UAW Concessions?

[daughtersrus]

[/I]



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).

So does the government! We moved my father to a VA nursing home last year. When he entered, we asked if it was ok for us to put some pictures up on the walls. We brought with some Command Performance hooks. They said that it was fine but we had to leave the items there and they would have them installed. Because they are union, the pictures had to be installed by a union carpenter. The light bulb in his room needed to be replaced. Again, we couldn't do that. We had to wait for a union electrician to come to do it.

Maybe we should be restructuring our country as well as the Big 3 and the UAW.

 

[Kermit1225]

If it's simply the economy......how is it that GM has lost 73 Billion dollars in the last four years?

This is much more than the economy. This horrific economy may in fact prove to be too much for very weak companies like GM and Ford to weather.....but it is far more than the economy. You simply need to look at Honda and Toyota....they're hurting like everyone else, but they'll make it because they're much stronger.

Read this article in the New York Times about GM's "best case scenario"......the best case scenario is going to look an awful lot like bankruptcy, and GM is going to have to get a *lot* smaller to even have a chance of making it.

http://www.nytimes.com/2008/11/22/business/22nocera.html?pagewanted=1&em

I think that the reasons it appears that the transplants are holding there own are that the money from the sales of the foreign automakers is not here in the US it is in their own country. The fact that our economy is failing makes a big difference there. Also there is a BIG misconception in the general public about the UAW. Now, don't get me wrong, they have some serious faults, but the big problem is not them. It is the CEO's and the decisions they have made. Take Chrysler, for examle. The so called "merger" with Daimler killed us. Chrsysler had a surplus of funds and things were going great until then. Then Daimler had Chrysler using the Daimler technology, but we had to pay for it. When at the same time they were using Chrysler technology for free. And using the surplus in Chrysler funds to bail themselves out. Now Cerberus in the picture and things aren't looking much better.

One thing that needs to happen is that our country needs to help its own. i know that our "Big 3" have made very costly errors in judgement as far as their manufacturing. They needed to focus on the smaller cars more and haven't done that.

Also...just another thought. Quite some years back Chrysler had to take a "loan" from the government. They repaid that loan early and with interest. What would be the harm in that again. If the government can bailout the banks and WallStreet, who created most of the problem, ehy not the Big 3. If the Big 3 go under, the ripple effect will be devasting and the banks and loan companies will just faulter again because their will be millions of people unable to pay their debt.

 

[Kermit1225]

Sorry, but I have another thought. I believe that another big problem with todays government and economy is the unfair trade ratio. They have made it so easy for other countries to import product and for our american companies to ship the manufacturing overseas. If the people in this country aren't getting paid to build the product how can they afford to buy the product. Why is it that all the toys we buy our kids are "made in China", or some other foreign country. What happened to "Buy American".

I think I can somewhat answer that myself. Because it is cheaper to pay other countries to build the products the price goes down. So if you have a product actually built here it costs more because we have to pay our workers fairer wages. If our government would find a way to equal out the trade between countries, things would be easier. It they would penalize American companies for shipping our jobs overseas, they would stay here and we could afford the products, thus eventually helping our economy.

 

[fkj2]

Also...just another thought. Quite some years back Chrysler had to take a "loan" from the government. They repaid that loan early and with interest. What would be the harm in that again. If the government can bailout the banks and WallStreet, who created most of the problem, ehy not the Big 3. If the Big 3 go under, the ripple effect will be devasting and the banks and loan companies will just faulter again because their will be millions of people unable to pay their debt.

The original Chrysler loan was made at a time when people were actually buying cars. Purchasing vehicles today has fallen off a cliff. Even the docks on the coasts are being overloaded with imports that aren't selling.

It was also at a time when debt levels, personal and corporate, where much lower. People just have no wiggle room.

 

[Tiggeroo]

Henry Ford's original vision was a car that his workers could afford to buy.

 

[dvcgirl]

Also...just another thought. Quite some years back Chrysler had to take a "loan" from the government. They repaid that loan early and with interest. What would be the harm in that again. If the government can bailout the banks and WallStreet, who created most of the problem, ehy not the Big 3. If the Big 3 go under, the ripple effect will be devasting and the banks and loan companies will just faulter again because their will be millions of people unable to pay their debt.

Right, and I think that this will be the new plan as well. These will be loans....and they'll be expected to pay them back. Except that old example you used was 1.5 Billion and Iacocca actually had a plan to turn things around. These three CEOs flew in on their Gulfstreams fully expecting that they were walking away with 25 Billion to divvy up as they saw fit....no questions asked.

I think that the big, big problem is that we're not going back to 17.5 million cars sold in the United States anytime in the next several *years*....if ever. We got to that number with easy, easy credit for anyone with a pulse.

I was listening to Bloomberg radio today and they had an auto analyst talking about the difficulty the dealerships are having in getting loans for anyone other than those with a.) money down and b.) stellar credit.

We did not sell 17.5 million units using anything remotely close to those type of rules.

Think about how many people you know right now who are "upside down" in their auto loans. Used autos plunged when gas prices hit $4 a gallon and they haven't come back up because nobody believes that this $2 a gallon deal is going to last. So a lot of people are riding around right now with cars worth far less than the amount owed on them.

In our old world of "easy credit for all", you could drive in with any kind of car and crappy credit and simply roll the amount you were upside in the old loan....into the new loan......that's not going to happen for a long, long time. It's just not. And that's very bad news for the auto dealerships. And since the balance sheets of the Big Three are in tatters, it's especially bad news for them.

This year is looking like we'll do 13 million in sales.....next year 12 million. Something has to give in that scenario. The weakest will not survive in this new environment.

And throwing money at them to manufacture cars that nobody wants to buy......well, that seems to make very little sense to me.

 

[manning]

So does the government! We moved my father to a VA nursing home last year. When he entered, we asked if it was ok for us to put some pictures up on the walls. We brought with some Command Performance hooks. They said that it was fine but we had to leave the items there and they would have them installed. Because they are union, the pictures had to be installed by a union carpenter. The light bulb in his room needed to be replaced. Again, we couldn't do that. We had to wait for a union electrician to come to do it.

Maybe we should be restructuring our country as well as the Big 3 and the UAW.

Reminds me of a situation a long time ago. We were moving a department to another state. We were moving delicate equipment and needed people who were specialized in moving it. Well the union insisted they will handle the move out of the building and it would take 12 men. They had no idea on how to handle the equipment. We solved the problem by having the specialists handle the move while the 12 men sat in a room playing cards. All they wanted was to get paid. Of the 12 only one pitched in to help where he could. Needless to say when it came time for job cuts, guess which one who wasn't cut.

 

[Colleen27]

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.
.

Again, they HAVE. Under the new UAW contract new hires make $14.50 plus benefits, for a total labor cost of roughly $30/hour. That $28 wage/$72 hour total compensation is the union average, and since hiring has been slim in recent years, it is skewed towards the earnings of long-term employees who received much more generous pay, benefits, and pensions.

 

[Colleen27]

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.

Because for the most part, there hasn't been much demand for them here. Until the gas price increases of the past year or so, Americans were still gobbling up SUVs and full sized trucks & vans. And now that gas prices are down, many people are picking that trend up where it left off - I have a friend who is a salesman in a Ford dealership, and he said the F150 and SUVs are back to being their top sellers after months of selling "nothing but Focuses". But now it is the credit crunch slowing things down - my friend said 720 is about the minimum acceptable credit score to get a new car loan right now, which excludes the majority of perspective buyers.

 

[Kermit1225]

Again, they HAVE. Under the new UAW contract new hires make $14.50 plus benefits, for a total labor cost of roughly $30/hour. That $28 wage/$72 hour total compensation is the union average, and since hiring has been slim in recent years, it is skewed towards the earnings of long-term employees who received much more generous pay, benefits, and pensions.

You are right. They are starting a 2-tier wage where all new hires will start at a lower wage. And I believe (please forgive me if I am wrong) but I think they are getting rid of the "job bank" so that the employees who are laid off, if called back can return under the lower wage.

Which is why this loan they are trying to receive is a "Bridge Loan". Just to hold them until that can begin.

 

[dvcgirl]

Again, they HAVE. Under the new UAW contract new hires make $14.50 plus benefits, for a total labor cost of roughly $30/hour. That $28 wage/$72 hour total compensation is the union average, and since hiring has been slim in recent years, it is skewed towards the earnings of long-term employees who received much more generous pay, benefits, and pensions.

Right, they HAVE cut wages...for new hires. Unless they buy out more of the old employees, trust me, there won't be many new employees hired. I don't know if they can even afford to continue on that road where they're buying out employees left and right.

How many employees do they have at the old wages that won't be negotiated down? And then of course we've got the retiree legacy costs that are far too high. That's the frustrating thing about unions.

Again, the marketplace is going to take care of a lot of this. GM has lost 73 Billion dollars in the last four years. They're already carrying 46 Billion in debt obligations....and they'll want 12 Billion of that 25 Billion "loan" to keep going. They're going to have to renegotiate their "old debt" before Congress even lets them borrow some of our money.

Auto sales will be down 25-30% over the next 14 months....at a minimum. That isn't exactly a growth environment. The government can't let them collapse because we'll lose far too many jobs....literally overnight. But in the best case scenario, the Big Three are going to be shedding models and closing plants like crazy. It's the only way they make it....

 

[jodifla]

Right, they HAVE cut wages...for new hires. Unless they buy out more of the old employees, trust me, there won't be many new employees hired. I don't know if they can even afford to continue on that road where they're buying out employees left and right.

How many employees do they have at the old wages that won't be negotiated down? And then of course we've got the retiree legacy costs that are far too high. That's the frustrating thing about unions.

Again, the marketplace is going to take care of a lot of this. GM has lost 73 Billion dollars in the last four years. They're already carrying 46 Billion in debt obligations....and they'll want 12 Billion of that 25 Billion "loan" to keep going. They're going to have to renegotiate their "old debt" before Congress even lets them borrow some of our money.

Auto sales will be down 25-30% over the next 14 months....at a minimum. That isn't exactly a growth environment. The government can't let them collapse because we'll lose far too many jobs....literally overnight. But in the best case scenario, the Big Three are going to be shedding models and closing plants like crazy. It's the only way they make it....

The truth is, most auto workers make about $50,000 a year. They are making good middle class wages, not lawyer, doctor wages.

You are continually arguing an outdated model...back when the workers got LOTS of overtime. That's all gone now.

 

[jodifla]

Right, and I think that this will be the new plan as well. These will be loans....and they'll be expected to pay them back. Except that old example you used was 1.5 Billion and Iacocca actually had a plan to turn things around. These three CEOs flew in on their Gulfstreams fully expecting that they were walking away with 25 Billion to divvy up as they saw fit....no questions asked.

I think that the big, big problem is that we're not going back to 17.5 million cars sold in the United States anytime in the next several *years*....if ever. We got to that number with easy, easy credit for anyone with a pulse.

I was listening to Bloomberg radio today and they had an auto analyst talking about the difficulty the dealerships are having in getting loans for anyone other than those with a.) money down and b.) stellar credit.

We did not sell 17.5 million units using anything remotely close to those type of rules.

Think about how many people you know right now who are "upside down" in their auto loans. Used autos plunged when gas prices hit $4 a gallon and they haven't come back up because nobody believes that this $2 a gallon deal is going to last. So a lot of people are riding around right now with cars worth far less than the amount owed on them.

In our old world of "easy credit for all", you could drive in with any kind of car and crappy credit and simply roll the amount you were upside in the old loan....into the new loan......that's not going to happen for a long, long time. It's just not. And that's very bad news for the auto dealerships. And since the balance sheets of the Big Three are in tatters, it's especially bad news for them.

This year is looking like we'll do 13 million in sales.....next year 12 million. Something has to give in that scenario. The weakest will not survive in this new environment.

And throwing money at them to manufacture cars that nobody wants to buy......well, that seems to make very little sense to me.

Another fallacy. GM sells more cars than anybody in the world. So, someone is buying them.'

 

[fkj2]

Another fallacy. GM sells more cars than anybody in the world. So, someone is buying them.'

Evidently not.

http://www.bizjournals.com/cincinnati/stories/2008/04/21/daily37.html

 

[fkj2]

The truth is, most auto workers make about $50,000 a year. They are making good middle class wages, not lawyer, doctor wages.

You are continually arguing an outdated model...back when the workers got LOTS of overtime. That's all gone now.

If the $50,000 included the sum of all the benefits autoworkers receive, I might agree. But when you factor in the incredible health care, retirement, sick leave benefits, sub pay, etc., that's far above "good middle class wages," especially when many of them are NOT paying back student loans for becoming a lawyer, physician, etc. I doubt many autoworkers are entering the work force carrying a $100,000 loan (and often much more) on their backs.

Talk about arguing an "outdated model."

 

[dvcgirl]

Another fallacy. GM sells more cars than anybody in the world. So, someone is buying them.'

I didn't mean GM....I meant, we'll be producing 17.5 million cars and selling 12 million. We'll be bankrolling the Big Three so that they can all help to produce cars that people won't be able to afford.

And isn't Toyota right there with GM at this point.

Really, I don't think it's fair to make me out as someone who wants to see the Big Three fail. I really and truly would *love* to see them succeed. And I get that they've been working towards becoming a profitable company. But they made a lot of missteps along the way as well. But the fact of the matter is that they've been caught in the mother of all economic storms without an umbrella.

They'll get their money, and by the end of 2009 they'll be back for more....

One has to wonder....where does it end?

 

[dvcgirl]

If the $50,000 included the sum of all the benefits autoworkers receive, I might agree. But when you factor in the incredible health care, retirement, sick leave benefits, sub pay, etc., that's far above "good middle class wages," especially when many of them are NOT paying back student loans for becoming a lawyer, physician, etc. I doubt many autoworkers are entering the work force carrying a $100,000 loan (and often much more) on their backs.

Talk about arguing an "outdated model."

Good point. And, how about those of us out in the "free market", who just have to take pay cuts and benefit cuts when times are tough....like my DH did back when the dot-com bubble burst. Where was the bailout then? He took a series of paycuts, benefit cuts...until he was finally laid off....the last guy to go in his satellite office. The grand majority of us have only what we put into our 401Ks, IRAs and taxable savings if we're lucky.....there's no "retiree health benefits".

I counted it up today....he's worked for nine companies in his nearly 20 year career as a software developer. Not because he switched jobs that often, but because of mergers and acquisitions. He's only lost his job once, but there's always uncertainty with any of these transactions.

Over time, I've learned not only to relax about all of this stuff, but I actually am happy about it. Because we don't work for anyone....ultimately we work for ourselves. We're all paid for what we know these days, not what we do. And we're also happy about being in charge of our own retirement savings....because we won't be sitting around in our 70s worried about whether or not our old company has enough money left to send our pension check or pay for the retiree benefits.

That model worked well in the old days, and I'm thankful that my father and my father-in-law both benefitted from that system. But times have changed, and you either change with them or you're going to fall behind.....

 

[S. C.]

If the $50,000 included the sum of all the benefits autoworkers receive, I might agree. But when you factor in the incredible health care, retirement, sick leave benefits, sub pay, etc., that's far above "good middle class wages," especially when many of them are NOT paying back student loans for becoming a lawyer, physician, etc. I doubt many autoworkers are entering the work force carrying a $100,000 loan (and often much more) on their backs.

Talk about arguing an "outdated model."

You think auto workers just deposit their whole paychecks in the bank?
Do you honestly think autoworkers do not help pay for their childrens college? Or that auto workers Don't have morgages, car loans, utilities to pay, food to buy etc?

BTW: NO auto workers are entering/hiring into the auto companies now and making the wages you are talking about.

 

[S. C.]

The truth is, most auto workers make about $50,000 a year. They are making good middle class wages, not lawyer, doctor wages.

You are continually arguing an outdated model...back when the workers got LOTS of overtime. That's all gone now.

Ditto

 

[jodifla]

Evidently not.

http://www.bizjournals.com/cincinnati/stories/2008/04/21/daily37.html

That was one quarter of sales.