.
I'm somewhat surprised that one of either GM or Chrysler hasn't already bullied a few lenders into providing financing. There's a significant first mover advantage here. The first one to declare has some chance at financing. Second one, not so much given the general sentiment that there's no longer room for three US automakers. (I think there would be, if so much of the price of the car wasn't going to health care costs)
Ford, as of yet, is not in the **** shape Chrysler and GM are. Although I think GM is exaggerating somewhat, while Chrysler really is in the last months of operations absent financing.
Anyway, I think it's worth some amount of risk to keep a domestically owned vehicle manufacturing base intact. It's a national security issue. A much bigger one than many of the things we spend far more money on in the defense department.
I believe the auto industry built a lot of war machines during WWII. I'd hate to lose even more manufacturing capability. But...I also hate to reward stupid management and outrageous Union agreements.
quote:
Originally posted by Ed W
...It's a given that supervision has the unabridged right to mismanage the company in any way they wish, and that the union has no say in the process....
Except for union wages and productivity
Please... this is not a loan. A loan is a sum of money given out with the expectation that it will be repaid. When a company says they need $4,000,000,000.00 NOW NOW NOW or they will go under I have my doubts that any reasonable person would surmise there is a high likelihood of that being repaid.
And the UAW could have done something if it so wished. I am of the opinion that they knew or should have known their wages were a detriment to the well being of the company and continued to press their advantage. They had as much if not more influence over the Big 3 than any other group. If they thought the company was operating on a faulty strategy they could have done something. It would have been unusual for sure, but not out of the realm of possibility.
And that fact is irrelevant. If/when they fail I will feel sorry for wage and salary jobs alike. The communities affected. Everyone involved. Just like I feel bad for Semgroup employees, WilTel employees, or anyone else that loses their job. But that doesn't mean tax money should pay their salaries as their company continues to fail. In the long run, that is not a viable options.
And in the long run, GM has proven that it should fail. Chrysler is held my a private equity firm that bought the company and replaced the mgmt for profit, they lost the bet. Ford had the fortitude to stand up and say it MIGHT be OK and probably doesn't need a handout, I hope they are right.
Bankruptcy certainly is an option. If it needs to be a special case, I understand. They ARE large enough to garner special treatment, but no one is too large to fail. Allow them to fail in a more orderly fashion if need be, but sustaining a failed company is worse for the economy in the long run.
Just buy out their inventory and then give every soldier returning from overseas duty a free car.
Problem solved.
quote:
Originally posted by cannon_fodder
Please... this is not a loan. A loan is a sum of money given out with the expectation that it will be repaid. When a company says they need $4,000,000,000.00 NOW NOW NOW or they will go under I have my doubts that any reasonable person would surmise there is a high likelihood of that being repaid.
...
Bankruptcy certainly is an option. If it needs to be a special case, I understand. They ARE large enough to garner special treatment, but no one is too large to fail. Allow them to fail in a more orderly fashion if need be, but sustaining a failed company is worse for the economy in the long run.
I have no doubt that with enough cash (and I don't know whether the numbers being bandied about at the moment are enough), GM and Ford can save themselves. Besides, subprime loans are still loans.
If they didn't have healthcare costs on the books, they wouldn't be having any trouble. Yet another reason why I support single payer healthcare.
And BK isn't an option without financing. Financing they can't get, and a lot of it..do you have any idea how much stuff they buy on credit from suppliers? You think their suppliers would continue offering product on terms with the buyer in bankruptcy?
Otherwise don't you think they'd have declared already? There's not a lot of downside.
quote:
Originally posted by RecycleMichael
Just buy out their inventory and then give every soldier returning from overseas duty a free car.
Problem solved.
Could they afford to keep and operate them?
A MODERN PARABLE...
A Japanese company (Toyota) and an American company (Ford) decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race. On the big day, the Japanese won by a mile. The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat.
A management team made up of senior management was formed to investigate and recommend appropriate action. Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing. Feeling a deeper study was in order. American management hired a consulting company and paid them a large amount of money for a second opinion. They advised, of course, that too many people were steering the boat, while not enough people were rowing. Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents, and 1 assistant superintendent steering manager. They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners, and free pens for the rower. There was discussion of getting new paddles, canoes, and other equipment, extra vacation days for practices and bonuses. The next year the Japanese won by two miles.
Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses and the next year's racing team was out-sourced to India.
Sadly, The End.
Here's something else to think about: Ford has spent the last thirty years moving all its factories out of the US, claiming they can't make money paying American wages. TOYOTA has spent the last thirty years building more than a dozen plants inside the US. The last quarter's results: TOYOTA makes 4 billion in profits while Ford racked up 9 billion in losses. Ford folks are still scratching their heads.
IF THIS WEREN'T TRUE, IT MIGHT BE FUNNY.
quote:
Originally posted by Gaspar
Here's something else to think about: Ford has spent the last thirty years moving all its factories out of the US, claiming they can't make money paying American wages. TOYOTA has spent the last thirty years building more than a dozen plants inside the US. The last quarter's results: TOYOTA makes 4 billion in profits while Ford racked up 9 billion in losses. Ford folks are still scratching their heads.
Ford has quite a different cost structure. Toyota doesn't have the pension and retiree health benefits to pay, for example.
For that reason, it is much cheaper for Ford to employ workers in Canada. (to name one nearby example) Toyota, not so much, since they don't have years of built up retirement expenses dragging them down.
Such a terrible thing, taking care of your workers.
quote:
Originally posted by nathanm
Such a terrible thing, taking care of your workers.
Toyota has never laid off workers. Not in Japan, not in the US. Not ever. Pretending Toyota doesn't take care of their work force is just a false idea. They make very good livings, have good benefits, and a sense of perfect job security. Toyota has had a net increase in jobs over the last decade. The BIG 3 have been laying off for a generation.
In the long run, who does it seem is taking care of the workers? The company that paid more and promised early retirement and then couldn't afford to pay and fired all the workers, or the company that pays a reasonable wage and retains its workforce?
If you can "take care of your employees" better, I'm always in favor. But compensating (among other problems of course) to such an extent that you can no longer afford to keep them working is doing no one any favors.
quote:
a region where the average manufacturing wage still runs around $12 an hour, Nissan's jobs are coveted. Even though the plant isn't unionized, Nissan starts workers at $14.19 an hour, including what Nissan calls a "guaranteed bonus" of $1.25 an hour. They top out after five years at $23, just a few bucks less than United Auto Workers earn in Detroit.
Benefits are close to union scale, too. UAW members have the gold standard of health-care plans, paying nothing but drug and office visit co-payments. Toyota's plan is similar, while Nissan workers pay 10% to 13% of health insurance premiums and have higher co-pays. The only area where they lag behind is retirement: While UAW members have traditional pensions that kick in after 30 years of service, Nissan provides a 401(k) plan that matches 68 cents for every dollar a worker contributes, up to a relatively skimpy 5% of salary.
One myth about foreign carmakers is that they don't do creative, intellectual work in the U.S. Just in the past year, Toyota, Nissan, and Hyundai all have expanded their U.S. design and research-and-development facilities. Hyundai just opened one in Ann Arbor and staffed it with 150 tech-savvy people, with plans to expand that headcount to 1,000 by 2010.
And Detroit carmakers? They're downsizing at home. GM has been cutting its white-collar payroll by 10% a year since 2000. Its engineering staff has been reduced from 19,000 then to 12,000 now. Fortunately, top researchers and designers have other places to go. Just ask Joel Piaskowski, chief designer at the Hyundai Motors Design & Technical Center in Irvine, Calif. Sitting at Hyundai's booth at the Detroit auto show, Piaskowski says he left his job at GM after designing the new Buick Lucerne sedan to join Hyundai -- with a nice promotion. He left Detroit, he adds, to be part of a company that is thriving. Piaskowski's new job gives him the freedom to design more types of vehicles. "Other companies are burdened by cost and overhead. We can do things they can't do," he says. While the upheaval in the car industry has shaken up the majority of Piaskowski's former co-workers at GM, it has left him in a better position than ever.
http://www.businessweek.com/magazine/content/06_07/b3971057.htm
Ironically, as they cut the dead weight and "steering" the Japanese automakers are happy to pick up the engineers, designers, and managers.
Gaspar:
While I appreciate your analogy, but of course it is overblown and simplified. And the comment that plants have been leaving the US is not accurate either:
http://media.ford.com/plants.cfm
Many of the Ford engines and parts are no longer made in the US. Large components and assembly is still done here, as is elemental components such as glass and rubber, however complex construction such as engines, electronics, and mechanical assemblies has been shifted to Mexico and other countries.
In many cases US carmakers have actually outsourced these materials completely. Mitsubishi builds many of the engines in our "American" vehicles. Delco is bankrupt and the German company Bosch is now supplying many if not most of the electrical components, lights and LEDs. Seals, rings and small simple components are made in China.
The more intricate and delicate the work, the less affordable it is to pay someone $30 an hour to build it here, especially when the unions are mandating maximum production speeds, and blocking incentive based production.
quote:
Originally posted by Gaspar
Many of the Ford engines and parts are no longer made in the US. Large components and assembly is still done here, as is elemental components such as glass and rubber, however complex construction such as engines, electronics, and mechanical assemblies has been shifted to Mexico and other countries.
In many cases US carmakers have actually outsourced these materials completely. Mitsubishi builds many of the engines in our "American" vehicles. Delco is bankrupt and the German company Bosch is now supplying many if not most of the electrical components, lights and LEDs. Seals, rings and small simple components are made in China.
The more intricate and delicate the work, the less affordable it is to pay someone $30 an hour to build it here, especially when the unions are mandating maximum production speeds, and blocking incentive based production.
Foreign carmakers use a lot of Detroit engines, just as US carmakers use some foreign engines, just FWIW.
As far as taking care of workers, many of the agreements the big 3 are laboring under were made back when they had a much larger market share than they do today.
Toyota and Honda (in the US) don't have defined benefit pension plans, and back home in Japan, they don't pay for their employee's healthcare. They also have the advantage of Japanese monetary policy.
Ford, at least, tries to sell better cars here, but nobody buys them. They tried to bring the Mondeo over here (as the Contour). It was a colossal market failure, since everybody here wanted SUVs, so you can't exactly blame them.
quote:
Originally posted by nathanm
quote:
Originally posted by Gaspar
Many of the Ford engines and parts are no longer made in the US. Large components and assembly is still done here, as is elemental components such as glass and rubber, however complex construction such as engines, electronics, and mechanical assemblies has been shifted to Mexico and other countries.
In many cases US carmakers have actually outsourced these materials completely. Mitsubishi builds many of the engines in our "American" vehicles. Delco is bankrupt and the German company Bosch is now supplying many if not most of the electrical components, lights and LEDs. Seals, rings and small simple components are made in China.
The more intricate and delicate the work, the less affordable it is to pay someone $30 an hour to build it here, especially when the unions are mandating maximum production speeds, and blocking incentive based production.
Foreign carmakers use a lot of Detroit engines, just as US carmakers use some foreign engines, just FWIW.
As far as taking care of workers, many of the agreements the big 3 are laboring under were made back when they had a much larger market share than they do today.
Toyota and Honda (in the US) don't have defined benefit pension plans, and back home in Japan, they don't pay for their employee's healthcare. They also have the advantage of Japanese monetary policy.
Ford, at least, tries to sell better cars here, but nobody buys them. They tried to bring the Mondeo over here (as the Contour). It was a colossal market failure, since everybody here wanted SUVs, so you can't exactly blame them.
Not exactly. The Toyota, scion, Honda, Hyundai (and several more) equivalents to the Mondeo sell quite well here.
Don't blame the American Public for exercising their freedom of choice. We buy American SUV's because they offer a good product for the price when compared with their foreign counterparts.
Conversely, when we buy small economical vehicles we buy foreign because they offer a better vehicle for the price. If american car makers could match the quality and price point on small cars than they would sell more.
In the last 10 years, the Asian market has started to offer large SUVs with comparable interior spaces to their US counterparts, eating away at our SUV market.
The problem is simple, but people are straining themselves to make it complex in an effort to protect a very flawed system that cannot survive in a free market.
Make what we want, for the quality we expect, at a competitive price.To do this concessions will have to come from BOTH Management and from Unions. If one will not budge, both shall perish.
Or. . . the Government could just punish the public for purchasing a non-domestic product, and a little bit more liberty dies. I think this is what will happen. It will not correct anything, but it will buy votes, and prop up US car makers at least until the current management gets to retire. Ah yes. . . a prolonged slow death on life support. The new American way.
The natural progress of things is for liberty to yield and government to gain ground. Timid men prefer the calm of despotism to the tempestuous sea of Liberty. – Thomas Jefferson
Tariffs, quotas and other import restrictions protect the business of the rich at the expense of high cost of living for the poor. Their intent is to deprive you of the right to choose, and to force you to buy the high-priced inferior products of politically favored companies. – Alan Burris
quote:
Originally posted by Gaspar
quote:
Originally posted by nathanm
quote:
Originally posted by Gaspar
Many of the Ford engines and parts are no longer made in the US. Large components and assembly is still done here, as is elemental components such as glass and rubber, however complex construction such as engines, electronics, and mechanical assemblies has been shifted to Mexico and other countries.
In many cases US carmakers have actually outsourced these materials completely. Mitsubishi builds many of the engines in our "American" vehicles. Delco is bankrupt and the German company Bosch is now supplying many if not most of the electrical components, lights and LEDs. Seals, rings and small simple components are made in China.
The more intricate and delicate the work, the less affordable it is to pay someone $30 an hour to build it here, especially when the unions are mandating maximum production speeds, and blocking incentive based production.
Foreign carmakers use a lot of Detroit engines, just as US carmakers use some foreign engines, just FWIW.
As far as taking care of workers, many of the agreements the big 3 are laboring under were made back when they had a much larger market share than they do today.
Toyota and Honda (in the US) don't have defined benefit pension plans, and back home in Japan, they don't pay for their employee's healthcare. They also have the advantage of Japanese monetary policy.
Ford, at least, tries to sell better cars here, but nobody buys them. They tried to bring the Mondeo over here (as the Contour). It was a colossal market failure, since everybody here wanted SUVs, so you can't exactly blame them.
Not exactly. The Toyota, scion, Honda, Hyundai (and several more) equivalents to the Mondeo sell quite well here.
Don't blame the American Public for exercising their freedom of choice. We buy American SUV's because they offer a good product for the price when compared with their foreign counterparts.
Conversely, when we buy small economical vehicles we buy foreign because they offer a better vehicle for the price. If american car makers could match the quality and price point on small cars than they would sell more.
In the last 10 years, the Asian market has started to offer large SUVs with comparable interior spaces to their US counterparts, eating away at our SUV market.
The problem is simple, but people are straining themselves to make it complex in an effort to protect a very flawed system that cannot survive in a free market.
Make what we want, for the quality we expect, at a competitive price.
To do this concessions will have to come from BOTH Management and from Unions. If one will not budge, both shall perish.
Or. . . the Government could just punish the public for purchasing a non-domestic product, and a little bit more liberty dies. I think this is what will happen. It will not correct anything, but it will buy votes, and prop up US car makers at least until the current management gets to retire. Ah yes. . . a prolonged slow death on life support. The new American way.
A large part of the issue with American cars is perception (at least related to Fords, having never owned a GM vehicle, I can't say about them)
Their small cars today are pretty similar to those of foreign makes, and have been for the last ten years.
Again, I don't know specifically about GM, but Ford's main problem is being caught in an environment where credit is unavailable with a dire need to retool into making fewer SUVs and more small and midsize cars due to a sudden oil price shock. (A price shock that would have passed quickly were it not for market manipulation but instead stretched out far longer than anybody expected)
They are also, as I said before, handicapped by obligations to retired workers that the foreign automakers simply don't have. Ignoring that and what happens to those retirees if the only alternative turns out to be reneging on the deal is just dense.
quote:
They are also, as I said before, handicapped by obligations to retired workers that the foreign automakers simply don't have. Ignoring that and what happens to those retirees if the only alternative turns out to be reneging on the deal is just dense.
Agree 100%. Any corporate entity that backs employee's retirements through investment in their own stock or internal pension programs is headed for tragedy.
It puts the worker at the mercy of the Company and the Unions, both of which are focused on self preservation above all else.
I believe we are seeing the end of an archaic system that squashes the liberty of it's members in exchange for perceived security.
For some reason I kept thinking this ad belonged here.
(http://www.treehugger.com/20081209-the-bailout-****ty-cars.jpg)
Edit, it won't let me post it due to possibly profanity in the filename... nevermind.
My company has a fleet of six vehicles...
How many does it take for Congress to consider bailing us out?
quote:
Originally posted by RecycleMichael
My company has a fleet of six vehicles...
How many does it take for Congress to consider bailing us out?
We call those "small business loans."
quote:
Originally posted by Gaspar
I believe we are seeing the end of an archaic system that squashes the liberty of it's members in exchange for perceived security.
This statement does not follow from what you wrote.
If it did, my comment would be this: Yes, every man for himself is a much better philosophy. (It worked great when we had that in the past) [B)]
quote:
Originally posted by nathanm
quote:
Originally posted by Gaspar
I believe we are seeing the end of an archaic system that squashes the liberty of it's members in exchange for perceived security.
This statement does not follow from what you wrote.
If it did, my comment would be this: Yes, every man for himself is a much better philosophy. (It worked great when we had that in the past) [B)]
As a fan of Unionized labor, could you provide any example the improvements that the UAW has produced for the consumer?
quote:
Originally posted by RecycleMichael
My company has a fleet of six vehicles...
How many does it take for Congress to consider bailing us out?
One more than you have, however many that is. [:)]
quote:
Originally posted by Gaspar
As a fan of Unionized labor, could you provide any example the improvements that the UAW has produced for the consumer?
Unions do not exist to benefit the consumer, they exist to benefit the employee.However, if you take employees as a subset of consumers, there are certainly benefits to those consumers, such as more money, which lets them buy more things, which I suppose does even trickle down to you and I by increasing production volumes, thus lowering the cost of goods in general.
However, go back to my first sentence. It's not about you, it's about the employees. Thankfully, through the efforts of various unions over the years, many new employers treat their employees well as a matter of course, thus obviating the need for a union in that particular shop.
And yes, there are downsides to unions. They sometimes are havens for corruption, just as any organization with cash sloshing around is, including the companies which they bargain against.
quote:
Originally posted by nathanm
Unions do not exist to benefit the consumer, they exist to benefit the employee.
I am not an auto employee. As a consumer then, you can find no benefit that the UAW has provided me. As a consumer, the UAW adds no value to my purchase.
And that's the whole point. If they don't benefit the company or the consumers than 2/3 of the equation numerically loses out. Of course, in the big picture for every union member making more money there is a consumer somewhere paying for that.
Labor unions ARE the market. They should be able to understand them. Pricing your labor in such a way as to price them out of jobs was a bad long term decision. They failed to see that in the big ticket the unions offered nothing to the consumer. Like all products that do not have value to the consumer, we stopped buying it. And now thousands will lose their jobs.
Plenty of parties had a hand in this. Certainly management, but the union held some cards also.
GM hired bankruptcy counsel today.
quote:
Originally posted by cannon_fodder
quote:
Originally posted by nathanm
Unions do not exist to benefit the consumer, they exist to benefit the employee.
I am not an auto employee. As a consumer then, you can find no benefit that the UAW has provided me. As a consumer, the UAW adds no value to my purchase.
And that's the whole point. If they don't benefit the company or the consumers than 2/3 of the equation numerically loses out. Of course, in the big picture for every union member making more money there is a consumer somewhere paying for that.
Labor unions ARE the market. They should be able to understand them. Pricing your labor in such a way as to price them out of jobs was a bad long term decision. They failed to see that in the big ticket the unions offered nothing to the consumer. Like all products that do not have value to the consumer, we stopped buying it. And now thousands will lose their jobs.
Plenty of parties had a hand in this. Certainly management, but the union held some cards also.
GM hired bankruptcy counsel today.
As others have so vehemently pointed out in their anti-union polemics, the current payscales are not very different between the domestic and foreign automakers in their US plants.
The problems are the sudden shift in the market due to the oil price shock that lasted longer than most expected and the retirement benefits the domestic automakers pay more of and the foreign makers do not. These are mostly past obligations that no amount of current bargaining can easily change.
Auto sales in this country are in the toilet (Ford less than others, interestingly). If the Big 3 hadn't been cash poor and saddled by the constant drain of their defined benefit retirement plans they wouldn't be in this situation.
Nor would they be in this situation (or at least in as dire a situation) were it not for oil speculators.
Given the funds we've outright given to the financial industry, I don't think the loan package that's on the table is at all unfair.
I can't say it's at all surprising given the current political climate, which is pretty much anti-manufacturing. I guess we'll just have to see whether we're making a monumental error in shortsightedness or being wisely frugal.
Lucky us! Hoover is alive and well! (//%22http://news.yahoo.com/s/ap/20081212/ap_on_go_co/congress_autos%22)
quote:
WASHINGTON (AP) — A $14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts.
Senate Majority Leader Harry Reid said he was "terribly disappointed" about the demise of an emerging bipartisan deal to rescue Detroit's Big Three.
He spoke shortly after Republicans left a closed-door meeting where they balked at giving the automakers federal aid unless their powerful union agreed to slash wages next year to bring them into line with those of Japanese carmakers.
Republican Sen. George V. Voinovich of Ohio, a strong bailout supporter, said the UAW was willing to make the cuts — but not until 2011.
Reid was working to set a swift test vote on the measure Thursday night, but it was just a formality. The bill was virtually certain to fail to reach the 60-vote threshold it would need to clear to advance.
Reid called the bill's collapse "a loss for the country," adding "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight."
Nathan's exactly right about labor and the purpose of unions. Unions don't exist to add value to the consumer. They exist to protect a unique commodity -- labor -- from abuse. Yes, in this situation the autoworkers share some responsibility for pricing their own labor, but they're also in constant renegotiation with management, and are responsive to changes in the marketplace. Labor doesn't simply make demands which absolutely must be met by mgmt, or else.
We're also not still in the age of anarchists and socialists, and trainloads of strike-breaking Pinkertons. The relationship between the UAW and the Big 3 is mature and stable, and it's simply a misperception that labor holds the whole industry hostage to its outsize labor demands.
Accepting wage and benefit cuts to match the profitable "foreign" manufacturers' compensation for US employees seems to be a painful but not unreasonable solution. The companies need it now, not in 2011. Management salaries and benefits need to follow the same example.
quote:
Originally posted by nathanm
quote:
Originally posted by Gaspar
As a fan of Unionized labor, could you provide any example the improvements that the UAW has produced for the consumer?
Unions do not exist to benefit the consumer, they exist to benefit the employee.
Thank you! That's exactly what I was looking for. The consumer is the one that votes with his or her dollars, and now that the unions have taken responsibility for the quality and price of production, they ARE in the business of ultimately serving the consumer. They have chosen to ignore the consumer over and over again, and now the consumer has chosen to ignore them.
The End.
That's a whole lot of axe grinding right there, Gassy. How do you figure unions have "taken control"? They are only one factor of many that goes into pricing the production of a car.
I may be way off base but, it would appear on the surface that the difference in the wages paid by the non-union "transplant" auto manufacturers is probably pretty close to the union dues that the employees of the domestic auto pay..... in other words, it appears to me that the cost of keeping the union in business is the problem. Ron Gettlefinger and his colleagues are the ultimate leeches... living off of the "gains" that they negotiate for their members. These "gains" add absolutely nothing to the value of the product or benefit the consumer in any way.. instead, they are a headwind that the companies have to overcome vs. their competitors.
When times are good a company can fight through these headwinds... but when times are bad they can be the death knell. Additionally, the car business has been cyclical forever. For management and labor to now claim that it is the cyclical nature of the business that is killing them is disingenuous at best, downright ignorant at worst. Nothing about their business has changed except the intractible nature of their cost structure.
quote:
Originally posted by we vs us
That's a whole lot of axe grinding right there, Gassy. How do you figure unions have "taken control"? They are only one factor of many that goes into pricing the production of a car.
Not really. They mandate production speed, and the cost of production is directly related to union oversight.
I have a friend, Armondo, who worked for the UAW in St. Louis. After he put in 38 years and retired, he worked as a "union rep" in his old plant. He always used to joke about how his job was just to make sure people didn't work too fast. Used to make me so angry. he said if they worked too fast they could lose their overtime.
That's the first time I became aware that the UAW was not focused on worker efficiency, productivity, or advancement, but only on worker compensation and advancement based on tenure rather than performance.
Armondo was a nice guy to argue and drink a beer with but he said he ran a bolt gun for 20+ years until they brought in a robot to hold and bolt the doors, then he spent about 18 years supervising the robot.
When Daimler came in they wanted to promote the Mercedes production incentive system where each line and each worker becomes a member of a team and competes for product quality against other production teams. Incentives and bonuses would be based on the quality of product that each team put out. You can imagine how that played out.
quote:
Originally posted by we vs us
That's a whole lot of axe grinding right there, Gassy. How do you figure unions have "taken control"? They are only one factor of many that goes into pricing the production of a car.
The Big Three pay out on average $73.26 per hour of union labor. $73.26. That is the companies cost per hour to work a union man. That
DOES NOT include legacy costs in any way, the SEC filings reflecting those costs specifically explain that it is expenses for currently employees in line with GAAP. That is the cost for that employee currently working. If you count legacy costs, which are largely already funded, the figure would be $104.26 per union man hour.
The average UAW member brings home near $70,000 in cash wages, doesn't have to contribute a dime to his 401K (guaranteed pension), has no payments for his health care, has his life insurance covered, has dental coverage, disability insurance.... All with a high school degree.
Source: http://www.heritage.org/Research/Economy/wm2162.cfm (very well referenced)
By all accounts the union labor and legacy costs add between $2500 and $3500 to the production cost of a Taurus over a Camry. Hence, the Camry can have more features and higher quality and sell at a similar price point profitably. Which is, of course, why the Taurus consistently sells at a discount ($2,500 cash back!) to make sure they can sell it... and why they lose money.
When labor costs approach THREE TIMES the national average, I'd say they have significant control. All the crap about legacy costs is a red herring, health care costs are a non-factor when compared to non-UAW US based auto plants, and the argument that wages "really aren't that high" simply doesn't hold water.
Counting benefits, a UAW employee with a high school degree does about twice as good as the average Tulsa attorney (median pay ~ $80,000, no overtime allowed). If an attorney in Tulsa didn't get enough business the response would simply be that they need to either improve their quality or lower their wage rate - or shut up and find a new profession. For some reason an auto worker making twice as much should get a Congressional bailout.
I applaud the union for doing so well and getting their members such an amazing package. I disparage management for continuing to concede to such wage demands as well as failing to lead the companies forward so many other levels. Labor and management both worked very hard to destroy the US auto sector.
Well then. . . I think attorneys should unionize. It seems that relying personal performance and productivity is unfair. What about benefits CF?
This is a travesty.
Lets start an lawyer's union and demand equal treatment and a tenure based income. We could mandate a $300/hr rate for all attorneys on a scale that increases to $600/hr the longer they have been in the business.
This is so cool! We could be union bosses and wear big black suits and smoke cigars.
Public defenders, judges, paralegals, and legmen could join too. We could negotiate with the Gubment and strike if they refused to meet our demands.
Awesome!
Actually, something HAS changed about their business, and that's the complete unavailability of credit for both them and their customers. Customers can't buy the product without it, and the company can't survive the downturn without it. The financial industry would normally be the ones providing that credit but, you know, they're the ones hoarding their own bailout funds, the funds that were provided to them to reliquidate those credit markets.
The fact that this entire argument has come down to whether or not the workers can play ball immediately (during the worst economic times since the Great Depression) or in two years is testament to how a lame duck rump of Republican senators can control the legislative process to serve their ideological needs. It's even more transparent if the amount of time and money in question is equal to union dues. That pretty much proves that the sticking point is the existence of the UAW, and that the GOP sees a golden opportunity to break the the union. The tragedy is that they're willing to destroy an entire American industry to do it.
I really can't fathom this hostility to organized labor, unless it's something in the conservative genes. A reflexive suspicion of the guys and gals who make your stuff, maybe. The irrational fear that they might demand so much that they drive their employers out of business, perhaps. Either way it's typical Objectivist hysteria, based entirely on slippery slope logic that posits the worst that can happen, rather than real world cause and effect.
that is so silly.
quote:
Originally posted by we vs us
Actually, something HAS changed about their business, and that's the complete unavailability of credit for both them and their customers. Customers can't buy the product without it, and the company can't survive the downturn without it. The financial industry would normally be the ones providing that credit but, you know, they're the ones hoarding their own bailout funds, the funds that were provided to them to reliquidate those credit markets.
Creditors are still granting auto loans to consumers. Interest rates have not changed, nor have qualification requirements.
quote:
The fact that this entire argument has come down to whether or not the workers can play ball immediately (during the worst economic times since the Great Depression) or in two years is testament to how a lame duck rump of Republican senators can control the legislative process to serve their ideological needs. It's even more transparent if the amount of time and money in question is equal to union dues. That pretty much proves that the sticking point is the existence of the UAW, and that the GOP sees a golden opportunity to break the the union. The tragedy is that they're willing to destroy an entire American industry to do it.
We are so so so far from " the worst economic times since the Great Depression." Credit markets are sore. Interest rates are still low, but my parents bought their last home during the 12.5% interest rate period caused by the Carter administration (went as high at 19%). We also had a corresponding 9.7% unemployment rate, a gas shortage, and a massive drop in new industry, home starts, and poverty soared.
(http://upload.wikimedia.org/wikipedia/commons/thumb/c/c3/Us_unemployment_rates_1950_2005.png/800px-Us_unemployment_rates_1950_2005.png)
(http://mortgage-x.com/images/graph/r_30_prime.gif)
quote:
I really can't fathom this hostility to organized labor, unless it's something in the conservative genes. A reflexive suspicion of the guys and gals who make your stuff, maybe. The irrational fear that they might demand so much that they drive their employers out of business, perhaps. Either way it's typical Objectivist hysteria, based entirely on slippery slope logic that posits the worst that can happen, rather than real world cause and effect.
Say what you will, but that will not change the fact that the consumer is in control, not the union, not the companies, not the government. Thank God.
quote:
Wevus, your entire position is an emotional please for the proletariat. The GOP and anyone against the deal hates the workers and wants to see them fail. The failure of the company is not their fault but the fault of the bankers. Anyone against bailing out the auto industry is hostile, suspicious, irrational, using faulty logic, and spreading hysteria. The workers are fighting for their rights and being thrown out on the streets by the bourgeoisie.
A very odd Marxist defense of giving tens of billions of tax payers money to the pinnacle of US private industry. I'm not calling you a Marxist, a commie, or anything. Just pointing out that your statement can be summed up as stated above.
You never addressed the sustainability of paying a high school grad $75. The market forces at work. The viability of the companies. Of the management and labor decisions that doomed these companies. Sorry for the prolonged response, but emotional please just scream at me to reply.
1) GASPAR: There used to be an effective Attorney's union called the ABA. It set "quotas" for how many new attorneys could be admitted. By limiting supply it artificially inflated the cost.
Unfortunately, the Supreme Court ruled some 30 years ago that such an action deprived many people the constitutional right of access. The AMA still operates with much success under the same principle though - limit supply and you will increase wages. Poor me, I just have to wait for older attorneys to die off.
2) WEVUS:
I am not hostile to labor in any way, shape, or form. Organized labor has and continues to do very good things for the American worker and the American economy as a whole. I have study the history of the American labor movement very closely and taken classes on organized labor from a noted author. I have worked for a union shop, run a union shop and negotiated with labor unions. I am not ill informed nor short selling labor.
3) HOWEVER:
quote:
The irrational fear that they might demand so much that they drive their employers out of business
Why is this fear irrational? Airlines, coal mining, the steel industry and yes... the auto workers. All the great union shops have shed tens of thousands of workers and are/were floundering. I would say it is a
realized fear.
Real world cause and effect: increased cost with no added value = lowered demand. Organized labor increases cost to the auto industry while adding no product value. Therefor, organized labor decreases demand for US made automobiles.
I fail to see what is reflexive, hostile, objectivist, or hysterical about that logic? I'm not positing hypothetical situations, it has happened. The airlines nearly all went bankrupt. Hardly any steel is made in the US. Tunnel coal mining is a rare breed. And the auto industry has failed.
4) Furthermore, the problem is not that the auto industry is in danger of going bankrupt. Every automaker but those using UAW labor will be just fine. The credit crunch is merely a great excuse to beg for funds for companies that were already failing. They've been shedding BILLIONS of dollars per year for a very long time. If you handed out $10,000 to every American they would still fail as Toyota, Nissan and Honda make money selling cars and the Big 3 LOSE money selling cars.
Credit crisis or not, they are not making money. It may have hastened the end but certainly was not the cause of their problems.
5) $74 an hour. Whoa be the poor working man and the evil GOP who is out to get them. DAMN them for standing on their ideological grounds.
The cold hard fact is, again, you can not pay a high school graduate $74 an hour and expect to be a profitable company. They should have "played ball" 10 years ago when it became clear that the big 3 lost their edge. The UAW chose to press the issue in hopes of the company being able to make up the losses later. They lost that bet.
6) Breaking the union?
The automakers are failing because of poor business decisions. The UAW depends on the automakers. If you don't give $15,000,000,000 to the automakers you are a union breaker.
That is a failure of logic. My opinion that failing companies should fail is not to spite the union. I would very much LOVE IT if the Big 3 could pay such wages and survive. It would be fantastic for the US economy as a whole. It merely is not a realistic possibility.
7) Any decision to not give tens of billions of dollars to the Big Three is NOT a decision to destroy the industry. The US Auto Industry is thriving. The Big Three are not. The Big 3 have been working diligently to kill themselves for a generation.
- - -
quote:
1) GASPAR: There used to be an effective Attorney's union called the ABA. It set "quotas" for how many new attorneys could be admitted. By limiting supply it artificially inflated the cost.
Darn! I wanted to be a big boss and meet the president. My hair looks good all slicked back.
(http://www.teamstersjc7.org/news-photos/hoffa-obama.jpg)
(http://symonsez.files.wordpress.com/2008/07/jimmy-hoffa.jpg)
quote:
Originally posted by cannon_fodder
Why is this fear irrational? Airlines, coal mining, the steel industry and yes... the auto workers. All the great union shops have shed tens of thousands of workers and are/were floundering. I would say it is a realized fear.
...
4) Furthermore, the problem is not that the auto industry is in danger of going bankrupt. Every automaker but those using UAW labor will be just fine. The credit crunch is merely a great excuse to beg for funds for companies that were already failing. They've been shedding BILLIONS of dollars per year for a very long time. If you handed out $10,000 to every American they would still fail as Toyota, Nissan and Honda make money selling cars and the Big 3 LOSE money selling cars.
..
5) $74 an hour. Whoa be the poor working man and the evil GOP who is out to get them. DAMN them for standing on their ideological grounds.
...
The automakers are failing because of poor business decisions.
The automakers are failing because they are cash poor. Have you looked at the sales declines of Toyota and Honda lately?
$74 an hour, like any other figure an employer throws out for what they pay their worker is around twice as much as what the worker actually gets. Between overhead, benefits, and taxes, it makes the wage look excessive when it's really not.
(http://mediamatters.org/items/200811220004?f=h_top) God love the right wing think tanks who mislead us all!
http://www.nytimes.com/2008/12/10/business/economy/10leonhardt.html?_r=1
http://www.tnr.com/politics/story.html?id=1026e955-541c-4aa6-bcf2-56dfc3323682
And if you haven't noticed, it's not just union shops that have been shedding jobs for the last 20 or 30 years. Look at basically any large american company. It's easy to blame the unions, but at&t (long before the current mess), the banks, companies like IBM, basically everybody has been slashing and burning jobs since at least the 80s, union or no.
Of course, we
remember the union shops better, because the unions actually put up a fight. You know, wage givebacks and trying to force the company to cut costs in other areas before cutting 30% of the workforce.
Wage earners have been cast as the sole source and sole solution of any problem with any company for the last 30 years.
quote:
Originally posted by nathanm
quote:
Originally posted by cannon_fodder
Why is this fear irrational? Airlines, coal mining, the steel industry and yes... the auto workers. All the great union shops have shed tens of thousands of workers and are/were floundering. I would say it is a realized fear.
...
4) Furthermore, the problem is not that the auto industry is in danger of going bankrupt. Every automaker but those using UAW labor will be just fine. The credit crunch is merely a great excuse to beg for funds for companies that were already failing. They've been shedding BILLIONS of dollars per year for a very long time. If you handed out $10,000 to every American they would still fail as Toyota, Nissan and Honda make money selling cars and the Big 3 LOSE money selling cars.
..
5) $74 an hour. Whoa be the poor working man and the evil GOP who is out to get them. DAMN them for standing on their ideological grounds.
...
The automakers are failing because of poor business decisions.
The automakers are failing because they are cash poor. Have you looked at the sales declines of Toyota and Honda lately?
$74 an hour, like any other figure an employer throws out for what they pay their worker is around twice as much as what the worker actually gets. Between overhead, benefits, and taxes, it makes the wage look excessive when it's really not.
(http://mediamatters.org/items/200811220004?f=h_top) God love the right wing think tanks who mislead us all!
http://www.nytimes.com/2008/12/10/business/economy/10leonhardt.html?_r=1
http://www.tnr.com/politics/story.html?id=1026e955-541c-4aa6-bcf2-56dfc3323682
And if you haven't noticed, it's not just union shops that have been shedding jobs for the last 20 or 30 years. Look at basically any large american company. It's easy to blame the unions, but at&t (long before the current mess), the banks, companies like IBM, basically everybody has been slashing and burning jobs since at least the 80s, union or no.
Of course, we remember the union shops better, because the unions actually put up a fight. You know, wage givebacks and trying to force the company to cut costs in other areas before cutting 30% of the workforce.
Wage earners have been cast as the sole source and sole solution of any problem with any company for the last 30 years.
Wow. Not even worth the energy to respond, but I can't resist because I have no self control.
Please define the hilarious talking point term "cash poor". I love it.
"hey guys, I'm not broke, I'm just cash poor"
"I'm not short, I'm vertically challenged"
"I'm not bald, I'm cranially unornamented"
"She's not ugly, she's visually destitute"
"He didn't max out his credit cards, he's simply credit challenged"
Perhaps the auto industry is simply "Credit Challenged".
Oh, oh, oh! I got it. . . They are:
"Sales Disadvantaged"Aww. We should bail them out.
[}:)]
Come on. Get real.
Oh this has got to make even the most crazed wild-eyed liberals mad too.
Harry Reed is tagging earmarks on to the auto bail-out bill. I guess he and Pelosi think that no one is looking.
Senate Majority Leader Harry Reid, D-Nev., insisted that the judicial pay raise go into the automaker loan measure, which is the only item of business on Congress' lame-duck agenda.
Delicious. He's tagging on a pay-raise for federal judges.
quote:
Originally posted by Gaspar
Delicious. He's tagging on a pay-raise for federal judges.
I guess you aren't mad that the Republicans wanted to tack on a pay cut for auto workers?
And cash poor means the fundamentals are fine, but the downturn is causing losses that can't be absorbed by existing cash reserves. The foreign makers have substantial cash reserves in addition to governments that have been subsidizing them for years.
GM is failing because of problems in non-core businesses. Even with the extreme handicap put on them by retirement benefits, their core auto business is profitable. (or was earlier this year, I don't know how last quarter looked)
Yes Republicans wanted the UAW to make some concession, any concession.
A small pay cut of $5 an hour (cutting worker pay to an average of $69 an hour) would save the auto industry nearly 5 billion dollars a year and stop the bleeding, but no. The hatred between the Unions and the industry they serve is so great that they are willing to take it down.
So be it.
I did not realize the opposition to the bailout using taxpayer money was in excess of 60%.
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4645892
quote:
Originally posted by Gaspar
Yes Republicans wanted the UAW to make some concession, any concession.
A small pay cut of $5 an hour (cutting worker pay to an average of $69 an hour) would save the auto industry nearly 5 billion dollars a year and stop the bleeding, but no. The hatred between the Unions and the industry they serve is so great that they are willing to take it down.
So be it.
That's not quite right. The UAW didn't want to unilaterally take big pay cuts while management didn't think they should have to be inconvenienced. If the entire pay of UAW labor was eliminated it adds up to only 10% of the cost of a GM car. Hardly enough to stop the bleeding.
You're playing with figures. The average worker does not make $69 hr unless you include benefits. That pay average is skewed toward the older, more experienced workers who are paid well while newer employees often find better paying jobs outside the industry.
The real problem here is two fold. Southern Republicans playing politics with their supposed enemies, labor unions, who are primarily Democratic supporters. Because of those southern Senators' intransigence, its likely labor will continue to support their opponents each election. And foreign competitors whose health care benefits are subsidized by their governments. Even when they locate factories on American soil, they profit from having lower labor costs in the south along with good cash reserves from their home operations.
The enigma is why southerners keep voting for leaders who despise them so.
Cash poor? They LOSE MONEY by the BILLIONS every month. The non-Big 3 car companies are still profitable. They are cash poor because they lose money and have been for a very long time.
Cash poor. Like this is a sudden crisis. They've been failing for a generation.
PAY:
You're article is wrong. Please note how the source I cited had 20 footnotes and your had none. The entire premise for the argument is "nah uh" with nothing to back it up. FACT: UAW members cost the company $74 an hour.
Why are facts so hard to comprehend?
You are failing to grasp something in the argument at a fundamental level. Instead of trying to logically figure out the issue, you are attempting to justify your position. On a guttural level, Big-3 Good, Union Good, anyone that doesn't think that = bad.
UAW labor adds $2500 to most Big 3 cars that the competition doesn't pay. Therefor, they are not competitive and are failing companies. No bailout will solve that basic problem of LOSING MONEY.
- - -
Per the Judicial raise bullcrap, it is totally unrelated to the automakers. A great example of what is wrong with government... while testifying that they NEED TO GET THIS PASSED they then shove it full of other crap. But as many strings on the "loan" as any lender would (show me you are profitable) but why tack on other garbage?
quote:
Originally posted by waterboy
You're playing with figures. The average worker does not make $69 hr unless you include benefits.
How can you
not include benefits in the cost of an employee? I don't see anyone here claiming the base pay of an autoworker is $138,000. per year (approx $69/hr). Every place I have worked has clamied that direct salary is about 1/2 the cost of an employee. $138,000/2=$69,000. That's about what some are claiming for employee (gross) income. That's still not too shabby for a high school grad. It sometimes makes me wonder why I spent all that time, effort and money to go to college.
quote:
Originally posted by cannon_fodder
Cash poor? They LOSE MONEY by the BILLIONS every month. The non-Big 3 car companies are still profitable. They are cash poor because they lose money and have been for a very long time.
Cash poor. Like this is a sudden crisis. They've been failing for a generation.
PAY:
You're article is wrong. Please note how the source I cited had 20 footnotes and your had none. The entire premise for the argument is "nah uh" with nothing to back it up. FACT: UAW members cost the company $74 an hour.
Why are facts so hard to comprehend?
You are failing to grasp something in the argument at a fundamental level. Instead of trying to logically figure out the issue, you are attempting to justify your position. On a guttural level, Big-3 Good, Union Good, anyone that doesn't think that = bad.
UAW labor adds $2500 to most Big 3 cars that the competition doesn't pay. Therefor, they are not competitive and are failing companies. No bailout will solve that basic problem of LOSING MONEY.
- - -
Per the Judicial raise bullcrap, it is totally unrelated to the automakers. A great example of what is wrong with government... while testifying that they NEED TO GET THIS PASSED they then shove it full of other crap. But as many strings on the "loan" as any lender would (show me you are profitable) but why tack on other garbage?
While I don't have time to do more research into the balance sheets of the big 3 for the last ten years now (I have a christmas party to get ready for), suffice it to say that the benefits they're paying retirees are included in the $70 an hour falsehood. Look at the references in your article. Just because they are there doesn't mean the article isn't stretching the truth of them.
Oh, and the payscale thing? The UAW is already taking cuts that are being phased in and will become fully effective in either 2010 or 2011. Those cuts will make UAW labor (not counting the retirees that the foreign makers have very few of in this country) less expensive than the non union labor in other factories.
This claim that neither the companies nor the unions have done anything to save themselves is complete and utter bull**** fed to us by people who have an ideological problem with unions and want to see the big 3 go under for no reason other than to break the UAW. (That would be the Heritage foundation)
Sadly, nobody bothers to do their homework, so the utterly misleading numbers put out by partisan think tanks are parroted as truth in news sources around the country. As far as I'm concerned, I have no more reason to believe the Heritage Foundation than I do the UAW's claims regarding their salary and benefits.
(and it was three articles, not one)
Red Arrow, you went to college to get a better job. Hopefully it doesn't include logic. When you compare foreign automakers profitability and labor costs to American, you have to understand that their home governments pay for the health care costs of their domestic employees. We don't. Since most of their employees are overseas, it is an advantage. They also receive help in research and development. Here, its on your own dime. They locate their American factories in low wage states where the senators hope for lowering their constituents pay even more. Unlike Detroit automakers who pay wages competitive with northern cost of living.
Throwing around figures like $69-74 hr. is not accurate or a fair comparison. For one thing its an average, not a mean, not a mode, just a stupid average. Average IQ in America is around 106.
Why should labor carry the entire brunt of stupid national policy and greedy, self-serving management?
quote:
Originally posted by waterboy
Red Arrow, you went to college to get a better job. Hopefully it doesn't include logic.
Anyone who says the cost of an employee isn't such & such a price
unless benfits are included could use some lessons in economics. The cost of benefits are always part of the cost of any employee. I got the $69/hr from your post. You can pick any number you want, benefits still cost the employer and are part of the cost of labor.
Notice: No where in here did I say that management is worth their salary either. The purpose of management is to lead the company. If they lead the company down a hole they should be fired.. no benefits, no parachute (unless it is lead).
My logic is just fine thank you. I often question the logic of Union lackeys
and 5 year plan Harvard MBAs.
quote:
Originally posted by Red Arrow
quote:
Originally posted by waterboy
Red Arrow, you went to college to get a better job. Hopefully it doesn't include logic.
Anyone who says the cost of an employee isn't such & such a price unless benfits are included could use some lessons in economics. The cost of benefits are always part of the cost of any employee. I got the $69/hr from your post. You can pick any number you want, benefits still cost the employer and are part of the cost of labor.
Notice: No where in here did I say that management is worth their salary either. The purpose of management is to lead the company. If they lead the company down a hole they should be fired.. no benefits, no parachute (unless it is lead).
My logic is just fine thank you. I often question the logic of Union lackeys and 5 year plan Harvard MBAs.
Then we agree. They don't have to pay for the cost of benefits because their government foots the bill. Our employees cost us more because of that shortsighted policy. It makes us uncompetitive across the board. So, saying that Toyota can produce cars cheaper because their labor is cheaper and deducing that we have to cut the cost of labor is a specious argument. We will never cut the cost of labor enough to balance out their advantages.
Three things are routinely ignored in these conversations:
1. If UAW workers were really making $69-74 hour of pay, there would be a rush of employees to Detroit to fill those jobs. Just like there was when Alaska was attracting labor to the north slope. Even adjusted for cost of living, thats good pay. There is no rush. And, wages are regional. A sanitation worker in Berkeley, CA makes more than a college educated policeman in Tulsa. Comparing their respective pay isn't meaningful benefits or not.
2. Who benefits should the big three have their labor neutered and possibly forced into bankruptcy? Simple enough. Southern states whose senators have manufacturing plants owned by foreign manufacturers like Toyota. States who tout their labor as cheap and willing. Solid red state senators who coincidentally have the most to gain by killing off big labor and the big three. Suddenly they will prosper even more and attract trained workers from the north into their states. They will finally win the civil war...economically.
3. UAB will not negotiate for a unilateral reduction in benefits. That is not negotiation, that is dictation. Reductions are already scheduled from past negotiations.
The system sucks for us to compete economically within our own confines. Our cars sell well overseas and make good money but here at home the rigid insistence that management and health insurers should be protected, while labor and the general public are punished means other industries are to meet the same crossroads that the automakers are at.
So while we're arguing about a 12 billion dollar loan to the auto industry, we're not supposed to pay attention to that man behind the curtain, or this:
Feds refuse to disclose recepients of Two Trillion Dollar loan (//%22http://bloomberg.com/apps/news?pid=20601087&sid=apx7XNLnZZlc&refer=home%22)
It seems to me we're being very effectively distracted while the Treasury is being looted. Two trillion is a whole boatload of money, and we don't need to know who's getting it?
quote:
Originally posted by Red Arrow
Anyone who says the cost of an employee isn't such & such a price unless benfits are included could use some lessons in economics. The cost of benefits are always part of the cost of any employee.
That would be stupid. Just as it's stupid to include the cost of benefits to retirees as part of the pay of active workers, as everyone seems to be doing.
Waterboy:
Don't put too many words into my mouth. I find it difficult to believe that the Japanese government in paying directly for US plant workers health care, social security (the part the company pays), life insurance, unemployment compensation contributions, and maybe a few more that I don't remember. The scuttlebut is that the US plants are profitable. I don't have access to financial papers and probably wouldn't understand them if I did. I am just an engineer, not a clever accountant.
quote:
Originally posted by nathanm
Just as it's stupid to include the cost of benefits to retirees as part of the pay of active workers, as everyone seems to be doing.
Two thoughts here.
Social Security taxes today pay for today's retired folks. People who are not self employed have 1/2 of their SS tax paid by the employer (a forced benefit that costs the employer). That sounds like the cost of today's retirees being part of the cost of today's active workers. (I didn't say pay, I said cost.)
The old time retirement account was supposed to be funded independently of the active workers. I know there were some "discrepancies". How the Big 3 got to where that is not the case is probably a failing on both management and the Unions.
Question:
I thought being part of a Union was supposed to include unemployment (strike or otherwise) and retirement benefits. Wasn't that part of the dues? At one time, the Union had more to offer than the order to strike. Is that no longer true? (My grandfather, a tool and die maker, always claimed that the income he lost during a strike was never made up by increased wages over the next contract.)
Interesting article here regarding the constitutionality of bailouts:
http://www.cato.org/pub_display.php?pub_id=9729
Also, here is Fox News legal analyst discussing this issue as well (yes, I know, Faux News sux):
http://www.foxnews.com/video/index.html?playerId=videolandingpage&streamingFormat=FLASH&referralObject=3292709&referralPlaylistId=playlist
quote:
Originally posted by Red Arrow
Waterboy:
Don't put too many words into my mouth. I find it difficult to believe that the Japanese government in paying directly for US plant workers health care, social security (the part the company pays), life insurance, unemployment compensation contributions, and maybe a few more that I don't remember. The scuttlebut is that the US plants are profitable. I don't have access to financial papers and probably wouldn't understand them if I did. I am just an engineer, not a clever accountant.
Nor put any into my mouth.[;)] We covered this some time earlier. They do not provide those benefits for their low paid American workers. However, the American employment is only a part of their costs of production. Their advantage is that their own employees are granted those benefits which are subsidized by their home governments. Just as their R&D is also underwritten by their governments.
Yes, I read that the Smyrna, Georgia and other American operations are profitable. Its because they pay low wages there (lower cost of living) and as noted, have built in advantages from the head offices overseas. It also helps that they are fine companies to work for, utilizing strong management techniques that result in low turnover, high morale, state of the art equipment and healthier employees. They also don't stubbornly build cars that nobody wants.
No one notes the obvious. Move Detroit to a southern state and contract with the Japanese to run them. Bankruptcy avoided, southern republicans happy, ineffective managers cut loose, labor costs reduced and probably no need for unions at all.
quote:
Originally posted by waterboy
Yes, I read that the Smyrna, Georgia and other American operations are profitable. Its because they pay low wages there (lower cost of living) and as noted, have built in advantages from the head offices overseas.
The average wages are only slightly lower for non-union foreign plants than the big 3 pay, when you don't count benefits for retirees as part of the wages of current employees, as the $70 an hour figure does.
A new big 3 employee actually makes less than a foreign maker's employee under the renegotiation last year. Old employees get to keep their current pay scale.
You also have to keep in mind that at least as of 2006, Toyota had something around one thousand US retirees.
And the falloff in sales over the last year of the foreign makes is much greater than that of Ford, and slightly over GM's drop.
There's a bunch of BS going around regarding the automakers.
quote:
Originally posted by waterboy
[No one notes the obvious. Move Detroit to a southern state and contract with the Japanese to run them. Bankruptcy avoided, southern republicans happy, ineffective managers cut loose, labor costs reduced and probably no need for unions at all.
I did think of that but thought it might give you a heart attack. Merry Christmas, or whatever you may celebrate.
quote:
Originally posted by Red Arrow
quote:
Originally posted by waterboy
[No one notes the obvious. Move Detroit to a southern state and contract with the Japanese to run them. Bankruptcy avoided, southern republicans happy, ineffective managers cut loose, labor costs reduced and probably no need for unions at all.
I did think of that but thought it might give you a heart attack. Merry Christmas, or whatever you may celebrate.
Nah. Wouldn't bother me. Maybe we could get a Toyota/GM plant in Oklahoma and alleve some of our suffering. I think that many are under the illusion that this is a simple fix- reduce the cost of labor- but I see it as more systemic. It is costly to not face up to our shortcomings, one of which is to ignore that the rest of the world has national health care of some kind which allows them competitive advantage. They can focus on productivity.
The other is that we have refused to address the havoc created in our workforce from drug abuse. There is no large scale, low cost or free health program to rehabilitate our workforce. Our fix is to use costly, private insurance that only treats those families who have good jobs or wealth or invest in private prisons. We'll pay dearly for that one.
Merry Christmas!
Wow. There's a bunch of people here that don't understand, business, math, or economics.
Person works for company. Company pays person MONEY. Company pays MONEY for person's health care. Company pays person more MONEY in tax deferred account for retirement. Company pays more MONEY for huge benefit packages. Company pays more money for various bonuses not based on performance.
MONEY + MONEY + MONEY + MONEY + MONEY= TOTAL EMPLOYEE COST
Rationalize it however you want. Nearly 500,000 full time UAW workers. Reducing their pay across the board by $5 hr, would save 2.5 million dollars every HOUR! 100 million a week. Over 5 billion a year.
Lets look at some pay scales for Daimler UAW workers.
First grade starts at $28/hr based on 2006 negotiation, plus $3,000 upfront signing agreement. Plus $600 Christmas bonus (for those working an average of 26 hours or more a week). Plus $80/wk COLA (cost of living payment). Plus 3% yearly performance bonus. NONE OF THIS INCLUDES WHAT IS PAYED INTO THE PENSION PROGRAMS.
And they won't budge to save their industry? OK.
CF:
I'll cop to being a little exercised about this subject, but mostly because it's pissing me off. There're lots of problems with the conventional wisdom regarding what's happening/happened to the Big 3, and the $70 per hour union wage is one of them. Turns out it's not even close to true. (//%22http://www.tnr.com/politics/story.html?id=1026e955-541c-4aa6-bcf2-56dfc3323682%22)
quote:
. . . [A]verage wages for workers at Chrysler, Ford, and General Motors were just $28 per hour as of 2007. That works out to a little less than $60,000 a year in gross income--hardly outrageous, particularly when you consider the physical demands of automobile assembly work and the skills most workers must acquire over the course of their careers.
More important, and contrary to what you may have heard, the wages aren't that much bigger than what Honda, Toyota, and other foreign manufacturers pay employees in their U.S. factories. While we can't be sure precisely how much those workers make, because the companies don't make the information public, the best estimates suggests the corresponding 2007 figure for these "transplants"--as the foreign-owned factories are known--was somewhere between $20 and $26 per hour, and most likely around $24 or $25. That would put average worker's annual salary at $52,000 a year.
The $70 wage lie is repeated for political reasons, pure and simple. There's no other reason to assert it, because it is certainly not true economically. I'm not accusing you of this, but the GOP is flogging that false number (//%22http://thenewshole.msnbc.msn.com/archive/2008/12/12/1713569.aspx%22) to score a political victory, and is doing so at the expense of many many working Americans.
Further, ancillary industries are quaking in their boots about possible Big 3 bankruptcies. (//%22http://www.nytimes.com/2008/12/12/business/12rescue.html?_r=1&hp%22) By most estimates, the toll in lost jobs in supplier industries would far outstrip the job losses in the Big 3 themselves. As I've been saying, we're not just playing with a couple companies here; we're toying with a
sector of the economy. Letting an entire industry go down without help is pure negligence, and make no mistake, that's what we're doing. Regardless of their marginal wage advantages, foreign companies will be hit almost as hard when their suppliers close shop. Already sales of Toyotas and Hondas are down just as much as Ford and GM. This is an industry wide downturn, and that's why focusing on relatively small wage concessions is fruitless and dishonest. This is a much bigger problem than that.
But the real issue is how we conceive of labor and what we think people who do the building of the cars are worth. As far as I know (and I'm willing to be corrected) no modern union has ever demanded so much as to tank its business. It's simply not in a union's interest to do so. Why destroy the thing that provides your livelihood? The fact that you cite the shedding of union jobs in the airlines, in steel, etc actually supports the thesis. The unions in each of these cases were willing to negotiate jobs away rather than destroy the business.
In the automakers' cases, the unions have continued to negotiate when market conditions change (cf. the new contract of 2007, as cited in the first link).
Similarly, that we are willing to believe a number as astounding as $70/hr -- and make policy decisions based on that erroneous info -- proves the gulf of mistrust there is between American conservatives and unionized manufacturers. While it's obvious with some digging that the relationship between the automakers and their union evolves with the times, it is ideologically convenient for the GOP to rely on outdated assumptions to justify their vote.
You are still not getting it. Current UAW data
Wage Rate of GM/Ford/DaimlerChrysler
UAW Represented Assembly Workers as of March 5, 2007
GM Assembler Hourly Rate $26.09
COLA 1.77
$27.86
FORD Assembler Hourly Rate $26.10
COLA 1.83
$27.93
DAIMLERCHRYSLER Hourly Rate $26.86
Assembler COLA 1.89
$28.75
With Benifit packages:
Competitive Labor Cost Comparison
2006 Average Labor Costs — UAW represented (per hour worked)
DaimlerChrysler $75.86
Ford $70.51
General Motors $73.26
It's not some wild Republican plot. IT'S PUBLISHED BY THE UAW, BY FORD, BY CHRYSLER, AND BY GM.
A PDF of the breakdown is available from the 07 Chrysler labor talks.
Christler Labor Talks 2007 (//%22http://chryslerlabortalks07.com/Economic_Data.rtf%22)
(http://chryslerlabortalks07.com/images/dcx_laborcostcomparison.jpg)
Wevus:
That article supports my assertion, it retorts the company COST figure by arguing that the employees do not bring home any more than $65,000 a year. $28 an hour take home pay ($28 per your article), plus full pension, plus complete health care, dental, life insurance, disability insurance, and overtime. EASILY costing the company $74 an hour. NOT how much the employee brings home, how much they COST the company.
Think about it, what do you pay per month for health care? How much is your life insurance? How much do you save in your 401k? Do you have dental insurance or disability? Do you get overtime? Do you realize how much you really COST your company?
I would be happy to work for $65,000 a year, a full pension, and all those benefits. That is probably equivalent to $100,000 in income without those benefits. A household with 2 average UAW members would be in the top 10% of income households in the nation. If you count their benefits at a mere $10 an hour (I've managed companies before, $10 is a very low figure) they are in the top 5% of households.
9-5 with $65,000 in cash and full benefits on a high school diploma, where can I sign up? That is more than the average college graduate makes. Including benefits, it is more than the average attorney in Tulsa makes. From an economic perspective, it is not efficient to have Americans costing a company $100,000 a year.
And if you want to throw in the retirees for fun, then lets discuss that. So what? It doesn't change the fact that the company is failing. They promised more than they can afford to pay. Very simple.
- - -
The discussion in this thread is on the labor aspect of the failure of the Big 3. Labor costs, either current or legacy, have contributed to the fall. Labor negotiated for those contracts and management gave them the contract. If it is too high or not, it really does not matter.
The companies are no longer competitive by their own fault. If you want to blame legacy costs so be it, but EVERYONE saw that coming for decades. Americans and the rest of the world are choosing to by other products. No matter what the underlying cause, it does not change that fact. The companies are failing.
$15, 20, $30,000,000,000.00 will not save them long term unless something drastic is done. Neither management or labor seems willing to do anything drastic. GM will go bankrupt eventually and will either die or emerge a leaner and more competitive company.
To be very clear: the failure of the big three is NOT labors fault. The worker in the plant showed up to work and did what he was told. I have no spite towards the workers. I also have no ill feelings for the engineers of Wiltel, the mechanics of AA, or the roughnecks that will soon be laid off.
I have clearly stated by position on labor, but we can remove that if it is the focus of disagreement on the bailout. Even if labor decided to work for minimum wage and IF the company still proved to be a non-viable entity - I would still oppose the bailout. I view it as trying to built a dam out of cash to stop a flood... it may slow the ultimate flood but it is not the solution.
Show me a viable solution and illustrate that the bailout is a governmental INVESTMENT and I'm in. Saving that many good paying jobs would be fantastic for our economy. But I do not think this bailout plan will ultimately lead to that goal. And once we have $30b in public funds in we will kick in additional billions and more billions. Slowing the ultimate demise and hurting the US economy as a whole.
Whenever you take money from Joe to subsidize a job for Bill, the end result is to hurt the economy by encouraging inefficiencies. Ultimately a way will need to be found to take GM into receivership and facilitate a restructuring and partial liquidation (selling off units). It is my understanding that pension liabilities can be restructured but not forgiven and that pensioners will (and damn well should) have their contracts fulfilled.
I want to see them all survive and want to see well paid American labor. We merely differ on the ultimate effect of the bailout.
quote:
Originally posted by Gaspar
You are still not getting it. Current UAW data
Wage Rate of GM/Ford/DaimlerChrysler
UAW Represented Assembly Workers as of March 5, 2007
GM Assembler Hourly Rate $26.09
COLA 1.77
$27.86
FORD Assembler Hourly Rate $26.10
COLA 1.83
$27.93
DAIMLERCHRYSLER Hourly Rate $26.86
Assembler COLA 1.89
$28.75
With Benifit packages:
Competitive Labor Cost Comparison
2006 Average Labor Costs — UAW represented (per hour worked)
DaimlerChrysler $75.86
Ford $70.51
General Motors $73.26
It's not some wild Republican plot. IT'S PUBLISHED BY THE UAW, BY FORD, BY CHRYSLER, AND BY GM.
A PDF of the breakdown is available from the 07 Chrysler labor talks.
Christler Labor Talks 2007 (//%22http://chryslerlabortalks07.com/Economic_Data.rtf%22)
(http://chryslerlabortalks07.com/images/dcx_laborcostcomparison.jpg)
Actually, Gassy, YOU'RE not getting it. The hourly wage is competitive with everybody else, with benefits included. $70+ does NOT go into every union worker's pocket every hour. More than half of it represents legacy costs (pensions, healthcare, retirement, etc) for workers who are no longer making the cars.
This is also before the 2007 labor talks, which, among other things began to shift responsibility for most of those legacy costs to a union-administered trust fund, and for which the Big 3 contributed start up funds, but for which the union itself was responsible for from that point on. At the same time, other benefits shrank, and they introduced a two tier system for wages, grandfathering in existing workers but offering new workers a reduced wage.
And I stand by what I've said about the GOP senators who killed this relatively miniscule bailout package. It was done for political gain, to the detriment of the American economy.
Strangely enough, I'm now waiting for President Bush to loosen up the approximately 2% of the TARP that it would take to offer the Big 3 the $14 billion bridge loan they're asking for. I guess we'll see if Bush will bypass his own party or, as Cheney told them, it really IS "Herbert Hoover time." (//%22http://www.politico.com/news/stories/1208/16515_Page2.html%22)
Wevus:
$28 an hour
+ pension
+ health
+ dental
+ disability
+ life insurance
+ overtime
+ taxes (FICA match + unemployment + workers comp)
__________________
Together > $28.
As I understand it, that is what the package is. Explicitly said it was sans legacy costs.
In any event, it does not change my perspective as outlined above.
quote:
Originally posted by cannon_fodder
Wevus:
$28 an hour
+ pension
+ health
+ dental
+ disability
+ life insurance
+ overtime
+ taxes (FICA match + unemployment + workers comp)
__________________
Together > $28.
As I understand it, that is what the package is. Explicitly said it was sans legacy costs.
In any event, it does not change my perspective as outlined above.
But $70 an hour includes the cost of benefits for people no longer working for the company. Retirees in Arizona or whereever. No company accounts for the cost of labor that way, yet everyone continues to assert that the wage plus benefits of current employees is $70 an hour. Why is that?
I guess one positive of bankruptcy (if they can get DIP financing) is that the companies will be able to dump the retiree benefits on the PBGC like most of the airlines did. That will end up costing us a lot more than the loans they are asking for, but we're short sighted like that.
Reading the text of the bill, I see that old Harry Reed got his earmark delicately tucked in:
(c) Authorization of Fiscal Year 2009 Cost of Living Salary Adjustment for Justices and Judges- Pursuant to section 140 of Public Law 97-92, justices and judges of the United States are authorized during fiscal year 2009 to receive a salary adjustment in accordance with section 461 of title 28, United States Code.
Nathan,
If you wish to continue hammering on wages, lets be VERY clear about it, but please read my position. I believe this information very clearly puts this issue to rest.
Legacy costs means retirees.
Sans means without.
The figure is WITHOUT the cost of retirees.
1) Average hourly wage for GM worker: $39.68 ($28 an hour as referenced in your article is from the same source I have reviewed and reflects base wage for regular non-overtime vehicle assembly workers, me $39.68 is average wage for all UAW hours worked. Which seems a more accurate reflection.)
Reflecting base pay, shift premiums, overtime, vacation and holiday redemption and any bonus.
-> General Motors Inc., "GM Manufacturing and Labor Resources," p. 28. Available at http://media.gm.com/manufacturing/handbook/other_benefits.pdf [last visited 12/15/2008]
2) Hourly benefit cost for hourly GM worker: $33.58
* Hospital, surgical, and prescription drug benefits;
* Dental and vision benefits;
* Group life insurance;
* Disability benefits;
* Supplemental Unemployment Benefits (SUB);
* Pension payments to workers pensions accounts to be paid out at retirement;
* Unemployment compensation; and
* Payroll taxes (employer's share).
-> General Motors Inc., "GM Manufacturing and Labor Resources," p. 28.
THESE ARE PRESENT AND FUTURE COSTS OF CURRENT LABOR. NOT legacy costs. No money goes to retiree pay.
NOT costs for retirees. These are NOT costs for people that are retired. These ARE costs for current workers that are both paid out of pocket and reserved for future payments. In accounting terms, they current are costs and expenses (some are technically accruing and deferred pension liability expense, but it is much easier to think of it in cost accounting terms and hence: a current cost).
PLEASE PLEASE PLEASE take notice that this figure is a joint publication by General Motors and is on file with the SEC and the UAW. It is not a biased report. It is not a political report. It is not made up by the left or right wings. The citation is GM.COM
http://media.gm.com/manufacturing/handbook/other_benefits.pdf
According to GENERAL MOTORS and the UAW the compensation for a CURRENT hourly employee averages:
$39.68 per hour cash compensation
$33.58 other compensation and costs
_____
$73.26
Very tellingly, the source that is saying wages are $28 cites the EXACT SAME SOURCE but chooses to only include cash compensation and only for the position of "vehcile assembler." TO that figure one would have to add the benefits package and it remains exclusive of over time, shift premium, banked vacation pay, or other actual cash compensations.
Essentially, the $28 an hour figure is the lowest figure one could extract from the report. And even that figure represents a cost to the company in excess of $60 an hour. So if that is your saving grace, drop the argument.
They have priced themselves out of the market, it is reflected in the performance of the company and in their total employment numbers:
GM Labor, hourly:
99 (2) 139,709
00 134,771
01 127,852
02 121,185
03 118,512
04 106,911
05 97,987
06 80,758
07 75,000 (est.)
08 70,000 (est.)
Please, don't pull some numbers from some BS blog and not understand where they come from. The actual GM provided numbers are on file with the SEC, they are published, and available. Use them:
http://media.gm.com/manufacturing/handbook/index.html
Similar publications are available from Ford and previous years for Chrysler (they are a private company now). Argue about the merits of their wage, or that management is kill it faster, or whatever else. But arguing the numbers when they are published seems a bit moot. You can not account for legacy costs and current costs the same.
- - -
To DRIVE my point home, the GM pension plan is currently over funded by $11 BILLION and is funded with about $68,500,000,000.00 in assets. As an employee works money is paid into the fund as a credit on their behalf. This is standard pension accounting. Current employees do not fund the pensions of former employees lest a pension find itself underfunded (there are federal parameters for funding) which is a cause for concern BUT not in the current situation per GM.
The risk would be to "nearly" retired persons who do not have their accounts fully funded or fully vested. To put 20 years in at GM and not have a pension secured. However, this discussion is ancillary to the compensation discussion above.
http://media.gm.com/manufacturing/handbook/pensions_401k.pdf
- - -
Want to blame management? Fine, plenty of fodder in the report to point a boney finger at them too:
MARKET SHARE
Calendar Year, Cars %, Trucks %, Total Vehicles %, US Vehicles tot
1978 47.9% 40.8% 46.0% 7,097,287
1979 46.3 39.8 44.7 6,326,705
1980 46.0 37.4 44.1 5,056,808
1981 44.6 37.1 43.0 4,643,875
1982 44.2 40.2 43.2 4,553,399
1983 44.3 39.5 43.1 5,302,296
1984 44.5 34.5 41.7 6,035,190
1985 42.7 34.7 40.3 6,344,578
1986 41.1 32.3 38.5 6,285,802
1987 36.6 30.9 34.7 5,273,177
1988 36.2 33.1 35.2 5,562,679
1989 35.1 33.6 34.6 5,144,598
1990 35.6 34.3 35.3 4,994,785
1991 35.9 32.9 34.9 4,371,710
1992 35.9 32.2 33.9 4,449,878
1993 34.4 31.4 33.2 4,713,254
1994 34.3 30.9 32.8 5,063,294
1995 34.2 29.9 32.4 4,895,368
1996 32.7 29.0 31.0 4,793,169
1997 32.5 28.7 30.7 4,766,104
1998 30.0 27.6 28.9 4,608,764
1999 29.8 27.8 28.8 5,017,150
2000 28.6 27.0 27.8 4,953,163
2001 26.9 29.2 28.1 4,904,015
2002 25.4 31.0 28.3 4,858,705
2003 25.7 30.0 28.0 4,756,403
2004 24.9 29.0 27.2 4,707,416
2005 22.6 28.5 25.9 4,517,730
2006 20.7 27.1 24.2 4,124,645
Not only have they lost market share at an alarming rate, they are producing just over HALF the total number of vehicles today as they did in 1978. The US auto market has nearly doubled in that time frame, and they produce HALF the vehicles.
Toyota, Nissan, et. al make more vehicles in the United States than GM does. Together, the "Japenese" auto makers produce about 6,000,000 vehicles in the US. Or about as many as GM did in 1984.
Clearly that is not labors fault, management has plenty of blame.
AGAIN, I am not blaming labor for the demise. At this juncture I would yield the argument in its entirety and still stand by my position. The company is failing and a drop in the bucket from the Treasury won't stop that.
- - -
Health care?
Total health care costs to GM are about $5 BILLION per year. That's for everyone. Working, retired, widow, salary, wage, everyone.
http://media.gm.com/manufacturing/handbook/health_care.pdf
While a staggering amount of money it is a known and reoccurring cost. Poor planning (again, another notch on managements belt) coupled with increasing costs and a failing business have caused the problem to be amplified. $5Bil accounts for about 1/3 of their cash losses. If health care cost was eliminate GM would still lose about $10,000,000,000 per year.
Looking over their cash flow, in the last 5 years (how far my S&P report goes back) no year would cash flow positively even if they had no health care expenses. Take away the health care costs and it is still a failing company.
Thus, a red herring in the discussion.
- - -
PLEASE, dear god PLEASE, don't tell me the number includes legacy costs again unless you have better numbers than the UAW, GM, and the SEC and have a reference for those numbers.
Once again, your "other costs" in the non-wage compensation includes the cost of health care (amongst other things) for retirees.
The PDF you linked does not say what you think it does. It once again is a so-called accounting of wage & benefits taken by adding up the entirety of GM's cost for active and retired employees and dividing it by the number of hours worked.
When their competitors have retirees numbering in the low thousands, that's not at all a fair comparison.
Thanks for the reference, though. It allowed me to calculate that the average GM worker works 2395 hours a year. There were 80,758 hourly employees. That's 193.4 million hours worked.
GM's pension benefits paid in 2006 were 4.9 billion dollars. They paid 4 billion dollars in health care for the retirees. They have 432,000 retirees.
That's $25 an hour in pension benefits. Interestingly, taking the $73 GM claims in those PDFs that they pay each worker per hour and subtracting the cost of pension benefits agrees pretty well with what I claim is actually the average worker's personal wage and benefits cost.
I think that's pretty good evidence that GM is in fact including the pension payments to retirees in the wage and benefits figure you cited.
Maybe I'm just stupid, but I cannot find in the 10-K where wage expense is broken out, otherwise I'd reconcile the difference. Perhaps you can check my numbers.
Either way, their operating loss last year was 6.2 billion. The retiree expense (including health care), if removed, would more than make up for that. It would not, however, stem the flow of losses from GMAC.
Interestingly, if you look at this page:
http://www.media.gm.com/division/uaw/gm_wages.htm
It claims the 1998 total compensation was $46.17 an hour. That pretty much proves to me that there is a bunch of relatively fixed cost being thrown into the 2006 average wage figures. I can't prove, at the moment, whether or not that relatively fixed cost is retiree benefits, but I can do some more research.
OMG he still doesn't get it.
You might as well give up CF.
quote:
Originally posted by nathanm
Once again, your "other costs" in the non-wage compensation includes the cost of health care (amongst other things) for retirees.
. . .
Interestingly, if you look at this page:
http://www.media.gm.com/division/uaw/gm_wages.htm
It claims the 1998 total compensation was $46.17 an hour. That pretty much proves to me that there is a bunch of relatively fixed cost being thrown into the 2006 average wage figures. I can't prove, at the moment, whether or not that relatively fixed cost is retiree benefits, but I can do some more research.
For god's sake, READ THE ENTIRE THING before making stuff up.
Unreal. Really. You don't like the facts presented so you decide they are wrong. Call the SEC and the UAW and tell them they have been lied to. I'm sure they would like to know. Would probably be the final death blow to GM, those groups don't take kindly to being lied to.
As for the 1998 numbers... you have to READ the document and not skim it. 1998 included Delphi as part of GM. Delphi workers were under a different contract that GM Auto workers. If you look at the employment figures it clearly reflects that in the numbers as well as in a footnote. Again, you have to actually READ the document, not just cherry pick parts that support your viewpoint.
I will go over this again, very very slowly and very very clearly using small words:
The wage number I gave does not include current cost for people no longer working at GM.
- - -
Lets break this down:
I went to the SOURCE for the article you referenced. A source published by GM, filed with the SEC, and distributed to the UAW. With that source I extracted the numbers you were citing and told you why they were out of context.
You then, went to that source and grabbed random numbers and extrapolated your own information from it, in spite of the very clear numbers to the contrary.
PENSIONS
1) By accounting and SEC rules you can NOT account for accrued pension liability as a current cost.
2) The GM pension plan is, as of the date of the latest publication, fully funded.
3) The best source specifically states that the number is for CURRENT employees.
I have GM, the UAW, the SEC, GAAP, and a GM published document and financial statements to support my argument. What are you basing your argument on?
- - -
You know what, never mind. I have cited the best sources I could and tried to very, very clearly lay out my position. I welcome interpretation of those sources but beg you to read them in full before throwing out information that is clearly covered (Delphi employees, pension funding).
Once more: I want GM to do well. I am a stake in Ford so clearly want them to do well. I am not patently hostile to organized labor as evidence by working with the AFL/CIO in many occasions. I've worked at and run union shops. So I'll pretend the labor contracts are just fine and it is economically feasible to pay a 300,000 high school graduates $75,000 each. I'll give you that.
I still say GM is a failing company and the bailout will only be successful if they require draconian measures.
Sorry I can not discuss this further, got to get to court.
quote:
Originally posted by cannon_fodder
quote:
Originally posted by nathanm
Once again, your "other costs" in the non-wage compensation includes the cost of health care (amongst other things) for retirees.
. . .
Interestingly, if you look at this page:
http://www.media.gm.com/division/uaw/gm_wages.htm
It claims the 1998 total compensation was $46.17 an hour. That pretty much proves to me that there is a bunch of relatively fixed cost being thrown into the 2006 average wage figures. I can't prove, at the moment, whether or not that relatively fixed cost is retiree benefits, but I can do some more research.
For god's sake, READ THE ENTIRE THING before making stuff up.
Unreal. Really. You don't like the facts presented so you decide they are wrong. Call the SEC and the UAW and tell them they have been lied to. I'm sure they would like to know. Would probably be the final death blow to GM, those groups don't take kindly to being lied to.
As for the 1998 numbers... you have to READ the document and not skim it. 1998 included Delphi as part of GM. Delphi workers were under a different contract that GM Auto workers. If you look at the employment figures it clearly reflects that in the numbers as well as in a footnote. Again, you have to actually READ the document, not just cherry pick parts that support your viewpoint.
I will go over this again, very very slowly and very very clearly using small words:
The wage number I gave does not include current cost for people no longer working at GM.
- - -
Lets break this down:
I went to the SOURCE for the article you referenced. A source published by GM, filed with the SEC, and distributed to the UAW. With that source I extracted the numbers you were citing and told you why they were out of context.
You then, went to that source and grabbed random numbers and extrapolated your own information from it, in spite of the very clear numbers to the contrary.
PENSIONS
1) By accounting and SEC rules you can NOT account for accrued pension liability as a current cost.
2) The GM pension plan is, as of the date of the latest publication, fully funded.
3) The best source specifically states that the number is for CURRENT employees.
I have GM, the UAW, the SEC, GAAP, and a GM published document and financial statements to support my argument. What are you basing your argument on?
- - -
You know what, never mind. I have cited the best sources I could and tried to very, very clearly lay out my position. I welcome interpretation of those sources but beg you to read them in full before throwing out information that is clearly covered (Delphi employees, pension funding).
Once more: I want GM to do well. I am a stake in Ford so clearly want them to do well. I am not patently hostile to organized labor as evidence by working with the AFL/CIO in many occasions. I've worked at and run union shops. So I'll pretend the labor contracts are just fine and it is economically feasible to pay a 300,000 high school graduates $75,000 each. I'll give you that.
I still say GM is a failing company and the bailout will only be successful if they require draconian measures.
Sorry I can not discuss this further, got to get to court.
I did read them fully, thanks. The reason I wanted to find wage expense on the cash flow statement was to find out whether or not GM's puff piece (which is, for what it's worth, entirely for the benefit of making themselves look good to the UAW) is accurate or not.
It's not a GAAP compliant financial statement. Hell, even GM claims that until they set up the trust last year, they were paying retiree health care on a pay-as-you-go basis. Hence their setting up the trust and making the UAW handle it to get it off their books. Even now they're still on the hook for a couple billion more in payments to that trust.
Oh, and yet another article citing an independent analysis stating that what I claim is in fact true:
http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-AutoPay_13bus.ART.State.Edition2.4a28693.html
It also claims Ford's wages and benefits for current employees are $55 an hour, with another $16 going to retirees.
And here's yet another article:
quote:
GM says its total hourly labor costs are now $69 including wages, pensions and health care for active workers, plus the pension and health care costs of more than 432,000 retirees and spouses. Toyota says its total costs are around $48. The Japanese automaker has far fewer retirees and its pension and health care benefits are not as rich as those paid to UAW workers.
http://www.manufacturing.net/News-GM-Vs-Toyota-Wages-And-Benefits.aspx
Fine, the SEC, UAW, and GM are all wrong and you are right. It doesn't really matter what source I show you will claim it is wrong. And you will read it in full and know before you type it that you are wrong (ie. Delphi employment figures) and still make the argument. Who cares, I can abandoned the argument and still make my point.
I amend my statement to say paying 100,000 high school graduates $55 an hour and then having to pay them $15 an hour even after they retire is not economically feasible. Using your number of 2400 hours worked, that is $132,000 per year for high school graduate hour worked + $36,000 for retiree benefits. So $158,000 a year. That is not economical.
We will use your number of $55 an hour + $15 for retirees. Please make the argument that a company can employee 100,000 high school graduates costing them $132,000 a year each and still be viable. Then argue the company can support an additional $36,000 per currently working employee to pay for deferred costs (essentially the productivity of current employees has to make up for deferred costs).
- - -
Now back tracking, the article you cite from the Dallas Morning News says the average GM worker makes just less than $30 an hour. That is their base wage. Add overtime, shift premium, vacation, etc. Then add the benefits package. Then add other costs to the company (taxes). Just as before, they have taken the lowest number of all the figures and attempted to pass it off as the labor cost.
It is the same AP news story you have posted before, this time reworked for a a Dallas audience. No matter how many times you post to the same AP numbers, they are still unsubstantiated. And, as indicated above,remain irrelevant.
And you "yet another article" says $69 an hour PLUS retiree costs. Which would seem to support my contention of $74 much more than the $28 an hour number otherwise used.
Not trying to be a dick about it, but I have a background in cost accounting and taking the lowest figure and pretending it accurately reflects total labor cost is ridiculous.
- - -
Now, to attempt to be very clear again:
I totally grant you $55 an hour + $16 an hour legacy costs. You win. The AP story trumps all other sources. STILL, labor costs are a significant part of the problem. Put labor costs in line with Toyota and GM still has problems.
You either get it, or you don't. There is clearly no point in continuing the discussion.
quote:
Originally posted by cannon_fodder
Now, to attempt to be very clear again:
I totally grant you $55 an hour + $16 an hour legacy costs. You win. The AP story trumps all other sources. STILL, labor costs are a significant part of the problem. Put labor costs in line with Toyota and GM still has problems.
You either get it, or you don't. There is clearly no point in continuing the discussion.
That, I agree with. I don't think we agree on what exactly the problem is. I think legacy costs are a large part of it. I also think the US manufacturers have an enormous problem with the way the public perceives the quality of their vehicles.
I don't know what exactly you think the fundamental issues are.
FWIW, I contend you're reading the subordinate clause in the sentence in my yet another article wrongly. It is unclear, however.
My last sentence was obtuse, I should have said you either agree with my position or you do not.
Basically, I think the labor contracts are not economical. I think management has failed to respond to the market and is out of touch with demand (in general, but concentrating on GM). I think the entire corporate structure has gone wrong and is now duplicative and wasteful (the different car "companies" in GM should be quasi separate and concentrate on different market segments... currently they all make cars for all markets). I think they have failed to properly assess future costs (both legacy and growing contractual obligations, health). I think management and labor both concentrated on short term goal$ instead of worrying about long term success (higher profits and stock prices for the company, job security and employment growth for the workers).
It is an wide spread, prolonged, and systematic failure of the company. The result is a loss of market share, a failure to be able to afford the current dwindling labor, a loss of good will, a lag in manufacturing equipment and techniques, and ultimately the demise of a profitable company.
The core issue is that the Big 3 are failing of their own volition. A bailout will not change that.
Bush is considering an orderly bankruptcy for the big 3:
http://apnews.myway.com/article/20081218/D955719G7.html
quote:
Originally posted by cannon_fodder
The core issue is that the Big 3 are failing of their own volition. A bailout will not change that.
I think that was true two years ago. They've already taken major steps to rectify the problems. They did get caught out by the sudden shift from SUV sales (as did the Japanese manufacturers!) due to the sudden spike in the price of gasoline and again by sales going in the tank due to economic uncertainty (as did the Japanese) while their cash reserves were low.
They (being GM..I don't know about Chrysler) expected to have the money to complete their restructuring but the drop in sales that has affected everyone, not just them, has made that impossible.
Ford, lucky for them, has the money to continue along with their restructuring presuming they don't have to make big cash infusions to suppliers if GM or Chrysler go away. Not only that, but their sales haven't dropped off nearly as much as they have at the other makers.
The problem is largely the perception of them as makers of unreliable cars who can't even be bothered to change their business to save themselves. None of that is true in the main.
quote:
Originally posted by nathanm
quote:
Originally posted by cannon_fodder
The core issue is that the Big 3 are failing of their own volition. A bailout will not change that.
Ford, lucky for them, has the money to continue along with their restructuring presuming they don't have to make big cash infusions to suppliers if GM or Chrysler go away. Not only that, but their sales haven't dropped off nearly as much as they have at the other makers.
Luck has nothing to do with it. Ford made very smart decisions and dumped unsuccessful brands. Axed poorly performing vehicle platforms and made quality decisions.
Luck is not usually a factor in success.
Agree on Ford. The reason I bought into Ford stock a while back (currently holding for a 50% loss) is that the chairmen has taken a personal long term interest in the company. Drastic cuts were made, hard decisions, and choices that may hurt short term performance and perception for long term gain.
I also had hope for Chrysler when the private equity firm bought it. I imagine their tune will change if they don't get free money and drastic steps will be taken.
GM, however, has done no such thing. They have made necessary reactive moves (today they announced some shutdowns and a cessation of work on the VOLT, can you say blackmail?), but nothing on the magnitude needed. For all three, it was too late to keep them in the realm of successful companies. They may be able to get back there, but currently it is not pretty.
- - -
I do not have information on the SUV sales, but I can tell you in the period you are talking about the Japanese made billions about billions of dollars and the Big 3 lost equal billions. So in the big picture, the Japanese made better decisions. Furthermore, Japan increased total sales AND market share while the Big 3 continued to slide.
So if they correctly anticipated the market trend and still sold fewer vehicles, a smaller market share, and lost billions... then they did something else terribly wrong. While benefiting from a weak dollar they STILL did not regain market share. Maybe I need to have sales figures thrown in my face, but while I realize foreign makers are also suffering - my understanding is that the Big 3 are still losing market share.
- - -
Per reliability. Most US made cars are equal to their foreign counterpart now. The problem is that such has only been true for 5-10 years. It took Toyota 20 years to be taken seriously as a quality car maker. It took the Big 3 some 20 years of making inferior quality cars to get their reputation down in the dumps (and by most accounts, it was deserved). I have owned Fords, Chryslers, GM products, Volkswagon, Volvo, and Nissan. All have had their pluses and minuses.
Recently I wanted to by an SUV for boat towing, camping, penis enlargement, dog hauling, and the like. My father has had bad luck with his Ford Explorer (3 transmissions). Jeep and Toyota retain their value too much to by used. GM products have poor rating for actual SUV performance but-for the top-tier. So Nissan it was. Just a matter of comparing what is out there, what has the best reputation (both from consumers and rating institutions [aaa., consumer reports, etc.]), and what is the best value. I didn't avoid America made, but Nissan fit my need.
My wife drives a Ford Taurus (with a 2 brand new transmissions on 75,000 miles, car not used for towing or anything), before that she had a Ford Taurus. For her next car she wants a Ford Mustang.
I'm not anti US vehicles. But like most consumers I will buy what fits my need. It is their job to do that and largely they have been failing or at least falling behind the competition.
No machine is 100% reliable. There are always trade-offs between reliability and replacement parts sales. I think that the Big 3 have crossed the line to the unacceptable area of reliability. Some improvements have been made but they have spoiled their reputation. One of the things about the late 50s Chevys was that they almost always got you home. It might be running on 6 out of 8 cylinders and the tranny might be noisy but you got home. None of them can say that any more. Little things are also very annoying. My 98 Regal GS has now had 4 of 4 power window regulators fail because of a few cents worth of plastic. The dealer parts cost to fix it is $350 each. Fortunately there are now aftermarket parts available for about 1/3 that cost. I don't mind replacing tires, brake pads (maybe even brake rotors), light bulbs and some occasional other moving mechanical parts. One window regulator would have been acceptable, but 4? In the past, buying everything "heavy duty" got you what the engineers intended before the accountants altered the design. I have generally had good luck in that regard. There are many good things about todays cars compared to even 30 years ago. Engines go longer, GM trannys last longer than 70,000 mi, service intervals are generally longer, almost all cars are better able to keep you alive in a collision. Where the US manufacturers have (at least in perception) fallen behind is in the cost to fix what should be little problems. Front wheel drive wheel bearings shouldn't be $600 PLUS labor. Dealer parts cost have always been high but I think they have priced themselves out of continuing maintenance. That business has been known (at a former employer of mine) to carry a business through a slow sales period. This is especially true if the customer believes that the failures are not unreasonable. This is all part of a management philosophy of where to balance initial vs. on-going costs to own a product.
White House extends $13.4 billion bridge loan to domestic automakers. (//%22http://www.cnn.com/2008/POLITICS/12/19/auto.bailout/index.html%22) More will be available in February if needed. The funds will be drawn from the TARP, but "If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury."
According to the CNN article above,
quote:
The government will put other conditions on the loans, Bush said Friday, including making pay competitive with foreign automakers with large U.S. operations such as Toyota and Honda. Employees of foreign automakers generally make less than those in U.S.-owned plants.
The plan also puts limits on executive compensation and perks such as corporate jets, requires the automakers to adhere to fuel efficiency and emission standards and open books to government scrutiny.
The March deadline seems absurd to me, given that by all accounts this recession could last well into winter of 2009 or even early 2010, and that sales in any industry aren't likely to be turned around in that period. It's also worth noting the heinous double standard here, given the absolutely free reign that troubled financial companies have received when being given their TARP funds. But beggars can't be choosers, obviously, and a hobbled bailout is better than no bailout at all.
I started a thread just for the Bush Auto Bailout:
https://tulsanow.org/wp/forum/topic.asp?TOPIC_ID=12327
This thread on the UAW has kind of run its course.