UAW Concessions?

[daughtersrus]

Show me a non-unionized industry that draws such a wage from its standard, non-executive, non graduate school/professional degree'ed employees.

Are you against all unions or only the UAW?

 

[Sandy V.]

Are you against all unions or only the UAW?

In general, I'm not "against" unions, although I think that they have outlived their usefulness given today's smaller world and more global economy, and I agree with what a couple of other posters have said regarding the subject on this thread and on the other thread regarding what will happen to the Big 3 if they go belly up.

We just happen to be talking about the UAW here, I feel that in this instance the cost of present and future benefits attached to the auto workers' salaries is obscenely high.

And yes, I think CEOs get paid too much as well, so I'm equal opportunity in my disgust (of the perks and benefits). As was pointed out on another thread, if the head honchos of Ford, GMC, and Chrysler are STUPID enough to fly to Washington in their company's private jets to stick their hands out before a Congressional committee to get $$$, they shouldn't be surprised at their very public roasting. Arrogant morons.

 

[Colleen27]

From my understanding, even with the little concessions they gave, the employees still make $74 an hour. Way too much. They need to have more concessions. They need to be like the other car industries in the US. They do not seem to have a problem and their employees make $47 an hour.

It took me a while to find the numbers - under the new contract (which would have made a world of difference to GM's long-term outlook if the credit crunch wasn't kicking them while they're down), new hires have a total compensation package of $30/hour. The union that is being slammed for not making concessions accepted terms that will cut GM's labor costs by more than half, and yet all we hear is "greedy unions" and "let them lose their jobs".

But labor represents only 10 percent of the cost of a vehicle, according to the UAW, and the 2007 contract makes significant concessions. It introduces a two-tier wage structure to pay new hires $15 an hour (instead of $28) with no pensions and dramatic cuts to their health care coverage. Factoring in the benefits, the total hourly cost of new hires is a more competitive $30 an hour.

http://www.detnews.com/apps/pbcs.dll/article?AID=/20081119/AUTO01/811190386

 

[Sandy V.]

It took me a while to find the numbers - under the new contract (which would have made a world of difference to GM's long-term outlook if the credit crunch wasn't kicking them while they're down), new hires have a total compensation package of $30/hour. The union that is being slammed for not making concessions accepted terms that will cut GM's labor costs by more than half, and yet all we hear is "greedy unions" and "let them lose their jobs".

So what you're saying is that the concessions only apply to NEW hires? How will there be any new hires for these concessions to apply to if things are truly as bad as everyone says? Don't you think that there need to be concessions made as well by EXISTING employees? (As well as CEOs; yes they are also paid too much).

I come from a unique perspective in looking at all of this. My industry is sending a lot of jobs overseas. My job requires a specialized education and the ever cost-conscious senior management even tried to outsource us to India - but our Indian counterparts wanted more money than they're currently paying US (including benefits)!!! How's that for bitter irony? You can't say that in many industries.

 

[BuzznBelle'smom]

The UAW saying they'll make no concessions, because they already cut back for new hires last year, shows that they're not serious about fixing the auto industry.

The auto execs, jetting to beg money from Congress and not cutting their own bloated compensation packages, tells me they're not serious about fixing the auto industry.

Congressional leaders, who are trying like heck to get some bailout money approved over the objections of their members, the executive branch, and the majority of the American people, tells me they're not serious about fixing the auto industry.

The auto industry has been going downhill for decades. Check your history --DECADES! They need to restructure under bankruptcy protection.

A few suggestions, feel free to add more:

Any executive making over $1M should take a 90% pay cut. No bonuses, no fancy perks beyond what the regular people get (health care, vacation,etc.). I would be happier to fire the lot of them, but someone needs to run the company. I can't imagine any slob off the street could do worse, however, for now, they can keep their jobs. I would also be happy to give them stock options, so that their future is tied to the success of the company.

The unions should similarly make concessions. Plant closures must happen. Lay-offs, real ones, none of this Jobs Bank crap, must happen. I'm okay with buy-outs, to a small degree. Cut salaries, cut benefits, and so forth. Again, I have no problem with giving stock options. Let the workers share in the future success of a company.

Congress should help with the bankruptcy by guaranteeing that warranty issues will be handled/paid for, regardless of which auto company. This is a big argument against Ch.11--that nobody would buy a car with no warranty. So, if Congress provides a $$ reserve to cover warranty issues, that problem goes away. Note, this is a promise to cover--not billions now to cover what "might be" down the road. Just as your bank deposits are guarenteed by the "full faith and credit of the US Treasury".

 

[Colleen27]

So what you're saying is that the concessions only apply to NEW hires? How will there be any new hires for these concessions to apply to if things are truly as bad as everyone says? Don't you think that there need to be concessions made as well by EXISTING employees? (As well as CEOs; yes they are also paid too much).

The auto makers have been offering buyouts and early retirement packages to trim the higher-earning, long-term employees and replace them with new hires. They've been doing this for quite a while now. And the health care and retiree benefit concessions do apply to everyone; the wage reset, however, does only apply to new hires.

 

[Sandy V.]

The auto makers have been offering buyouts and early retirement packages to trim the higher-earning, long-term employees and replace them with new hires. They've been doing this for quite a while now. And the health care and retiree benefit concessions do apply to everyone; the wage reset, however, does only apply to new hires.

Thanks for the information; I wasn't aware of that.

 

[Bob NC]

It took me a while to find the numbers - under the new contract (which would have made a world of difference to GM's long-term outlook if the credit crunch wasn't kicking them while they're down), new hires have a total compensation package of $30/hour. The union that is being slammed for not making concessions accepted terms that will cut GM's labor costs by more than half, and yet all we hear is "greedy unions" and "let them lose their jobs".

That's a riot. The UAW is laughing their butts off. No matter what happens, the number of employees at the big 3 is dropping. No matter what happens, if they DO need a new employee, he'll come straight from the job bank. The UAW knows if there is ever a need for a "new" employee it will be a decade and a half from now.....if ever.

 

[Colleen27]

That's a riot. The UAW is laughing their butts off. No matter what happens, the number of employees at the big 3 is dropping. No matter what happens, if they DO need a new employee, he'll come straight from the job bank. The UAW knows if there is ever a need for a "new" employee it will be a decade and a half from now.....if ever.

That isn't true at all. They have been hiring new people off the street to replace workers who accepted buyouts (part of the buyout is ineligibility to return). The job bank only applies in layoff situations, which is why the Big 3 have been offering buyouts and early retirement rather than layoffs to shrink their labor force and lower their costs.

 

[Galahad]

I heard audio today of the UAW guy telling Congress that with all of their painful concessions that their newer employees' compensation, including benefits is now about equal to what workers at American plants of Japanese auto makers bring in. If that's true, the the UAW is now officially obsolete.

 

[scheddj]

For those of you who think the transplants will just "pick up the slack" - apparently they themselves aren't so convinced:



Detroit crash could halt transplant output
Could the financial collapse of a Detroit automaker halt production at Asian- or European-owned auto plants in the United States?
That hypothetical scenario suddenly looks painfully plausible. The reason? Import-brand automakers rely on many of the same North American suppliers as General Motors, Ford Motor Co. and Chrysler LLC.
If GM halted operations and was unable to pay a big North American supplier, the damage to the supplier's cash flow and creditworthiness could force the company to shut down. That would cut off the supplier's parts to Japanese and German assembly plants.
All over North America, financially vulnerable GM suppliers provide critical parts to the transplants. "The number of parts for which there are double- or triple-sourced suppliers is very small," says Carlos Tavares, Nissan Motor Co. executive vice president for corporate and product planning.
Cockpits for crossovers
For instance, Delphi Corp. is the exclusive supplier of cockpits for Mercedes M-class crossovers built in Vance, Ala. Johnson Controls Inc. sends seats and interior components to Nissan North America's plants in Smyrna, Tenn., and Canton, Miss. Magna International Inc. supplies transfer cases to the X5 crossover at BMW's Spartanburg, S.C., factory.
Dana Holding Corp. sells truck frames to Toyota's plant in Princeton, Ind., and the Japanese automaker's New United Motor Manufacturing Inc. joint venture with GM in Fremont, Calif. ArvinMeritor Inc. produces door modules for the Hyundai Sonata built in Montgomery, Ala.
The latter four of those North American-based supplier giants last week had their credit ratings placed on CreditWatch by Standard & Poor's. The suppliers may not be able "to withstand the liquidity shock of a sudden bankruptcy filing by one or more" of the Detroit 3, S&P said.
"We are deeply concerned," says Mike Goss, a spokesman for Toyota Motor Engineering & Manufacturing North America Inc., the Erlanger, Ky., headquarters for Toyota production. "We share many of the same suppliers with the Detroit 3.
"We are trying to monitor a fast-changing situation. I think we are watching to see who is at risk, but I can't go any further. We are vulnerable in a few cases."
Tavares of Nissan dismissed the idea that contingency plans could eliminate the risk to his company of a Detroit 3 failure. "No company can do that," he said.
A former Toyota U.S. manufacturing executive who asked not to be identified said a supplier's business failure typically gives an automaker the right to step in and continue producing its parts. But he added that in the event of a major supply-chain collapse, "not even Toyota would be able to retool suppliers and financially support such a downward spiral."

 

[MarkBarbieri]

Suppliers will die off or scale down as long as the market keeps shrinking. They won't all die because there is still a demand for cars. The demand just isn't enough to support the capacity that we have. What is killing the US makers is that they have far more excess capacity relative to the demand for their products and they have much less flexibility in shedding jobs and closing plants.

GM, at the least, is doomed. It is possible that it can be broken up and the healthier parts of it can survive. It is possible that we can pour huge amounts of cash into it to keep it alive, but that will only stave off the inevitable.

My advice is to buy Ford shares and short GM shares. Even at the amazingly low price of $1.6 billion, GM is over valued. I'm not sure about Ford. You'll make money on the GM shorts and the Ford shares serve as a protection against a major federal bailout.

 

[minnie61650]

For those of you who think the transplants will just "pick up the slack" - apparently they themselves aren't so convinced:



Detroit crash could halt transplant output
Could the financial collapse of a Detroit automaker halt production at Asian- or European-owned auto plants in the United States?
That hypothetical scenario suddenly looks painfully plausible. The reason? Import-brand automakers rely on many of the same North American suppliers as General Motors, Ford Motor Co. and Chrysler LLC.
If GM halted operations and was unable to pay a big North American supplier, the damage to the supplier's cash flow and creditworthiness could force the company to shut down. That would cut off the supplier's parts to Japanese and German assembly plants.

................A former Toyota U.S. manufacturing executive who asked not to be identified said a supplier's business failure typically gives an automaker the right to step in and continue producing its parts. But he added that in the event of a major supply-chain collapse, "not even Toyota would be able to retool suppliers and financially support such a downward spiral."

I agree. It is like a house of cards. GM, Ford, and Chrysler. are the foundation.
Remove any one of those Detroit 3 during these tough economic times and the all the rest of the cards will fall including the Toyota US plants.

Just my 2 cents.

 

[carone0318]

I work for a auto mfg (inventory planner for service parts), not one of the big 3 and let me tell you the number of last time buys I am doing and I believe it is totally related to this. Johnson Controls was one of my suppliers. I have many suppliers that are the same as the big 3 - it is a domino affect. Granted we would probably be able to get parts from back over in Japan, but it would be crazy in the interim.

For those of you who think the transplants will just "pick up the slack" - apparently they themselves aren't so convinced:



Detroit crash could halt transplant output
Could the financial collapse of a Detroit automaker halt production at Asian- or European-owned auto plants in the United States?
That hypothetical scenario suddenly looks painfully plausible. The reason? Import-brand automakers rely on many of the same North American suppliers as General Motors, Ford Motor Co. and Chrysler LLC.
If GM halted operations and was unable to pay a big North American supplier, the damage to the supplier's cash flow and creditworthiness could force the company to shut down. That would cut off the supplier's parts to Japanese and German assembly plants.
All over North America, financially vulnerable GM suppliers provide critical parts to the transplants. "The number of parts for which there are double- or triple-sourced suppliers is very small," says Carlos Tavares, Nissan Motor Co. executive vice president for corporate and product planning.
Cockpits for crossovers
For instance, Delphi Corp. is the exclusive supplier of cockpits for Mercedes M-class crossovers built in Vance, Ala. Johnson Controls Inc. sends seats and interior components to Nissan North America's plants in Smyrna, Tenn., and Canton, Miss. Magna International Inc. supplies transfer cases to the X5 crossover at BMW's Spartanburg, S.C., factory.
Dana Holding Corp. sells truck frames to Toyota's plant in Princeton, Ind., and the Japanese automaker's New United Motor Manufacturing Inc. joint venture with GM in Fremont, Calif. ArvinMeritor Inc. produces door modules for the Hyundai Sonata built in Montgomery, Ala.
The latter four of those North American-based supplier giants last week had their credit ratings placed on CreditWatch by Standard & Poor's. The suppliers may not be able "to withstand the liquidity shock of a sudden bankruptcy filing by one or more" of the Detroit 3, S&P said.
"We are deeply concerned," says Mike Goss, a spokesman for Toyota Motor Engineering & Manufacturing North America Inc., the Erlanger, Ky., headquarters for Toyota production. "We share many of the same suppliers with the Detroit 3.
"We are trying to monitor a fast-changing situation. I think we are watching to see who is at risk, but I can't go any further. We are vulnerable in a few cases."
Tavares of Nissan dismissed the idea that contingency plans could eliminate the risk to his company of a Detroit 3 failure. "No company can do that," he said.
A former Toyota U.S. manufacturing executive who asked not to be identified said a supplier's business failure typically gives an automaker the right to step in and continue producing its parts. But he added that in the event of a major supply-chain collapse, "not even Toyota would be able to retool suppliers and financially support such a downward spiral."

 

[rwdavis2]

The UAW needs BIG concessions to make this work. I don't see it happening though. Unions have a history of preferring to keep their perks rather than keeping jobs.

Just look at the steel industry in Pittsburgh to see a perfect example of this. As of about 1986 or so, there was no net loss of steel industry jobs in the USA. They just all moved south and/or to non-union mini mills. (Source is from a Brookings Institution book published in the 1980's)

As an additional item, I worked for a company in Pittsburgh in the early 1990's. They did the airport people movers as well as heavy rail (subway cars). They considered buying the heavy rail division from GM but eventually declined due to all the paid idle workers in the job bank. They could not ever see it being profitable while still having to pay people that didn't do anything.
BD

 

[ScottJ]

First of all, this is a LOAN unlike the bank bailout.

We the people have given the bank hundreds of BILLIONS. AIG has received over $170 billion. So, the country is willing to bailout people making several times what auto-workers make but not save millions of jobs and hundreds of communities and several States with only a $25 billion LOAN.

So, save the rich and damn the unions?

I doubt if anyone has any idea of the the bailout that will be needed if any of the BIG 3 fail or if all fail. It will be the Government who provides the welfare, job programs, food program, housing programs needed to save people. 1 in 10 jobs in the US is directly tied to the US auto industry.

There is no other industry in the US as large. There may be other that make more money or are more profitable but none have more employed at fair to good wages.

Let's see, 3 million jobs lost in the first year & an additional 2 million in the second year. It would cut $500 billion per year in tax revenue to the US government. US auto industry would halt due to supplier defaults. The car you buy will be made in Japan, Germany, Korea, China, India or Russia. Our national defense will be severely compromised due to the loss of the Big 3. The Arsenal of Democracy will be gone.

I believe the Unions have been greedy, Auto Execs made bad decisions in the past and our Government has messed up worse than either.

Also, the Big 3 have faced an unfair US perception against it. Sure, Toyota has the Yaris and the Prius but they sell many times more SUVS and trucks and you know what the Big 3 lead in MPG in those categories.

 

[ScottJ]

I'm sorry for my emotional post but I really believe OUR Country could be headed for economic times most of us have never seen in our lives. I live in the metro Detroit area. Everyone I speak with fears what will happen if any of the three fail. 50% unemployment is not hard to imagine.

 

[Galahad]

First of all, this is a LOAN unlike the bank bailout.

We the people have given the bank hundreds of BILLIONS. AIG has received over $170 billion. So, the country is willing to bailout people making several times what auto-workers make but not save millions of jobs and hundreds of communities and several States with only a $25 billion LOAN.

So, save the rich and damn the unions?

I doubt if anyone has any idea of the the bailout that will be needed if any of the BIG 3 fail or if all fail. It will be the Government who provides the welfare, job programs, food program, housing programs needed to save people. 1 in 10 jobs in the US is directly tied to the US auto industry.

There is no other industry in the US as large. There may be other that make more money or are more profitable but none have more employed at fair to good wages.

Let's see, 3 million jobs lost in the first year & an additional 2 million in the second year. It would cut $500 billion per year in tax revenue to the US government. US auto industry would halt due to supplier defaults. The car you buy will be made in Japan, Germany, Korea, China, India or Russia. Our national defense will be severely compromised due to the loss of the Big 3. The Arsenal of Democracy will be gone.

I believe the Unions have been greedy, Auto Execs made bad decisions in the past and our Government has messed up worse than either.

Also, the Big 3 have faced an unfair US perception against it. Sure, Toyota has the Yaris and the Prius but they sell many times more SUVS and trucks and you know what the Big 3 lead in MPG in those categories.

Wow, did you just get a talking points memo?

The finance industry bail outs are also largely loans or in exchange for an ownership interest in the company. They are not gifts. Executives abusing their privileges doesn't make an argument for or against them.

If the auto makers go bankrupt they will not be going out of business. They will be forced to restructure. If they choose to restructure in a way that harms national defense then they should probably be held up as treasonous.

The big three's claim about fuel efficient models is pretty much a joke. Their number of models is over stated because a Chevy is a Pontiac is a Buick, no matter how loudly they try to claim otherwise.

Everything every where is made everywhere. We need to get over globalization or be killed by it.

Anything that is done - bankruptcy, government loan, needs to kill the current contract mess (even if it kills the union, IMO), and hold the executives to account (limiting their pay etc. if necessary). But there is nothing sacred about a Chevy or a Chevy worker.

 

[Galahad]

Everyone I speak with fears what will happen if any of the three fail. 50% unemployment is not hard to imagine.

If there is no demand for their product propping them up is much worse that letting them "fail".

 

[ScottJ]

"If there is no demand for their product propping them up is much worse that letting them "fail"."

Can you please explain further that there is no demand? The Big 3 account for just under 50% of the sales in the US? So, I don't understand what you mean by no demand.

There are so many myths being falsely stated by saying Chapter 11. Debt is not the problem, liquidity is. U.S. sales went from 16 million vehicles to 11 million. We have an economic problem no a debt problem. Not to mention, there is no credit for bankruptcy. Bankruptcy is death.

No the bank bailout was not loans, we bought equity shares into many banks. So, back to my question, why does AIG deserve $180 billion and not automakers?

As far as MPG is concerned, are you serious? Cars are so close in fuel economy and the Detroit automakers are damned for selling trucks and SUVs where the Japanese are praise for selling a handful of Prius and Yarus. You can buy a new Chevy Cobalt with better MPG than the Honda Fit.

Yeah, everything is made everywhere but you know what we need more than just Walmart and McDonald jobs to buy everything from everywhere. It's just a shame our Government has allowed countries like Japan to manipulate their monetary policies to take give their industries huge advantages over the US.