UAW Concessions?

[MarkBarbieri]

Originally Posted by MarkBarbieri
I don't think that the direct labor costs are the core problem. The problem is all of the non-producing costs. Those include some labor costs (jobs bank, restrictive work rules making employees less productive, unfunded retirement expenses, etc) and the include a lot of other costs (debt servicing, capital invested in excess plant capacity).

If you get hurt on the job, do you think it is alright for your company to fire you since you are no longer as productive as you were when hired?
What about my friend who was running her machine and something from above by the ceiling fell on her knocking her completely out? Should she be fired since she is no longer as productive as she was when hired? She is a very hard worker and works circles around most but does have some restrictions because of it. It was not HER fault that this happen!

When I hired in the GM plant I'm at in 1979 there were 12,000 plus workers. now we are less than 3000. Over 9000 workers have either retired, died, or went elsewhere and that's just at one plant.

I'm not sure why you would assume that I believe any of those things based on what I said. What I was trying to say (and correct me if I am wrong) is that Unions often have fairly strict rules on who can do what work. The classic example is that even trivial electrical work cannot be done by someone that is not part of the electrical union. I'm not talking about reasonable safety issues (the following of which benefit shareholders as well as workers).

 

[dvcgirl]

The CEO's are the ones that have company paid private jets and the multimillion dollar bonuses! BUT...it is the union workers that are overpaid and causing car prices to be too high!

The CEOs will need to take big pay cuts too. However, try and find anyone qualified to run any of those companies who won't demand a giant salary. I mean, who would do it? It's like signing up to be the Captain of the Titanic after it struck the iceberg.

Really, the whole private jet thing was just a ridiculous PR move on the part of the Big Three....they were clearly not thinking.

But if the Big Three can't convince the Unions that they need to drastically cut salaries, head count and retiree benefits.....we won't have any US auto makers to even talk about because they won't be here. Unless our government just plans on throwing billions and billions of dollars at these companies for the foreseeable future.

And I don't think you'll see that.....the American People are sick to death of all of these bailouts and threats that the world will end if we don't get 700 Billion for the financials, 25 Billion for a few months operating expenses for the auto industry.....and God only knows what else.

From my perspective things have gotten a lot *worse* since the Government came in with all of their *help*. Maybe they should be helping a little bit less and let the unhealthy companies go......

 

[dvcgirl]

I read the article and in the 2nd paragraph it stated, "Car sales have slowed to a crawl." This is an once in a lifetime economic period. Unfortunately, for some of our parents and grandparents, this is their second once in a lifetime economic event.

As far as $73 billion losses in the past 4 years as I stated, GM has had to deal with many one-time quarterly charges. Example, even though GM had $39 billion in losses in the third quarter of this year most of that was due to having to write off unused credits. These were non-cash losses.

Don't get me wrong, GM is in bad shape but most of it is due to economic conditions not its business model. You just don't have a 45% decline in sales and it not be economic.

Sure the foreign automakers are leaner and can compete better in these economic times. I know things have to be adjusted to compete with the Japanese, Koreans and Chinese but that's more in the hands of the Government than the BIG 3. All three of these countries manipulate their monetary exchange rates but our country would never enforce trade laws. Let's face it, if they did very few Americans would pay $4000 more for an import how many would actually buy Honda or Toyota? Or for that matter, they would have never got a foot hold here in the first place.

I am perplexed Americans aren't angry that we allowed unfair trade into our Country. That we allow the sell off of our Country, only to be employees & servants to the rest of the world. I maybe could see the BIG 3 losing to foreigners on a fair ground and most Americans being fine with it. But we don't compete on fair grounds, it is next to impossible to sell a US car in Korea or Japan. I would think Americans would be more angry at other countries unfairly using the system against us than Americans trying to make a living.

I completely agree that the economy is proving to be the nail in the coffin for GM, but the coffin was already in place. Now we need to seriously reassess the situation. Their "turn-around" was based on them selling lots and lots of autos. That whole premise has turned out to be flawed......let's face it, we sold 17.5 million autos in the US because of cheap and easy credit for *everyone*. If you could fog up a mirror.....you drove off the lot. A solid 1/3 of potential buyers is now completely out of the market. Gone. Same deal for the housing market. We've been selling a lot of crap to a lot of people who simply couldn't afford it. Imagine that.

Also, let's factor in all the bad press that the Big Three have gotten in the past few months. Flying in on corporate jets to beg for money......so ridiculously silly. Think most Americans are feeling the love for the Big Three these days?

I think a lot of Americans have just *had* it......and I'm thinking that a lot of them aren't feeling really motivated to buy a Chevy Malibu. They're already going to be getting enough of my money.....thanks, I'll keep driving my 12 year old Toyota 4-Runner.....which still runs like a top.

 

[minnie61650]

....I think a lot of Americans have just *had* it......and I'm thinking that a lot of them aren't feeling really motivated to buy a Chevy Malibu. They're already going to be getting enough of my money.....thanks, I'll keep driving my 12 year old Toyota 4-Runner.....which still runs like a top.

DH just traded in his Chevy van and bought a new Saturn Outlook 2 weeks ago.

If GM can hang on a little longer we plan on buying a new Buick Lucerne for me this coming April (2009) as I will be leaving my older(2000) Buick Park Ave( 74,000 miles ....runs like a charm...not giving that car up) at our Florida snow bird home this coming year.

 

[minnie61650]

Disclaimer:

We live in SE Michigan.
Neither DH nor I nor any of our close family members work for the auto companies.

We are however concerned about the Detroit 3 auto companies because 1 out 10 workers jobs directly or indirectly are connected to the auto companies.

 

[dvcgirl]

Disclaimer:

We live in SE Michigan.
Neither DH nor I nor any of our close family members work for the auto companies.

We are however concerned about the Detroit 3 auto companies because 1 out 10 workers jobs directly or indirectly are connected to the auto companies.

We should all be concerned, but our concern isn't going to help them run their companies more effectively, or help them expedite necessary union deals.

Also, I think that the "1 in 10" are more "indirectly" affected than "directly" affected.....because those stats come from parties and associations with a very direct intere$t in their $urvival .

 

[minnie61650]

We should all be concerned, but our concern isn't going to help them run their companies more effectively, or help them expedite necessary union deals.

Also, I think that the "1 in 10" are more "indirectly" affected than "directly" affected.....because those stats come from parties and associations with a very direct intere$t in their $urvival .

It is my feeling that those numbers are more accurate than many want to believe.

I also think if the Detroit 3 fail all the US auto plants including US Toyota will be permently shut down since most if not all of the auto part suppliers will shut down, most if not all of the US steel plants will shut down, most if not allthe tire plants will shut down, many car battery plants will shut down, many glass factories will shut down,etc. (Many of those plants are too large and cannot just scale back to less than 10% production for Toyota.)

The government will lose $150 billion in lost taxes(from the auto companies) in the next 3 years alone. Add 2 to 14 million workers (2 million work directly for the auto comanies& 14 million work indirectly for the auto companies) who lost jobs directly or indirectly ,and that is a lot of people getting unempoyment. After unemployment runs out many will no longer be paying taxes, many may need subsidized housing, food stamps etc.

I really do not think at this time when our economy is so weakened that the US can really afford to let the Detroit 3 auto companies fail.



JMHO

 

[dvcgirl]

I really do not think at this time when our economy is so weakened that the US can really afford to let the Detroit 3 auto companies fail.



JMHO

We won't let them fail. Not outright. They'll get their 25 Billion bridge loan once they come up with their "plan" to turn themselves around. Unfortunately, the plan is going to look an awful lot like a bankruptcy.

Congress will make them sit down with the unions and renegotiate contracts.....sit down with suppliers and renegotiate prices.....slash spending and close plants. Hopefully they'll make it in some form. I'm certainly not against them coming out of this thing in one piece. I'm just against throwing money out the window.

But since we're throwing Billions into Citi as we speak on this fine Sunday Evening.....well, what's another 25 Billion or so. I know I'll sleep well knowing that I'm part owner in another failing bank. I sure hope that they keep Citi's management team in place....they've done such a bang-up job.

 

[Colleen27]

Still too much.....they'll need to cut that in half to compete with the foreign auto makers.

They have. The cost of new hires is roughly $30/hour. And that $72/hour figure is extremely misleading - it is their total labor costs, including retiree benefits and pensions, divided by the number of workers.

 

[Colleen27]

The government will lose $150 billion in lost taxes(from the auto companies) in the next 3 years alone. Add 2 to 14 million workers (2 million work directly for the auto comanies& 14 million work indirectly for the auto companies) who lost jobs directly or indirectly ,and that is a lot of people getting unempoyment. After unemployment runs out many will no longer be paying taxes, many may need subsidized housing, food stamps etc.

I really do not think at this time when our economy is so weakened that the US can really afford to let the Detroit 3 auto companies fail.

Bloomberg reported the projected cost to the government of allowing GM to fail - JUST GM, not the whole domestic automotive industry - at $200 billion, not including lost tax revenue. That's strictly increases in unemployment, welfare, PBGC, etc.

 

[chris1gill]

I guess this question kind of goes with the bail-out threads. I don't know if we should or shouldn't bail out the auto industry - I feel split.

I heard on a radio show yesterday that when you factor in benefits, the average auto worker makes upwards of 60.00 per hour. (I don't know if it's true or not - just what was said on the radio).

My question is since things are so bad, have the union members taken concessions in pay, benefits, etc? It not, why not? Are they willing to?

I'm not asking because I'm anti-union or pro-union. I work for a non-union corporation in an industry especially hard it by the mortgage melt-down. We have seen huge layoffs and taken an 18% pay decrease this year. We don't like it, but we're doing it because we have no choice and want to keep our jobs. Lots of companies are doing this right now.

I'm just wondering if unions are willing to make the same sacrifices?

My post isn't an attack on any group, I just am curious about this and what others think.

Have you looked up the Detroit news to answer your questions? I'm just curious. And to answer your question, while the old timer's may be making that much under the contract (and you figure 15 grand of that is healthcare), the new people are being hired at half that amount. But feel free to read the Detroit news to get the gyst of what the UAW has done.

Why is it Ford can make economical, fuel efficient cars in Europe but cannot bring them here? Why is that? It's a curious question, with curious answers.

 

[minnie61650]

From Freep.com:

If I had the floor at the auto rescue talks
OK. It's a fantasy. But if I had five minutes in front of Congress last week, here's what I would've said: ......................................


Protecting the home turf?
Sen. Shelby. Yes. You. From Alabama. You've been awfully vocal. You called the Detroit Three's leaders "failures." You said loans to them would be "wasted money." You said they should go bankrupt and "let the market work."

Why weren't you equally vocal when your state handed out hundreds of millions in tax breaks to Mercedes-Benz, Hyundai, Honda and others to open plants there? Why not "let the market work"? Or is it better for Alabama if the Detroit Three fold so that the foreign companies -- in your state -- can produce more?

Way to think of the nation first, senator.

And you, Sen. Kyl of Arizona. You told reporters: "There's no reason to throw money at a problem that's not going to get solved."

That's funny, coming from such an avid supporter of the Iraq war. You've been gung ho on that for years. So how could you just sit there when, according to the New York Times, an Iraqi former chief investigator told Congress that $13 billion in U.S. reconstruction funds "had been lost to fraud, embezzlement, theft and waste" by the Iraqi government?

That's 13 billion, senator. More than half of what the auto industry is asking for. Thirteen billion? Gone? Wasted?

Where was your "throwing money at a problem that's not going to get solved" speech then?

Watching over the bankers?
And the rest of you lawmakers. The ones who insist the auto companies show you a plan before you help them. You've already handed over $150 billion of our tax money to AIG. How come you never demanded a plan from it? How come when AIG blew through its first $85 billion, you quickly gave it more? The car companies may be losing money, but they can explain it: They're paying workers too much and selling cars for too little.

AIG lost hundred of billions in credit default swaps -- which no one can explain and which make nothing, produce nothing, employ no one and are essentially bets on failure.

And you don't demand a paragraph from it?

Look. Nobody is saying the auto business is healthy. Its unions need to adjust more. Its models and dealerships need to shrink. Its top executives have to downsize their own importance.

But this is a business that has been around for more than a century. And some of its problems are because of that, because people get used to certain wages, manufacturers get used to certain business models. It's easy to point to foreign carmakers with tax breaks, no union costs and a cleaner slate -- not to mention help from their home countries -- and say "be more like them."

But if you let us die, you let our national spine collapse. America can't be a country of lawyers and financial analysts. We have to manufacture. We need that infrastructure. We need those jobs. We need that security. Have you forgotten who built equipment during the world wars?

Besides, let's be honest. When it comes to blowing budgets, being grossly inefficient and wallowing in debt, who's better than Congress?

So who are you to lecture anyone on how to run a business?

Ask fair questions. Demand accountability. But knock it off with the holier than thou crap, OK? You got us into this mess with greed, a bad Fed policy and too little regulation. Don't kick our tires to make yourselves look better.

Link to full article:

http://www.freep.com/article/20081123/COL01/811230371/1014/BUSINESS01

 

[#1hockeymom]

Have you looked up the Detroit news to answer your questions? I'm just curious. And to answer your question, while the old timer's may be making that much under the contract (and you figure 15 grand of that is healthcare), the new people are being hired at half that amount. But feel free to read the Detroit news to get the gyst of what the UAW has done.

Why is it Ford can make economical, fuel efficient cars in Europe but cannot bring them here? Why is that? It's a curious question, with curious answers.

Emission and crash test standards are completely different in the USA compared to Europe.

 

[Galahad]

They have. The cost of new hires is roughly $30/hour. And that $72/hour figure is extremely misleading - it is their total labor costs, including retiree benefits and pensions, divided by the number of workers.

So that's $149K for total labor cost per person on average per year. I assume their "wage" part of that is much less that $149K. When my company hires an I.T. person with a salary of $100K, the total labor cost per year is just over $120K. Further, when that I.T. person is layed off, my company's costs end almost immediately. It's not so much that the union guy is over paid or anything like that. It is that the contract ties the hands of the employer. The logic seems to be - if the fat cats are getting rich off the system then we want to negotiate a way for the little guy to get some of that. Right? But the problem is that the "system" wasn't working to begin with. So there is nothing noble about getting your fair share of a pie that isn't big enough for what's being promised.

 

[dvcgirl]

They have. The cost of new hires is roughly $30/hour. And that $72/hour figure is extremely misleading - it is their total labor costs, including retiree benefits and pensions, divided by the number of workers.

I meant "half of $28". The foreign auto makers start their new hires at $14 an hour. That's where the Big Three need to be to make it.

I know, you're thinking...."not much of a salary". And I completely agree...that's why it's great that folks have a choice to *not* work for those wages.....and go find something that pays better.

 

[#1hockeymom]

Minnie61650>> I read that Sunday while at hockey practice. I was just about to post it!

 

[ReneeA]

I meant "half of $28". The foreign auto makers start their new hires at $14 an hour. That's where the Big Three need to be to make it.

I know, you're thinking...."not much of a salary". And I completely agree...that's why it's great that folks have a choice to *not* work for those wages.....and go find something that pays better.

Their salary is starting at $12-13 an hour. In the US, we don't have a national healthcare program, so the remainder of the wage makes up what it cost to insure them, etc.

We have a friend that started at GM a year and a half ago and hired in at $13.50 an hour.
I don't understand why this is such a hard concept? The US automakers are coming in at a disadvantage because they have to pay for benefits packages on top of hourly wages, and many other companies don't because their country has universal healthcare.

 

[ScottJ]

We should all be concerned, but our concern isn't going to help them run their companies more effectively, or help them expedite necessary union deals.

Also, I think that the "1 in 10" are more "indirectly" affected than "directly" affected.....because those stats come from parties and associations with a very direct intere$t in their $urvival .

Actually, 1 in 10 Americans are directly employed by the auto industry. This is widely cited by both domestic and foreign automakers both conservative and liberal groups. Those jobs include both tier 1, 2 & 3 suppliers and people who work directly for the auto companies.

Jobs not included in that number are trucking, trains used for freight, international shipping, your corner store, your barber, the building industry, your ice cream parlor and so on.

It's a huge industry & some believe the foreign auto companies would build plants here to make up that difference. They currently don't have the capacity to feed our demand. HOWEVER!!!

This was taken from the New York Times,

"It still doesn’t tell the whole story, though. After all, if Americans still buy cars, how permanent would those auto-related job losses be? Some argue that most of these jobs would be recovered, because foreign-owned auto companies would expand their plants in the United States to fill the void left by the Big Three. Others predict that foreign companies would instead expand their production overseas because of cheaper labor costs and because the suppliers that now serve both domestically — and foreign-owned American plants would be pulled under along with the Big Three."

 

[daughtersrus]

blah blah blah.....

Just to be clear, are you saying that your XBF made $60.00/hour in salary plus the costs of his benefits?

If that's the case, would you mind telling us what his job entailed as well as which company he works for?

 

[daughtersrus]

Still too much.....they'll need to cut that in half to compete with the foreign auto makers.

This from another post. Are you saying that they need to cut back to $29 including benefits to compete with the others?

The BIG 3 executives and union have renegotiated there contacts already! These contracts take effect in 2010. That's why they are asking for a BRIDGE LOAN. After these contracts take effect in 2010. After these changes are made, average union compensation will make $58 an hour. It's not the same as foreign automakers but it is a significant change and closes the gap