"CRASH COURSE - The American Automobile Industry's Road from Glory to
Disaster" by Paul Ingrassia (Amazon.com: http://xrl.us/CCourse )
Paul Ingrassia of the Wall Street Journal, who covered the American
auto industry for a quarter-century and probably knows it as well as
any journalist, begins this account of its spectacular collapse by
describing something called the "Jobs Bank." No, I'd never heard of it
either. It was established by the manufacturers and the United Auto
Workers in the 1980s "to provide temporary security for hourly workers
on layoff," but "by the 1990s laid-off workers could remain 'bankers,'
as they were nicknamed with knowing irony, for an unlimited time,
making 95 percent of their wages while not working." This in turn led
to "inverse layoffs," wherein "senior workers volunteered to be laid
off and thus bumped junior workers back onto the assembly line."
Ingrassia asks: "After all, why should a worker with high seniority
slave away building cars when workers with lower seniority collected
virtually full pay just for sitting around? Such was the logic of
Detroit's dysfunction." Indeed, "dysfunction" barely begins to cover
it. "Self-destructiveness" or "insanity" would come a lot closer...
I find that article to be somewhat disingenuous. For one, the Bank workers
did not just "sit around," and it was not something for nothing!
When the job bank was set up BY MANAGEMENT, under the contract to which it
had agreed, EVERY UAW member began paying sixty-five cents an hour into that
fund. The company matched the amount, quarterly. It was paid by both
sides, for all QUALIFIED WORK hours. That means even on ones vacation pay.
The "Bank" workers were required to report for ALL of the work hours
scheduled, or they would lose ALL of their Bank work hours wages.
IE GM laid off 100 workers and say thirty of those would became Bank
workers, who had to report to work for say two weeks. Those that were laid
off were paid under the contracts previous "Supplemental Unemployment Plan."
The "Supplemental Unemployment Plan," was financed by BOTH Management and
the UNION workers as well. "Supplemental Unemployment Plan." paid an amount
ABOVE their states Unemployment plan to equal 70% of their BASE pay rate.
Bank workers were NOT eligible for payment under the "Supplemental
Unemployment Plan" rules. During a shift the Bank workers were used to
replace line workers during those times when scheduled workers were not
available for what ever reason, eating, in the head, sick, bad weather etc.
The problem was Management and the Union never expected to have hundreds of
thousands of their workers laid off. The Union gave up the Bank during new
Contract talks when it became obvious there were no long enough works paying
into the fund to support it.
Those harping about the UAW seem to forget Manufactures in Japan were
required by the Japanese government to pay their worker, from the end of
WWII up until around 1998 whether they worked or not, under their guaranteed
annul wage law.
Seems to me the US Congress should look to the UAW Union as a guide, now
that there are no longer enough workers working and paying FICA to support
the scheduled Social Security benefits promised to those soon to be retiring
baby boomers, that are going to bankrupt SS in a few short years.
As to the writers comment that the Jap made small cars and the domestics
turned to making "gas guzzling trucks and SUVS," what color is the sky in
his world? Every Jap manufacturer grew it market over the past fifteen
years by offering trucks, SUVs, ever LARGER cars, they still do today, and
they offering BIG Luxury cars as well.
The fact is EVERY manufacture foreign and domestic was responding to the
market, even Honda makes a pseudo "truck," out of the Accord, to get some of
the truck market. One thing for sure is he "probably knows (the auto
business) as well as any journalist but they don't know very much.
Or just export the whole costly corrupt mess and import cars like TVs.
Saves corrupting the system at taxpayers expense.
BTW, what you say is true of the Japanese worker, but for their benefits
they are expected to put the company, not the union or whining ahead of
everything else. If a fellow worker sees you screwing the company, they
take it personal like and take care of it without much fuss. They are
"soldiers" for who they work for. And if pork management lets them
down, suicide and quiting are their expected options. Quit a bit
different culture, honor and integrity rank very high be in cleaning the
toilets or running the board room.
Abet not the only one, but UAW is a major obsticle for any US
manufacturer to overcome, certainly a big handycap. Does not mater how
you cut it.
On 17/01/2010 12:06 PM, Mike Hunter wrote:
For once you are correct about something. The Japanese are much smarter
than Americans, they buy from their own manufactures to support their own
economy. Americans are greedy, they will buy from anywhere if they can save
a dollar, regardless of what happens to their own economy and the jobs of
their children and grand children.
I think it is far more simple than that.
No one wants over priced North American crap autos.
I have driven a Cavalier in Europe, and a Cavalier here. GM NA UAW/CAW
make over priced crap.
On 17/01/2010 1:52 PM, Mike Hunter wrote:
Really? Industry figures show the average drive home price for an import
is 20% to 30% HIGHER than the average drive home price of a similar size
Domestic, with the same equipment even though the comparable import costs
less to produce
They also buy from US companies in the US.
Americans are very smart, too. Who invented the automobile? OK, it was
the Germans. But we have made many improvements to the automobile,
invented the PC, iPhone, and made major medical advances.
Or was it the Russians, Swiss, or French? I think it depends on what
you call an automobile...
http://en.wikipedia.org/wiki/Automobile agrees with you sort of ("Karl
Benz generally is acknowledged as the inventor of the modern
Perhaps, but if one reads what I posted it referred to consumption. My
point was that the Japanese are much smarter than Americans, they tend to
buy from their own manufactures, to support their own economy.
American apparently could not care less about their own economy or they too
would support their economy before that of foreign countries, It is the US
manufactures that provides the good paying jobs their children and grand
children will require.
As to what we produce in the US today, it is a sad state of affairs that
Walmart is the nations, as well as many of the states, number ONE employer,
rather than the US Steel manufactures and auto manufactures who, not too
long ago, were the number one and two leading employers in the US.
The really sad part is it was, and still is, the US government mandates that
crated the conditions that sent those job off shore and companies out of
business. If BO and the Dims in Congress get their way, more of our good
paying job will go off shore in the not too distant future.
Get real, actually SS will start paying out more than it is taking in by
2017. The way the economy is tanking under BO and the Dims in Congress
with all of the 16,000,000 unemployed no longer paying into SS may cause
that 2017 date to move UP. At that point the US Treasury will need to
start paying off the billions is SS bonds it holds.
My concern is for my four living children who will be retiring shortly. My
youngest child is 49 and my oldest is 59. My first born son died in 2007,
at age 58.
I have no concern for myself. I am a wealthy man, I did not apply for my
SS retirement benefits when I became eligible, until I discovered I could no
longer renew my private healthcare insurance after age 65, unless I paid for
Part "B" coverage.
The ONLY way one can buy Part "B," is to have it deducted from ones SS
check. I donate my SS check to the charitable endowment fund I have
In the first place if you do a search you will discover it is sooner than
2040 that the SS Bonds will run out. Where do you think the Treasury is
going to get the billions necessary to pay those Bonds and the interest they
have been earning, Bonds that the Treasury has been accumulating for 80
years or so, all the while the government has been spending the money to
back those Bonds?
"The economy is getting better" is Obama speak. The economy is not getting
better, the GNP in December was at the lowest RATE in history. The stock
market is up, but it is because the corporations have adjusted their
economies of scale to the conform to lower economy of today. At 15,000,000
it is the highest number of unemployed in history, as well.
Some companies are, in the foreseeable future, not going to have anywhere
near the same level of employees.
Luck will never do it for you. It was not luck on my part, it was my
education and a hard struggle for this black man, in a white mans domain,
over the past 60 years that got me to were I am today.
It was also luck. You could have met the same fate as 100,000 men in
WWII (dead), could have been lynched and were lucky enough to go to
college. Or you could have been born 100 years earlier and been owned by
OR I could have been like all too many us blacks and never turned
Republican, when Reagan came along. I could stayed in that shack in
Georgia and voted for all the Dims that wanted to give us check, food,
housing, transportation and medical care, all free, paid for by those that
do want to work and produce. We as a people, have learned nothing from MLK
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