Monday, November 17, 2008
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$73/Hour Bailout
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Posted by:
Amanda Carpenter at
10:57 AM
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 Detroit hasn't been making cars people want to buy and was catering to Big Labor demands long before the mortgage crisis hit. It's no wonder why they aren't competitive anymore. (I say this as a Flint, Michigan native.)
Mark Perry of the wonderful Carpe Diem blog put together this chart showing the inflated wages the Big Three automakers pay over their competitors. Big Three union workers, with their gold-plated health care plans, make about $73 an hour in total compensation. And, now they're begging Washington for a bailout before they even think about negotiating with the UAW.
It's been said before, but it's worth repeating. GM and all the rest aren't car manufacturers anymore. They're health care providers who occasionally crank out a car down the assembly lines. It's unfair for them to shake down Washington for tax dollars to meet their unfunded liabilities. That means millions of American who can't afford health care themselves are going to be obligated to keep the $73 an hour union workers on their top-notch plans.
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Aren't Toyota's health care benefits paid for by the Japanese government and hence the Japanese taxpayers, at least for their workers in Japan? |
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You cant really blame the unions for getting the best deal they can but you can blame a management that caved to the union demands back when the big 3 ruled the auto industry. It is time for a reality check in Detroit. Bite the bullet UAW and join the rest of the workers in the US who don't have a sugar daddy. |
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Note to Bob: this isn't Japan. The Japanese/American auto-makers pay a good wage for the area their plants are located with a good benefit package. They they aren't unionized. |
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"this isn't Japan."
These figures don't seem to be "Toyota in the USA," but rather Toyota in general. What are the corresponding numbers for Japanese automakers in the US, including tax breaks given them by the states they're in? |
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UAW doesnt fit into the Free Enterprise model to the degree they are at present.
No one that I know receives complimentary health benefits where GM workers do not pay a dime for their coverage and very little for actual costs.
http://www.usatoday.com/money/autos/2005-06-22-gm-healthcar e-usat_x.htm
I know that they used to (and may still do) pay workers for not even working under certain situations.
I know that they receive close to full benefits and considerable pay after they retire.
What other companies can really afford to do that in a global market?
I just bought a car...non-American because I couldnt find a reasonable model and price to meet my needs with an American company. Seriously, why would I but a hybrid that gets the same gas mileage as its gas-only equivalent?
Let them have the loan under the condition they file bankruptcy, restructure without UAW, and hire a competent product management group to come out with some better products that will compete with foreign car-makers. They need to find more efficient processes for retooling between model years.
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The U.S. Government should be supporting the new "GREEN ECONOMY", companies like BG Automotive.
For USD $25 Billion, BG could put 1.5 million Electric Cars on the road while creating jobs, saving U.S. consumers USD $2.5 Billion/yr on gasoline, and also reducing CO2 emissions by 7.5 million net tons per year.
First legitimate electric car coming to the market.
Safe, reliable and affordable.
Check it out............
Article:
http://planetgreen.discovery.com/tech-transport/electric-c1 00-vehicle.html
Video-You Tube:
http://www.youtube.com/watch?v=hog9wpZCg8U
BeGreen Advocate
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At $18,000 and a $2000 savings in gas it would take 9 years to pay off a car that can only be used in the city. Max speed of 25-45 mph makes it impractical to go anywhere. Sorry, but you might as well buy a scooter for aprox. $1000-$1500 that gets 100 mpg. and where a jacket in the winter. |
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man you are the master of discord. One of these days that liberal brain of yours will get the sound reasoning behind..."what about the Unions don't you get?" Unions have bankrupted and corrupted business where they pitched their tents. Blame them for exporting jobs from our shores to more competitive markets. Read and study the issue before you go all haywire. Toyota Plants in Mississippi pay good wages for the part of the country they are in. Workers are happy and satisfied and there is an open dealing with Management and the Toyota Automaker plants in Japan. Their benefits Health and otherwise are "cost share" they are not in the healthcare business, they are in the car business and profitable. Get it?
They also make quality products which the UNIONIZED big three cannot compete. |
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What is it about unions being the cause of failure that liberals don’t understand? Time after time, industries in our country have failed due to the overindulgence of labor unions. These guys simply strike themselves out of jobs, then moan and groan that their jobs went away.
I blogged about this too at http://www.sickupandfed.com
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You said...
"man you are the master of discord. One of these days that liberal brain of yours will get the sound reasoning behind..."
I don't believe I have a lot in common philosophically with Bob Munck, but he asks a legitimate question. There's no reason to attack with ad homs.
In defense of Bob, he appears to be asking a question to determine if we are comparing apples to apples. That is a fair and legitimate question. If it is not an apples to apples comparison, then it is meaningless.
This doesn't mean that the unions haven't been wrong over the years. They have. So has management. Both parties, along with the US government, have created the situation they are in now. There is nothing at this point that can be done to save them as they currently exist. The best option is to file Chapter 11, reorganize, reduce costs, and come out smaller but better able to cope with the current economy. It's going to be painful to some workers, lenders, and communities, not to mention shareholders. But it's really the only way to move forward at this point. Government guaranteed loans will not solve their problems. Nationalizing the car industry (either in part or in whole), will not solve their problems either. |
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that the Big 3 are going to have to restructure deals with the assembly line workers and that may include the dissolution of the UAW.
However....the $73.00 an hour portrayed in the chart is not what they are paid in salary per hour. This amount includes cost of compensation for retirement and health care plans, etc.
You, the general public, might be surprised what you cost your employer per hour in TOTAL COMPENSATION.
And holding up the Japanese companies as an example of doing it cheaper is not as clear-cut as it would seem. I believe that Bob Munck is right in saying that the Japanese govt and the Japanese automakers (eg. Honda of Japan, Toyota of Japan, etc)are paying a great deal toward the American workers' compensation who work for Honda of America, Toyota of America, etc.
And another thing a lot of people don't know about this........
Honda of America, Toyota of America, etc., companies who do not allow unionization of their Ameican assembly plants........pay their assembly line workers in Japan differently.
You see.....Honda's and Toyota's(et al) assembly line workers in USA are non-union, while all their assembly line workers in Japan are union..... |
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"What are the corresponding numbers for Japanese automakers in the US, including tax breaks given them by the states they're in?"
Meaning that the US automakers couldn't get the same tax breaks in the same states? |
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"Meaning that the US automakers couldn't get the same tax breaks in the same states?"
I'd imagine they could, but they aren't really in a position to be building new plants in those states.
The foreign companies were smart; they brought new industry to depressed states that needed it, and were able to leverage that into both tax breaks and avoiding unionization. They were forced to come pretty close to the salary and benefit levels that unionized automakers have up north, to keep the unions out. If the unions hadn't existed, those people wouldn't be getting as much as they are.
So why didn't the American automakers expand into the south when they could have? Capitalism, baby. Bigger profits for the CEO in going overseas. |
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"So why didn't the American automakers expand into the south when they could have? Capitalism, baby. Bigger profits for the CEO in going overseas. "
Translated, they were afraid of the unions. If it were a matter of money the foreign automakers would never have come to the US. The Big 3 were afraid of what the UAW etc would do if they built a plant non-union plant down in Mississippi and the others weren't. The employees at the non-union plants could organize if they want to but they don't because they can see it would be a poor choice for them. The foreign companies treat their workers well WITHOUT unions.
And while unions have certainly been a boon to the working man they have lost their use as evidenced by their declining membership. To think that unions now exist to help workers is to live in another dimension. Unions offer a service, collective bargaining. They offer this service at a cost for one reason, to stay in business, just like any other service company does what it does to stay in business. To say that the big unions are for the workers is a complete joke.
Now, there are some small unions (ie, one company) that are made of employees and serve the employees. But they are a rare breed. |
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"Unions offer a service, collective bargaining. They offer this service at a cost for one reason, to stay in business"
That's what unions do; it's their raison d’être. Do you somehow think that collective bargaining doesn't benefit the employees? You're criticizing unions for being unions.
"The foreign companies treat their workers well WITHOUT unions."
But also in large part BECAUSE of the unions. Collective bargaining has benefited those workers too. |
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You said
"But also in large part BECAUSE of the unions. Collective bargaining has benefited those workers too."
Companies are often criticized for focusing solely on short term results at the expense of long-term survival. The same is true of unions in today's world. They are only interested in saving the most number of jobs, getting the most salary, and the most benefits they can at the expense of the long-term health of the company.
They do so in the following ways:
1. A job pays more than it is worth to the company.
2. Benefits that are out of line with the way most employees are covered.
3. Work rules which are designed to maximize employment numbers rather than output of the employees.
4. Protecting the bad workers in order to maximize employee count.
And other ways as well. I worked in a plant for a short time. I've seen it all. I also have a number of friends whose parents worked in plants and I've heard all the stories.
There are a lot of good people who work in manufacturing plants, but unions are an anachronism of a foregone time. The days of child labor and slave-like wages in sweatshop conditions are gone in the US. Jobs are only worth so much money, and any company that wants to maximize profits for its shareholders is going to look for the lowest costs. That includes human resources as well as tax rates, environmental concerns, etc. |
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"Companies are often criticized for focusing solely on short term results at the expense of long-term survival. The same is true of unions in today's world. They are only interested in saving the most number of jobs, getting the most salary, and the most benefits"
Getting good pension benefits and health care is hardly a short-term consideration. Those things last for decades. Nor is keeping all of your members in their jobs.
"at the expense of the long-term health of the company."
That's what upper management is for. They're paid a hundred times or more what the average laborer is paid. If they're not doing everything they can to insure the long-term success of the company, someone has made a horrid mistake, and it isn't the union.
"I worked in a plant for a short time."
So did I; Beloit Eastern Iron Works. Ever work in an iron foundry? It's hot, noisy, smelly, dangerous work, and I was earning $8.40/hour in today's dollars to move casting forms around. That was a very long time ago, but some of those guys were still doing the same lousy job when they retired or were carried out. Their union got them a semi-decent wage, health care, and a pension for those who survived to collect it. |
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to dissolve the UAW, but not impossible......
it would be ugly: strikes, violence, threats of violence, lost money on both sides.......
might even doom the company......
if the automakers' management come to the rank and file now and reasonably make their case for the UAW to go away.......
under these current financial circumstances, the assembly line workers would do well to at least consider it.....
GM has already shown it to be successful......
their Saturn plant in Spring Hill Tn. is non-union and has voted down unionization several times (under secret ballot of course).....
No "card check" there..... |
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"GM has already shown it to be successful......
their Saturn plant in Spring Hill Tn. is non-union"
Spring Hill is UAW; always has been, as far as I know. They did have unusual contracts in the early days, giving the workers more input into the operations. Now they're under the same contract as all other GM workers.
What it's not is a Saturn plant, as of a couple of years ago.
Where did you get this stuff about "voted down unionization several times?" Do you just make these things up? |
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Let me see...."eight years of failed Bush/Republican policies" are responsible for the financial meltdown. Yet, decades of malpractice by the UAW and the Big Three are NOT responsible for the condition of the Big Three. The Republicans should be held accountable, but not the UAW and Big Three. Maybe some liberal genius can explain how this is consistent. |
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You said
"So did I; Beloit Eastern Iron Works. Ever work in an iron foundry?"
No, I worked in an aluminum foundry though. Also worked in a GM plant for a summer.
"Getting good pension benefits and health care is hardly a short-term consideration. Those things last for decades. Nor is keeping all of your members in their jobs."
They most certainly are to the corporation.
"That's what upper management is for. They're paid a hundred times or more what the average laborer is paid. If they're not doing everything they can to insure the long-term success of the company, someone has made a horrid mistake, and it isn't the union."
And they have hundreds of times the responsibility of the average worker so of course, they are paid more. However, the union is responsible, just as management is, for the failure of the company, just in different ways.
Look at the graph in this link...http://corner.nationalreview.com/post/?q=NGE4MGEwMTkwMzE3MGE1NWI4MGJkYTA4M2NkMTIwZmU=
The pre-tax profit for every vehicle sold in NA is a loss. They don't make money on manufacturing cars. It's pretty much through the financing arm that they make any money. And those losses are in good part due to the current and historical costs of GM's union employees, both salary and health care.
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"And they [upper management] have hundreds of times the responsibility of the average worker so of course, they are paid more.
So you're saying that they have 99% of the responsibility for the success or failure of the company? Sounds about right.
"However, the union is responsible, just as management is, for the failure of the company, just in different ways."
No, the union's job is to get the maximum benefit for the workers. Management's job is to balance what they get against all the other demands and pressures on the company, so as to insure the long-term success. You're saying that the union did its job too well, and management not at all.
Big 3 management has made A BUNCH of major mistakes in the last few decades, from dropping any pretense at quality control through pushing gas-guzzling SUVs to transforming themselves into financial companies with a sideline in auto making. Putting the blame for their failures on the unions is a transparent sham. |
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"So you're saying that they have 99% of the responsibility for the success or failure of the company? Sounds about right."
No, that's not what I'm saying. My statement was only in regards to salary comparison via job requirements. Nothing more.
"No, the union's job is to get the maximum benefit for the workers. Management's job is to balance what they get against all the other demands and pressures on the company, so as to insure the long-term success. You're saying that the union did its job too well, and management not at all."
Right, that's exactly what I said, and they do it at the expense of the long-term success of the company. You act as though all management had to do was not acquiesce to the union's demands. How many strikes has GM lived through. Frankly, not that many. Because if the workers are on strike, there's no one building cars. If no one's building cars, there's soon going to be no inventory of cars to sell. If you aren't selling, you aren't making any money. No matter how much in lost wages a strike costs the union employees, it costs the company significantly more, both in direct and indirect losses. Unions, especially when combined with government rules regarding representation, generally hold the upper hand in negotiations. Not completely, but enough. Pretty much all companies fear strikes, from productivity and real cash losses, to reductions in stock prices.
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"Big 3 management has made A BUNCH of major mistakes in the last few decades, from dropping any pretense at quality control through pushing gas-guzzling SUVs to transforming themselves into financial companies with a sideline in auto making. Putting the blame for their failures on the unions is a transparent sham."
Did they make mistakes? Of course. But this nonsense of "they pushed gas-guzzling SUVs" is baloney. Car companies don't force people to buy suv's. Car companies manufacture vehicles that people want to buy. And people wanted to buy big trucks and suv's. Their financing arm happens to make them a lot of money. Nothing wrong with that. And there's nothing majorly wrong with the QC either. If there is, that's a direct reflection on the assembly workers, either working for GM or a distributor(s).
I acknowledge that mistakes have been made by both sides. You refuse to do so, despite all evidence to the contrary. The standard liberal attack line of bad corporation/management vs poor worker isn't going to work for you here. |
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"My statement was only in regards to salary comparison via job requirements."
Upper management's chief responsibility is the long-term health of the company. If they are making 100 times as much as their workers because they have 100 times as much responsibility, then they must have 99% of the responsibility for that long-term health.
"You act as though all management had to do was not acquiesce to the union's demands."
No, they also had to convince the union not to make demands that put the company in danger. Unions are not suicide pacts; if management deals with them in an open and honest way, convinces them that their demands cannot be met, they'll compromise. One problem there is that it's hard for a CEO to make that case to a union team when he's sitting there making $4,000/hour.
"But this nonsense of "they pushed gas-guzzling SUVs" is baloney."
You've never seen an ad for an SUV? More to the point, the auto companies lobbied the government like crazy for all kinds of tax breaks and regulation changes that would let them sell SUVs.
"And there's nothing majorly wrong with the QC either."
Perhaps less so now, after Japanese and European cars made ours look like junk for a decade or so.
"If there is, that's a direct reflection on the assembly workers, either working for GM or a distributor(s)."
No. Quality control is a MANAGEMENT function. I've taught courses on the subject. You're displaying an appalling ignorance of how assembly-line manufacturing works. |
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"Upper management's chief responsibility is the long-term health of the company. If they are making 100 times as much as their workers because they have 100 times as much responsibility, then they must have 99% of the responsibility for that long-term health."
That is a simplistic and ultimately incorrect view. In a non-union workplace, I would agree with you. But the rules in a union workplace are completely different. Unions have a much higher responsibility because they are using their leverage to gain as many benefits as they can, regardless of the cost to the company. They will push the limits as far as they possibly can, knowing that a dollar today is worth more than any unknown cutbacks in the future. It's the same principle that drives management to manage to the stock price.
"No, they also had to convince the union not to make demands that put the company in danger. Unions are not suicide pacts; if management deals with them in an open and honest way, convinces them that their demands cannot be met, they'll compromise. One problem there is that it's hard for a CEO to make that case to a union team when he's sitting there making $4,000/hour."
Unions have no concerns for the long-term benefit of the company. If they did, they certainly wouldn't put all the demands into the contract that they do. While I agree that a company should approach negotiations in an open and honest way, that in no way facilitates any kind of compromise on the part of the union. I've seen it too many times. And what exactly does the hourly salary of the CEO have to do with anything. The CEO isn't even sitting down with the workers. Company lawyers are sitting down with union execs, all of whom make way more than the average worker. But, even if it were true, it wouldn't matter. The CEO could be making 100k/hr and it should have no impact whatsoever. Running a company and putting bolts on a door are never going to be comparable.
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"No. Quality control is a MANAGEMENT function. I've taught courses on the subject. You're displaying an appalling ignorance of how assembly-line manufacturing works."
That figures. Textbook theory vs real-world working. QC defects can generally be traced to one of several areas. Design, process, and assembly. In most cases with cars, it's a defect of workmanship, not design or process. And workmanship is the one area that management can't control in the way you say. You may have taught courses, but I received my degree in Operations Management. I've worked an assembly line. I know the difference between theory and real-world. |
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Quality control in the USA was a salary person, in canada it was a team effort of 18 in the body shop and teams across the plant so for you to teach one person is good. |
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