Auto Industry

[astro]

Should the government assist the auto industry? Again, they are in the situation that they are in based on mismanagement. Yet, a lot of people depend on this industry.

Personally, I don't think that they should. I wanted to get other people's opinions on it.

[Sotnos]

I'm a little tired of them handing out our money to help corporations, personally. I haven't followed this too closely, but unless they're retooling to start building more "green" cars then all the money in the world won't help.

[Donnie D]

In theory no

But the reality is that we go into a depression if we don't and it will cost us even more money.

[WaiverWire]

Very good question Astro. I have been thinking about this for weeks now and have been going back and forth.

My father owned a manufacturing company that supplied GM and Chrysler/Plymouth/Dodge when I was growing up. We had 250 employees and were one of the largest family owned businesses in Michigan.

Around the country there are approximately 8 jobs tied to 1 job in the auto industry. The loss of the auto jobs will be huge. Do we help these companies or do we let them sink. No matter what happens we will be using tax dollars for either a bailout or unemployment benefits, food stamps and medical care.

However at the same time how should this money be used? Should the unions be asked to reduce their contracts in order to help save their jobs?

Over the week-end I heard the following figures. The average US worker makes just over $28 and hour. The average non-union US auto worker, such as Nissan, Toyota, Mercedes makes just over $48 and hour. The UAW workers that need help........just over $78 an hour!

In the 60's and 70's the Big Three had very little competition from the foreign market. That all changed. In fact the foreign market was able to capture such a demand in the US they built plants here and were able to keep the UAW out. Thus one of the reasons the Big Three are bleeding is because of the ridicules contracts they have given their workers.

On the issue of MPG, GM has the technology, built cars and then crushed them after getting in bed with the oil industry. Go to your video store and check out "Who killed the Electric Car". The documentary is very accurate as to what took place.http://www.whokilledtheelectriccar.com/

I have emailed my US Senators and US Representatives. My feeling is that without further UAW concessions the American Auto industry should file Chapter 11. This is very hard for me to say as my family grew up in the industry. I know that allowing a company like GM to fail will cause us more hardships down the road. But these companies management teams have made some poor choices in the direction they took their companies. However the UAW also has benefited from very friendly contracts that are assisting in the bleeding of these companies.

This brings up a bigger issue that was part of the Obama campaign....the right for union leaders to know how a member votes, which Obama is for. This would allow a union, like the UAW, to request elections in non-union plants and then see how one voted thus knowing who they need to target in future votes. Same is true for current UAW members. UAW leaders would know how you vote for a contract. This is scary as hell to one that grew up in the industry and knowing how violent they can be.

[Hoek]

Bankruptcy is the best thing that could happen to them. They need to restructure badly.

[timothy]

I forget the word/term, but there's a situation in which it would allow the auto maker to be able to re-negotiate their deal with the unions. That's what needs to happen, if the government bails out the industry.

[WaiverWire]

I think in order to do that they have to go into Chapter 11. If they go into Chapter 7 then they must liquidate. Problem is that GM does not have time on their side.

Funny thing is that Chrysler is worse off than GM. We could be left with just Ford :omg:

[pete]

There needs to be some major strings attached to the money... like, guess what boys? You're going to be building hybrids, electric cars, and/or hydrogen cars in American factories with American parts and workers. Time to join the 21st Century.

[WaiverWire]

pete, with the UAW worker making about $30 an hour more (salaries and bennies) than the non union auto worker do you think that also needs to be looked at in order to make the companies profitable thus able to be competitive with Toyota, Nissan, Mercedes, etc?

[Donnie D]

As I understand it their biggest problem is not current workers but pensions and retiree medical costs.

[TexasBolt]

There needs to be some major strings attached to the money... like, guess what boys? You're going to be building hybrids, electric cars, and/or hydrogen cars in American factories with American parts and workers. Time to join the 21st Century.

This. If we give them money to continue building overpriced, oversized SUVs and pickup trucks that no one wants, they just keep falling down the rabbit hole.

[Sotnos]

This. If we give them money to continue building overpriced, oversized SUVs and pickup trucks that no one wants, they just keep falling down the rabbit hole.
Yeah, that's what I was trying to get at, they need to get with what people need/want. Isn't the best selling car a Camry? Let's see some real innovation here.

[WaiverWire]

As I understand it their biggest problem is not current workers but pensions and retiree medical costs.

GM and the UAW will tell you that the UAW pays for the medical for retirees and not GM. However GM gives the money to the UAW for the UAW to spend, thus leaving the UAW in charge as to what type of plans they have and who administers them.

Just this year the UAW took over the medial costs. GM gave the UAW over a $1,000,000,000 to place in the medical pool.

Until the auto companies can get their employee costs closer to the $48 and hour that the non union manufactures pay........they will always be in trouble.

[Sotnos]

I have a real problem with blaming the people at the bottom of the food chain for all the auto industry's issues.

[WaiverWire]

I have a real problem with blaming the people at the bottom of the food chain for all the auto industry's issues.

It is both. Management for failure to have insight on the future and allowing for contracts that they gave the UAW. I also blame the UAW for coming out and saying they need help when they are not willing to step up and say they will seek contract reductions in exchange for a change to save their jobs.

Problem is time is running out. The UAW is so big I do not think it would be possible to reduce a contract prior to getting a bailout as they have only about 6 weeks of life left.

And if you have never worked on a UAW floor you have no idea as to how they have screwed things up. The UAW and management set standards for the number of units needed to put together in an hour's period. I know of UAW members that could far exceed these standards, only to be told to slow down or be removed from the job by the UAW stewarts. And let me tell you, you never ever want to be on the bad side of UAW management.

Sontos.......I am not blaming the bottom workers. I blame company management and UAW leadership.

[pete]

pete, with the UAW worker making about $30 an hour more (salaries and bennies) than the non union auto worker do you think that also needs to be looked at

Not really. It's not the workers' faults that Ford and GM did everything in their power to make themselves irrelevant by designing a crappy, high-maintenance, gas-guzzling product.

Union bashing won't solve GM, Ford, and Chrysler's problem, which is that they put out an inferior product.

[astro]

Not really. It's not the workers' faults that Ford and GM did everything in their power to make themselves irrelevant by designing a crappy, high-maintenance, gas-guzzling product.



I have the same opinion. If they couldn't get past the SUV craze, they deserve to fail. They placed all their eggs in one basket. When the price of gas skyrocketed, they lost money and possibly their company.

Yet, I know that a lot of lives revolve around GM. What would happen if they filed for Chapter 11? Why isn't that an option, like the airlines?

[pete]

The problem is that the credit markets are locked up right now, so a post-bankruptcy reorganization would be difficult to pull off right now.

I certainly feel less bad about giving the auto industry a bailout than I did about Wall Street for the same reasons you suggested: a lot of hard working regular people have their jobs tied up in the big three. So, like I said, I'd give them the money with a lot of strings attached, and I would make sure that the auto industry would be dragged kicking and screaming into the 21st Century.

I hope Obama and the Democrats realize the opportunity they have here. They've got GM, Ford, and Chrysler by the balls, pardon my francais. They can demand the industry goes in a more environmentally responsible, progressive direction and even if they don't like it, if they want the loot, the big three would have to live with it.

[Sotnos]

Not really. It's not the workers' faults that Ford and GM did everything in their power to make themselves irrelevant by designing a crappy, high-maintenance, gas-guzzling product.Exactly. Saying that you blame management only so far as they gave in to the UAW is still blaming the small fry when it's a complete lack of vision that's doing them in.

[Donnie D]

The big problem with Chapter 11 is the mindset of the buyer. Who is going to invest in a $25,000 product when there is no assurance that they will still be around to service or obtain parts when you need assistance? It's a lot different for the airlines when they took that step, you just needed the airlines to stay in business through the duration of your travel - not the next 8 years.

Sorry, but the unions are partially to blame for the problem. It was poor workmanship and I don't give a shit cause I'm protected by the union that contributed to the problem. That and the fact that because the worker costs were higher, the only way they could stay competitive with the foreign cars was to cut costs or charge more for the same quality car.

Like most situations like this there are a whole host of items that led to the problem. The designers that built cars that are no longer marketable, the unions, the health care costs that our manufactures have to cover that were covered overseas for their workers, etc. etc.

My problem with the govt. mandating the types of cars that Detroit builds is that the govt. may mandate hybreds, smaller cars and the buyers may just reject them. Just because the environmentalists say that we should buy something, doesn't mean that the consumer will.

[pete]

It was poor workmanship

Poor workmanship, or poor engineering? I know which is the case for my American car, and it's the latter. The guy who assembled my car can only put the ignition switch and cylinder in. If the electronics inside it are faulty, there's not a damned thing he can do about it on assembly (assuming he actually even touches that piece of hardware, because half the time it's a robot).

My problem with the govt. mandating the types of cars that Detroit builds is that the govt. may mandate hybreds, smaller cars and the buyers may just reject them. Just because the environmentalists say that we should buy something, doesn't mean that the consumer will.

Then Detroit better find a way to build bigger cars that are fuel efficient and/or run on alternative fuels. In fact, that's probably exactly what Ford and GM should be focusing on doing because that's a new segment of the market that doesn't exist that they could plant their flag in. And don't half ass it like that ridiculous Escalade hybrid that can't go past the next gas station. Build big vehicles that are plug in hybrids that are really engineered to have top notch fuel savings.

It's a joke that Ford ran itself into the ground with its "Explorers and big trucks only" mindset while Toyota and Honda were literally stealing the American market right out from under them with hybrids and other fuel efficient, low maintenance cars. It's an even bigger joke that when Ford finally did decide to hybrid the Escape that they had to go with their tails between their legs to the Japanese begging for the technological help to make it happen. Which returns me to my original point: if your designers and engineers suck, sack up, fire your designers and engineers and get good ones. Moreover, if your corporate management sucks, and they can't read the oil industry reports that say hybrids are the only way that demand can be lowered and we can avoid the pain of peak oil, the fire your crappy corporate management. Don't blame the grunts.

I mean, laying this at the feet of the workers is like Napoleon blaming his troops for Waterloo. We know where the real culpability resides.

[WaiverWire]

Not really. It's not the workers' faults that Ford and GM did everything in their power to make themselves irrelevant by designing a crappy, high-maintenance, gas-guzzling product.

Union bashing won't solve GM, Ford, and Chrysler's problem, which is that they put out an inferior product.

pete and why do you think they built these type of vehicles? One, the public was buying them left and right. Two they needed to sell these types of vehicles in order to make enough of a profit to be able to cover the contracts. Smaller vehicles do not currently have enough of a profit margin for GM to make enough money to stay afloat.

I ask, have you ever worked on a UAW floor? I have, and I can tell you it is not all the fault of the engineers. I have always maintained it is the fault of management and the workers. Want to get a good inside look of what goes on in the auto industry? Read a book by Arthur Haley called " Wheels" . It was written many years ago but the industry has not changed.


And guess why the standard UAW vehicle is not up to par of other non UAW vehicles...........because the manufacture has to spend on average $30 and hour more in wages......they have to cut back some where in order to make asome money.

[dmitry]

My problem with the govt. mandating the types of cars that Detroit builds is that the govt. may mandate hybreds, smaller cars and the buyers may just reject them. Just because the environmentalists say that we should buy something, doesn't mean that the consumer will.

Exactly. You can't simply decree desirable and economical products.

[Flycoon]

because the manufacture has to spend on average $30 and hour more in wages......they have to cut back some where in order to make asome money.

Check your source WW, I believe the $78/48 hourly wages you quoted were a combined total for wages and all allocable benefits. I'll bet there are no line workers in AL with an hourly wage of $48 in ANY industry.

[Bolthed]

I completely agree with Pete on engineering. It is an absolutely crucial aspect of market competitiveness and the U.S. fails miserably in comparison to Asia and Europe. I can personally attest that one of the reasons I don't buy American anymore is because of that and craftsmanship, which I don't fault the grunts for but instead the executives who decide to use cheaper materials than are typically found in imports. For an easy example, check out the quality of the plastic that's all over the interiors of most vehicles in the middle price range. You can tell quality by how easily it scratches. Mid-priced American cars use inferior materials for roughly the same overall price. And therein lies my final verdict - if your product isn't better than the competition it should at least cost less. :tsk:

[Sotnos]

Sorry, but the unions are partially to blame for the problem.I'm fine with that, it's saying that it's ALL their fault that I have a problem with.

[Flycoon]

This is a low interest LOAN program, not a purchase of preferred stock to fatten the balance as happened in the banking deals.

[timothy]

Exactly. You can't simply decree desirable and economical products.

The world is not just made up of single, couples, and one-child families that can drive off in a Pria. There are some families that like having a whole mess of kids....

[pete]

And who is to say that if the CEO of Ford had treated the Escape hybrid program as a real opportunity to create a legitimately solid hybrid SUV rather than an act of tokenism (ditto the Mariner and Escalade programs with Mercury and Cadillac) that we wouldn't have fuel efficient family-sized vehicles already?

I just cannot believe the intellectual laziness of the American auto industry over the past, my gosh, 10-15 years? It seems like innovation died right after airbags.

And you just can't blame the workers for that. My gosh, Waiver, what happened to Joe the Plumber? Now you want to scapegoat Joe the Factory Worker? Beause Joe the Factory Worker's healthcare and retirement plan are too good? The greedy bastard wants his kids to have dental. How dare he! Ultimately, that's a function of the broken health care and retirement savings systems we have too, by the way.

Like I said, I wouldn't be pissed if they helped the auto industry, but there needs to be strings attached. Another provision, for instance, might be some way of capitalizing on the dormant factories the big three have to build wind turbines. They have a glut of factory space and also some machinery that could easily be converted. They've also got some workers who are already trained in their operation.

But, you know, it requires the government to be more managerial than people have been comfortable with since the 40's or 50's. The situation may warrant that level of involvement, though.

[Flycoon]

Keep in mind that across the river in Windsor, GM employees make several $ more than their (long ago laid off) counterparts in Detroit because they have the dreaded "socialist" health care benefits.

[Flycoon]

The world is not just made up of single, couples, and one-child families that can drive off in a Pria. There are some families that like having a whole mess of kids....

Don't know how you guys do it.

[Sotnos]

The world is not just made up of single, couples, and one-child families that can drive off in a Pria. There are some families that like having a whole mess of kids....I don't think that's an issue at all. There will also always be people who need trucks for towing, big 4WD vehicles for driving in the snow, etc. They'll still be making such things if there's demand for them, how about making more variety of fuel efficient things while they're at it?

Is Pria the plural of Prius? :p

[astro]

Check your source WW, I believe the $78/48 hourly wages you quoted were a combined total for wages and all allocable benefits. I'll bet there are no line workers in AL with an hourly wage of $48 in ANY industry.

This is a common trick that management/CEOs like to use. For example, the FAA claims that the average salary for an air traffic controller is $168,000. I've been in the FAA for 11 years and I make less than half of that. They were using that trick 2 years ago and they are using it again (Rep. John Mica).

For those who remember, what did the auto industry do in the '70s? There was a time that fuel efficiency was a driving force (smaller cars.) What did those with big families drive? Since I was born in '73, I need a little insight.

[WaiverWire]

Tricks, common practice???

Come on, you have got to be kidding me. Bottom line it costs the UAW manufacture $30 more an hour to make a car. Who cares if it is in salary or benefits? The cost is still there......correct?

And Pete..........check out what I have posted. No where have I said that the worker was 100% to blame. I said that there was mismanagement also. There is enough blame to go around for everyone. But in Pete style, you attempt to put words in my postings that were not there........you have me blaming the workers 100% and you are 100% wrong in that accusation.

[WaiverWire]

Check your source WW, I believe the $78/48 hourly wages you quoted were a combined total for wages and all allocable benefits. I'll bet there are no line workers in AL with an hourly wage of $48 in ANY industry.


Does it matter? Cost is cost no matter how you label it. Bottom line is a worker in a UAW plant costs the manufacture $30 an hour more in labor costs for the manufacturing of the vehicle.

Let us look at a corvette as that was one of a few cars that listed the time to assemble. It takes 36 hours to to put the parts together. That is $1080 more than a non UAW plant. Now this is only putting the car together, it does not include building an engine or any of the other parts prior to arrival at the assembly plant.

Thus this savings can be put into the overall quality and/or R&D of the non union manufactures.

[pete]

Who cares if it is in salary or benefits?

I don't consider people who want to have better health care to be greedy. Maybe that's just a fundamental difference between you and I.

No where have I said that the worker was 100% to blame.

But, you know, it's the first or second thing you or any Republican politician I've seen on TV today has mentioned. It's just nothing but pure, unadulterated union bashing.

Union membership nationwide bottomed out at 12% in 2006 and contrary to what anti-labor forces in government and the media would have had you believe, prosperity and happiness haven't followed for the economy and the American worker has discovered new and exciting ways of getting screwed over in the process.

[WaiverWire]

I don't consider people who want to have better health care to be greedy. Maybe that's just a fundamental difference between you and I.



But, you know, it's the first or second thing you or any Republican politician I've seen on TV today has mentioned. It's just nothing but pure, unadulterated union bashing.

Union membership nationwide bottomed out at 12% in 2006 and contrary to what anti-labor forces in government and the media would have had you believe, prosperity and happiness haven't followed for the economy and the American worker has discovered new and exciting ways of getting screwed over in the process.

Pete, I have no problem if they want dental, more money or any other benefit. But they, like you and I, must live within their means. If part of the problem with the industry today is the cost difference and being able to compete, then costs must be cut somewhere. You yourself have stated that the US auto manufacture puts out an bad product when compared to other auto manufactures from other countries. If this is the case then how does the US auto manufacture attempt to reduce savings in order to compete? I do think there are ways management can save some money. However doing away with huge bonuses won't even get you close to what needs to be saved. But there are ways they can.......and there are also ways that UAW can cut back to assist in keeping jobs for many thousands of their members. It will take both sides.....not just one like you suggest.

[pete]

Pete, I have no problem if they want dental, more money or any other benefit. But they, like you and I, must live within their means.

How much did the CEO of GM make last year, Waiver?

[astro]

How much did the CEO of GM make last year, Waiver?

"The Securities and Exchange Commission filings reported earlier this year that gave Mr. Wagoner, the company's chairman and chief executive, a 33% raise for 2008 and equity compensation of at least $1.68 million for his performance in 2007, a year for which the auto maker reported a loss of $38.7 billion. The salary increase puts Mr. Wagoner's salary for this year at $2.2 million, compared with $1.65 million in 2007."

"In April, Ford reported Mr. Mulally received $2 million in base salary, a $4 million bonus and more than $11 million of stock and options in 2007. His base salary was unchanged over 2006. Mr. Mulally has earned nearly $50 million in compensation since taking the helm of the auto maker."

http://online.wsj.com/article/SB122702915620437775.html?mod=googlenews_wsj

[WaiverWire]

How much did the CEO of GM make last year, Waiver?


Do not know, but I am sure the answer would be far too much.....but not enough to save the company. When Lee Ioccoca turned Chrysler around he took zero while they were in the dumper.

Pete.....what I am saying is that everyone that works there, management and hourly workers, must tighten their own belts. The UAW has made a great step in doing so in their last contract, but their labor cost are still much higher then their non UAW counter parts. If they all cut back, and then can get their companies on a more solid footing, then they can always move forward and request the return of some of the things they gave up.

I also feel that if we to save their jobs with tax dollars, then until the monies are paid back then they should lose the right to strike just like government employees.

Want to know what really pisses me off? A GM CEO that flies to DC on a private jet and stays in a high dollar hotel with an overall cost of $20,000 and the whole time there begging for our money to bail them out...........it stinks and they should be replaced.

[Hoek]

Why do these things always have to turn into a blind, short-sighted class war ad nauseum? Of course the CEOs make too much (especially since they're idiotic, inept, and shouldn't have a job at all to begin with), but as WaiverWire astutely notes a million bucks here and there isn't gonna save any of the companies by a long shot. To continue to make excuses for the UAW because aww shucks they're the "little guy" and point fingers of outrage at "the man" is as delusional as everything else that's put the industry on this path. The precipice they face is pretty simple. Everyone needs to turn about face and stop marching in that direction or they're all gonna go splat together. That means they all have to give up something. Emotional pleas to populism is no way to run an economy.

And I don't trust the government to write up the right business plan or guidelines to produce a successful rebirth of the industry either. After all they created this mess to begin with. Who subsidizes artificially cheap gas? Who created the loophole for gas guzzling SUV's which made them so appealing to make for a quick buck, short circuiting any long term push for efficiency? Blaming the "free market" is ignorantly fashionable these days when a true free market hasn't existed in the first place. The Japanese automakers didn't need to be nationalized to make the right moves, why should ours?

[pete]

The Japanese automakers didn't need to be nationalized to make the right moves, why should ours?

The Japanese government plays a far more managerial role in the development of Japanese industry, though, and the Japanese government has been promoting green industry hard since the 80's, which is why Toyota and Honda got the jump on us. They read the oil industry's reports. They saw the obvious: that the world's supply of oil is finite. They set themselves up to capatilize on that reality.

[timothy]

The Japanese government plays a far more managerial role in the development of Japanese industry, though, and the Japanese government has been promoting green industry hard since the 80's, which is why Toyota and Honda got the jump on us. They read the oil industry's reports. They saw the obvious: that the world's supply of oil is finite. They set themselves up to capatilize on that reality.

It's possible that the lack of natural resource on the Nipponese island was the mother of the Japanese tendencies towards the green industries....

[pete]

It's probable, actually, but the truth is that the world itself is an island with a finite amount of resources too. We've all known that since the 70's. The difference is that the US chose to put its fingers in its ears and chant, "LA LA LA, I CAN'T HEAR YOU!" from 1981 on.

[pete]

http://www.tnr.com/politics/story.html?id=1026e955-541c-4aa6-bcf2-56dfc3323682

If you've been following the auto industry's crisis, then you've probably read or heard a lot about overpaid American autoworkers--in particular, the fact that the average hourly employee of the Big Three makes $70 per hour.

Let's start with the fact that it's not $70 per hour in wages. According to Kristin Dziczek of the Center for Automative Research--who was my primary source for the figures you are about to read--average 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.

So the "wage gap," per se, has been a lot smaller than you've heard. And this is no accident. If the transplants paid their employees far less than what the Big Three pay their unionized workers, the United Auto Workers would have a much better shot of organizing the transplants' factories. Those factories remain non-unionized and management very much wants to keep it that way.

But then what's the source of that $70 hourly figure? It didn't come out of thin air. Analysts came up with it by including the cost of all employer-provided benefits--namely, health insurance and pensions--and then dividing by the number of workers. The result, they found, was that benefits for Big Three cost about $42 per hour, per employee. Add that to the wages--again, $28 per hour--and you get the $70 figure. Voila.

Except ... notice something weird about this calculation? It's not as if each active worker is getting health benefits and pensions worth $42 per hour. That would come to nearly twice his or her wages. (Talk about gold-plated coverage!) Instead, each active worker is getting benefits equal only to a fraction of that--probably around $10 per hour, according to estimates from the International Motor Vehicle Program. The number only gets to $70 an hour if you include the cost of benefits for retirees--in other words, the cost of benefits for other people.

Of course, the cost of benefits for those retirees--you may have heard people refer to them as "legacy costs"--do represent an extra cost burden that only the Big Three shoulder. And, yes, it makes it difficult for the Big Three to compete with foreign-owned automakers that don't have to pay the same costs. But don't forget why those costs are so high. While the transplants don't offer the same kind of benefits that the Big Three do, the main reason for their present cost advantage is that they just don't have many retirees.

The first foreign-owned plants didn't start up here until the 1980s; many of the existing ones came well after that. As of a year ago, Toyota's entire U.S. operation had less than 1,000 retirees. Compare that to a company like General Motors, which has been around for more than a century and which supports literally hundreds of thousands of former workers and spouses. As you might expect, many of these have the sorts of advanced medical problems you expect from people to develop in old age. And, it should go without saying, those conditions cost a ton of money to treat.

[Sotnos]

Thanks Pete. I looked several times this week to find something to either back up or refute the "average wages" that are floating around and couldn't find anything.

[WaiverWire]

Thank you pete for that information that backs up what the big 3 has been saying.

You can spin it all you want, but at the end of the day these industries have "X" amount of dollars that they must set aside in order to pay their labor costs. After the big 3 divides that cost by the number of employees (current/retired) that receive the benefit the amount comes to, according to your source, $70. When Toyota USA, Mercedes USA, etc completes their calculations the costs are much lower. Thus companies, such as GM, have a much higher labor cost per individual even though the hourly wages of all involved are about the same.

Now to become competitive companies, such as GM, must first look from within for savings. This could be done by doing nothing more then speeding up a production line, or by making sure their procedures are cost effective. They also need to look at the quality and types of products being manufactured and sold to the customers.

At the same time, the employees need to also look at ways of cutting costs. Be it in salary and/or benefits, or ways of doing their jobs in a manner that cuts costs.

When looking at costs within the auto industry one should also be looking at buyout programs that not only the salary employee can obtain, but also those that are hourly workers. In 2006-2007 these companies, such as Ford, offered up to $140,000 to eligible hourly workers as an incentive to retire early while being able to keep 100% of their contracted benefits. What is interesting is that these payouts were to be paid 33 months after seperation.......you so the math........seems they are now due.

[pete]

Thank you pete for that information that backs up what the big 3 has been saying.

If by "backs up" you mean "exposes it as a ball faced deception."

[WaiverWire]

If by "backs up" you mean "exposes it as a ball faced deception."

It is not a deception pete. It is part of the cost of labor. The pay you put into your pocket is not the only labor cost to your employer.

The bottom line is the hour labor cost for a UAW worker is far greater than a non UAW working that does the same job.

[Sotnos]

It is not a deception pete.
How can it not be deceptive to calculate in benefits for other people into someone's salary/benefits package?

[WaiverWire]

How can it not be deceptive to calculate in benefits for other people into someone's salary/benefits package?


Because we are talking about average overall cost to the employer.

If the employer pays you $20 an hour that is not his cost of labor. Cost of labor has to include every penny the employer spends in order for you to have that job, such as all benefits they provide you.

The overall benefit package for a UAW member, on average, is $30 an hour higher than a non UAW member. Now is that because maybe there are more UAW workers and retirees than non UAW workers? Doesn't matter as the UAW manufactures still are bound by a contract to pay those costs. One can not just look at hourly wage alone, there is much more in costs that can add up very fast.

[pete]

It is not a deception pete.

These workers don't make $70+ an hour with benefits Waiver. They only make a shade more than half of that. To suggest otherwise is a deception.

You're trying to make this out to be the fault of greedy unions, when the reality is (if you read the story) the real reason The Big Three are at a disadvantage to foreign manufacturers is because they simply are more established companies and have a greater pool of retirees to take care of. In other words, if anything, both The Big Three and the union are at the mercy of the fact that this country has dysfunctional health care and retirement security systems. If they were smart, Ford, GM, and Chrysler's CEO's would've been inviting the head of the UAW to jetpool with them up to DC to lobby for universal health coverage, because that more than anything would bail them out. Instead, we get union bashing, because these jabronies are still living in the 1980's (when union bashing was cool), which is why they're getting creamed by the foreign automakers in the first place because they still haven't figured out it's the 21st frickin' Century.

The UAW (as the story has also mentioned) has already worked with The Big Three last year to try to restructure the retirement benefits to help The Big Three make it out of the woods. They've made concessions already. That's why it's very difficult to take when folks like you and every single Republican Congresscritter who goes on TV these days immediately use the auto bailout as an opportunity to bash unions. $70+ an hour for UAW workers is total bullspit, just like the article says, and yet we still see the misrepresentation constantly thrown out ad nauseam. That's nothing more than exploiting a dire situation to try to undercut working people, and that's disgusting. Anything to capitalize on people's fear and uncertainty: it reminds me why I vehemently dislike Republicans.

[WaiverWire]

These workers don't make $70+ an hour with benefits Waiver. They only make a shade more than half of that. To suggest otherwise is a deception.


My god pete, read your own article....it says just what I have been saying, yet you want to argue.

Unbelievable

[pete]

My god pete, read your own article....

Here, I'll even narrow it down to the pertinent section:

It's not as if each active worker is getting health benefits and pensions worth $42 per hour. That would come to nearly twice his or her wages. (Talk about gold-plated coverage!) Instead, each active worker is getting benefits equal only to a fraction of that--probably around $10 per hour, according to estimates from the International Motor Vehicle Program. The number only gets to $70 an hour if you include the cost of benefits for retirees--in other words, the cost of benefits for other people.

Add $10 to the average wage of $28 per hour, and the average active worker's wages and benefit package cost comes to $38 per hour, not $70+ per hour.

Now let me quote what you said to tip off this thread:

Over the week-end I heard the following figures. The average US worker makes just over $28 and hour. The average non-union US auto worker, such as Nissan, Toyota, Mercedes makes just over $48 and hour. The UAW workers that need help........just over $78 an hour!

That would mean that either A.) Sean Hannity or whoever fed you your facts was lying to you, or B.) You knowingly committed a pants-on-fire infraction.

Either way, it was bogus union bashing bullshit, pardon my French. Let me reiterate, in case it still hasn't sunk in, the average UAW worker doesn't make $70 or $78 an hour. They make around $38 per hour, including benefits.

[WaiverWire]

And pete if you had taken the time to look at the other posts I was clearly talking about the average cost of hourly labor, and not what an employee is paid. I even gave an example of a cost of labor for manufacturing a car. But no, you can only look at the my first post and not look at the others that clearly show what I meant. However you failed to acknowledge what I was typing as hourly cost of labor which is the cost of the current and retired employees.

And once again it was you that brought the postings down to a republican vs democrat way of thinking, and you were wrong, flat out wrong as once again I repeat for you pete, all sides need to work on this issue of saving their company. In fact I give a lot of credit to the UAW and the industry for setting their views aside in order to fight for a common cause........saving their jobs.

[pete]

And pete if you had taken the time to look at the other posts

You were the one who misrepresented UAW workers as gold plated upper class freeloaders from post one, not me.

And once again it was you that brought the postings down to a republican vs democrat way of thinking, and you were wrong, flat out wrong.

When you parrot Republican talking points, how else am I supposed to respond? Do you know how many times I've seen GOP House and Senate members cropping up on cable news using the same exact bogus, misleading "statistic" to try to make UAW workers look greedy and overpaid? Far too many to count; and I find it reprehensible each time they do because it's so obvious they're lying to try to exploit a crisis.

I hope your canidate is more open minded than you.

I hope my President-Elect isn't foolhardy enough to think demonizing hard working Americans is an appropriate solution in the midst of an economic crisis.

[WaiverWire]

You were the one who misrepresented UAW workers as gold plated upper class freeloaders from post one, not me.



When you parrot Republican talking points, how else am I supposed to respond? Do you know how many times I've seen GOP House and Senate members cropping up on cable news using the same exact bogus, misleading "statistic" to try to make UAW workers look greedy and overpaid? Far too many to count; and I find it reprehensible each time they do because it's so obvious they're lying to try to exploit a crisis.



I hope my President-Elect isn't foolhardy enough to think demonizing hard working Americans is an appropriate solution in the midst of an economic crisis.



This is what I quoted pete

Over the week-end I heard the following figures. The average US worker makes just over $28 and hour. The average non-union US auto worker, such as Nissan, Toyota, Mercedes makes just over $48 and hour. The UAW workers that need help........just over $78 an hour!


Much to your sure disappointment I did not hear this from a cable news program. I heard this on one of the Sunday morning, over the air, talk shows. Saying this were two US Senators.....one democrat and one republican.


You were the one who misrepresented UAW workers as gold plated upper class freeloaders from post one, not me.



And you are the one that refused to acknowledge that I was talking cost of labor and not hourly wage in the posts as you just wanted to be fixated on the first posts. Hell, even your link had the cost of labor at the higher rate and you failed to see it.

I hope my President-Elect isn't foolhardy enough to think demonizing hard working Americans is an appropriate solution in the midst of an economic crisis


Once again you attempt to make it sound as if I am blaming just one side.


But in pete fashion I will bow to you as the superior one.

[gphockey]

There needs to be some major strings attached to the money... like, guess what boys? You're going to be building hybrids, electric cars, and/or hydrogen cars in American factories with American parts and workers. Time to join the 21st Century.

Let them start retooling to build high speed trains and the electric shuttle vans/busses to support a new transportation system.

I would LOVE to take the high speed from venice to tampa, get off, catch a shuttle to the forum.
Sit back, read, relax instead of the white knuckle talladega restrictor plate nightmarish freight train we call I-75....just a matter of time before the big one happens and I don't want to be in it.

If you want change, real change, get rid of our dependancy on oil, create tons of new jobs then think about it.

If it wasnt for the goofy way they worded the question on the last vote a few years ago, they WOULD be building the train today....by the way who does word those, there was one other this time which I had to read about 5 times and still think I got it wrong.

[kid A]

I would LOVE to take the high speed from venice to tampa, get off, catch a shuttle to the forum.


I would love to just be able to go from st pete to downtown tampa on some kind of rail...park somewhere on the st pete side, take the train into tampa, and then take a bus or walk to work - that would be beautiful. Spare my car the hundreds of miles each week too.

[Hoek]

Everyone says that now, but if you build it, nobody will come as long as gas is still relatively cheap. They just closed one of the "park and ride" bus stops close to my neighborhood a few months ago. It had been empty and unused for years and years on end. The bay area and most of the state is just not designed for mass transit unless you had a lot of buses and routes to cover everything (at a loss). Too sprawly.. I wish it weren't so, because having been to Vancouver, Montreal, Boston, etc. it's really nice to not have to put all your attention on driving for a couple hours each day just to get where you need to go.

[Avery86]

The bay area and most of the state is just not designed for mass transit unless you had a lot of buses and routes to cover everything (at a loss).

And they'll regret it in less than a decade. So glad I'm moving to a city where I don't need to depend on a car. I don't understand it, even if gas stays at this level (it won't), why wouldn't you want to sit back, relax, and let someone ELSE drive while you read the paper or a book?

Being in Europe for three months was the first time in my life where I never, ever thought about a car, other than "oh yeah .. those. I remember those."

Even paying for a transportation system (bus fares, train fares, etc.), would probably be cheaper than all the gas, maintenance and insurance needed for a vehicle every month. Taking the trolley every single day, twice a day, for a month in New Orleans would still be less than I would pay in insurance, let alone everything else, on a car.

[pete]

The auto bailout and transit are two separate issues. I do believe a greater percentage of the USDOT's budget should be portioned out for transit, and that USDOT funding should be tied to metropolitan regions having a significant transit plan that shows they have at least done the intellectual exercise and it's on the books in each regions TIP.

But, that doesn't mean the auto industry should be allowed to die off in favor of transit.

[kid A]

The auto bailout and transit are two separate issues.

Yes, indeed. I just perked up on the whole light rail subject.

But, that doesn't mean the auto industry should be allowed to die off in favor of transit.Quite true. I like my car, don't get me wrong, but it would be nice to prolong it's life and consume less gas, by being able to utilize some kind of public transport, esp for going between Tampa and St. Pete. I know it's a pipe dream, but I would much prefer the European model of using public transport for most day to day stuff, and cars for longer/special trips.

An aside - is it really that difficult to connect St. Pete and Tampa with a rail? You have 3 bridges - can't you just tack a railway onto the side of one of them? Maybe follow 275 or the Crosstown as well? What about going under the bay like they do with BART in Frisco? We don't even have to worry about earthquakes... Does the composition of the ground (limestone, i assume?) completely prohibit this from a design standpoint? Is this a hurdle that is completely out of the reach of a technological solution? Or just insanely cost prohibitive?

[WaiverWire]

Too bad they tore up the tracks that were on the Courtney Campbell.

[WaiverWire]

Pete,

Here is a good article from the Automotive News.

They say the UAW needs to reopen their latest concisions and readdress three areas:

1. Voluntary Employee Beneficiary Association or VEBA

2. Job Banks.......paying workers up to full pay and benefits for two years while not working

3. Pay.........wish I could have been paid for 17 holidays each year

In response GM is looking at closing or shedding Hummer, Pontiac, Saab and Saturn. That would leave them Buick, Cadillac, Chevrolet and GMC. Then they need to down size within each unit as there is no need to offer so many models.


I would love to see the manufactures and the UAW travel and arrive together in DC on 12/08.


http://www.autonews.com/article/20081126/ANA02/311269892/-1

[Flycoon]

[QUOTE=WaiverWire;23726
In response GM is looking at closing or shedding Hummer, Pontiac, Saab and Saturn. That would leave them Buick, Cadillac, Chevrolet and GMC. Then they need to down size within each unit as there is no need to offer so many models.
[/QUOTE]

It would make more sense to scrap Buick and keep Saturn, Buick's loyal buyers will all be dead or unable to drive in a few years.

[Hoek]

LOL good point Flycoon. I was wondering how the heck Buick made the cut and Saturn didn't. Then again these are the still the same goofballs in charge.

Edit: Apparently Buick is really popular in China for some unfathomable reason, so I guess it's a pretty bright move.

http://www.msnbc.msn.com/id/12801549/

[Donnie D]

I would think that they need to consolidate Buick and Chevy. The problem is that Buick has the better reputation, but Chevy has the larger dealerships.

They need an entry level car (Saturn)
A luxury car (Caddy)
A premium car

And a truck line.

The rest can go.

[WaiverWire]

Remember when doing away with a division they must also compensate the dealers per most state laws. If they let Chevy go that could be costly when compared to Pontiac or Saturn.

[pete]

They've reached a temporary $15B bailout deal that will allow the autos to stay afloat until Obama takes office and settles in.

[WaiverWire]

Will be interesting as to how many companies that receive bail out funds will be attending this year's Super Bowl and having parties and corporate tents.