If corporations continue to be looked at as nothing but welfare mechanisms, we should not be surpised if they cannot compete. I find it disturbing that american auto companies cannot be competitive with other auto makers operating in the same country. (We're not comparing american vs. mexican labor rates).
When "Big Oil" makes a profit they are hailed as evil by people who have never had to look at a P&L or balance sheet. If you take about 30 seconds to think about it, you can find information like this:
The average net profit margin for the S&P Energy sector, according to figures from Thomson Baseline, is 9.7%. The average for the S&P 500 is 8.5%. So yes, energy companies are more profitable than many others...but not by an inordinate amount.
Google, for example, reported a net profit margin of 25% in its most recent quarter. Should we have an online advertising windfall profit tax?
This is appalling:
Here's what he said. "The union targeted GM --" now, remember, this was a union contract that featured basically job training, and as the assembly line modernized, it was job training for union workers, but, of course, the modernization eliminated some work, but did not eliminate the jobs. And the union specifically targeted General Motors to get this aspect of a new contract for all three eventually of the Big Three, and here is what Daniel Brooks said in his analysis, 13 months ago. "The union targeted GM because they have some cash. On the other hand, GM also famously spends over $1,600 per vehicle on the healthcare costs of current and retired US workers while Toyota pays about $200 per vehicle. Although GM also pays about another $1,000 per vehicle on holiday pay, work rules, plant-shutdown-pay and line-relief to UAW workers -- expenses Toyota, for example, does not have -- these costs were not as much the focus of these negotiations," because the irony here is that the UAW targeted GM for this new contract because they had the cash. Do they have the cash now? We found out that they're going through billions every quarter, six billion, four billion, whatever it was.
So it's not just that there's $1,600 per GM car for health care, for current and retired auto works. There's another $1,000 per vehicle for holiday pay, work rules, plant-shutdown-pay and line-relief. So $2,600 per car coming out of General Motors that Toyota does not have to spend. So that leads to the figure that we shared with you last Wednesday, the hourly cost of doing business at General Motors is $73 bucks and some change. At Toyota it's in the forties, or maybe even less than that. But nobody's even close to General Motors' 70, 71. Now, you might say, "But, Rush --" and certainly if you're an autoworker, you might say that the company agreed to this. I mean, they made the deal. It's up to them to honor it. Yes, they made the deal. They're telling us they don't have any money and their balance sheet looks like they don't have any money. Now, they did make the deal. Did they have a gun to their heads? Were they told, "We're going to strike and put you out of business?" Who knows what goes on behind closed doors at these negotiations. But if they had the money back then, they had the money, but they don't now.
This could have been addressed. If you want a great american success story, look no further that our own CAT based in Peoria, IL. The management made the right choice and decided to run a profitable company. They have recently announced it was going to invest $1B to upgrade its ILLINOIS operation. No government bailout needed.
If we are going to look at corporations as welfare mechanisms and discourage profits, we should get our checkbooks ready. Just something to think about for when we start hearing about "tax loopholes" and "CEOs" and "windfall taxes", etc. etc. etc.
How about a compromise? Let's limit welfare jobs to those provided by the government. Over there we can keep offering excessive pensions and benefits and pass the buck to the next generation of taxpayers. At the very least, let our companies make a profit.
For the record, I blame management at the auto makers. : ) They should have done what CAT did almost 15 years ago.
Gotta love the villification of the worker. Classic B.
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Anon, what would you know about logic and facts, would you like to try to apply some and respond to my comment maybe? - Run4cvrlib on 2008-10-16 @ 11:00pm
I have serious problems with the whole situation, in both directions (union/management). Bad management. Bad union deals. Bad spending & borrowing policies. Bad reliance on brand recognition and not on quality. Lack of accountability. Complete and total disregard for pension funds. Ignorance and denial of rising healthcare costs. Etc. If I ran my house like that, I would not have one anymore and no one would bail me out.
"You keep using this word, I do not think that it means what you think that it means."
Seriously, vilification is defined as abuse or defaming. Pointing out that GM is stuck with a contract that pays a union worker much more in salary or benefits than the competition you are so fond of is nothing more than stating the cold hard truth, and isn't that what we want here? Are B or I really abusing these poor union workers by pointing out that their contracts are bleeding GM dry?
Unclosed html tags should be punishable via a syn tax.
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Glock21 Op/Ed
OW!! :D
"You keep using this word, I do not think that it means what you think that it means."
Seriously, vilification is defined as abuse or defaming. Pointing out that GM is stuck with a contract that pays a union worker much more in salary or benefits than the competition you are so fond of is nothing more than stating the cold hard truth, and isn't that what we want here? Are B or I really abusing these poor union workers by pointing out that their contracts are bleeding GM dry?
Perhaps you should continue reading definitions before you pick one definition and hang your argument on that. For the record:
You are not abusing these poor union workers, but you are being slanderous in saying that GM's problems are because of their labor costs alone. You are attempting to paint them as the "bad guy" in this situation, and making it sound as if GM would be a highly successful company if only they could shed their unions. This is a red herring, and you should be ashamed for parroting it. If you can't, then I'll be ashamed for you.
The cold, hard, truth is that GM refused to adapt to the changing market. In fact, they actively try to manipulate the market to be closer to what they produce than what the market is actually wanting, and then fight for import restrictions to limit choice from foriegn competition. Instead of being market leaders, they continued pushing the same crap that consumers are rejecting, not investing those immense profits they used to make into research and development for the future, and continued to vastly overpay executives and management that told them to "stay the course". Yet, you deftly ignore all of these factors and point the blame squarely at the unionized workers as the main factor in what is bringing down GM.
The workers on the line have no say in what products GM makes. They just put together what GM tells them to put together. They can assemble anything, be it gas-guzzlers, hybrids, or something in between. They have no say in r&d or marketing, either. So how is it their fault that GM failed so miserably in doing all of these things?
Are those union workers reaping the benefits of a great contract? Absolutely, and that's the power of collective barganing. However, no discussion of union benefits being too high should neglect to mention that management/executive compensation is even higher. If you're going to complain about the salaries and benefits of those just doing what they were hired to do and demand that they get a pay cut, shouldn't you also be complaining about the salaries/benefits of the inept management that did nothing to ensure that their company would continue to be able to pay out what they agreed to? How can you seriously ask that the workers take a pay cut, when the group who actually wrecked the company not have to suffer along side them?
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Anon, what would you know about logic and facts, would you like to try to apply some and respond to my comment maybe? - Run4cvrlib on 2008-10-16 @ 11:00pm
Perhaps you should continue reading definitions before you pick one definition and hang your argument on that.
I don't believe in Internet dictionaries.
Are those union workers reaping the benefits of a great contract? Absolutely, and that's the power of collective barganing. However, no discussion of union benefits being too high should neglect to mention that management/executive compensation is even higher. If you're going to complain about the salaries and benefits of those just doing what they were hired to do and demand that they get a pay cut, shouldn't you also be complaining about the salaries/benefits of the inept management that did nothing to ensure that their company would continue to be able to pay out what they agreed to? How can you seriously ask that the workers take a pay cut, when the group who actually wrecked the company not have to suffer along side them?
I don't recall ever demanding a pay cut for union workers, and if you are familiar with me at all you should know that I absolutely believe that we should hold the salaries of the executives to a higher standard than those of the union worker. I am not trying to be adversarial with you, but I strongly believe that it may be in the union's best interest to at least consider offering a re-structure of their deals. Otherwise they risk going down with the ship, after all, an executive can be canned but contracts specifically restrict the removal of union workers and their jobs.
One last thing, please keep in mind that I have been in unions and consider them a good thing. I would not call what I am saying slander and I have never said that shedding the contracts would solve all the problems at GM. Nice straw men though. I am sure that you do not like Rush, but please read the linked article above, as he is saying a lot of the same things that I was saying last week and today, only he has a gift of effective communication. :)
"Are those union workers reaping the benefits of a great contract? Absolutely, and that's the power of collective barganing. However, no discussion of union benefits being too high should neglect to mention that management/executive compensation is even higher. If you're going to complain about the salaries and benefits of those just doing what they were hired to do and demand that they get a pay cut, shouldn't you also be complaining about the salaries/benefits of the inept management that did nothing to ensure that their company would continue to be able to pay out what they agreed to? How can you seriously ask that the workers take a pay cut, when the group who actually wrecked the company not have to suffer along side them?"
The union contracts were negotiated with and agreed to by the company's management, throughout its history. Management bears more responsibilty for those contracts than the union, because, after all, they're the management.
The labor costs are a factor in the failure of the three companies, but awful management is the most critical common denominator. To me, it's pretty simple: these companies were poorly managed, and should be allowed to fail.
The short-term pain will be awful, especially to the employees, but allowing such failures is a long-term necessity. Another $25 billion handout (on top of the one they recieved just two months ago) is only going to result in delaying their failure.
The Big Three failed years ago to change product, methods and manufacturing techniques. They are now looking for the taxpayers to bail their failed companies instead of filing Chapter 11. By not going the bankruptcy route management can continue with their failed strategies, taking the UAW with them. You are fooling your self if you believe Honda, Toyota, BMW, VW have to pay for employee health insurance, training, plant shut down, model conversion, line relief etc costs. Currently Toyota's Texas Tundra Plant is shut down, yet the employees are going to work and getting paid. Amazing how that can happen without the UAW in a USA plant not owned by one of the Big Three. The Big Three want Taxpayer $'s in order to avoid change to profitability. Any politician who votes to sink tax dollars into these giant corporate monoliths is not representing the taxpayers.
Opps, the word doesn't, should be inserted between 'VW' and 'have' in the fourth sentence.
I don't believe in Internet dictionaries.
Oy. It's not like I'm pointing to a definition for "poison" that says it means "happy-fun-juice". But whatever, Merriam-Webster agrees with what I said about vilify.
I don't recall ever demanding a pay cut for union workers, and if you are familiar with me at all you should know that I absolutely believe that we should hold the salaries of the executives to a higher standard than those of the union worker. I am not trying to be adversarial with you, but I strongly believe that it may be in the union's best interest to at least consider offering a re-structure of their deals. Otherwise they risk going down with the ship, after all, an executive can be canned but contracts specifically restrict the removal of union workers and their jobs.
I'm not entirely doubting that a restructuring of the contract would help, but it comes with the caveat that management restructures as well. Since we know they won't do that voluntarily, we're at a deadlock. I'm saying is it is damn hard to say that the union should consider another contract restructuring when management is unwilling to take a financial hit themselves. That change has to begin with management, since they control the operations of the company.
One last thing, please keep in mind that I have been in unions and consider them a good thing. I would not call what I am saying slander and I have never said that shedding the contracts would solve all the problems at GM. Nice straw men though. I am sure that you do not like Rush, but please read the linked article above, as he is saying a lot of the same things that I was saying last week and today, only he has a gift of effective communication. :)
You may not be saying that specifically, but by putting yourself in the same group as B (who has made very clear their contempt for unions) as you did in response to my initial, you are implying that you agree, so it's not exactly a straw man argument.
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Anon, what would you know about logic and facts, would you like to try to apply some and respond to my comment maybe? - Run4cvrlib on 2008-10-16 @ 11:00pm
I'm not entirely doubting that a restructuring of the contract would help,
That is all I was looking for, thank you.
I am not vilifying the worker. There are many great workers working at Caterpillar earning a good wage. I'm betting those workers in Dayton (where they will close down a plant) would love the pay package currently being offered to Cat employees. Check out http://www.cnn.com/2008/US/11/19/ohio.plant.closing/index.html.
I'm not kidding when I say this is management fault. They should have never agreed to any UAW proposal that does not allow them to compete. I wonder if the UAW workers can get their union dues refunded?
I don't know about you, but I'm not paying $1600/car.
It's incorrect to think that the UAW hasn't given any concessions to GM. They recognized that GM had poorly funded their pension and OPEB liabilities, which effectively created a going concern for the company.
2005 UAW Health Care Settlement Agreement
-Reduced hourly OPEB liability by $14.5b
2006 IUE-CWA Health Care Agreement
-Reduced OPEB liability by $500m
2007 UAW National Agreement
-Reduces new-hire Tier II employees base pay from $28/hour to $15/hour and substantially decreases benefits
-Reduces total hourly expense for these employees from $78 to $26
I can go on, but I think you get the picture.
How about GM makes an offer to an employee and they can accept it or go find a better offer somewhere else? Good luck.
http://www.mlive.com/business/index.ssf/2008/11/uaw_leader_says_no_more_conces.html
If GM goes completely out of business, they all lose jobs. Let's hope those union fees bought them a cash injection from the taxpayers.
It takes longer to realize in huge burocratic system, but the laws of economics catch up to you sooner or later.
If GM goes completely out of business, they all lose jobs. Let's hope those union fees bought them a cash injection from the taxpayers.
If GM goes completely out of business, I'm sure we'll see Toyota, Honda, Daimler, etc. wanting to hire thousands of experienced employees and buy existing manufacturing facilities to fill the void left by GM.
"If GM goes completely out of business, I'm sure we'll see Toyota, Honda, Daimler, etc. wanting to hire thousands of experienced employees and buy existing manufacturing facilities to fill the void left by GM."
Yep. So let them go out of business already. Their production capacity will be absorbed by (or provided by) other companies in direct proportion that they can provide products to meet demand. Let's stop pretending that bankruptcies by Ford/GM/Chrysler would be the end of the world. It will be painful in the short-term, but much better in the long run.
The big shock that I got this morning is reading the "Let Detroit Go Bankrupt" op-ed in the NYT - written by Mitt Romney, of all people:
http://www.nytimes.com/2008/11/19/opinion/19romney.html?ref=opinion
Which is pretty ironic, considering that he won Michigan promising to bring all of the rust belt manufacturing jobs back. It's worth a read, now that he doesn't have any elections to lose by saying what he does.
An unskilled, HS diploma-only worker just hired into a UAW contract position makes $58,000 per year, and gets more than half as much again in defined benefit pension and health care, which is to say that an 18 year old guy with no skills is costing his employer about $90,000. So when Arvid talks about "these poor union workers," let's remember that they are "poor" in the sense that people are calling them on being overpaid, not that they are suffering from poverty. Note: a newly hired humanities professor at UI, with four years of college, and another 4-8 years of grad school, can expect to make a similar amount of money as a new UAW worker, but will have to pay for their own retirement and part of their healthcare.
The cold, hard, truth is that GM refused to adapt to the changing market.
Heck yeah. They did not adapt to the market for higher mileage, better built cars. They didn't design nice looking cars. They didn't design ugly cars that people would still buy because they were sensible. And they didn't negotiate good contracts, especially when the labor market for manufacturing moved away from unionized auto workers, as they are down south in all of the foreign auto plants operating in the U.S. That was one of the big market changes that they didn't adapt to - and saying that the workers are just going to work under the best contract that they could get misses the point...which is that unless they start getting paid more like other workers, they will soon find themselves working in McDonalds and Walmarts. That is not mutually exclusive to the management being overpaid and under-brained. They can both be true.
When "Big Oil" makes a profit they are hailed as evil by people who have never had to look at a P&L or balance sheet.
Which, when looked at with the auto companies and the banks, proves Ronald Reagan's adage about government correct: If it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidize it.
An unskilled, HS diploma-only worker just hired into a UAW contract position makes $58,000 per year, and gets more than half as much again in defined benefit pension and health care, which is to say that an 18 year old guy with no skills is costing his employer about $90,000.
I call BS on this. Your projection of $58,000/year contradicts the contract information posted above:
An 18-year old with just a HS diploma is not going to land a Tier II employee salary, he will start at Tier I. Please show a source that contradicts the above, or you're just falling into the worker vilification trap.
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Anon, what would you know about logic and facts, would you like to try to apply some and respond to my comment maybe? - Run4cvrlib on 2008-10-16 @ 11:00pm
You can just check out their website. UAW's 2007 Entry-Level Wages. Looks like the wages are $14-16/hour. That works out to half of your asserted $58,000. Throw in the fact that their benefits are significantly lower than typical employees, and I don't see a company spending $90,000 for an 18-year-old with a HS diploma.
I"m not really for a bunch of bailouts but what happens to all of the businesses who supply GM? I read an article recently that said 3 million Americans are either employed by GM or in industries that rely on them. I don't think the current economy can absorb 3 million unemployed people. Perhaps we need to start with the proposition that the current management needs to go, followed by the UAW and their current contract. I would think that a job with some benefits would be better than no job at all.
"You can just check out their website. UAW's 2007 Entry-Level Wages. Looks like the wages are $14-16/hour. That works out to half of your asserted $58,000. Throw in the fact that their benefits are significantly lower than typical employees, and I don't see a company spending $90,000 for an 18-year-old with a HS diploma."
The union has made such signficant concessions. Entry level employees are only getting paid $14-16 per hour with no college degree, with full benefits, a $600 family flex spend account, and 6.4% defined contribution plan, plus a nice bonus. Rough.
It seems to if anyone was making concessions, it was the shareholders and (soon-to-be) taxpayers who have will bear the burden of the excessive legacy costs.
Is it just me, or does the outline for UAWs entry level wages look like a good model for municiple and state employees???
GM/UAW does this 15 years too late and we're supposed to bail them out? No.....and let this be lesson to everyone. This has been coming for a long time. If we don't do something about our municiple and state budgets, more weight will be placed on the back of the taxpayer. It is crap if people are expected to give sympathy for the "concessions" they have made after the company has been bled dry for so many years. I'm not voting to bail out cities or school system that continue to ingore the problems if we're going to wait until we hit rock bottom like everyone else. Believe me, their time is coming soon enough.
I thought that Romney's point about the lack of R&D was valid. It seems like executives are rewarded for generating as much profit as they can in the short term, even if it's not good for the company in the long run.
"I"m not really for a bunch of bailouts but what happens to all of the businesses who supply GM?"
Exactly what is supposed to happen when society looks at corporations as welfare mechanisms and we don't allow them to be competitive and earn a profit. There are no surprises here, just the assumption that if all else fails, you can argue that the economy needs you to exist even though you're not making a profit.
We really should just write checks rather than thow good money away on a sure loser.
The union has made such signficant concessions. Entry level employees are only getting paid $14-16 per hour with no college degree, with full benefits, a $600 family flex spend account, and 6.4% defined contribution plan, plus a nice bonus. Rough.
So you're saying that they should be happy for the opportunity to work in a manufacturing environment? How much do you think they should make, and are you willing to do the job for the same amount? Re-read the page, they are not getting $29,000/year plus 6.4% defined-contribution. They ar having 6.4% of their wages taken out and put into a defined benefit plan. So right off the top, they lose around $1800/year. Also, they are not eligible for dental or an eye exam for 3 years, and don't get vision insurance for 5. The bonus is tied directly to the job that they do, so if things are going well, they don't get a bonus.
Why do you hate the American worker so much?
Is it just me, or does the outline for UAWs entry level wages look like a good model for municiple and state employees???
It's just you. Show me where city/state employees are starting out at $14-16/hour with just a high school education and no work experience.
It is crap if people are expected to give sympathy for the "concessions" they have made after the company has been bled dry for so many years.
The company has not been bled dry by union workers, yet you'd prefer to demonize the workers for demanding and getting a fair wage for difficult work. This is what happens when you focus on maximizing profits instead of focusing on the people.
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Anon, what would you know about logic and facts, would you like to try to apply some and respond to my comment maybe? - Run4cvrlib on 2008-10-16 @ 11:00pm
Mea culpa. I was using the previous contract's numbers of $28/hr. I applaud the move towards a more sane wage schedule - $14 to $16/hr sounds about right for a new unskilled worker on an assembly line. Now they just need to chip away a bit more at those benefits, and they might actually have a decent labor situation. Of course, I would agree with Arvid on the other points - that they still have much more to fix in terms of bad management, overpayment of those bad managers, weak designs, and a ton of other things. I would be shocked if they can make it.
The company has not been bled dry by union workers, yet you'd prefer to demonize the workers for demanding and getting a fair wage for difficult work. This is what happens when you focus on maximizing profits instead of focusing on the people.
Wow, I had to read that last sentence twice. No, giving the unions one sweet contract after another for years *is* "focusing on people," not "maximizing profits." If they *used* to receive $28/hr and up, then they weren't receiving "a fair wage," they were getting overpaid. How can you look at bloated, inefficient companies looking for a government bailout and figure that their problems are down to "maximizing profits"? You have it exactly backwards - they *should* have been maximizing profits, but weren't.
Wow, I had to read that last sentence twice. No, giving the unions one sweet contract after another for years *is* "focusing on people," not "maximizing profits." If they *used* to receive $28/hr and up, then they weren't receiving "a fair wage," they were getting overpaid. How can you look at bloated, inefficient companies looking for a government bailout and figure that their problems are down to "maximizing profits"? You have it exactly backwards - they *should* have been maximizing profits, but weren't.
Accepting the concessions that the union has over the last few years is hardly giving them one sweet contract after another, especially when the burden is not being shared across the board with management. The question is "what did GM do with the money they got from thsoe concessions?" Wellm hey kept their failing practices and designs exactly the same, and gave that money to upper management as a reward for 'increasing profits'. That's not focusing on people, that's focusing on getting the maximum amount of money into the hands of the very same people who are sinking the ship.
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Anon, what would you know about logic and facts, would you like to try to apply some and respond to my comment maybe? - Run4cvrlib on 2008-10-16 @ 11:00pm
One can hardly fault the workers for taking better pay or benefits. One can also hardly fault the unions, whose sole purpose is to look after their members of pressuring employers for better pay or benefits. It's easier to blame unions for screwing both sides when they make demands that the company is unlikely or unable to agree to and call a strike that causes harm to both their members and the company for little to no gain for far more cost. In this case the company agreed to the demands. The unions did their job. Now if the companies agreed to labor deals that sealed their eventual doom in the long run, which some are arguing here, then the companies themselves, specifically those running them, have effectively screwed everybody, including themselves. The bigger picture seems to be far more boneheaded decisions also played into their fate, but the labor costs/obligations certainly seem far higher than their competitors with all the comparisons I've seen lately, so I'm sure their decisions there certainly played some role in it as well.
On the flip-side though, I'm not sure if I'd classify auto plant jobs as 'difficult work' as much as monotonous and tedious work. Granted there may be an odd ball job here or there that actually involves some difficult work, but the overwhelming majority of auto plant line jobs are unskilled and not labor intensive... though I'd recommend some comfortable shoes for jobs being on your feet throughout the day.
Am I reading this right that up until a year or two ago that a new hire could start off with $58k/yr and that just recently got slashed in half? And that's before benefits and such? Sounds great for anyone who was able to get in on that gravy train, but that seems pretty overboard to have been paying well over the median *household* income for work that is so close to the bottom of the barrel for skills/education/training/specialization/etc that has led to so many workers being replaced by robotics. It's not fair to demonize the workers or unions for what they do. But it's a bit absurd to exaggerate the kind of work this is to justify exaggerated pay for labor that is, quite frankly, easily and cheaply replaceable under most circumstances.
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Glock21 Op/Ed
Accepting the concessions that the union has over the last few years is hardly giving them one sweet contract after another, especially when the burden is not being shared across the board with management.
That's why I put "used" into asterisks - they *used* to get $28/hr and up to start - and noted that lowering wages was a step in the right direction. Those little star thingies mean that I'm stressing that.
But the larger point is the disconnect between the two pro-union arguments: the union is getting screwed out of their proper due (when wages are lowered) and the workers deserve to be able to afford all the trappings of a middle class life (when wages are raised). For decades, these were very well paying jobs - there were few jobs in America where a worker with no skills or higher education could come in and make as much money. The pro-union crowd pointed to that as progress, while cruel Montgomery Burns types like me would call that "one sweet contract after another." If someone didn't go to college and has no marketable skills, they probably shouldn't be middle class.
I'm having a huge cognitive dissonance with your avatar, Arvid. Doesn't Ron Paul want the marketplace to sort out all of the winners and losers? Maybe Cookie Monster should be saying "EUGENE DEBS!"
are the concesssions all being put on the new hires? how much of a hit has the 10-15 year employee taken?
That's why I put "used" into asterisks - they *used* to get $28/hr and up to start - and noted that lowering wages was a step in the right direction. Those little star thingies mean that I'm stressing that.
I think you're missing what I'm saying here. If profitiability is the issue and you have to go to your line workers for a wage concession, then the lowering of wages for the worker needs to coincide with similar reductions at the management level, otherwise they're just being fed a huge pile of bullshit and taking it in the shorts so upper management can get a bonus while the gettin' is good. You know, the same kind of bullshit that tells people that we need to cut taxes on the rich so it will trickle down to the rest of us unwashed masses.
I would have no problem with the union concessions if management was making similar concessions, but they're not.
But the larger point is the disconnect between the two pro-union arguments: the union is getting screwed out of their proper due (when wages are lowered) and the workers deserve to be able to afford all the trappings of a middle class life (when wages are raised). For decades, these were very well paying jobs - there were few jobs in America where a worker with no skills or higher education could come in and make as much money. The pro-union crowd pointed to that as progress, while cruel Montgomery Burns types like me would call that "one sweet contract after another." If someone didn't go to college and has no marketable skills, they probably shouldn't be middle class.
Do you really think they are hiring 18 year-old Joe Just-Barely-Graduated-High-School for these jobs? More realistically, they're hiring people who are graduating or have at least attended some kind of vocational education, like the automotive programs at Parkland. They are not handing an arc welder to some 18-year-old kid and saying, "have at it", and most likely have not for years. If they are, well, then they deserve to fail as a company even more than I've previously said
Who are you to say that they should not be able to afford a decent living for themselves and their family for working a job that, quite frankly, many of us would not be able to do successfully? At the risk of sounding Republican, isn't that class warfare? Henry Ford was very anti-union, but had the fundamental belief that those who make his product should be able to afford to purchase it. This philosophy is being sacrificed in the name of profits and management bonuses while at the same time pointing the finger of blame at the workers.
I'm having a huge cognitive dissonance with your avatar, Arvid. Doesn't Ron Paul want the marketplace to sort out all of the winners and losers? Maybe Cookie Monster should be saying "EUGENE DEBS!"
I'm sorry, but at what point over the almost two years I've been posting here did I lead you to believe that I'm any form of supporter of Ron Paul?
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Anon, what would you know about logic and facts, would you like to try to apply some and respond to my comment maybe? - Run4cvrlib on 2008-10-16 @ 11:00pm
"If GM goes completely out of business, I'm sure we'll see Toyota, Honda, Daimler, etc. wanting to hire thousands of experienced employees and buy existing manufacturing facilities to fill the void left by GM."
No. Toyota fights the union. I don't think they'll bring in a bunch of union-minded folks. Just a hunch.
"Why do you hate the American worker so much?"
I hate the UAW, not the American worker. Remember, there are no surprises here. This has been coming for a long time.
"Show me where city/state employees are starting out at $14-16/hour with just a high school education and no work experience."
How about Champaign? Except they get much better benefits including a full pension.
"The company has not been bled dry by union workers, yet you'd prefer to demonize the workers for demanding and getting a fair wage for difficult work."
Demonize? At $78/hour? Based on 2880 hours per year, that's $162,000.
Oh, and by the way, I'm happy that Toyota can pay their employees $70,000. GM might have been able to if they hadn't let the UAW destroy Detroit. Toyota is making a profit. Maybe those people who think unionizing Toyota should take a closer look at GM and Ford.
"Show me where city/state employees are starting out at $14-16/hour with just a high school education and no work experience."
How about Champaign? Except they get much better benefits including a full pension.
You make this claim, but provide no evidence. How about providing a job class that requires absolutely nothing other than a high school diploma and zero work experience, as you are claiming. I want to see a job that someone from this upcoming high school graduating class can apply for and actually get. If you actually find that job (since I suspect it's probably a dirty one), I want you to ask yourself how much you would have to be paid in order to do that job.
Demonize? At $78/hour? Based on 2880 hours per year, that's $162,000.
Logical errors abound. They're not making $78/hour, that's if you factor in all of their benefits. Do you tell people you make the value of your salary with all of your benefits combined? Second, 2880 hours/year is 55/hours a week. Third, since this is a non-public company, why do you care how much their workers make? I thought that was your precious private sector/invisible hand/market doing its job? So again, why do you hate the American worker, who comprises the UAW?
-----
Anon, what would you know about logic and facts, would you like to try to apply some and respond to my comment maybe? - Run4cvrlib on 2008-10-16 @ 11:00pm
Aren't the companies supposed to have people running long-term projections? I mean I can run a high-mean-low tri-projection, can a multi-billion dollar company not? Are you really suggesting that an assembly line worker should be responsible for saying, "Well, this is about the line of what I can make and keep the company profitable, so..."?
Obviously there is an upper limit for salaries. I would not trust the average worker to practice moderation on her/his own and I would not expect the company to not hire slave labor if it thought it would profit from it.
Why not have a shared process of projection where the worker/union leadership and the company can work together to maximize worker benefits and still keep the company profitable?
I don't blame the workers... I blame the unions whose seemingly sole purpose is to brutally sodomize the american dream.
"Aren't the companies supposed to have people running long-term projections?"
Yes. Blaming the unions or workers for companies failing just doesn't make sense. The management agreed to these contracts and these benefits. It seems to me that rather than discussing whether the employers are an undue burden on the company, we should be focusing on why the management was making such stupid decisions that they now need a handout from the taxpayers in order to put off bankruptcy for a few weeks.
No. Toyota fights the union. I don't think they'll bring in a bunch of union-minded folks. Just a hunch.
No? Toyota will opt to hire untrained individuals over experienced assemblers, foremen, welders, etc.? Who are these thousands of people Toyota will hire overnight?
Do you think that, just maybe, Toyota's avoided unionization by providing comparable benefits to its employees, thereby foregoing the need for the UAW? I don't think a recently unemployed, experienced, fomer UAW-member who finds he can make the same money (or better), with comparable benefits and better working conditions at Toyota is going to instantly try to unionize.
GM has required their suppliers for the several years now to build capability to supply parts for their Chinese and US productions in China. As a result many of those Chinese parts are now in US GM vehichles. This was a real streach for some suppliers as it meant getting in with a Chinese manufacturer. Some US GM suppliers refused to ship jobs and manufacturing to China so they no longer supply GM. They now supply Honda, Toyota, VW, BMW, Ford etc. I do not think these 'forced' suppliers will shed many tears for GM business model.
I can't quite understand the Big 3's horror at reorganizing under Chapter 11 of the Bankruptcy Code. Well I guess I can, since under Chapter 11 UAW contracts would be renegotiated and (hopefully) the creditors would send a lot of highly paid, but underperforming, executives packing. With the exceptions of American and Southwest, every major US airline used Chapter 11 to restructure into companies that could compete in the marketplace, and kept flying while doing so.
A cash bailout is money down the rat hole. The Big 3 have retained structures like they still had 75% of the US market, a share they haven't had for decades and aren't likely to reacquire.
Arvid,
Thank you for your grassroots efforts in support of Dr. Paul.
You are welcome to join the C4L and get involved even more.
Regnad <3
Let me try this again. It gave me some kind of warning when I tried to post it before and then the commen disappeared. Guess the board did not like my comments.
I keep hearing economists saying that the loans needed to restructure under Chapter 11 just are not available now due to the credit crunch and the automakers would end up failing anyway. Also who is their right mind would buy a new automobile from a company in bankruptcy. No one to honor the warranty. No one making replacement parts. I've bought "universal" replacement parts for small appliances and they usually don't fit right or don'w work. Don't want to do that for a new car. And do we really want all automobiles made by foreight companies. Do you really think if there were no competition from American automakers that prices on Japanese imports would not skyrocket. Plus, all those millions of unemployed workers will not be contributing to the economy and they won't have any health insurance. The fallout of a GM failure will encompass far more than just the autoworkers themselves and suppliers. If the U of I closed how many other businesses here would soon follow? There must be strings attached but we need to give them a lifeline. They are asking for enough to survive until union concessions kick in in 2010 and the Volt comes on line.
"There must be strings attached but we need to give them a lifeline. They are asking for enough to survive until union concessions kick in in 2010 and the Volt comes on line. "
No. Congress gave them $25 billion in subsidized loans about two months ago, and they're already back asking for more.
These are poorly managed, uncompetitive and unprofitable companies. They need to be allowed to fail, or the long term pain will be worse than the short term pain.
"A White House alternative would let the car companies take $25 billion in loans previously approved to develop fuel-efficient vehicles and use the money for more immediate needs"
I lost the link to the article but will try to find it again later. It basically said they have not yet received the previously approved money and they cannot use it just to stay afloat.
http://www.msnbc.msn.com/id/27752456/
"Bush wants to speed the release of $25 billion from a separate loan program intended to help the automakers develop fuel-efficient vehicles and have that money go toward more urgent purposes as the companies struggle to stay afloat. The loan program was approved by Congress last year, but more legislation would be necessary to change its purpose."
"It basically said they have not yet received the previously approved money and they cannot use it just to stay afloat."
Good. Hopefully they'll never get it.
Giving $25 billion (or $10 billion or $700 billion or whatever) to companies that are so poorly managed is rewarding incompetence.
And how much have they given to AIG???? I'll admit to some personal interest here. We have three GM vehicles in the family and two are less than one year old. And I have relatives who work for major GM suppliers. Already have two family members and two friends out of work in totally unrelated industries. My son's company on the other hand has gained lots of new business due to the realignment of the banking industry.
"And how much have they given to AIG????"
Too much. I was and am opposed to that bailout for the same reasons as I'm opposed to the one for the automakers.
Using taxpayer money to reward the failures of badly managed companies is a recipe for long-term disaster.
Even if all of the Big Three go 'belly-up' there will be car parts for a minimum of 7 years and probably more if the market is there. Please recognize this as yet another 'fear' campaign. I can still buy parts for a studebaker. Chapter 11 for these auto corporations would, in all reality, dump the current executives/leadership, open up the corporate books completely allowing a reorganization plan to be developed to return the companies to profitability while paying off as many obiligations as possible with judicial review. In all likelyhood you would not see any of the executives who testified to the Senate and House in the last couple of days be retained. Yes, and all the labor contracts would be up for renegotiations, which means some 'high roller' UAW leadership jobs could be lost. Obviously labor is for a government bailout.
I found it interesting that 'government' employees requested the banking industry 'bailout' yet the auto industry executives requested their own bailout. Oh that's right, those government employees use to work in the banking/investment industry prior to their government service. I wonder where they will go after leaving the government jobs.
We have seen this before, with the bailout abet via the individual states rather than the Feds, but Chrysler did this in the early 80's./ Result? The FWD drive vehicle and the minivan were brought onto the scene... The company was again profitable. Unfortunatly, they did not learn from that experience and have stayed with the same product line for nearly 30 years.
when you have million dollar payouts ( and they are not just limited I might add to companys, but Cities as well) for executives who run their companies into the ground -- Bristol Meyers CEO got six or seven million for taking his stock from 56 down to 20 ..... abefore he was let go. It seems to me that a whole change in the structure in how the companies operate is needed much more than just the cash to help run it for a few months.
I'll just throw in a couple of quick comments. First, the auto industry has been more than partly responsible for the industrialization of the American economy which has resulted in such wealth as we now take for granted. In short, one of the reasons the U.S. government even has $25 billion to throw at the automakers is because of the automakers themselves.
These folks are an integral part of our economy and, historically, have probably put food on more tables and kids through more colleges than any other industry, save farming. Not to mention WWII, in which they responded to the needs of this country by converting all of their plants to defense manufacturing. Yes, they probably had almost no choice. And yes, they made a handsome (though not extreme - this is back when capitalists were responsible people) profits. But my point is that this is not AIG, and this is not Starbucks. In many ways, Detroit helped to make America.
Secondly, we spend about $25 billion in Iraq in six weeks. Six weeks. Where's the aggressive analysis of that spending, and the outrage about that bailout?
Thirdly, B's "2600 per vehicle number" could be greatly reduced with nationalized, single-payer health care. But even as it is, this is less than 10% of the price of the average new car purchase in this country ($28,500). It is not an out-of-line figure in any way. In fact, if you trimmed off the health care coverage, this figure would drop to almost 5-7% of the average cost. So the notion that the problem in Detroit is that they are paying their employees more-than-poverty wages (how dare they!), just doesn't float.
Cheers!
Even if all of the Big Three go 'belly-up' there will be car parts for a minimum of 7 years and probably more if the market is there. Please recognize this as yet another 'fear' campaign.
I wouldn't be so sure about that. Chapter 11 proceedings for manufacturers that rely on warranties are pretty complicated. Obviously, it's in everyone's best interest to honor existing warranties (either through a government-sponsored fund akin to the PBGC, a separate entity that emerges from the proceedings, or through a post-Ch.11 GM), but that's not set in stone.
As a a US manufacturer I have to either have parts or insurance assuring parts coverage for seven years from the date I quit manufacturing regardless of reason. Insurance is the cheapest alternative. The word "warranties" was injected by TP for which I have no knowledge but there will be parts if it was made by a US corporation.
As a a US manufacturer I have to either have parts or insurance assuring parts coverage for seven years from the date I quit manufacturing regardless of reason.
Is that actually true? I know it's frequently cited, but I've never found any actual requirement for that - so I tend to believe it's just common practice, but not a legal requirement. Regardless, if you're no longer a US manufacturer (Chapter 7) or you're a different entity (Chapter 11), that idea goes out the window. And that's my point - most common practices and requirements become null and void post-bankruptcy.
By the way, "warranty" was brought up because that's what we're talking about - implicit/explicit warranties related to products.
FYI, I finally found the "requirement" - it's seven years in CA for products over $100 (functional parts only), 4 years in CT, 7 in IN, 4 in RI, and length of warranty in NH. No federal requirements exist.
Edit - actually, at least the CA requirement doesn't even apply to cars (only appliances and other electronics). Parts availability is only necessary for the period of the express warranty, which becomes hazy when a company undergoes Chapter 11.
On November 20th, 2008 at 04:49 PM, D. Boon said: "I'll just throw in a couple of quick comments. First, the auto industry has been more than partly responsible for the industrialization of the American economy which has resulted in such wealth as we now take for granted. In short, one of the reasons the U.S. government even has $25 billion to throw at the automakers is because of the automakers themselves.
These folks are an integral part of our economy and, historically, have probably put food on more tables and kids through more colleges than any other industry, save farming...But my point is that this is not AIG, and this is not Starbucks. In many ways, Detroit helped to make America."
So because they were successful decades ago, and important to the overall US economy decades ago, the Federal government should bail them out now? Because their recent track record is so stirling, this most recent hiccup is just a rough patch? Earlier, in another thread, you said the Big Three had acted "really, really irresponsibly by placing so much advertising emphasis on inefficient, needless gas guzzlers just to turn a quick buck." You then go on to say "The idea is no longer about long-term success that is good for the country. Is all about short-term profits that are good for the shareholders." So we should reward theses companies and their leadership (and, to be evenhanded, reward the leadership of the UAW) by bailing out their companies? Why should we reward continued incompentence?
The Big Three got themselves into this problem, by, among other reasons, planning poorly for rising fuel prices (which would affect purchasing habits of consumers), poor R&D (seriously, Toyota's Prius has been on sale in the US for roughly 7, 8 years now; GM is just now rushing to complete the Volt...seriously?), voluntarily agreeing to onerous employment contracts (and then failing to keep their word). No bailout, no handout, nothing at all.
The only outcome acceptable to me is Chapter 11 bankruptcy, with the US Treasury acting as either debtor-in-possession loan originator, or guarantor (right word?) for those loans. Our domestic airline industry went through a round of Chapter 11 bankruptcies a couple of years ago (they may still be ongoing, not sure); consumers didn't suddenly stop flying, and those companies didn't suddenly die.
HG
HG, I think Boon was just trying to throw some context and perspective into the picture, not necessarily advocating a bailout.
Sorry, one more thing...
Mini rant regarding the Big Three/UAW union employment contracts: I'm not really well-disposed towards unions in general (personal history), but I'm not frothing at the mouth anti-union. That said, if, when this crisis is resolved, the current leadership of both the Big Three and the UAW are out on the street looking for a job, I couldn't be happier. Both sides walked into the negotiations eyes wide open. Management made a committment, they gave their word, to abide by the contract. The union did the same. Don't come crying to me because you made a bad deal, and now have to suffer for it. Suck it up, work together, or fail alone.
/mini-rant
Sorry, had to get that off my mind.
HG
On November 20th, 2008 at 11:48 PM, ThoughtPolice said: "HG, I think Boon was just trying to throw some context and perspective into the picture, not necessarily advocating a bailout."
If that's correct, I apologize for arguing against Boon, and a position he may not have taken. In that case, please read my post as arguing, in general, against any bailout for the auto industry.
HG
Yeah, it was more context. I am not sure what to think about the bailout. On one hand, I completely agree with my former self that these folks pretty much blew it with the "innovation" factor. But on the other hand, I can't imagine a modern United States without Chevys, Fords, and Cadillacs. Especially considering what (historically) those companies have done for this country.
I think alot of these "let them fail!" folks are living in an ideological world. It is simple to do the math and say these corps deserve to sink. It is something else to imagine a U.S. economy without the Big Three. There is something fundamentally amiss there.
But I've said it before and I'll say it again: this economy is based on consumer spending. But wages have not increased along with productivity, so the middle class lifestyle is mortgaged through credit cards and home equity loans. What you are really looking at here is a massive correction in the U.S. economy that will send many workers into the place where they actually belong: the lower classes. And lower class folks (God bless 'em) don't buy new cars.
It is a shame the wool was pulled over the eyes of so many Americans for so long. So many people seem to have bought the lie that the stock market is a "safe bet" for savings, and that working 60 hour weeks for 40 hours of pay is a bargain (be happy you have a job!). The real buying power of the average worker places him or her in the lower class. The money has been funnelled to the top and has not been distributed fairly. And that is the fundamental problem at the core of the economic crisis that is at hand.
So will a bailout save Detroit? I doubt it. But they probably deserve at least six weeks worth of Iraq spending. I guess.
Cheers?
"I think alot of these "let them fail!" folks are living in an ideological world. It is simple to do the math and say these corps deserve to sink. It is something else to imagine a U.S. economy without the Big Three. There is something fundamentally amiss there."
It's not as if companies that restructure through Chapter 11 go away entirely. Saying "let them fail" isn't the equivalent of "let all those jobs and products go away never to return."
Much of the airline industry has passed through Chapter 11, for example. Sometimes, with poorly managed companies, it's absolutely necessary and also the right thing to do.
There is already a perfectly fine option for these failing auto companies, and it's Chapter 11 bankruptcy so they can restructure and reorganize and get rid of the hideously bad management. They don't need or deserve a government bailout, and they shouldn't get one.
In theory, I'm all for no corporate welfare. The flipside of this argument is that this is not about expanding corporate welfare. It's about the shape of corporate welfare.
I'd rather that we took back the $700 billion. But if I have to choose, I'd much rather give the $700 billion to the auto makers than the financial institutions.
"Do you think that, just maybe, Toyota's avoided unionization by providing comparable benefits to its employees, thereby foregoing the need for the UAW?"
No. They move to states where it is more difficult to form a union. They will go to great lengths to keep the union culture out of their shop. Management will seek to avoid vocal anti-management people. Example: when the rantoul plan was rumored to close down, certain hiring companies were told to ignore applications from those workers because they were union. This is fact. This is real. Yet, Toyota opens up and creates good jobs with good pay and still makes a profit.
"Yes. Blaming the unions or workers for companies failing just doesn't make sense. The management agreed to these contracts and these benefits."
Management is completely accountable for acting like a bunch of ******* over the past several decades and conceding to unreasonable demands. I suppose I might be too harsh on them. If someone holds a gun to your head, you have to have the stones to challenge them to pull the trigger. It's easier said than done. Caterpillar did that. It was a rough couple of years, but it worked.
"Why not have a shared process of projection where the worker/union leadership and the company can work together to maximize worker benefits and still keep the company profitable?"
Like at Toyota? Nissan? Honda?
"They're not making $78/hour, that's if you factor in all of their benefits. Second, 2880 hours/year is 55/hours a week. Third, since this is a non-public company, why do you care how much their workers make?"
http://wiki.answers.com/Q/How_many_working_hours_make_up_a_year. I assume since they are probably calculating vacation and sick time in that. Sorry: I wrote 2880 but used 2080 (accurate) in the calculation. It's still $162k/year.
"Do you tell people you make the value of your salary with all of your benefits combined?"
YES! YES! YES! As a shareholder or taxpayer, I would like to know how much employees make per hour when you factor in all their benefits, including the present value of the future pension liability. That I way, we can all analyze compensation and accurately and make sound comparisons. Instead, people try to mask benefits and hope people will focus strictly on wage or salary. Example: if a govt employee scores a huge pension, the next step is to argue for more wages because someone in the private sector is getting paid more per hour/year. I think that taxpayers would find it very interesting how much government employees make per hour when you factor all the benefits, including pension. That's the number we should be looking at. If the taxpayer wants to pay that, great! If not, we should not hide the true compensation.
"Third, since this is a non-public company, why do you care how much their workers make?"
1) I am being asked to bail them out. 2) Lobbyist are trying to impose union-cultures and impose union-made products on me, so I have an indirect and ongoing concern. 3) Not pay-related, but union systems fail and fail and fail. The only successful UAW company I can see is CAT. They put the union on the street and avoid the death grip of the UAW.
"Thirdly, B's "2600 per vehicle number" could be greatly reduced with nationalized, single-payer health care." Good grief. This is $2600 per vehicle that other manufacturers don't have, yet single-payer health care is the solution.
Seriously, check out the UAW website. Whatever they touch, they pretty much destroy - including the lives of all those people who will be affected with GM. They used to say - look we got at GM and Ford. Yep, look what you got them.
Airlines. Schools. American Auto Makers. There must be an epidemic of bad management out there. : )
Not hiring people because they organize? And that's the solution? Wow. We aren't going to have much common ground here. What about the Columbian and Russian campaigns? Is it ok to torture and murder workers who have the nerve to organize too?
The hilarious thing is that you make it sound like that vehicle cost is tipping the scales. Then you leap from that to blaming it 100% on the union. It's like blaming a celing fan for getting smoke in your drapes when your house is being consumed by an inferno.
The American automakers offer more poorly performing vehicles for less money even with their higher costs. If I could get a car that will last 10 years or more, and I had to pay an extra $1,000 for it to be union made, I would gladly do that. I have in the past.
These days, you get so much less car for less money. That's corporate vision and development lacking, not the union status of the workers.
Look even at the ad campaigns: "X vehicles over 30 MPG--most of any automaker" WTF is that supposed to mean? I only buy one vehicle. It doesn't do me any good to get 5 chevys all with worse MPG than my one Toyota.
And the funny thing is that with better employee integration into the development and direction of the company, you wouldn't see these problems. But when workers are not given that power, they will use their power to fight for more direct benefits and compensation. You can call that a lack of imagination on the part of the workers. But isn't vision in management why management is supposed to be getting millions of dollars more than the individual worker each year? Maybe if they spent less money on anti-union propaganda, they could develop some decent cars...
"Not hiring people because they organize? And that's the solution? Wow."
Yet all the other auto makers are making a profit and provide good jobs. If we don't want to blame the union directly, let's blame the culture that union culture creates. Failure after failure.
"The hilarious thing is that you make it sound like that vehicle cost is tipping the scales."
Tipping the scales? When did I say that. It simply puts things in perspective. If you want to pay extra for union made, fine so long as others aren't expected to.
"And the funny thing is that with better employee integration into the development and direction of the company, you wouldn't see these problems."
You mean like at Toyota? Nissan? Honda?
Well, at a well run company, union organization helps provide a logical structure for employee integration. The fact that it's done better at three Japanese companies says a lot more about the poor American management than it does about unionization. But since you seem to blame the fact that you can't get the lid off of your spaghetti sauce jar on unions, I don't know what else to say.
Uh ... all of the automakers are losing money right now and will most likely be laying off thousands of workers. You continue to ignore some basic facts here:
1. The "$2600 per vehicle" number still brings labor costs in at less that 10% of the cost of the average new car. Are seriously saying that paying 10% of the cost of a product to the people who make the product is excessive?
2. The Big Three, as I mentioned earlier, are special corporations in this country. They have not only put more food on the table than any other industry over the years, they are currently paying pensions to millions of Americans who spent their lives making cars and making American industrial capitalism great. Are you proposing that these people deserve nothing for all of those years in the plants? Or are you arguing that their pensions are excessive and they don't deserve to have a comfortable retirement? What, exactly, is a career's worth of hard work worth to you? $10K a year pension? $20K?
3. Toyota and the rest of the foreign automakers don't have pensions to deal with because they have only been manufacturing in the US for the last 20 years. And back home in Japan or Germany the government takes care of retirement.
4. What about all of these other industries that are failing right now that haven't allowed organization of the work force?
You argument seems to boil down to "unions are asking for too much and they have ruined industrial capitalism in America". But the collapse of our industrial sector has aligned very acutely with the decline of the power of unions. And, on the other hand, the golden years of industrial capitalism aligned acutely with the rise and strength of the unions. There are many reasons for this, but it at least seems clear that a healthy, organized work force is hardly an impediment to a strong industrial economy.
What America needs right now is a return to reality. While I am not in favor of the shock that an un-bailed-out economy would bring to America, there is a desperate need for the facade to fall here. We have a workforce that is far more productive than at any time in this country's history, but the average worker is not making enough money to claim middle-class status. We complain about the schools, but everyone knows it is the parents that make the biggest difference. Yet our day care centers are bursting at the seams because so many families now require two incomes just to stay afloat. We complain about crime, but there is a real lack of opportunity for young men who aren't particularly gifted in academics in this country. There are no factory lines to start up on - no union to join for protection at the workplace.
In many ways the unique problems that this country faces right now are due to a lack of an organized work force. Unions are not the cure-all for whatever ails us, but they are something that can bring a lot of positive changes to America if they were encouraged to expand.
There is more than enough money to go around in this country. Unfortunately, under conservative economic principles, most of that money hasn't gone around - it has just gone up. Unionization are a good way to reverse that trend.
There is more than enough money to go around in this country. Unfortunately, under conservative economic principles, most of that money hasn't gone around - it has just gone up. Unionization are a good way to reverse that trend.
And this, Boon, is exactly why people like B will fight tooth and nail against unions. B just wants to be in that master class someday, but he'll probably never get there.
"the fact that it's done better at three Japanese companies says a lot more about the poor American management than it does about unionization."
It's ironic that the Japanese are better managers because they have avoided unions, but the problem is not unionization.
"The "$2600 per vehicle" number still brings labor costs in at less that 10% of the cost of the average new car. Are seriously saying that paying 10% of the cost of a product to the people who make the product is excessive?"
When Toyota customers pay $200 and GM customers pay $2600 for employee benefits, that is 1300% more. Excessive.
"Are you proposing that these people deserve nothing for all of those years in the plants? Or are you arguing that their pensions are excessive and they don't deserve to have a comfortable retirement?"
Yet people at non-UAW factories have good paying jobs. Is it really that Americans can't be good managers? Really? When you collective bargain so agressively, you're gambling you don't put them out of business. If you're going to take that risk for the short-term benefits, you have to be prepared for the downside risk.
"Toyota and the rest of the foreign automakers don't have pensions to deal with because they have only been manufacturing in the US for the last 20 years. And back home in Japan or Germany the government takes care of retirement. "
Yet in America we keep offering pensions. Soon it will be state, county, and municiple taxpayers who need to bail out out government regularly.
"We have a workforce that is far more productive than at any time in this country's history, but the average worker is not making enough money to claim middle-class status."
Isn't this what destroyed the companies in the first place. Look at Toyota. Look at Honda. These are not Walmart jobs.
"Unions are not the cure-all for whatever ails us, but they are something that can bring a lot of positive changes to America if they were encouraged to expand."
Based on their track record, unions are the destroy-all. We will not appreciate it fully until we see referendum and referendum after referendum to increase taxes. It's already started.
"B just wants to be in that master class someday, but he'll probably never get there."
Actually, I want to the workers to be in a better class than what the UAW has provided them. Show me a UAW factory that is not sweating bullets right now. Was it worth it?
It's ironic that the Japanese are better managers because they have avoided unions, but the problem is not unionization.
Have you looked at the compensation packages of the Japanese management? It's not because they avoided unions, it is because they keep management pay reasonable. You're trying to find a "all-problems-are-Union-caused" solution here, and nobody is biting. I'm still waiting for you to show me the City of Champaign job that someone in this upcoming high school graduating class can get with zero experience and be making $15/hour plus full benefits.
This is just like your example in the Green Dot thread, where you claimed it was the lack of union that generated success, not all of the other change factors that actually took place while the union stayed in place. Oops again.
"Are you proposing that these people deserve nothing for all of those years in the plants? Or are you arguing that their pensions are excessive and they don't deserve to have a comfortable retirement?"
Yet people at non-UAW factories have good paying jobs. Is it really that Americans can't be good managers? Really? When you collective bargain so agressively, you're gambling you don't put them out of business. If you're going to take that risk for the short-term benefits, you have to be prepared for the downside risk.
They also have a different business culture than you find in the US auto makers. Why are they voluntarily giving good pay and benefits to their employees? Because they know that it's the right thing to do for the long-term security of their workforce, and by association, their company. It's also because they're not as "profit-at-all-costs" cutthroat as the US auto makers. But you can't recognize that because, after all, why would someone be in business if they're not actively taking steps to squeeze out every last dime of profit they can?
"Toyota and the rest of the foreign automakers don't have pensions to deal with because they have only been manufacturing in the US for the last 20 years. And back home in Japan or Germany the government takes care of retirement. "
Yet in America we keep offering pensions. Soon it will be state, county, and municiple taxpayers who need to bail out out government regularly.
So are you advocating that instead of pensions, we have the government guarantee retirements like Japan and Germany? That's how they roll overseas.
They do have pensions at US Toyota plants, but their workforce just hasn't been around here long enough to start really tapping into it. Their first generation of workers are just now reaching retirement age. It shows your complete ignorance on this subject when you make statements like, "When Toyota customers pay $200 and GM customers pay $2600 for employee benefits, that is 1300% more. Excessive.", but you fail to realize that Toyota only has a few decades of working here in the US, so they don't have a huge backlog of retired employees yet. Once those people start to retire, that number will rise.
But you keep right on fishing, I'm sure you'll eventually get someone to bite.
Based on their track record, unions are the destroy-all. We will not appreciate it fully until we see referendum and referendum after referendum to increase taxes. It's already started.
Yes, because management has absolutely no responsibility in any of this whatsoever. Nope, it's just those damn unions who forced those poor multi-millionaire managers to sign such heavily loaded contracts and then forced those same managers to accept massive raises.
<comic-book-guy>Worst. Example. Ever</comic-book-guy>
"B" may be for "Business", but it's clear that you don't actually understand "business". Now run back to your Chamber of Commerce meeting and come up with more reasons about how this is all the fault of the American worker.
-----
Anon, what would you know about logic and facts, would you like to try to apply some and respond to my comment maybe? - Run4cvrlib on 2008-10-16 @ 11:00pm
Toyota is expected to pay it's executive team 3.92b yen next year ($40.5M) and GM paid it's exectutive team approximately $34M this year based on what I could find. It seems management pay and benefits is in line with the industry. Is this just a loose theory that you came up with today?
"I'm still waiting for you to show me the City of Champaign job that someone in this upcoming high school graduating class can get with zero experience and be making $15/hour plus full benefits."
Fire departement does not require a college degree to get hired.
"Because they know that it's the right thing to do for the long-term security of their workforce, and by association, their company. It's also because they're not as "profit-at-all-costs" cutthroat as the US auto makers."
BS. It looks like the US auto makers are guilty of overwhelming generosity and are not the cut throat types you claim. Actually, it appears over their history the US automakers have been anything but cutthroat looking at compensation over time.
"It shows your complete ignorance on this subject"
At Toyota, a worker's pension consists of an investment account in which the company deposits the equivalent of 5 percent of a worker's earnings each year, typically around $3,000 to $3,500. An employee can supplement that with a 401(k) plan, and the company matches contributions up to a maximum of 4 percent of the worker's income.
For the company, these retirement packages carry no uncertainty. But they do for workers, whose nest eggs depend on their contributions and the financial markets.
"Yes, because management has absolutely no responsibility in any of this whatsoever. Nope, it's just those damn unions who forced those poor multi-millionaire managers to sign such heavily loaded contracts and then forced those same managers to accept massive raises."
No. Mangement is to blame for not putting the union on the street. I've said this over and over again. It seems they weren't cutthroat after all and that's the problem.
Anti-union <> anti-worker. Green Dot's version of the union is what it should have been across the teaching profession 30 years ago. I'm not going to concede my position because they are technically a union.
They do have pensions at US Toyota plants, but their workforce just hasn't been around here long enough to start really tapping into it. Their first generation of workers are just now reaching retirement age.
This is correct. Apologies for wording this poorly the first time. When I said "deal with" I meant right now - in the future Toyota, etc. will find themselves in the same spot. Strangely, people who work for big corporations often think they should have a pension plan. Even the folks who work for Toyota.
"We have a workforce that is far more productive than at any time in this country's history, but the average worker is not making enough money to claim middle-class status."
Isn't this what destroyed the companies in the first place. Look at Toyota. Look at Honda. These are not Walmart jobs.
I'm sorry, I think I am confused. Did you just say that workers who make enough to claim middle-class status are a problem? Are you honestly arguing that these skilled workers should be paid less-than-middle class wages? I am honestly stunned.
Based on their track record, unions are the destroy-all.
Yeah, it seems like this conversation is about over. Let me just say one more thing. The strength of the American economy in the 20th century was the movement of massive numbers of people into the true middle class status. We now have an economy that is run primarily by consumer spending. Toyota, Nissan, Mercedes and the rest will collapse very quickly if the American consumer stops buying their products. It is absolutely essential that we develop an economy that allows Americans to feed their families, put their kids through college, and take a couple weeks of vacation every year. That is the only way we will have a better economic future in this country.
The conservative formula of reducing union membership, giving tax cuts to the wealthiest, and encouraging the middle class to invest in the stock market is a failure. We need to go back to good paying jobs, true middle class lifestyles, savings accounts, and reasonable tax rates. Union membership is an important piece of that puzzle. Unions are not the problem. Unions are the way out of this crisis and back onto solid economic footing.
If you are going to continue to insist that unions are nothing but evil then I have nothing left to add to this conversation.
"Fire departement does not require a college degree to get hired."
Technically, this is correct. However, without at least a 2-year degree one will not end up high enough on the list to ever get hired. Usually takes the points for a Bachelor's to make it close to the top (or Veteran's points). But you won't find a new high school graduate walking into CFD and getting a job.
"in the future Toyota, etc. will find themselves in the same spot."
No they won't. Their pension plan is structured different as I referenced in my previous post.
"Did you just say that workers who make enough to claim middle-class status are a problem? Are you honestly arguing that these skilled workers should be paid less-than-middle class wages? I am honestly stunned."
Am I saying that? Are other auto makers paying their factory workers less-than-middle-class wages? I think they should get paid a wage under terms that allows their companies to compete and be profitable. Like at Toyota, Nissan, Honda, etc. $160k/year is probably a bit much, especially with a pension on top of that. Changing their pay rates last year is not a valid argument after the company was destroyed.
"Unions are not the problem. Unions are the way out of this crisis and back onto solid economic footing." Yet our airlines, auto makers, school, and government are all failing financially. Apparently we need more union-focused burocracy.
"If you are going to continue to insist that unions are nothing but evil then I have nothing left to add to this conversation."
Yeah right - I've heard that before. Unions aren't evil. They don't have bad intention. They just prove destructive time and time again. Even in "successful" cities like Champaign we have to raise taxes, even after all that growth. It's a shame.
I think they should get paid a wage under terms that allows their companies to compete and be profitable. Like at Toyota, Nissan, Honda, etc. $160k/year is probably a bit much, especially with a pension on top of that. Changing their pay rates last year is not a valid argument after the company was destroyed.
Funny - the Japanese automakers base their wages on the UAW wages. That's an effective way of preventing a union - provide the employees with the same benefits they'd get with a union. I don't really understand your point - GM is forced to pay the UAW wages, and Toyota opts to pay the UAW wages. It's a common denominator - the ability for the respective companies to compete and be profitable is not based on wages. Maybe, just maybe, people don't like Detroit's cars.
$160k/year is probably a bit much, especially with a pension on top of that.
Who makes $160k? In 2007, the average wage for employees of the Big Three was $28/hour. That's $100k short of your figure. Stop making up data.
"Funny - the Japanese automakers base their wages on the UAW wages. That's an effective way of preventing a union - provide the employees with the same benefits they'd get with a union."
We're they really getting the pensions all these years that UAW workers were getting?
"Who makes $160k? In 2007, the average wage for employees of the Big Three was $28/hour. That's $100k short of your figure. Stop making up data."
But in prior to the 2007 concessions it was $78/hr. Didn't seem like the auto makers were a bunch of greedy cutthroaters now, does it?
"Green Dot's version of the union is what it should have been across the teaching profession 30 years ago. I'm not going to concede my position because they are technically a union."
So, they are only "real" unions when they use democratically structured collective bargaining to do things that you don't like, because if they use democratically structured collective bargaining to do things that you approve of, then they are only "technically" a union. I think that tells us everything we need to know.
But in prior to the 2007 concessions it was $78/hr.
No, it wasn't.
1998 Averaqe Wage: (all job classifications) $21.18 per hour (includes COLA). That's from GM.
UAW's 2003 agreement with GM. And Ford. And Chrysler. I can't find anything close to $78/hour.
How, exactly, would $25-30/hour transform in $78/hour through the contractual 2-3% COLA?
I encourge everyone to take a look at democratically structured collective bargaining.
http://reason.tv/video/show/60.html
Once unions agree to an accountability-based culture, it's only a matter of time before performance is rewarded on an individual level. Just what the doctor ordered.
You posted this earlier....
On November 19th, 2008 at 11:37 AM, ThoughtPolice said:
It's incorrect to think that the UAW hasn't given any concessions to GM. They recognized that GM had poorly funded their pension and OPEB liabilities, which effectively created a going concern for the company.
2005 UAW Health Care Settlement Agreement
-Reduced hourly OPEB liability by $14.5b
2006 IUE-CWA Health Care Agreement
-Reduced OPEB liability by $500m
2007 UAW National Agreement
-Reduces new-hire Tier II employees base pay from $28/hour to $15/hour and substantially decreases benefits
-Reduces total hourly expense for these employees from $78 to $26
I can go on, but I think you get the picture.
For someone so interested in business, I'm surprised you can't see the difference between total hourly expense and wages. What does that quote state? Oh yeah, base pay was $28/hour. Not $78.
A huge portion of that $78/hour never gets to the employee - it's paying for guys already retired. The guys aren't bringing home $160k. If the average wage is, and has been, somewhere between $25-30, how can they possibly make $160k like you assert? Are they averaging 100 hours a week?
B is for Business - is there any validity to the idea that maybe, just maybe, Detroit makes cars that suck? For comparable vehicles (i.e., size, class, features), Japanese and German cars are more expensive - and yet people consistently choose them over American cars. How can you possibly blame crappy car designs on the UAW?
"For someone so interested in business, I'm surprised you can't see the difference between total hourly expense and wages."
Please explain to me what the accounting definition of total hourly expense is. In the limited context you presented your data, I don't see how you can draw all the conclusion you did. I would not assume that pension costs of former employees are factored into total hourly expenses unless it was specifically stated. If you can point me to an accounting definition where this is supposed to be common business knowledge, I will have learned something new today.
Provided that Toyota can pay their employees $70,000 in wages, I would feel comfortable making the assumption that GM pays paid employees $160,000 with benefits included. If that amount includes taxes, they should be removed from the discussion.
How can you conclude what exactly the $78/includes? You supplemented information with base pay data. Does that factor in all the COLA increases over time? How can Toyota be paying factory workers $70k? Something doesn't add up.
"How can you possibly blame crappy car designs on the UAW?"
When you have the pressures of a huge pension obligation and a labor contract that is unforgiving in business downturns, it just bad business. We don't make good decisions when we're desperate, business or otherwise. Of course, the UAW is not directly accountable for bad designs. At the same time, success is not possible in a culture of failure. Sooner or later failure will happen. Mangement can never be that good.
How can you conclude what exactly the $78/includes?
I don't know exactly what the breakdown is. However, I know that it's going to include contributions to chronically underfunded pensions and OPEBs. With underfunded, underperforming pension assets, GM needs to pay extraordinary amounts of money to fund the pension and OPEBs. That's where the $50/hour disparity comes into play.
It doesn't even matter - you've stated that the average GM employee brings home $160k. That's just not the case.
You supplemented information with base pay data. Does that factor in all the COLA increases over time?
If you actually visited the sites I linked to, you'd see that it does. The COLA is about 2-3%.
Let's assume the high-level of 3% COLA and the high base wage of $30/hour. For the average salary to be $78, the average worker will need to have about 32 years on the job. I don't think that's the case. If we take a $25/hour wage at a 2.5% COLA, the average experience will be 46 years. This, of course, would also assume that the average wage 30 years ago was $30/hour (which it wasn't).
We can also look back to the 1998 data and see the average wage was $21.18. Let's assume all of those employees have stayed on for the past ten years, receiving raises. For the current figure to be anywhere near $78/hour, they'd need to make a 14% COLA. That's far above the contract.
Here are some more fun facts.
From the fun facts, a typical skills-trade worker makes $32.32, or $67k per year in straight-time labor. Then tack on benefits, time off, overtime, performance bonuses, profit sharing, and pension. I wonder what a non-typical worker makes? Not bad when a company about to fold.
"The highest figures sometimes cited also include the benefit costs of retirees who are no longer on the payroll." I don't know where you go the information on your first post, but it does not seem to tie off with your fun facts link. According to your first post, the total hourly expense decreased to $28/hr. How can this be when fun facts says a typical assembler makes $27.81 in straight-time labor when you haven't even started to factor in benefits? And what is a "typical" employee anyways?? It does not say "average". I have also been careful not to say "take home" or "wages", but I did say that it was $78 + pension costs and this was not accurate. I should have stated "including" pension costs. On the flipside, you are just assuming that a large portion of benefits is relating to retiree benefits and that is a loose assumption.
The average private sector worker earned $25.36 an hour in 2006--$17.91 an hour in cash wages and $7.45 an hour in benefits such as pensions, paid time off, and health insurance. Autoworkers at Japanese plants located in the United States earn substantially more than this: between $42 and $48 an hour in wages and benefits, which amounts to over $80,000 a year in total compensation--hardly cheap labor.
The typical UAW worker at the Big Three earned between $71 and $76 an hour in 2006. This amount is triple the earnings of the typical worker in the private sector and $25 to $30 an hour more than American workers at Japanese auto plants. The average unionized worker at the Big Three earns over $130,000 a year in wages and benefits.
read more....
Note that wording shows the workers "earning". That woud lead me to believe that these numbers do not include pension obligations of retired employees. So your number of $78 seemed to make sense outside of your pension theory. I found data that shows $73.26/hr in average hourly labor costs and $130,000 a year in wages and benefits.
In summary:
Taxpayers Should Not Bail Out the UAW
By seeking a bailout, the UAW, along with the Detroit automakers, are asking taxpayers to help keep UAW earnings at $75 an hour when the typical American takes home a third that much. The Big Three also want Congress to use taxpayers' money to pay billions of dollars into the new health care VEBA, thereby funding health care benefits for UAW retirees that are far more generous than those provided by an already under-funded Medicare system.
UAW workers understandably want to preserve the standard of living to which they have become accustomed, but that standard is not sustainable in a competitive economy. Congress should not tax all Americans in order to maintain UAW workers' affluent lifestyles.
IF those benefits include the pension benefits of retired employees, I'd like more than a hunch.Base pays seem to be consistent with what Thought Police has provided. All the benefits and union perks seem excessive after reading the heritage.org website. If these costs include retiree benefits, it is misleading. It does not seem to be the case.
I don't know where you go the information on your first post,
From the UAW's website.
but it does not seem to tie off with your fun facts link. According to your first post, the total hourly expense decreased to $28/hr. How can this be when fun facts says a typical assembler makes $27.81 in straight-time labor when you haven't even started to factor in benefits?
Ahh, poor reading comprehension. I'll bold the key part - "Reduces total hourly expense for these employees from $78 to $26." That's following the discussion of newly hired Tier II employees, who only make $15/hour.
I have also been careful not to say "take home" or "wages"
Entirely incorrect. Here you go - "I think they should get paid a wage under terms that allows their companies to compete and be profitable. Like at Toyota, Nissan, Honda, etc. $160k/year is probably a bit much, especially with a pension on top of that."
On the flipside, you are just assuming that a large portion of benefits is relating to retiree benefits and that is a loose assumption.
Not really. If the average wage is $28/hour, and we're allocating "labor costs" at $78/hour, there's $50 that needs to be made up. Unless the UAW employees are getting crazy insane health care (which they're not), there's no way that most of that $50 is going towards health care. Aren't benefits typically 30-40% of your wage? (answer: yes)
Note that wording shows the workers "earning". That woud lead me to believe that these numbers do not include pension obligations of retired employees.
Hmm, it's probably just Heritage misusing the term to further their political agenda. "Allocating" is a better term. If the UAW members stopped working right this instant, there'd still be exorbitant costs GM would need to cover (e.g., retiree benefits, job bank, etc.). Currently, they're allocating these costs based on manhours. It's just like Medicare taxes - they're allocated based on your income, but there's not a direct 1-to-1 payoff with your tax contributions.
IF those benefits include the pension benefits of retired employees, I'd like more than a hunch.
Similarly, I'd like to see the thousands of highscool-dropout GM employees making $130-160k.
Sorry, GM hasn't released their cost allocations. And they never will - by claiming they've been strong-armed into paying $75/hour to their employees, they're hoping they can get billions from the government. They're hoping Congress will force the UAW to make concessions, so claiming $75/hour is in their best interest.
Base pays seem to be consistent with what Thought Police has provided.
So you're conceding that UAW employees don't earn wages of $160k, like you previously stated?
Heritage! HAHAHAHHAHAHAHAHA! Now that's a friday funny unto itself.
I had the unique experience of meeting one of their leaders and he is one of the only people I've ever met who manage to think that EVERYONE in the room was laughing with him when EVERYONE in the room was laughing at him/groaning in disgust.
I find it interesting that according to B's own numbers, somewhere between the vast majority and the entire compensation difference is accounted for by our failure to provide nationalized health care and pension.
The average GM assembly-line worker makes about $28 per hour in wages, and I can assure you that GM is not paying $42 an hour in health insurance and pension plan contributions. Rather, the $70 per hour figure (or $73 an hour, or whatever) is a ridiculous number obtained by adding up GM's total labor, health, and pension costs, and then dividing by the total number of hours worked. In other words, it includes all the healthcare and retirement costs of retired workers.
http://mediamatters.org/columns/200811250012?f=h_column
Toyota Suffers First Credit Rating Cut in 10 Years Amid Slump
"So you're conceding that UAW employees don't earn wages of $160k, like you previously stated?"
I said $160k a year is bit much, I never said "wage". I've been very careful not to say "wages" or "take home", but I could have put it in another paragraph in your example to be more clear. Based on heritage.org, I will stand behind $130,000 per year in wages and benefits. It seems much, BUT WHEN THE UAW IS USING $78 PER HOUR ON THEIR OWN WEBSITE, I'm comfortable standing behind that number until someone clearly states that the pension benefits of retirees are included in that number. I'm just using numbers from the UAW website that you gave me and you can't say for sure what it includes. : ) One or two media reports speculating is not good enough for me.
If you provide me with this, then I'll concede the $160k+ (per UAW page) and $130k (per Heritage page). If so, Heritage should not use the word "earn" and the UAW should not have got caught playing that game (if you are correct) for their own benefit when talking concessions.
Then on top of the UAW putting $78/hr on their very own website (hardly a conservative propoganda site), $50 of that just magically dissapears. Plus that $78 was for "these" new hire Tier II employees. Rational people could then assume it was benfets for "these" active employees. Can it be because pension was coming off the books in 2010? Possibly, but nobody is making that case.
At the end of the day, we're paying $2400 additionally per UAW car for UAW benefits. Toyota came in and seems to have setup their pension correctly. Their first generation of employees is about to retire and americans can look at the Jap car companies as a model to do it right. There is suppose to be some concession that because the UAW FINALLY conceded to reasonable benefits, we are supposed to be happy. Some (laughably) continue to argue that we need stronger unions.
Xian wants to laugh at heritage.org. This is certainly a conservative political site, like the UAW is the extreme opposite. If you want a good laugh, look at how great a job the UAW has done. On their own website they use $78/hr to demonstrate their concessions. Whoops. The conservatives use a similarly high number and it is still not clear if that amount includes pension amounts for retirees. Just another example of why I don't want UAW efficiency representing me and and I certainly don't want to pay this "premium" in the products I buy.
I've been warning of this since the mid-90s. Ironically, because the UAW culture killed the auto makers, non-UAW auto makers are paying their employees more. What a great selling point for the UAW.
Look at schools, airlines, american auto makers, and governenment budgets. Success cannot exist in a culture of failure. Does caterpillar and green dot have unions - yes, however, going to war with the union is something only the very best leaders do. Expecting all executives to be that great is hardly a rational expectation. Is there really an epidemic or bad managers? Can Americans simply not manage?
The right thing to do is to file bankruptcy, remain in business, and restructure.
"Toyota Suffers First Credit Rating Cut in 10 Years Amid Slump"
Let's not get too excited there Kevin.
"The rating cut leaves only five companies left with an AAA rating from Fitch: Exxon Mobil Corp. and Johnson & Johnson in the U.S. and Regie Autonome des Transports Parisiens, Reseau Ferre de France and Societe Nationale des Chemins de Fer Francais in France."
Toyota will come through this just fine.
"Let's not get too excited there Kevin."
What the hell are you talking about? I provided no comment one way or the other on that article, preferring instead to let people weigh all of the facts in it for themselves, rather than cherry picking or spinning.
There are American workers who will lose their jobs because of what's happening at Toyota and other automakers. What planet are you living on that you think I am "excited" in any way by that? And what kind of sick mentality reads any possibility of glee into an economy that is tanking faster than our comprehension can keep pace? How dare you, sir...
Only the best human beings can restrain their natural impulses of selfishness to actual vote in the best government. Therefore, I should be elected supreme ruler of the country and I can get rid of bad people.
It's a great plot for a manga, but it's really scary in real life.
Unions are democracy. They are imperfect, but what you see about is the definition of zealotry--the complete denial of any facts, the justification of misleading others when called on those false truths and the ignoring of counterarguments.
Your own data says that the difference in compensation comes from medical coverage and benefits. Your solution is not to address that concrete difference but to deny workers their human right to communicate and organize. We've all see the historical background for what happens without that right, some of us just don't care.
"There are American workers who will lose their jobs because of what's happening at Toyota and other automakers. What planet are you living on that you think I am "excited" in any way by that? And what kind of sick mentality reads any possibility of glee into an economy that is tanking faster than our comprehension can keep pace? How dare you, sir..."
Glee? No. Optimism, yes. When people stop looking at corporations as welfare mechanisms and allow them to compete for the long-term, it will be a good day. When lawmakers stop using quasi-government as welfare mechanisms and stop throwing our markets into chaos, it will be a good day. When government stops offering pensions to incoming employees, it will be a good day. Things us conservatives have been asking for as long as I can remember. Distasters could been avoided if you had listened to us. If we learn our lesson, this could be constructive. If we blame this on managers when every strong union culture company/entity is basically failing, the taxpayer will continue to bear the burden for select groups of employees. If the proposed solution is sleezy tactics such eliminating secret balots, then we can expect further destruction. If you propose a culture of failure, you will realize failure. In time, our state/school/county/city govts will hit rock bottom. When that happens, I will not be filled with "glee". I will be optimistic that we start doing things right and get ready for the success that all taxpayers deserve - not just select groups of employees.
Spin and cherry-picking? That has been the cornerstone of the union marketing plan for as long as I can remember.
This is a sensitive subject for you and I don't mean to make it personal. I'm being asked to pay for this and I'm going to be paying for it in the future. I'm not filled with "glee", I can assure you.
"Unions are democracy. They are imperfect, but what you see about is the definition of zealotry--the complete denial of any facts, the justification of misleading others when called on those false truths and the ignoring of counterarguments."
There is nothing misleading about the failure rate of strong-union-culture businesses/entities. Doesn't it seem more misleading that it is always management's fault?
When people stop looking at corporations as welfare mechanisms ...
And this, ladies and gentlemen, is the core of the argument. I still don't understand how the pension of a retired autoworker can be labeled "welfare". I don't understand why a hard working blue collar American shouldn't be able to earn enough to support a family. It is clear that the auto workers aren't making $78 an hour. But what if they were? Why would it be so horrible if the auto workers really were making $160,000 a year?
No, seriously. Don't dismiss the question as ridiculous. Why, in a country as affluent as ours, where $700 Billion can be easily handed out to white collar criminals, is it so ridiculous to pay a hard working auto worker $160,000 a year? Why?
Competition? Profit? Stock price? At some level these are esoteric notions that lose their meaning. At the end of the day an economy is designed to benefit the people in a society. People in a society are not designed to benefit an economy. If an American citizen can't make enough money coming out of high school to support a family on the work of his hands for 30 years then there is something fundamentally amiss in our economy.
I know this sounds insane to you, B. And probably to most other conservative economic thinkers. But these notions were actually pretty commonplace in American history. From the craftsmen of the Early Republic to the union workers of the 1950s and 60s, there has always been a belief in this country that labor is to be valued. That, at the end of the day, the *work* that takes place in this country takes place because the citizens get up and go to work every day. It is not the managers and the owners who have made America great. It is the workers. They are the ones who have done the heavy lifting. And without unions that are almost always exploited for naked greed and profit.
I understand where you are coming from, B. But you are wrong. Very, very wrong to focus your anger over this economy on unions. The American worker is the true hero in this country. And he deserves to be able to rest easy at night knowing that if he plays by the rules and works hard his family will be fine. That is a notion that has been missing in this country for far too long.
Boon,
Systems need to be sustainable. You can mask welfare in the system, but in the end the system will self-destruct if there is any competition. It just takes longer to realize. Today we can look at UAW vs. non-UAW companies and see that total hourly costs between the two = $2200/car difference. I'm not willing to pay it and I think many other people will agree with me once they start appreciating the welfare factor.
If we are paying workers > market value, then I call it taxpayer-funded or consumer-funded welfare. If you don't want me using the term welfare, let me know what term would be better. I have stopped making socialism references in favor of welfare after all your talk of the capitalistic welfare state.
If we need to provide welfare (or whatever) into the mix, let's not mask the costs in the system with burocracy and let the taxpayers simply write a check to avoid the destruction of companies, markets, schools, city budgets, etc.
"The American worker is the true hero in this country."
I propose giving them the right to work and earn a good and fair wage. Not to force upon them a burocratic system that is likely to leave them without a job or begging for a taxpayer bailout, or have to keep asking for more money even though it can never be enough.
"The American worker is the true hero in this country."
It'd be hard to have any lower a standard for heroism. I have "get a haircut and get a real job" stuck in my head now. What was the heroic choice they made? Work or mooch off their parents? Work or otherwise be a bum? It's not like people take crap jobs because there's some better alternative out there and they feel they must haul appliances for a living 'for the sake of the Republic!' I have a free ride at U of Initial and want to be an engineer, but there's a shortage in the nation's food service industry and my country needs me!
Manual labor used to be a requirement of every person to survive. It's not some sort of heroic achievement to do it, it's normal. People take tedious and laborous jobs today for similar reasons, they need money to survive. There's plenty of good qualities in our culture involving work ethic and innovation, but let's try to keep it within reason.
--
Glock21 Op/Ed
The standard is pretty low. Getting a legacy ivy league education and getting paid 40 mil a year to ruin the financial system makes professional nose picker seem like a galactic heroes profession.
What is it that CEOs and administrators do to deserve to make so much more than the rest of us?
And B still hasn't answered the real question: Why does he stick to his anti-union agenda when he's been shown again and again to just be making up facts?
I'll ask Boon's question in a different way...What does it say about a person's perspective when they constantly say stuff like "What if workers were making 160K a year, even though I'm wrong and they aren't, but teh OMG aren't unions bad?!"!""!?!?!?!?!"!
According to business week, GM pumps $8.7B/year into the pockets of assembly workers. According to companypay.com, the GM executive teams earns $5.9M in salary and $34M with all the special benefits. The exective pay is 0.39% of the labor costs when using the $34M number. Clearly the issue is with executive pay.
Considering americans pay $2400 more per UAW car, I think the important question really should be why is executive pay so high. : )
Just to be clear : that is zero POINT three nine percent and should not be confused with 39%.
The argument seems to be that the pay is unrealistically inflated... kind of like those CEOs. I'd argue that it'd be absurd to pay dishwashers millions of dollars per hour, but it doesn't mean I hate dishwashers or that it would be some horrible thing for a dishwasher to be rich. This thread has been another long exercise in people talking past each other. Oh yeah but what about my pet peeve? Response: Why do you hate pets? Now here's my pet peeve!
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Glock21 Op/Ed
People are talking past each other because one party is not interested in any facts that disagree with his posts. I agree with the point about executive pay.
Considering americans pay $2400 more per UAW car, I think the important question really should be why is executive pay so high.
But here's the thing - Americans are willing to pay thousands more for better foreign cars. The problem isn't that American cars cost more, so consumers avoid them. A Malibu costs less than a comparably equipped Accord, Camry, or 3-series. The problem is that the American cars suck. That's why their sales are down. Everyone's now focusing on the cost side (which, without a doubt, Detroit has problems with), but the revenue side of the business is the big problem. GM's costs weren't seen as such a problem when they were selling lots of vehicles.
Sure, all things being equal between the vehicles, the American car would have a higher expense (e.g., $30,000 for the Toyota and $32,400 for the GM). However, that's just not the case right now - people don't buy American cars because they suck, not because they're too expensive.
"People are talking past each other because one party is not interested in any facts that disagree with his posts."
I was very interested in the facts as presented by Thought Police from the UAW's very own website that indicate .. "Reduces total hourly expense for these employees from $78 to $26".. emphasis added to "these" employees. When I hear "these" employees in the context of "new-hire Tier II employees" I think it is appropriate to assume these new-hire Tier II employees and not assume the $78 referenced "those" retired employees. Then again, my reading comprehension is not as good as other people who are clearly much smarter than me.
When I read the UAW site information after I had read heritage.org where they indicate UAW earn $130k in wages and benefits, it seems to be in line with that $78/hr number when you factor in taxes and those types of things. Both the UAW and heritage.org seemed to have been close. This is hardly making up facts.
The exective pay is 0.39% of the labor costs when using the $34M number. Clearly the issue is with executive pay.
I'm sorry, did you just claim that the entirity of management at GM makes only $34M combined each year? I don't know much, but I know you're wrong about that one.
You do understand that management means anyone not covered by the union, right?
What is it that CEOs and administrators do to deserve to make so much more than the rest of us?
I would also like to know the answer to that question.
American workers are heroes. They get up every morning and go to work for their families. Some work two or three jobs to put their kids through college. Maybe engineering grad students at U of I have a hard time understanding that most of the people in this town work long hours for their pay, but I know that fact very well.
Every time a mom drops her 3 month old newborn off at a day care center so she can go back to work and pay the bills (after all, government funded vacations for new moms would be too "socialism", right), I call that a hero. It might hurt to take a bullet in the ass for the US of A in some desert somewhere, but it just might hurt a whole lot more to drag your ass to work every day so your kids can eat and go to college.
Either way, a wounded soldier deserves our respect and a whole hell of a lot of government checks. Wounded hearted moms get minimum wage and the rhetorical spit of people like B running down their cheeks.
I call that a hero, plain and simple.
"A Malibu costs less than a comparably equipped Accord, Camry, or 3-series. The problem is that the American cars suck. That's why their sales are down."
I'm not sure you comparison is a good one because I'm not familiar with the Malibu. Either way, what would happen to the sales of the Malibu if it was priced $2000 less? Would people still not buy them because they simply suck?
When I read the UAW site information after I had read heritage.org where they indicate UAW earn $130k in wages and benefits, it seems to be in line with that $78/hr number when you factor in taxes and those types of things. Both the UAW and heritage.org seemed to have been close. This is hardly making up facts.
Look, neither GM nor UAW will break down that $78 figure. However, you can rest assured that both parties gain a lot by referring to the number. GM's management now gets to use the UAW as a scapegoat - "See, we're having to pay so much more than Toyota for our employees! It's not our fault!" Similarly, UAW gets to exaggerate the concessions they provide to GM - "See! We cut the cost by two-thirds! It's not our fault!" I'm surprised that you're falling for these clearly political moves.
Look, I'm an accountant. It's my job to allocate costs however you want them allocated. If you want to look at variable costs per labor hour, I can easily inflate the number. For example, I can look at a factory and say, "Hey, when people are working, we have to pay for AC, water/sewage, disposable hearing protection, and toilet paper. If we weren't employing these people, all of these costs would be $0. Therefore, each labor hour consists of wages, benefits, a share of the power/water/sewage bill, a set of ear protection, and a tenth of a roll of TP." Similarly, we regularly allocate supervisory costs and other variable overhead (i.e., we need one supervisor for every ten employees, so every labor hour includes one tenth the wages of that supervisor). Give me a target hourly expense and I can allocate costs to meet that figure.
Until GM or the UAW breaks out these costs (don't hold your breath), we can't really compare the cost to that of Toyota or Honda - all of the cost figures are based on managerial choices on cost allocation. We can compare the relative productivity of the companies and see that a Detroit has lower productivity, adding to the additional labor cost per vehicle.
"I'm sorry, did you just claim that the entirity of management at GM makes only $34M combined each year?"
This is the information provided by companypay.com for the executive team. The highest salary of the executive team was making around $800k. If you want to provide better data, then provide it. I never said management. Quit putting words in my mouth.
I'm kindof thown for a loop with the hero speech. I'll keep it simple:
anti-union<>anti-hero
Either way, what would happen to the sales of the Malibu if it was priced $2000 less? Would people still not buy them because they simply suck?
If the Malibu were $2000 cheaper, of course sales would increase. However, people don't like buying cheap, crappy, inefficient cars, so it's not really a long-term strategy. Your comparison to Toyota/Honda/Nissan/BMW would then be apples-to-oranges, and you'd have to start comparing Detroit to Kia and Hyundai.
Like I said - the main problem with Detroit right now is that their cars suck. If they started making efficient, reliable cars on-par with their Japanese and European counterparts, we could start pointing our finger at the UAW. What we're doing now, in effect, is pointing our finger at the employees of buggy-whip factories as the cause of unprofitable buggy-whip companies.
Sure, all things being equal between the vehicles, the American car would have a higher expense (e.g., $30,000 for the Toyota and $32,400 for the GM). However, that's just not the case right now - people don't buy American cars because they suck, not because they're too expensive.
Exactly, and until this and the benefits issue are addressed, I'm just going to keep posting this over and over again.
From GM website:
Despite the poor results in October, there were a number of bright spots for individual GM car and truck lines, including:
Looking at things, it appears that GM sells a LOT of cars. It appears people DO buy American cars, even though they suck. :)
Looking at things, it appears that GM sells a LOT of cars. It appears people DO buy American cars, even though they suck. :)
Well, I guess that explains why GM's market share has declined steadily since the 60s while the Japanese and Germans have significantly increased theirs.
Great, Malibu sales are up 134%. They're still outsold 2:1 buy the Camry, Corolla, Accord, and Civic - that means they're outsold 4:1 by those manufacturers. Oh, and it appears that the 134% is a little overstated (actual YTD change - +53%). Looking at the graph, it seems like the Detroit cars are improving their sales while the Japanese are constant or slightly worse - but it's too little, too late. They're not the new-comers to the market - they once held those top positions. They're slowly recovering, but they're now having to reverse 20 years of poor sales to get there.
"What is it that CEOs and administrators do to deserve to make so much more than the rest of us?"
There's the empathy we all look for.
"What is it that CEOs and administrators do to deserve to make so much more than the rest of us?"
There's the empathy we all look for.
Yes, because if you even question anyone ever, you are not showing empathy. Empathy means just letting people control whatever you want without saying anything about it.
"This is the information provided by companypay.com for the executive team. The highest salary of the executive team was making around $800k."
I think we need to know exactly what their definition of "executive team" is. If you're telling me that the CEO of GM only makes $800K, I'm calling zero credibility on the face of it. I would be very surprised if that were true.
According to Forbes, the CEO of GM earned $8.5M annually just a few years ago.
companypay.com says GM executives make a whole lot more than $800K per year.
The highest salary of the executive team was making around $800k. If you want to provide better data, then provide it. I never said management. Quit putting words in my mouth.
Rarely have I seen a thread so filled with factual errors, and so completely absent of accountability for those errors. If someone refuses to even acknowledge that some of the stuff they are throwing out there is crap, then that is a big loss of credibility in my eyes. It has gotten to the point where almost any "fact" posted by B is now suspect.
Sorry if that is unduly harsh, but I honestly don't believe anything this guy says anymore.
I'm done.
This is what happens when you let people in unions post on threads. Suddenly the lack of empathy for people who don't believe in reality becomes apparent and their right to speak their hollow drivel without being challenged gets compromised.
I sure am glad he's got the keys to the front page.
I made a mistake. I obviously meant to say the lowest person on the exectutive team is paid $800k a year to demonstrate that I was not talking about management as a whole as boon had suggested. Clearly the CEO makes more than that, as companycom.com clearly states.
Still, the total compensation of the executive team in miniscule relative to the amount paid to assembly workers. But you can keep making that the focus of your argument. Or, I made a mistake and clearly I'm making up facts. : )
"Look, neither GM nor UAW will break down that $78 figure. However, you can rest assured that both parties gain a lot by referring to the number. GM's management now gets to use the UAW as a scapegoat - "See, we're having to pay so much more than Toyota for our employees! It's not our fault!" Similarly, UAW gets to exaggerate the concessions they provide to GM - "See! We cut the cost by two-thirds! It's not our fault!" I'm surprised that you're falling for these clearly political moves."
So basically, I initially referenced the number that you gave me. The number that you pulled from the UAW website. You claim that this is likely an exaggerated number for the benefit of exaggerating the concessions they've made. So when I use the number, I should have known there was more behind the number that you provided, even though you cannot tell me for sure. After you suggested that we had to further research the numbers that you/UAW were providing, it does seem there is political motive behind the numbers. When you go back and read through, clearly I am not making up facts.
On November 26th, 2008 at 11:06 PM, xian said:
This is what happens when you let people in unions post on threads. Suddenly the lack of empathy for people who don't believe in reality becomes apparent and their right to speak their hollow drivel without being challenged gets compromised.
I sure am glad he's got the keys to the front page.
You Xian are allowed to post and You are in the Chicago Teachers Union, or whatever they call it, it's still a Union. You should be thankful You still have a job! "Organized Labor" The folks that bring You the weekend. I was in the Teamsters Union for 25 years working for the Government You hate, and am reaping the benefit of My pension. Enjoy Your Thursday, I know Thanksgiving is another mostly white holiday You can't stand!
"Like I said - the main problem with Detroit right now is that their cars suck. If they started making efficient, reliable cars on-par with their Japanese and European counterparts, we could start pointing our finger at the UAW. What we're doing now, in effect, is pointing our finger at the employees of buggy-whip factories as the cause of unprofitable buggy-whip companies"
In North America, according to the 2007 10K, they sold 4,516,000 vehicles on sales of $112 B with Cost of Sales at $106B and Selling/General/Admin at $8B, with 23% market share.
If the UAW premium is $2400/car * 4,516,000 = the total UAW premium =
$10,838,400,000. That is just in one year!
Is the issue executive pay which accounts for 0.39% of the labor costs? Is the issue that people aren't buying cars even though they bought 4,516,000 of them from GM last year in NA? Is it really the management at ALL THREE american auto makers can't manage? Or is that $11B (rounded) in corporate welfare the problem?
So what's next?
Maybe I shouldn't be taken seriously because I made two mistakes in thread. It would not be charecterisic of union-types to sensationalize a mistake. Clearly management cannot be trusted.
Maybe I shouldn't be taken seriously because I (rhetorical) spit on the faces of heroes. Anyone like me who is against a union is against a fair and honest wage, hates mothers, and somehow even hates wounded soldiers coming home from war. Clearly people against unions hate workers and heroes.
Maybe I shouldn't be taken seriously because I looked at the numbers provided by my debate opposition and used them against the opposition. People who do that are making up facts.
Maybe I shouldn't be taken seriously because right now I'm popping open champaign bottles at the expense of american workers who are going to lose their jobs. Clearly I am the evil stepchild of Gordon Gekko.
Disclaimer: I am being sarcastic.
"Exactly, and until this and the benefits issue are addressed, I'm just going to keep posting this over and over again."
I wouldn't expect anything less from a union guy.
Gregg: I have to suspect that you completely misunderstood xian's post, which was actually sympathetic to unions on its way to criticizing an anti-union poster. I am reminded of Bobby Fischer's advice to chess players: sit on your hands.
B: Everyone makes mistakes. You've made a couple in this thread, and a rather significant one in a thread a couple of weeks ago. This most recent mistake seems distinctive in that you claim to have meant exactly the opposite of what you actually said. But hey, at least you admit them, which is better than some other posters here, and I give you credit for that.
If your comment about champagne corks was in reference to me, however, you are still making mistakes, and have in fact misrepresented comments of mine three times in this thread alone. I never accused you of celebrating; rather, I took you to task for accusing me of celebrating, even though I had said nothing at all.
"If your comment about champagne corks was in reference to me, however, you are still making mistakes, and have in fact misrepresented comments of mine three times in this thread alone."
I was being a smart-ass. I'm consistently a smart-ass. I have made a couple mistakes in this thread and I made a signifcant one in a thread a couple of weeks ago, yes. If I make mistakes in the future, I will continue to appreciate those who point them out. Clearly, when I point to companypay.com which shows $1.558M in salary for the CEO something is off.
This is the second thread in recent memory where you used "just kidding" as an excuse to deliberately misrepresent someone.
I'm going to start calling you Judy Grimes.
"This is the second thread in recent memory where you used "just kidding" as an excuse to deliberately misrepresent someone."
This one of many threads where people are accusing me of saying things that I'm not actually saying. If you can't filter through the sarcasm, this is understandable. If you can't interpret "Disclaimer: I am being sarcastic", that is something completely different.
Did I say "just kidding" in this thread. No. You stated this in quotes as if it were fact. Clearly you are making up facts and should never be trusted ever, ever, ever, ever, ever, ever again.. (This is saracasm)
This is one of several threads in recent memory when someone can't hold their own in a thread and they have to start arguing the semantics of the conversation.
So what's next? Some lecture or speech about how your moral compass is so much better than mine? You going to tell me what I meant to say or what I was thinking when I wrote something? Are you going to wait until Thought Police comes back with something constructive to add to the conversation then jump in with an "exactly"? Are you going to give us another quality summation like, "What does it say about a person's perspective when they constantly say stuff like "What if workers were making 160K a year, even though I'm wrong and they aren't, but teh OMG aren't unions bad?!"!""!?!?!?!?!"!".
I have given you an inch with my mistake, but I'm not giving you a mile. I'm not responding to your BS unless you have a question about the actual topic or you have something constructive to add to the debate about the topic.
I posted five or six quality, content driven posts before I got frustrated with the total fabrications in your posts. It doesn't count as quality discussion if you just cite statistics and don't understand what they mean.
I'm not saying that you shouldn't be sarcastic. I'm saying that you often can't be sarcastic, as in you fail at being sarcastic, and merely end up misrepresenting people in a way that intentionally or unintentionally misleads others and derails the exchange of ideas.
But let's get back to content. The argument is not that no one, anywhere, ever buys a Chevy. It's that many people don't buy based on strictly on price. Otherwise, these massive rebate campaigns would work.
Whether they "Suck" or not is subjective, but whether they match up in quality to the non-American cars is less so. If American cars had developed better cars, there is no doubt that they would sell better. If you added nationalized health care and pension programs, they would sell even better since the prices would be nearly identical.
All told, Wagoner said, these costs add $1,500 to the price of each GM vehicle; that compares with about $300 for Toyota Motor Corp. in this country
That was 2005. Of course, health care costs have plummented recently, right? ;)
The union contracts helped worker maintain their wages even as the American automakers were passed by the competition. Instead of being forward thinking, the CEOs collected millions of dollars in salaries for driving the auto industry off of a cliff. Nothing in the union contract told them they had to avoid developing decent cars. Nothing forced them to pursue 8 lines of cars blowing $5 billion dollars a year.
Your absolutist statements are false, but the general sentiment is true: without unions, poorly run companies sustain higher profitability. At the extreme end however, content workers lead to higher productivity.
This is also true in reverse. I could say that the end game of non-regulated business is slavery. This is completely true. If I said that therefore, companies are evil and must be destroyed, I'd be a fool.
In reality, it's a push and pull game that results in ideal capitalism--the kind that makes us wealthy enough as a society to meet everyone's needs, and the kind that doesn't force poor people to act as organ banks for the rich.
After all, history looks far worse on un-unionized business than on over-unionized business.
"But let's get back to content."
Thank you.
"I got frustrated with the total fabrications in your posts"
The facts. The whole facts. And nothing but the facts:
1) The UAW premium is $2400 per auto sold. The UAW premium as referred to in this thread is figured by calculating the amount of benefits that a GM pays out that Toyota does not. This is an additional amount consumers pay for GM autos unrelated to the physical car. Source: The quote is attributed here to a man named Daniel Brooks, who is a professor of supply chain management at the W.P. Carey School, and he was asked to look at the United Auto Workers contract a year ago, 13 months ago from a broad perspective of risk. (link)
2) The UAW Concessions: 2005 UAW Health Care Settlement Agreement -Reduced hourly OPEB liability by $14.5b, 2006 IUE-CWA Health Care Agreement-Reduced OPEB liability by $500m, 2007 UAW National Agreement -Reduces new-hire Tier II employees base pay from $28/hour to $15/hour and substantially decreases benefits -Reduces total hourly expense for these employees from $78 to $26. Source: UAW website per Thought Police. $78 figure has been brought into question.
3) The average private sector worker earned $25.36 an hour in 2006--$17.91 an hour in cash wages and $7.45 an hour in benefits such as pensions, paid time off, and health insurance. Autoworkers at Japanese plants located in the United States earn substantially more than this: between $42 and $48 an hour in wages and benefits, which amounts to over $80,000 a year in total compensation.The typical UAW worker at the Big Three earned between $71 and $76 an hour in 2006. This amount is triple the earnings of the typical worker in the private sector and $25 to $30 an hour more than American workers at Japanese auto plants. The average unionized worker at the Big Three earns over $130,000 a year in wages and benefits. Source: heritage.org. Whether or not the $130,000 per year figure includes compensation to retired employees has been brought into question.
4) At a Toyota plant, Leonard Habermehl is a skilled repairman and makes up to $85,000 per year. (link) Source: NPR news article.
5) UAW's 2007 Entry-Level Wages. (link) Souce: UAW.
6) 1998 Averaqe Wage: (all job classifications) $21.18 per hour (includes COLA) (link). Source: GM per Thought Police.
7) According to business week, GM pumps $8.7B/year into the pockets of assembly workers. (link)
8) According to companypay.com, the GM executive teams earns $5.9M in salary and $34M with all the special benefits thrown in. (link)
9) Total paid to executive salary / total paid to assembly workers = $34M/$8.7B = 0.39%.
10) Detroit has lower productivity, adding to the cost per vehicle. Source: unknown per Thought Police's graph.
11) GM lost 2.7% market share between 1Q 2002 and 1Q 2005. Source: World's AutoInfoBank, via Bloomberg via Thought Police.
12) In North America, according to the 2007 10K, GM sold 4,516,000 vehicles on sales of $112 B with Cost of Sales at $106B and Selling/General/Admin at $8B, with 23% market share. Source 2007 10-K filing.
13) Selling/General/Admin is defined by about.com as "SGA expenses consist of the combined payroll costs (salaries, commissions, and travel expenses of executives, sales people and employees), and advertising expenses a company incurs." (link)
14) 4,516,000 vehicles * $2400 = $10,838,400,000 = Total GM's UAW premium.
15) $10,838,400,000 > $8B. Total UAW premium > Total Selling/General/Admin in North America.
16) At Toyota, a worker's pension consists of an investment account in which the company deposits the equivalent of 5 percent of a worker's earnings each year, typically around $3,000 to $3,500. An employee can supplement that with a 401(k) plan, and the company matches contributions up to a maximum of 4 percent of the worker's income. Source: NYT (link)
Please let me know if there are any errors or anything left out that is material to the debate.
"In reality, it's a push and pull game that results in ideal capitalism--the kind that makes us wealthy enough as a society to meet everyone's needs, and the kind that doesn't force poor people to act as organ banks for the rich."
Considering that every UAW company except CAT (which put them on the street) is failing and the companies are no longer sustainable on their own (even when selling 4.5M cars a year in NA, it is reasonable to conclude that the company was pushed (or pulled depending on how you look at at) into bankruptcy. I don't believe it is reasonable to conclude that there is an epidemic of bad management at all of these companies. Given the failure rate of union operations, it doesn't seem reasonable to me that a stonger union is the answer. I'd say their needs to be some pulling/pushing in the other direction and a lot more of it.
Anti Union <> Pro-slavery. : )
1) Makes sense. Fix the problem--level the benefits playing field. Get rid of the most inefficient health care system in the world.
2) Doesn't this speak to the willingness of unions to make concessions?
3) Irrelevant. You make more per hour than people who recycle aluminum cans that they find on the street. The second part has been shown to be fabricated polemical representation of the data.
4) Please connect this to an argument.
5) Look reasonable.
6) Also look reasonable
7) Have no idea what this means. It's completely worthless without the context. They don't literally pump money into their pockets, and I don't say that to be a pain, I'm just wonder what they are counting, how the money is delivered and in what time frame. It's a horrible way to put it as it conveys nothing.
8) That's not the management. That's the executive team of 5 dudes who destroyed the company and make 34M/year. From the looks of it, they added another to the team last year for $4.4 million.
9) So 5 dudes make 0.39% of the amount that the rest of the workers make, not including the thousands of others on the management team. That's a tremendously large amount. What would be your guess at the percentage that the entire management team makes compared to the workers' salaries.
10) Lower productivity--I'm slow, I don't understand how this is measured. Which graph is it?
11) Losing market share has to do with making crappy, cheaper cars.
12-15) I'm not following what how you are connecting these.
16) Seems reasonable.
Given the failure rate of union operations, it doesn't seem reasonable to me that a stonger union is the answer.
I like this logic. Here's the "greatschools.net" ranking for Judah Christian School: 4 stars out of 5. Judah Christian does not have union teachers and its students are well known to be underachievers on standardized tests. Here's the ranking for Stevenson High School: 5 stars out of 5. Stevenson is a model school, and is full of union employees.
Therefore, according to your logic, the answer is obvious - Judah needs unionization ASAP. After all, there can't possibly any other explanation. Right?
I'd say their needs to be some pulling/pushing in the other direction and a lot more of it.
That's an interesting analysis, considering the unions are now in the weakest state we have seen since the 1920s.
10) Lower productivity--I'm slow, I don't understand how this is measured. Which graph is it?
It's this one:
That shows the number of assembly hours per vehicle. The data comes from the comprehensive "Harbour Report." It partially explains why Detroit has a higher per-vehicle labor cost.
"Get rid of the most inefficient health care system in the world."
This does not account for costs that are assumed on the back end by the taxpayer. You will likely argue that it will costs the taxpayer less and I will argue it will cost the taxpayer more. This argument would dilute the clear and quantifiable UAW premium and the impact it has on US auto industry. If you want to debate the benefits of a single-payer health care system, please start a thread.
"The second part has been shown to be fabricated polemical representation of the data."
IF you are correct in your speculation, it was fabricated by both the UAW and the heritage.org site.
"Please connect this to an argument."
In a limited context, it demonstrates that that Toyota pays factory workers a good wage even though they are not union.
"Have no idea what this means."
It has been used in calculations throughout this post with citation. If you have better data, feel free to provide it. It is also worth mentioning that Business Week is not heritage.org.
"So 5 dudes make 0.39% of the amount that the rest of the workers make, not including the thousands of others on the management team. What would be your guess at the percentage that the entire management team makes compared to the workers' salaries."
What I can tell you is that total selling/general/admin in NA = $8B, so it's less than $8B which is 7.5% of the cost of sales ($8B/$106B). Keep in mind there is a whole lot you have to remove from that $8B to get to the "management" amount. There is no indication that management is overpaid. Keep in mind that the UAW premium is greater than whole entire SGA amount. Given this, all we seem to hear about is excessive pay to CEOs when the executive team doesn't even get paid 1% of the payroll. Even if we doubled their pay, I would much more concerned with the real cost issues - not the philisophical ones.
"Lower productivity--I'm slow, I don't understand how this is measured. Which graph is it?"
We can compare the relative productivity of the companies and see that a Detroit has lower productivity, adding to the additional labor cost per vehicle.
"Losing market share has to do with making crappy, cheaper cars."
Which could have been brough on by pressures to make good short-term business decision and poor long-term business decisions given the business contraints that do not exist in Toyota. For instance, you can't downsize because you have to continue paying workers in that job bank thing they have.
"I'm not following what how you are connecting these."
I'm not sure I can lay it any more clear. You will have to be more specific.
"That's an interesting analysis, considering the unions are now in the weakest state we have seen since the 1920s."
Where are they still strong:
Airlines - Failing.
Schools - Failing.
Government - Failing.
US Auto Companies - Failing.
If not failing, struggling financially. Then again, it could all be because of bad management. I will concede to you that anything's possible. (sarcasm)
You are doing the pretentious latin fallacy thingy: sequence doesn't equal causation:
Everyone from the 1700s ate food.
Everyone from the 1700s is dead.
Therefore, we must avoid all food.
All four of the industry you cite have been taken over by neo-liberal short-term profiteers. Why not point in that direction? They are famous for conceding to unions until they feel they can win a public relations campaign and then crush the union. They are uninterested if they destroy the efficiency of the industry in the meantime.
They are famous for conceding to unions until they feel they can win a public relations campaign and then crush the union.
Well, we can also say that unions form in response to poor management. After all, if the management were good, the union would provide absolutely nothing to its members (example: Toyota).
"All four of the industry you cite have been taken over by neo-liberal short-term profiteers."
I typed in "neoliberal short-term profiteers" on google and got this website as the first hit. No joke. "Socialist Appeal" on socialist.net. I appreciate the chuckle. : )
"After all, if the management were good, the union would provide absolutely nothing to its members (example: Toyota)."
I think it is a very tough to sell to keep pitching the bad management theory. Anyone can see there is a very strong correlation between a stuggling/failed organization and the presence of a strong union. At some point the taxpayer is going to look beyond the populist propoganda and start paying attention to how much the welfare premium is costing them. Those costs can only be buried in burocratic layers for so long before the bottom falls out. GM was a long time in the making and I'm quite shocked it took this long for it to happen. When you start hearing ideas like gross receipts tax and raising fees on small businesses, you know the state of illinois is not far behind. When you hear that the city of champaign cannot even salt side roads (even after all this incredible growth over the past decade plus), i have a feeling people will start asking how this could be. How did all this growth get squandered? The union will have their work cut out for them...
I think it is a very tough to sell to keep pitching the bad management theory. Anyone can see there is a very strong correlation between a stuggling/failed organization and the presence of a strong union.
Yes, but there's a stronger correlation between inferior, outdated products and a struggling/failed organization.
Example:
SWA - efficient, low cost, point-to-point, standardized aircraft, lean operations = success
United/Northwest/Delta - inefficient, strange tier pricing, hub-and-spoke, highly variable aircraft, bloated operations = failure
Toyota, Honda - efficient, high-value, stylish, reliable vehicles = success
GM, Chrysler, Ford - inefficient, low-value, unreliable boats = failure
Seriously, I don't think it's a tough sell when you take a look at Detroit's market share over the past 30 years. It's steadily fallen - that's the reason they're in a crappy place. Unions don't cause you to offer crappy cars to the market. Unions don't cause you to abandon innovation.
Oh well, you'll never accept that the major reason Detroit is failing is because they make crappy cars. Feel free to keep pointing your finger at the UAW all you want. The rest of us see through the BS.
And as evidence of this idea, besides looking at the market share losses/gains of the Japanese/Germans relative to Detroit, I also point to the volatility of their stock prices. When oil goes up in price, all of the car companies lose value - but in recent years, Detroit drops twice as fast.
WSJ Mentions:
"In 1970, General Motors, Ford and Chrysler made about 90% of the new cars sold in the U.S. Today their share is closer to 40%. Their market share of light trucks has also declined, but less precipitously thanks to a 25% tariff on many imported light trucks."
I don't think anybody should be surprised that when you start off with 90%, your market share will decrease with increased competition.
"Oh well, you'll never accept that the major reason Detroit is failing is because they make crappy cars. Feel free to keep pointing your finger at the UAW all you want. The rest of us see through the BS."
At the very least, everyone should be able to appreciate the $11B UAW welfare premium every year that that is greater the entire amount selling/general/administrative expense at GM NA. Everyone should be able to appreciate that is $11B per year that does not get applied to innovation. Everyone can appreciate that american-made UAW autos costs $2400 more than american-made non-UAW autos. But no, the problem is that management at ALL THREE UAW auto makers sucks and they make crappy cars even though GM sold 4.5M last year.
I suspect that market share will further fall. Why, because more people are going to look at the UAW and appreciate that the Malibu (with a starting MSRP at $22,275) includes a welfare premium of more than 10% of the purchase price. $2400/$22,274 = 10.77% >10%. I think you're going to have think of something better than bad managment once people catch on. The whole buy american campaign doesn't work when other autos are american made.
"The rest of us see through the BS". I think the rest of us are starting to appreciate how deep in BS we have been this whole time. We need to rip the band-aid off.
Seems like nothing new is being added to this long convesation. Here what business week envisions as a revitalized GM and it sounds intriguing:
What would a healthy GM look like? It might have five fewer assembly plants, building around 4 million vehicles a year in North America instead of 5.1 million. That would slash U.S. market share to around 20%, but factories would hum with real demand, stoked less by rebate giveaways and cheapo rental-car sales. Workers would have a cost-competitive health-care plan but would fall back on government unemployment benefits when hard times demanded layoffs. Profitable auto sales and finance operations would fuel a richer research budget, tightly focused on four or five divisions instead of eight.
This new GM might make two-thirds as many models: Chevrolet, perhaps its most recognized global brand, handling trucks and mass-market cars; Saturn, behind its cool new Euro styling, selling more expensive cars with design flair. A resurgent Cadillac would parade advanced technology and luxury. Hummer would only last as long as brawny SUVs are hip. GMC, which is very profitable these days, would stick around if Chevy couldn't satisfy America's yen for trucks. Pontiac, Buick, and Saab would follow Oldsmobile to the scrap heap.
On the other hand, GM also famously spends over $1,600 per vehicle on the healthcare costs
B of Business are you saying that we should have a single payer government run healthcare system, after all who else is going to pay for healthcare if the company doesn't?
I think the other costs you reference are give backs from the union as they are trying to help the companies compete. You’re saying the Unions and the Companies who are directly involved in these negotiation know less then you do about the companies they work for and manage?
I don’t think the economy can run on jobs paying $7.50 an hour with no benefits. I look at the standard of living in Japan or China and I like how it looks here better. Management always wants to drive down pay and benefits in larger companies and cares little for their employees, whether they do a good job or how much they produce for so someone has to help employees get what employees deserve.
"B of Business are you saying that we should have a single payer government run healthcare system, after all who else is going to pay for healthcare if the company doesn't?"
Golly, I guess healthcare can't exist unless a company pays for it. (sarcasm)
"I think the other costs you reference are give backs from the union as they are trying to help the companies compete. You’re saying the Unions and the Companies who are directly involved in these negotiation know less then you do about the companies they work for and manage?"
Give backs? How incredibly charitable of them. I'm saying that the UAW premium is $2400 per vehicle or $11B in total UAW premium. I'm speculating that people are going to be taken back by this and less likely to pay for it. If people want to pay for it, fine. If they don't, we shouldn't expect them to. The unions and companies who are directly involved clearly aren't sustainable, unlike non-UAW operations in the exact same industry. The American consumers and taxpayers are going to catch on sooner or later and this UAW bailout might be great opportunity to raise awareness.
"I don’t think the economy can run on jobs paying $7.50 an hour with no benefits. I look at the standard of living in Japan or China and I like how it looks here better. Management always wants to drive down pay and benefits in larger companies and cares little for their employees, whether they do a good job or how much they produce for so someone has to help employees get what employees deserve."
That's right. If we don't support unions everyone will be forced into minimum wage jobs and we'll all become slaves to the mighty corporations. (sarcasm) There were 27.2M businesses in the US in 2007, according to SBA. Lots of good jobs out that pay more than minimum wage. Here we have more the same: big bad management doesn't care for their employees. If there's a problem, it's bad management. If there's a profit, management is greedy for not giving more to the real american heroes. And here we sit today with american taxpayer being asked to give more and more "givebacks" with no end in sight.
B for Business it seems you give a lot of sarcasm but few answers. The cost of healthcare is about $1200 a month per person even McCain's proposal was to give $5000 tax credits to help pay for healthcare. So I ask again who will pay if the employer des not pay?
How incredibly charitable of them. I'm saying that the UAW premium is $2400 per vehicle-You keep quoting this figure when $1600 of it is insure then you list the other $1000 for vacation and training. So now we are not going to allow employees to take vacations or stay home with their families for Thanksgiving Holidays. I suppose Stooge you are going to take away the Christmas Turkey.
Of course the cost of production is higher in the United States we have a higher standard of living I think part of the reason is those Unions.
Maybe we should just go back to the early days, have 7,8, and 9 year old kids working in garment factories working on old machines because with their little hands, they can get them inside the machinery better,,,,,of course they lost a few fingers along the way,,,,,but that is just the cost of doing business, Maybe we should also bring back workhouses for the poor, forced labor. Without the strong union movement of the early 20th century, this country would be nothing,,,,even people like B for Bus, would find it hard to be a success. We always seem to forget the very good and justifiable reasons for things to originate, I for one dont care if the autoworkers can make 300 dollars per hour, the more the better,,,and please quit trying to justify the fatcats drawing the big money,,they in reality are about as worthless as mams on a boar hog, really. Even in the environs of Champaign-Urbana, I know many of the CEO's of the biggest companies here,,,,,,,most of them milk every dime they can for themselves and leave table scraps for the workers, if they can. I will not call for a workers revolution per se,,,,,,,but I would sure as hell call for an end to the greed and ignorance of many in the management class,,,,I wonder if some on here are grads of Rush Limbaughs,,,school. :)
"So I ask again who will pay if the employer des not pay?"
Individuals and/or taxpayers.
"then you list the other $1000 for vacation and training. So now we are not going to allow employees to take vacations or stay home with their families for Thanksgiving Holidays. I suppose Stooge you are going to take away the Christmas Turkey."
Throughout this thread we have been comparing UAW to non-UAW. Your argument would be incredibly sad if Toyota employees were allowed to go home and enjoy the holidays.
Anti Union <> Anti Christmas Turkey
"but I would sure as hell call for an end to the greed and ignorance of many in the management class"
At least you said "many". : )
I don't blame management or owners for all of our problems there are cycles in the economy, nor do all businesses or managers treat there people poorly. If businesses don't make money they won't be able to employee people I like receiving a check. I guess "many" may even be strong. I think in the modern world of Marketing (not advertising but business development, management and production) there is no line item left for the employee. I think that is a mistake there was a time when people made up a company now it seems labor costs are considered something that should be avoided at all costs even if it destroys the company in the long term.
"I think in the modern world of Marketing (not advertising but business development, management and production) there is no line item left for the employee. I think that is a mistake there was a time when people made up a company now it seems labor costs are considered something that should be avoided at all costs even if it destroys the company in the long term. "
(cue the violins)
The idea that labor is something that should be avoided at all costs? Really? Is there really no line item left for the employee when there are currently 6M employers in the US according the 2007 SBA numbers? Speaking of line items, it would be appropriate to create a line item named corporate welfare so everyone can appreciate the number. This is much different than the idea that labor "should be avoided at all costs". Much different.
These threads have given me much pleasure. No, it is not pleasant to see someone like B succumb so fully to an illogical hatred of "unions" (whatever that means, who knows?). And no, it is not pleasant to lose respect for a poster because of his continued dismissal of logic and nuance.
No, what is pleasurable about this thread is the fact that it doesn't matter. Welcome to the wilderness, everybody. This is what it looks like. Angry, illogical attacks on the Joe Six Packs of America from a disgruntled conservative who thinks pensions should be slashed and health care should be optional for all Americans. One can only imagine what kind of extreme arguments would be spewed forth from B if environmental regulations were the topic of the day. Can you imagine?
But it doesn't matter. The most progressive president in a generation, an almost filibuster-proof majority in Congress. It literally does not matter what the U.S. Chamber of Commerce spews forth about unions anymore (or their local mouthpiece, "B").
Welcome to the wilderness my friend. Make sure to wear a helmet when pounding your head against the wall for the next four years.
"Angry, illogical attacks on the Joe Six Packs of America from a disgruntled conservative who thinks pensions should be slashed and health care should be optional for all Americans."
Of course, pointing out the $11B UAW american consumers pay when they don't pay it for american-made toyota vehicles is an attack on Joe Six Pack even after pointing out the Joe is doing pretty good with his job at Toyota. : )
The only thing extreme about this post was the ease pointing out the troubled success rate of the union system, the ease pointing out the silliness of focusing on CEO/executive pay when it only amounts 0.39% of the UAW premium (not even including wages), the ease pointing out that american consumers are paying an extra $11B for GM features not relating the physical car. Talk about extreme!
If you think I'm angry and disgruntled, think again. I'm just pointing out the obvious. Actually, I'm become "extreme"ly accustomed to the collectivist speak. I'm almost looking forward to liberals trying to explain to the american people that Walmart needs to become like GM. I'm looking forward to chicago liberals attempts to fix the pension crisis in Illinois. This is going to make for some good entertainment, kindof like a dog chasing its tail.
The only thing extreme about this post was the ease pointing out the troubled success rate of the union system, the ease pointing out the silliness of focusing on CEO/executive pay when it only amounts 0.39% of the UAW premium (not even including wages), the ease pointing out that american consumers are paying an extra $11B for GM features not relating the physical car. Talk about extreme!
Wow, still shilling on this strain of intellectual bankrupcy. Quick show of hands, who believes that "management pay" (the original concept being discussed) consists of the pay of 5 dudes? Who thinks that 5 dudes in a massive company commading 1/250th of the entire compensation deserves the modifier "only"?
"Who thinks that 5 dudes in a massive company commading 1/250th of the entire compensation deserves the modifier "only"?"
Yet when you take the ENTIRE $8B amount of selling/general/admin, which includes management pay and EVEN includes marketing expenses, it is STILL less than the $11B in UAW premium that consumers of american-made-non-UAW-autos do NOT have to pay. In that $11B, it does not even include the wages of assembly workers. This just happened with GM and Joe Six Pack can appreciate that $2400 premium he's being asked to pay for Chevy Malibu that has nothing to do with the physical car.
The idea of corporate welfare can only be sustained by eliminating competition. The unions will continue to try and eliminate competition. They can only thrive in industries where they have unionized the entire industry or paid off enough politicians to insulate them from competition. If competition is premitted, the unsustainability of corporate welfare will certainly become exposed and the credibility of the union will likely be at stake.
Conventional wisdom is like concrete. Once it hardens, there is nothing you can do about. The unions have been, and will continue, to convince people that they are victims and bad management is the root of all evil. With GM, the corporate welfare burden that consumers pay is clear, quantifiable, and has been exposed. Once that sets in consumer minds, it will be entertaining to watch politicians continue to ask for tax increases as the taxpayers notice the welfare burden associated with government employees that we never really could afford. They might start asking why the governor mandates that all state road contracts must be union while we don't have the funds for capital improvements. They might start asking why a city that has experienced such tremendous growth over the past decade or so and cannot even affort to salt secondary streets.
Intellectual bankruptcy will be demonstrated by those who continue to support systems that are not sustainable and keep arguing that more money will solve everything.
Intellectual bankruptcy will be demonstrated by those who continue to support systems that are not sustainable and keep arguing that more money will solve everything.
Or by people who keep parroting out facts about how poorly paid the five dudes running GM into the ground are, ignore the scope of the history of capitalism and how societies are most profitable when capitalism and communal worker rights are balanced and generally twist every event they stumble across into a poorly supported diatribe against unions.
"Mommy! This milk tastes sours!"
"F******* Unions!"
"Or by people who keep parroting out facts about how poorly paid the five dudes running GM into the ground are"
Of course, I have not claimed that the five dudes are poorly paid. Nope. Not once. Not even close. Arguing this in relation to intellectual bankruptcy is pretty much the icing the cake.
On a political blog, I'm being criticized for using facts to support my argument. Very nice. : )
When all else fails......
"Mommy! This milk tastes sours!"
"F******* Unions!"
B for business-I think you are blaming the Unions for asking for things most non-union employees get Vacation, Holidays and Healthcare then you blame them for being more successful. You also don't seem to blame the management of those car companies for agreeing to those contracts. You just seem to want to have a boogey man to blame for the ills of our economy so that business can keep screwing up remain unaccountable. I think the heads of the car companies should be fired. I also don’t agree with many that say they should have known and started building small cars earlier so they could be more environmentally conscience. All of the American car market was not ready to move to those small cars and the car companies have to sell larger vehicles to cover their costs. America is just a larger country so the American people want larger more comfortable cars to travel in which I know people don’t like.
In 2007, GM sold 4.5M autos. The management at GM has $11B in additional costs that their competitors do not have. There were no suprises that this was coming down the pipeline. No surprises at all. "You also don't seem to blame the management of those car companies for agreeing to those contracts." Please go back through and read the thread. You will see this is simply not accurate. "You just seem to want to have a boogey man to blame for the ills of our economy so that business can keep screwing up remain unaccountable." When a business screws up they file for bankruptcy and/or go out of business (in theory).
"B for business-I think you are blaming the Unions for asking for things most non-union employees get Vacation, Holidays and Healthcare then you blame them for being more successful."
Take a look at GM, Ford, and Chrysler. Would you say they are successful? I have also provided some detail on their benefits from heritage.org to give you some perspective:
Only 38 percent of the $75.81 an hour that Chrysler's UAW workers earned came as base wages. The rest came as benefits (though some of those benefits, such as overtime premiums and paid vacation days, are paid in cash). Health care costs are the most expensive benefit, accounting for over a quarter of total compensation.
Gold-Plated Health Care
Health care costs the Big Three so much because the UAW negotiated gold-plated health benefits that include medical, hospital, surgical, and prescription drug coverage. These benefits also cover durable medical equipment (e.g., hearing aids), dental benefits, and even Lasik eye surgery. For all this, GM workers and retirees must pay monthly premiums of $10 for an individual and $21 for families As a result, UAW workers and retirees have some of the most comprehensive and least expensive health care in America.
Competitive Disadvantage
These gold-plated health care benefits put the Big Three, and especially GM, at a competitive disadvantage. For example, GM has three times as many retirees as active workers, and health care costs for both groups cost the company $4.6 billion in 2007. The UAW's lavish health benefits added $1,200 to the cost of each vehicle produced in the United States.
The Japanese automakers, by contrast, provide standard health benefits to their American employees. Consequently, health care for active workers cost Toyota $215 per vehicle in 2006.
Every American buying an auto made in Detroit pays an extra $700 to $1,000 to support health benefits far more generous than most Americans receive.
UAW employees also receive the following extraordinary provisions:
You still haven't proved that the problems in the industry are a result of the union contract. You've laid out a bunch of very questionable "facts" (most of which I don't believe due to your source's previous exagerations) and made the leap that if the union didn't exist, everything would be peachy.
This is the problem with your analysis here, and on the other union threads. You don't do the hard work of proving the connection between your facts and the conclusions you are drawing. It doesn't matter if the union people are driving to work in limos - that doesn't automatically imply that their company's woes are due to their salaries. You have to prove the connection, not assume the connection.
There is an axe to grind here and there is little else going on besides grinding. Over the last three years the UAW has made major concessions to the auto makers, to little avail. The Big Three are industrial corporations that are struggling to compete in a global marketplace where other countries (like Japan) treat their sacred cows (like Toyota or Mitsubishi) with a level of deference that you and other conservatives find appalling. The Japanese government pretty much paid for the research that led to the battery which powers the Prius. The Japanese government also picks up the tab for all of the health care and pension costs for Toyota's domestic workforce. And yet Toyota's cars are even more expensive than GMs.
What we are seeing in the world today is the collapse of the countries that have bought into America's neo-liberal philosophy toward economics. The countries that are the strongest right now are those that have resisted the privatization and deregulation of their markets. Advocating the destruction of unions and arguing against government intervention in the marketplace at this point is like asking the Captain of the Titanic to plow into a couple more icebergs because it was so good for the ship the first time.
"You've laid out a bunch of very questionable "facts" (most of which I don't believe due to your source's previous exagerations) and made the leap that if the union didn't exist, everything would be peachy."
So you are questioning the UAW benefits I listed because heritage.org used the same (or very similar) high $70+/hr number that the UAW website initially used? Are you saying you don't believe the union doesn't receive those benefits?
"and made the leap that if the union didn't exist, everything would be peachy."
I don't say things like "everything would be peachy" and I really wish you'd stop putting words in my mouth. Instead, I've pointed out that the UAW premium on cars is $11B annually that consumers of non-UAW cars do not have to pay.
According to the thetruthaboutcars.com, "I can say 100 percent that Toyota received absolutely no support - no money, no grants - from the Japanese government for the development of the Prius," Toyota spokesman Paul Nolasco tells the AP."
"Advocating the destruction of unions and arguing against government intervention in the marketplace at this point is like asking the Captain of the Titanic to plow into a couple more icebergs because it was so good for the ship the first time."
Advocating the destruction of unions and arguing against unecessary government invervention in the market place at this point is like removing the icebergs from the equation so the ship is less likely to sink suddenly. Each new burocratic layer that we add is another iceberg. Smart captains avoid icebergs.
You are blaming the unions for the woes currently affecting GM. You've done none of the heavy lifting required to prove your case. Instead, you've simply cut-and-pasted some misleading (at best) statistics about what UAW workers are paid/have been paid in the past and then declared the case settled. Since you have refused to even take other issues under consideration (nationalized health care and pensions in Japan, lack of innovation, inefficiencies, poor strategic planning, NAFTA, etc.) your argument is not persuasive.
There are few things that are really true, but I can tell you without any doubt that nothing is ever about one thing. I don't doubt that the unions have played a part in the problems facing the Big Three, but they do not explain the entire problem. And, most importantly, destroying the unions is not the way to fix GM. On the contrary, having a highly paid and highly skilled (if smaller) workforce is probably step one toward creating an effective 21st century automaker.
Look around Planet Earth today. Which countries' economies are sinking? Which countries are losing their power, their hold on the world? And which countries are just fine, thank you very much, and gaining power as every day goes by? The privatized, deregulated, globalization-at-any-cost markets are in big trouble this morning. And the countries that have kept a check on their neo-liberal reforms and steered the ship toward a more Keynesian style are surviving just fine. In fact, many are loaning us money because they have it to loan and we don't.
America used to be one of those countries. We used to be the biggest, best industrial economy in the world. Those days are behind us. Placing the blame at the feet of the UAW makes about as much sense as blaming the coal in the Titanic's engines for hitting the iceberg.
"You've simply cut-and-pasted some misleading (at best) statistics about what UAW workers are paid/have been paid in the past and then declared the case settled."
Of course, I have never declared the case settled. I will continue to provide statistics to support my arguments. If you have any to provide to the discussion, by all means, please share them with us.
"America used to be one of those countries. We used to be the biggest, best industrial economy in the world. Those days are behind us."
We do suck horribly in areas where competition and choice is removed. We do suck when we work to mask the costs of these efforts within layers of burocracy, where costs are further buried in the financial statements so consumers and taxpayers are not able to appreciate the real costs of welfare. In a system that allows this to happen, there are no victims. There are only volunteers. If people want to keep paying for this in products and tax increases, so be it. If they can't determine the costs because the system is engineered so they can't easily do so, then maybe they are victims.
How will consumers feel about paying $2400 additionally per car now where they can appreciate the welfare premium? How will the taxpayers feel once they realize $11B goes to pay the annual welfare premium at GM? Will the liberals pretend this premium doesn't exist or will they argue this is the premium they have been fighting for and will continue to fight for? This will be very interesting.
America will be the biggest, best industrial economy in the world if we embrace the competive nature of our culture that got us made us the best in the first place. You can only blame CEOs and say "middle class" so many times before the american people are going to want to crack open the cover. I suspect american taxpayers are not going to support paying to support welfare once they realize they are paying for it. That is just a hunch.
"Look around Planet Earth today. Which countries' economies are sinking? Which countries are losing their power, their hold on the world? And which countries are just fine, thank you very much, and gaining power as every day goes by? The privatized, deregulated, globalization-at-any-cost markets are in big trouble this morning. And the countries that have kept a check on their neo-liberal reforms and steered the ship toward a more Keynesian style are surviving just fine. In fact, many are loaning us money because they have it to loan and we don't.
America used to be one of those countries. We used to be the biggest, best industrial economy in the world. Those days are behind us. Placing the blame at the feet of the UAW makes about as much sense as blaming the coal in the Titanic's engines for hitting the iceberg."
Wow, talk about failing to do the heavy lifting needed to support an argument. Would you care to name a few other countries like the US that are in big trouble, and the ones that are surviving just fine?
If what you claim is true, why are countries lending us money? If there is better growth elsewhere, why not send it there, or invest it in their own country? Are they lending money out of the goodness of their hearts?
Would you care to name a few other countries like the US that are in big trouble, and the ones that are surviving just fine?
Sure. Thailand, Indonesia, Argentina, several countries in Africa are all examples of countries that bent over big time for the IMF's neo-liberal "reforms". And these countries are falling apart more quickly than even the U.S. financial sector.
On the other hand, China has steadfastly refused to play by the neo-liberal rules. The Gulf States are another example, as is Russia. I won't speak of Venezuela, since even mentioning the word "Chavez" will cause the neo-liberals to vomit, but a rational, non-emotional analysis of what Chavez has done economically would be wise.
My point isn't that these countries are to be modeled completely in everything they do. On the contrary, these are some of the worst human-rights abusers on the planet. And they torture people, too. But taking all of that away and looking soberly and rationally at how they have resisted neo-liberal reforms, one has to be at least slightly impressed. Rome is burning, and they are roasting marshmallows.
The economic reforms this country has undergone, and forced many of our trading partners to undergo, has undercut our national security. This economic crisis has weakened American prestige and power around the globe almost as much as the Iraq Fiasco. We are no longer the big kid on the block, our power is waning. And when historians look back, it will be globalization, the destruction of the American middle class, and the neo-liberal economic reforms that will be blamed.
B would like to accelerate the American economy in that disasterous direction. He is wrong.
"On the other hand, China has steadfastly refused to play by the neo-liberal rules. The Gulf States are another example, as is Russia. I won't speak of Venezuela, since even mentioning the word "Chavez" will cause the neo-liberals to vomit, but a rational, non-emotional analysis of what Chavez has done economically would be wise.
My point isn't that these countries are to be modeled completely in everything they do. On the contrary, these are some of the worst human-rights abusers on the planet. And they torture people, too. But taking all of that away and looking soberly and rationally at how they have resisted neo-liberal reforms, one has to be at least slightly impressed."
I disagree about the relative financial health of the Gulf states, but I'd like to discuss the others you cite: China, Russia and Venezuela. Their political and econonic systems are inextricably linked. They are resisting "neo-liberal" reforms not because they're opposed to them as a bad economic policy, but because their ruling elites are afraid of empowering their people economically or any other way, because that empowerment might lead them to throw off their political shackles. I don't think it's fair to cite China/Russia/Venezuela as economic models to emulate given that their economic systems are a direct offshoot of their political oppression.
I don't think it's fair to cite China/Russia/Venezuela as economic models to emulate given that their economic systems are a direct offshoot of their political oppression.
And vice-versa. My point isn't that they should be emulated, only that these three countries (especially China and Russia) are now positioned to dominate the 21st century economically. In fact, it is my opinion that our obsession with neo-liberalism (as opposed to Keynesian) economics over the last 30 years has weakened our hand on the global stage. Fighting China and Russia economically (where the real battles are won and lost) is now going to be almost impossible.
America still is the shining lamp on the hill (imo) - democracy and capitalism are still the cornerstones of our civilization. But both must be tempered to work correctly and to ensure prosperity and strength of country. We have much to give to the world in regard to democratic reform and free markets, but not when we err so far to the extreme in both regards. We cannot bring democracy through our armies and we cannot spread capitalism through deregulation and excess. On the contrary. By over-reaching in both regards we have now, I fear, made the world a much less hospitable place for American values. The Chinese and the Russians will fill that gap, and there is little we will be able to do to stop them.
"On the other hand, China has steadfastly refused to play by the neo-liberal rules. The Gulf States are another example, as is Russia. I won't speak of Venezuela, since even mentioning the word "Chavez" will cause the neo-liberals to vomit, but a rational, non-emotional analysis of what Chavez has done economically would be wise."
I think you should author a post to discuss how the United States should be more like China, Russia, and Venezuela. I'm intrigued. Hopefully in this forthcoming post you will provide us at last some detail on these "neo-liberal" rules, or the "economic reforms", or how exactly they relate to the alleged undercutting of our national security... rather than expecting us to simply trust you.
"B would like to accelerate the American economy in that disasterous direction. He is wrong."
Seriously, what's it's going to take for this guy to stop telling me what I'm saying, what I mean to say, what I would like, etc? If I want to accelerate something somewhere I'll tell you. If you are curious if I want to accelerate something somewhere, ask a question. Amazing.
"My point isn't that they should be emulated, only that these three countries (especially China and Russia) are now positioned to dominate the 21st century economically."
Well, I don't think I could disagree more strongly.
Neither China nor Russia, even with their massive wealth of human and natural resources, will achieve anything close to their economic potential as long as they restrict their citizens' political and economic freedom as much as they do now.
"We have much to give to the world in regard to democratic reform and free markets, but not when we err so far to the extreme in both regards. We cannot bring democracy through our armies and we cannot spread capitalism through deregulation and excess."
Again, I couldn't disagree more strongly. Regardless of how you feel about our economic system, we are not "erring so far to the extreme" in terms of democratic reforms. If anything, we could be more open in terms of voter franchise and citizenship than we are now.
And democracy has always been spread by both military power and the power of individuals' will. It's how we won our own freedom, and we've spent a good portion of the last 100 or 150 years helping others achieve the same, often using our military power to do so. The examples are obvious: Japan. Germany. Much of Europe had never known democracy until we either liberated them or flexed enough military muscle that their oppressors collapsed.
"By over-reaching in both regards we have now, I fear, made the world a much less hospitable place for American values. The Chinese and the Russians will fill that gap, and there is little we will be able to do to stop them."
Again, I disagree. People - individuals - will never flock away from the values of freedom and liberty and opportunity to the those of fear, oppression, murder and corruption. I can't imagine why anyone would think they would.
Seriously, what's it's going to take for this guy to stop telling me what I'm saying, what I mean to say, what I would like, etc? If I want to accelerate something somewhere I'll tell you. If you are curious if I want to accelerate something somewhere, ask a question. Amazing.
Christ, you're becoming Mr. Technicality. Yes, technically, you did not state that you "would like to accelerate the American economy in that disasterous direction." Try reading Boon's post again. He listed a few things he thinks are bad (globalization, neo-liberal economics, etc.), things that you have readily agreed with in the past. Go ahead and discuss the validity of his points (that globalization and neo-liberal economics are necessarily bad things), but don't assert that you've never said such things or that he's putting words in your mouth. You're insulting our intelligence.
This is just like your slippery evasion of the UAW workers making $160k. Yes, technically you never stated that they bring home $160k, you just stated that they should make a sustainable wage, and that $160k (with a pension on top) is too much. You're either clearly asserting that they are making $160k currently, or you're just throwing in hyperbole (that's just happens to be the $78*2080 number you've thrown around) to make a point.
I'm sure you technically haven't said that you "think unions are a bad thing and detrimental to capitalism" - but is it really a stretch to attribute that view to you? Come on.
"Go ahead and discuss the validity of his points (that globalization and neo-liberal economics are necessarily bad things), but don't assert that you've never said such things or that he's putting words in your mouth. You're insulting our intelligence."
I insult intelligence. I make up facts. I hate the american worker. I villify the american worker. I parrot out facts.......
He constantly puts words in my mouth. He is capable of making a good argument without having to do that. Given his history, I don't give him much latitude and I'm not starting now. I don't care to discuss some tangent argument when he doesn't even provide much (if anything) to support his theory. I don't know where to start talking about the economic reforms he references when he doesn't even tell us what they are. I'm not quite sure how it relates. Even if I was sure, I might not be intrigued enough to discuss it.
Mr. Technicality? After all that grief about making up facts I'm getting more for wanting to be accurate. Technically, I used the number that you provided me that was provided to you by the UAW, just to be clear.
"I'm sure you technically haven't said that you "think unions are a bad thing and detrimental to capitalism" - but is it really a stretch to attribute that view to you? Come on."
It really depends on the context you claim I said something. Of course, your example does not claim that I want the economy to move in a certain direction after referencing the destruction of the middle class.
Neither China nor Russia, even with their massive wealth of human and natural resources, will achieve anything close to their economic potential as long as they restrict their citizens' political and economic freedom as much as they do now.
I agree. But America's self-destruction (and that is hyperbole, but it is close to the truth right now) might make the "potential" less important. The fact that they haven't collapsed and are loaning us billions right now puts them in a very important position for the future. Also, both countries are moving, to varying degrees, toward more freedom for their citizens. They are just also clinging to their quasi-socialist economic systems along the way.
Again, I couldn't disagree more strongly. Regardless of how you feel about our economic system, we are not "erring so far to the extreme" in terms of democratic reforms. If anything, we could be more open in terms of voter franchise and citizenship than we are now.
I was talking about Iraq, not American democracy. Our push to militarily establish a democracy in the middle east is a huge piece of our diminishing power.
It's how we won our own freedom, and we've spent a good portion of the last 100 or 150 years helping others achieve the same, often using our military power to do so. The examples are obvious: Japan. Germany.
Well ... this is debatable stuff. Not the Japan and Germany stuff - more like Cuba or the Philippines, or Vietnam. World War II is almost a singular incident of America's benevolence on the international stage. Democracy rarely works at the point of a gun.
People - individuals - will never flock away from the values of freedom and liberty and opportunity to the those of fear, oppression, murder and corruption. I can't imagine why anyone would think they would.
Freedom and liberty are great when everyone has enough food. When you need cheap goods you turn to China, and I haven't seen many Americans protesting the importation of sweat shop products into the American marketplace (just the folks who were mocked for protesting against the new Urbana Wal-Mart, I guess). My point is not that Russia and China will gain power through totalitarianism. On the contrary, they will most likely continue to ease restrictions on their citizens as their economic power grows. But the economy is (imo) the most important factor. If they consolidate economic power from the vacuum left by America's fall from grace, they will soften the criticism of socialism. And that, imo, is a very bad thing.
I get the feeling we are talking past each other. My point is simple: neo-liberalism and democratic internationalism have gone too far. We over-reached and now we are significantly weakened as a result. I truly hope that the message of freedom is more powerful than economics, but I am not sure. I wish we had "stayed the course" after WWII and kept with a strong industrial base manned by labor unions. But we didn't, and now we are paying the price.
"I wish we had "stayed the course" after WWII and kept with a strong industrial base manned by labor unions. But we didn't, and now we are paying the price."
GM is manned by labor unions. We are paying the price - $2400 extra per car.
We have neither a strong industrial base nor a strong union structure, and the economy is in shambles. I'm not saying that the two are correlated, but it certainly makes it hard for most reasonable people to argue the opposite...
"We have neither a strong industrial base nor a strong union structure, and the economy is in shambles. I'm not saying that the two are correlated, but it certainly makes it hard for most reasonable people to argue the opposite..."
Most reasonable people can see an extremely strong correlation between the presence of a strong union and their employer being in shambles. Maybe the relationship between strong unions and organizations in shambles is an extremely lucky coincidence? Maybe there is an epidemic of bad management almost everywhere the union is strong? Anything is possible. Dream Big.
Most reasonable people can see an extremely strong correlation between the presence of a strong union and their employer being in shambles.
Yes, but correlation ≠ causation (and most reasonable people know that).
You point out that companies with strong unions have problems. But thousands upon thousands of companies fail without strong unions. And it's tough to find examples to compare unionized to non-unionized companies in the same industry. You point to the car industry, but clearly the quality of products leads to Toyota:GM::Apples:Oranges comparison. The airline industry shows that some companies can succeed while others fail, although all deal with strong unions. Our top schools show that strong teachers unions do not necessarily prohibit success. Looking at these two examples (which you previously mentioned), I tend to believe that strong unions do not necessarily cause failure.
Here's how I look at things - unions form when management doesn't do a good job, right? If the companies paid their employees well and provided adequate benefits, a union couldn't offer much. So, if the origin of unions stems from poor management, why is it foolish to think that managerial failures are the root of the problem? Further, the union only benefits (both itself and its members) when the employer stays profitable - if the employer folds, there are no more union dues, inadequate pensions, no healthcare, and no wages. Isn't it in the union's best interest to keep the employer afloat?
Most reasonable people can see an extremely strong correlation between the presence of a strong union and their employer being in shambles. Maybe the relationship between strong unions and organizations in shambles is an extremely lucky coincidence? Maybe there is an epidemic of bad management almost everywhere the union is strong? Anything is possible. Dream Big.
Does not match with:
I don't say things like "everything would be peachy" and I really wish you'd stop putting words in my mouth.
But we're the ones putting words in your mouth, when you draw up a correlation and someone bothers to actaully vocalize what you are implying. Your arguments are weak, as usual, and have been roundly contested, but you are choosing to ignore them and refute with what you call "facts". Just the fact that both Run4cvrlib and I agree on the fact that you are so horribly wrong should be enough to tell you that you are just flat out wrong in your thinking.
Score still remains at Unions: 2; B for 'Business': 0
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Anon, what would you know about logic and facts, would you like to try to apply some and respond to my comment maybe? - Run4cvrlib on 2008-10-16 @ 11:00pm
Isn't it in the union's best interest to keep the employer afloat?
TP, how dare you use reality to refute B's "argument"! That's not fair! I blame the unions!
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Anon, what would you know about logic and facts, would you like to try to apply some and respond to my comment maybe? - Run4cvrlib on 2008-10-16 @ 11:00pm
If unions are allowed to continue, we all might have to face reality someday...
P.S. I got a yeast infection today. It is because i is union worker.
"Just the fact that both Run4cvrlib and I agree on the fact that you are so horribly wrong should be enough to tell you that you are just flat out wrong in your thinking."
By that logic, one could make a good case that I am so obviously right on the money.
"Yes, but correlation ≠ causation (and most reasonable people know that)."
Yet I'm accused that I "draw up" the correlation even after you point that out. Pretty sad that there is resistance to the obvious.
"And it's tough to find examples to compare unionized to non-unionized companies in the same industry. You point to the car industry, but clearly the quality of products leads to Toyota:GM::Apples:Oranges comparison."
$2400 extra per car. Pretty easy to compare.
"Here's how I look at things - unions form when management doesn't do a good job, right?"
Unions form when management doesn't do a good job? Where there is a union, should we assume the management sucks?
$2400 extra per car. Pretty easy to compare.
Are you now claiming that the $2400 premium is the sole reason GM fails while Toyota wins? That inefficient manufacturing, inferior products, wasteful marketing, and strong competitors are not the reason that GM's selling fewer cars and making less money - it's just that pesky $2400 cost? If GM could eliminate that $2400 cost, would they become profitable overnight?
Unions form when management doesn't do a good job?
What other explanation is there? Why would you form a union if you get along with management and they take care of you? If they're paying you what you're worth, what could the union possibly provide you with - union dues (i.e., lower pay)?
Where there is a union, should we assume the management sucks?
Of course not - the management can easily improve in the years following unionization. But the mere existence of a union indicates that management has failed in the past and that the employees don't trust their employer.
Yet I'm accused that I "draw up" the correlation even after you point that out. Pretty sad that there is resistance to the obvious.
No, you're accused of using the correlation as "proof" that unions cause companies to fail. When you make statements like "Whatever they touch, they pretty much destroy," don't be surprised when people question the validity of that assertion.
P.S. I got a yeast infection today. It is because i is union worker.
Dumbass! you can't get yeast infection that way!
Dumbass! you can't get yeast infection that way!
I never said anything of the sort! Stop putting yeast infections in my mouth!
You said that unionization can't give you a yeast infection! Are you saying that you CAN'T have a yeast infection and be in a union? Or are you just saying I suck at logic and don't understand how converse statements work or don't care to admit that I do?
...for he that is yeast among you all, the same shall be great.
"it's just that pesky $2400 cost? If GM could eliminate that $2400 cost, would they become profitable overnight?"
That pesky $2400 removes $11B of profit. If you have $11B in profit over the past 10 years, that would be $110B in resources GM would have to improve the company. That doesn't even include the likely return on assets that would be added on top of that. I look at a number like $110B and can confidently say that they would NOT be begging for a bailout.
"don't be surprised when people question the validity of that assertion."
You can safely assume that when I made this post, I expected people to raise a lot of questions. It would be incredibly sad if people denied the strong correlation between strong unions and unsustainable organizations. This is easy to see.
In response to the bad management theory, I can counter with with quantifiable costs of the UAW premium. The typical response has been attacking my credibility and talking about yeast infections.
I make an effort to back up my arguments with with external references. If you don't like the way I'm shaping my argument, fine, but the attempts at intellectual humor do not help their case.
If bad management and yeast infections are the counter argument, then fair enough.
I don't know, if you can't manage yeast infections or logical fallacies, I don't know if you could manage our economic structure.
"I got frustrated with the total fabrications in your posts"
"All four of the industry you cite have been taken over by neo-liberal short-term profiteers."
"I don't know, if you can't manage yeast infections or logical fallacies, I don't know if you could manage our economic structure."
Maybe this is a good time for a recap because I feel we're getting distracted with all this talk about yeast infections.
1) The UAW premium is $2400 per auto sold. The UAW premium as referred to in this thread is figured by calculating the amount of benefits that a GM pays out that Toyota does not. This is an additional amount consumers pay for GM autos unrelated to the physical car. Source: The quote is attributed here to a man named Daniel Brooks, who is a professor of supply chain management at the W.P. Carey School, and he was asked to look at the United Auto Workers contract a year ago, 13 months ago from a broad perspective of risk. (link)
2) The UAW Concessions: 2005 UAW Health Care Settlement Agreement -Reduced hourly OPEB liability by $14.5b, 2006 IUE-CWA Health Care Agreement-Reduced OPEB liability by $500m, 2007 UAW National Agreement -Reduces new-hire Tier II employees base pay from $28/hour to $15/hour and substantially decreases benefits -Reduces total hourly expense for these employees from $78 to $26. Source: UAW website per Thought Police. $78 figure has been brought into question.
3) The average private sector worker earned $25.36 an hour in 2006--$17.91 an hour in cash wages and $7.45 an hour in benefits such as pensions, paid time off, and health insurance. Autoworkers at Japanese plants located in the United States earn substantially more than this: between $42 and $48 an hour in wages and benefits, which amounts to over $80,000 a year in total compensation.The typical UAW worker at the Big Three earned between $71 and $76 an hour in 2006. This amount is triple the earnings of the typical worker in the private sector and $25 to $30 an hour more than American workers at Japanese auto plants. The average unionized worker at the Big Three earns over $130,000 a year in wages and benefits. Source: heritage.org. Whether or not the $130,000 per year figure includes compensation to retired employees has been brought into question.
4) At a Toyota plant, Leonard Habermehl is a skilled repairman and makes up to $85,000 per year. (link) Source: NPR news article.
5) UAW's 2007 Entry-Level Wages. (link) Souce: UAW.
6) 1998 Averaqe Wage: (all job classifications) $21.18 per hour (includes COLA) (link). Source: GM per Thought Police.
7) According to business week, GM pumps $8.7B/year into the pockets of assembly workers. (link)
8) According to companypay.com, the GM executive teams earns $5.9M in salary and $34M with all the special benefits thrown in. (link)
9) Total paid to executive salary / total paid to assembly workers = $34M/$8.7B = 0.39%.
10) Detroit has lower productivity, adding to the cost per vehicle. Source: unknown per Thought Police's graph.
11) GM lost 2.7% market share between 1Q 2002 and 1Q 2005. Source: World's AutoInfoBank, via Bloomberg via Thought Police.
12) In North America, according to the 2007 10K, GM sold 4,516,000 vehicles on sales of $112 B with Cost of Sales at $106B and Selling/General/Admin at $8B, with 23% market share. Source 2007 10-K filing.
13) Selling/General/Admin is defined by about.com as "SGA expenses consist of the combined payroll costs (salaries, commissions, and travel expenses of executives, sales people and employees), and advertising expenses a company incurs." (link)
14) 4,516,000 vehicles * $2400 = $10,838,400,000 = Total GM's UAW premium.
15) $10,838,400,000 > $8B. Total UAW premium > Total Selling/General/Admin in North America.
16) At Toyota, a worker's pension consists of an investment account in which the company deposits the equivalent of 5 percent of a worker's earnings each year, typically around $3,000 to $3,500. An employee can supplement that with a 401(k) plan, and the company matches contributions up to a maximum of 4 percent of the worker's income. Source: NYT (link)
Please let me know if there are any errors or anything left out that is material to the debate.
Here are some other figures that are useful to discussion (all from GM's 2007 10-K):
Total savings from the UAW's healthcare concessions in 2005
2006: $2.8b
2007: $1.8b
Total pension and OPEB expenses:
2005: $8.1b
2006: $8.5b
2007: $4.2b
Total pension contributions to US hourly and salaried employees:
2005: $0
2006: $2m
2007: $0
I'm not seeing the $11b figure. Their total expenses from all benefits from their global operations are less than $11b. In case you're wondering, nearly all of their actual cash payments to pension/OPEB obligations are for benefits to non-US workers (i.e., not UAW employees).
According to business week, there is a handicap of $1600 per car attributed to legacy costs. 4,516,000 autos sold * $1600 per car = $7.2B. You point out that pension (presumably legacy costs) are over $8B for two of the last three years. These numbers are in the ballpark. You also point out that pension contributions to hourly and salaried employees (presumably not retired ones) is basically nothing. I have to say, I'm not surprised that the pension contributions of currently-employed hourly and salaried employees is nominal. You do not make it clear that benefits include the costs of seven weeks of vacations, years of being paid not to work while sitting in a job bank, etc. These might very well be accounted for as wages or somewhere else on a P&L. These numbers make up the reminder of the $2600 total per car, $2400 per car if you are comparing with Toyota. The numbers you provide seem to be focused solely on pension contributions.
I cannot explain how exactly GM decided to account for these costs, but I feel confident in Business Week's fact checking department. If an Illini Pundit blogger pointed out that business week's facts were off, I would be extremely impressed. It doesn't seem to be the case.
You point out that pension (presumably legacy costs) are over $8B for two of the last three years. These numbers are in the ballpark. You also point out that pension contributions to hourly and salaried employees (presumably not retired ones) is basically nothing.
So we're in agreement, then, that the UAW's pension and OPEB costs are not the issue here - it's foreign operations (i.e., those not covered by the UAW). The pensions of current and former UAW members (i.e., US hourly and salaried pension plans) currently cost GM next to nothing.
"Although our U.S. pension plans are now fully funded, certain of our pension plans outside the United States are partially or fully unfunded. As a result of funding our worldwide pension obligations, we have relatively less available cash to invest in product development and capital projects than some of our competitors." (GM 2007 10-K, page 23)
You do not make it clear that benefits include the costs of seven weeks of vacations, years of being paid not to work while sitting in a job bank, etc. These might very well be accounted for as wages or somewhere else on a P&L. These numbers make up the reminder of the $2600 total per car, $2400 per car if you are comparing with Toyota.
I'd include those numbers if they were still an issue. However, under the UAW Attrition Agreement, the JOBS banks have been virtually eliminated, employees have been offered buyouts for their retirement, and previous JOBS bank employees have filled openings at existing plants. Total liability for the wages of employees at idle plants - $858m. This past February, they created yet another attrition program that's expected to further lower these costs.
So how exactly is the UAW killing GM? The $2400 number you're using seems to arise if you take their total pension/OPEB costs from global operations and divide them by North American auto sales (thereby ignoring the 4,854,000 units sold overseas). That's hardly a fair cost allocation, although it certainly makes for a sensational press release.
Nice work, TP.
There seems to be a pretty obvious question that is floating around this discussion: should companies have pension plans? Should a worker who puts in a lifetime of labor for a company expect that company to take care of him or her during the old age? Or should workers be on their own? Can we expect workers who make $15 an hour to live a middle class lifestyle, fuel the American economy through their purchasing, and save enough for retirement?
In other words, if the company isn't responsible for making sure it's workers have enough retirement, then are they responsible for paying their employees more money so they can take care of themselves?
"Although our U.S. pension plans are now fully funded, certain of our pension plans outside the United States are partially or fully unfunded. As a result of funding our worldwide pension obligations, we have relatively less available cash to invest in product development and capital projects than some of our competitors." (GM 2007 10-K, page 23)"
At the beginning of the same paragraph: "We believe we are a competitive disadvantage because we provide pension benefits to more than 400,000 retirees and surviving spouses in the United States."
"However, under the UAW Attrition Agreement, the JOBS banks have been virtually eliminated,"
Really, they have virtually been eliminated? In a news release today about an hour ago, "DETROIT, Dec 3 (Reuters) - United Auto Workers President Ron Gettelfinger said on Wednesday the union would surrender job security protections and delay payments to a retiree healthcare trust in concessions intended to help U.S. automakers clinch government aid to survive a sales downturn." "Details on the suspension of the jobs bank and delay of payments to the healthcare trust still need to be worked out, as does the time frame, but quick action is expected. Some changes may require approval of UAW members, others may not."
Looks like they weren't eliminated until today. Looks like logical people are the ones fighting for this.
"that the UAW's pension and OPEB costs are not the issue here - it's foreign operations (i.e., those not covered by the UAW)"
You base this whole conclusion based on a sentence within paragraph that starts with the sentence "We believe we are a competitive disadvantage because we provide pension benefits to more than 400,000 retirees and surviving spouses in the United States."
Not very convincing.
Want some more perspective on job banks?
"There's also the "jobs bank," a feature of the UAW contract that drew fire from senators, in which workers get 95 percent of their base pay and all of their benefits if they are laid off or their plant is closed.
In the past, workers could stay in the jobs bank forever unless they turn down two job offers within 50 miles of their factory. GM's new contract imposes a two-year time limit, and workers are out of the jobs bank if they turn down one job within 50 miles or four jobs anywhere in the country.
GM has about 1,000 workers in the jobs bank now because it's been thinned out by early retirement and buyout offers. At its peak, the jobs bank had 7,000 to 8,000 people, Sapienza said."
I suppose we're going to be told that we should focus on the recent concessions (a.k.a "givebacks"), not that the job banks had 7-8k (before buy out offers) people getting 95% of the salary and full benefits - getting paid not to look for work.
At the beginning of the same paragraph: "We believe we are a competitive disadvantage because we provide pension benefits to more than 400,000 retirees and surviving spouses in the United States."
Of course - none of their competition provides pension benefits to 400,000 retirees. Their competition has far fewer retirees, so their expenses aren't as high. How does this refute the fact that they've contributed a whopping $0 to the pensions of US employees? That's right - it doesn't.
Really, they have virtually been eliminated?
...
Looks like they weren't eliminated until today.
Hmm, it seems like you're missing the meaning of "virtually." However, your second post supports my assertion - "GM has about 1,000 workers in the jobs bank now because it's been thinned out by early retirement and buyout offers. At its peak, the jobs bank had 7,000 to 8,000 people." So they've eliminated 87.5% of the JOBS bank, but that doesn't qualify as "for the most part; almost wholly; just about" eliminated?
You base this whole conclusion based on a sentence within paragraph that starts with the sentence "We believe we are a competitive disadvantage because we provide pension benefits to more than 400,000 retirees and surviving spouses in the United States."
No, I base this whole conclusion on the numbers in the 10-K. I already posted the total contribution GM makes to the pension plans for domestic workers - $0. That's what I base my conclusion on - actual facts.
Not very convincing.
Let's face it, no amount of evidence will convince you that the UAW (and unions in general) are not the sole cause of GM's downfall. You'll keep relying on spin and sensational reporting from the media, but present little-to-no data (other than repeatedly citing $2600). I've gone through multiple 10-Ks, the UAW contract details, quarterly sales figures, and industry reports (e.g., the Harbour Report) - all first-hand, actual data. You've relied on lots of second- and third-hand reporting of information, nearly all of which originates from highly biased sources (that, surprisingly, have the same agenda as you).
I suppose we're going to be told that we should focus on the recent concessions (a.k.a "givebacks"), not that the job banks had 7-8k (before buy out offers) people getting 95% of the salary and full benefits - getting paid not to look for work.
What do you want to happen? Should the UAW build a time machine? They're making as many concessions as possible right now - it's in their best interest. Why are you still pointing your finger at them?
I'll ask again - could Detroit's downfall possibly have anything to do with their inferior products (which have led to decreasing market share, slimmer margins, and brand erosion)? How is it in the UAW's interest to watch their employer fail?
"Of course - none of their competition provides pension benefits to 400,000 retirees. Their competition has far fewer retirees, so their expenses aren't as high. How does this refute the fact that they've contributed a whopping $0 to the pensions of US employees?"
In 30 seconds I can look at the 10-k and see "Our OPEB obligations for employees and retirees are at $60 billion at December, 2007." "We believe we are a competitive disadvantage because we provide pension benefits to more than 400,000 retirees and surviving spouses in the United States."
I do not feel compelled to research complex accounting rules relating how pension contributions are reported on financial statements. If people don't think GM is paying signficantly for legacy costs, open up that 10-K and browse around. It is over 600 pages. You don't have to browse around too long to find "if the arragements contemplated by the Settlement Agreement are approved and implemented, we will be required to contribute more than $25B in assets to the New VEBA in a relatively short time period, plus $5.6 billion immediately or in payments through 2020...." That agreement was with the UAW.
"Should the UAW build a time machine? They're making as many concessions as possible right now - it's in their best interest. Why are you still pointing your finger at them?"
People need to admit that excessive benefits are not sustainable. These concessions should have been made in advance, before the company was in this bad of shape. If those concessions were made a long time ago, things would not be this extreme and the company would get through this without a bailout.
If someone gives can get me the kinds of excessive benefits that UAW employees have been getting at GM, I probably wouldn't care about the perceived quality of management. Give me more! Why the hell not? What are the odds the factory will close? Even if they do, I could sit in a job bank and not look for a job. What are the odds the company will go belly up? Even if they do, the goverment would make sure that doesn't happen. Right?
"How is it in the UAW's interest to watch their employer fail?"
It is not in their interests. It is not in the taxpayer's interest to watch their employer fail.
"GM has about 1,000 workers in the jobs bank now because it's been thinned out by early retirement and buyout offers. At its peak, the jobs bank had 7,000 to 8,000 people."
Those early retirement and buyout offers cost money and put the company at a further disadvantage. Yet, the job banks do not finally go away until the Senate Republicans hold bail out money over their head. Sad.
"I'll ask again - could Detroit's downfall possibly have anything to do with their inferior products (which have led to decreasing market share, slimmer margins, and brand erosion)?"
Excessive legacy/employee benefits that are not a function of company performance is the reason for Detroit's downfall. Any company that agrees to job banks, 7 weeks of vacation, etc. like GM did should not be expected to survive and sure as hell should not be bailed out. Making concessions on your deathbed is nice, but too late. Especially when the cancer was obvious for such a long time. There were no surprises here. Management didn't have a chance unless they had fought agressively for the recent concessions a long time ago.
Moving forward they need to restructure to be competive and the goal should not be to maximize jobs. It should be to maximize profit. Business Week's suggestions were very interesting.
After more than 200 posts, I suppose I'll concede. It was management's fault. They should have never conceded to the excessive benefits.
"In other words, if the company isn't responsible for making sure it's workers have enough retirement, then are they responsible for paying their employees more money so they can take care of themselves?"
No, that's ridiculous. Nobody is responsible for your own financial well-being other than yourself.
Why in the world would would you want anybody, whether they be a greedy business owner or a greedy politician to be in control of your retirement?
"on your own" sounds scary, but not when you stop and consider what it really means, that you have complete control over how your money is invested. The alternative is actually quite scary when you think about it.
Just remember, on your social security statements it says that congress can at any time change the law, and your benefits could go to zero if somebody decides you don't need or deserve the government's money.
What if we stopped doing things we ourselves would consider morally outrageous if done by others to us but then somehow we consider perfectly all right when carried out by government in the name of "public policy" or by unions in the name of the "greater good" when done to others?
If you hired someone out of your own pocket, you would not offer a pension plan. seven weeks vacation, and a promise to get paid not to work in case times got tough.
You would not support all the service providers colluding to fix the price of products of service that you want. You would not support those colluding providers harrassing those willing to offer products and services to you at a lower price.
If you are building a house, it would seem insane if the local union chapter brought over a giant blow-up inflatable rat and picketed your house. It would seem insane if a contractor you hired to perform services could not get materials delivered because a truck driver will not cross a picket line.
If paying for it directly yourself, you would not support the idea of removing choice and creating dependency on only one service provider or one type of service provider.
You would not pay someone a signficant premium to perform services when qualified people are lining up to provide you those services for less.
You would not support the idea that if someone you hired to perform a task stopped working for you and then told you that you couldn't hire anyone else. That wouldn't be logical.
When systems are designed to fail, they will fail. We can make up excuses all we want, but there are no suprises when a system that was designed to fail actually fails.
Coming soon to a newspaper near you....school budget mess, city budget mess, state budget mess, champaign county nursing home mess, champaign county budget mess, and much talk about a reduction in services without a reduction in employee benefits.
I guess you can blame anyone you like B for Business the budget is probably Blago's fault but the General assembly has been robbing the pension systems for years. The Public employees have been paying for general fund expenditure with their raises and what would be social security payments (pension payments) for years. If the taxpayer chooses to accept out of control state spending by voting their representatives then they should pay for the cost of the spending of those representatives. They shouldn’t expect the employees to take pay cuts because taxpayers like the benefits of public programs but don’t like the cost. You like to portray the employees as having high wages and benefits by cherry picking you’re facts but in the real world they have taken cuts.
Coming soon to a newspaper near you....school budget mess, city budget mess, state budget mess, champaign county nursing home mess, champaign county budget mess, and much talk about a reduction in services without a reduction in employee benefits.
Don't blame the employees and make them pay for bad management of states and now a bad economy brought on by a stupid congress and some banks that gave out bad loans and where greedy.
The last thing you don't expect to take a pay cut (Tax increase) don't expect state employees too.
I forgot one important thing:
You would find it morally outrageous if you were forced to tell people who you voted for in an election.
"If the taxpayer chooses to accept out of control state spending by voting their representatives then they should pay for the cost of the spending of those representatives."
At the end of the day, the taxpayer is going to have to choose between roads or paying people not to work. It is reasonable to payback what an employee put into a system with interest. It is unreasonable to pay them not to work when we cannot sustain that idea financially. There will need to be a compromised solution pretty quickly. Individuals and business have been pretty much taxed/levied to death in this state.
Of course....the feds can bail us out if there's any money left.