It would make no sense to ask financial industry workers to make
concessions. The financial industries problems flow from bad
investments in the trillions of dollars. Cutting pay and benefits in
the millions or even billions would have no effect. By contrast, ALL
of Detroit's problems have to do with its assembly line workers.
First they have nearly destroyed the market for domestic products with
their crappy workmanship and their crappy attitudes, beginning with
the strikes of the Sixties and continuing at least through the mid
Nineties. Economic meltdown or no economic meltdown, the result of
these decades of crap products is that it is difficult to find anyone
under the age of 50 who will even consider a Detroit product. Second,
Detroit's assembly line workers' pay packages and work rules and
benefits put Detroit at a competitive disadvantage. That competitive
disadvantage is sending the industry to the bottom. Modifications to
the pay packages and work rules and benefits can have an effect on
that competitive disadvantage.
Now do you understand why financial workers have not been asked to
make concessions, while Detroit's assembly line workers must make
concessions or else lose their jobs completely? Moreover, your
argument is not against concessions, it is in favor of spreading the
concession mandate more broadly. Or, if I misunderstand you and your
argument is that Detroit assembly line workers should make no further
concessions, then you better start that job search right now.
I agree. To that end, Congress and President-Elect O! should devote
their energy to propogandizing in favor of buying American. What
they should not do is "loan" money to guaranteed losers, or worse yet
nationalize GM or Chrysler.
Of course, this new marketing effort would have to exclude Canadian,
Mexican, Australian, and Korean built products, like the Chevy Aveo
and the Dodge Challenger and the upcoming Camaro, and include made-in-
the-USA Hondas, Toyotas, Nissans, and BMWs.
Your quoted/linked item from the NY Times is the factually challenged
story. See a thorough debunking here: http://www.heritage.org/Research/Economy/wm2162.cfm
. A quote:
Retirement Benefits Alone Cost $31 an Hour
The argument that retiree pension and health benefits inflate the
hourly labor costs of the Detroit automakers cannot withstand basic
scrutiny. For instance, General Motors UAW retirement plan paid $4.9
billion to 291,000 retirees and surviving spouses in 2006. That works
out to $31.04 an hour when apportioned among active workers. That
figure accounts for virtually all GM's benefit costs--before
accounting for health care costs, disability benefits, supplemental
unemployment benefits, or any of the other benefits GM provides. GM
pays too much in retirement benefits to have labor costs of only $70
an hour if that figure included benefits to current retirees.
Labor Costs Similar Despite Retiree Differences
The Detroit automakers pay similar wages at each company despite
having very different numbers of retirees to provide for. . . .
General Motors has far more retirees per active worker than Ford or
Chrysler. For each active worker at GM, there were 3.8 retirees or
dependants in 2006. At Chrysler this ratio was half as much: two
retirees for each worker. At Ford there were only 1.6 retirees per
worker. If the hourly labor costs included retiree benefits, hourly
wages at GM would be much higher than at either Ford or Chrysler.
But this is not the case. General Motors did not have the highest
hourly labor costs despite having more retirees. Chrysler paid $2.60
an hour more in labor costs in 2006 than GM did. Ford paid only $2.75
an hour less than GM did, despite having half as many retirees
relative to workers to provide for. All three automakers had roughly
the same hourly labor costs despite having very different numbers of
retirees to provide for. Hourly labor costs account for the expense of
providing wages and benefits to current workers but do not include
Taxing the Many to Pay the Few
UAW spokespeople have roundly condemned the estimate of labor costs in
excess of $70 per current worker hour. They assert these figures
include the cost of current retiree pension and health benefits. They
have done so, however, without marshalling evidence to support their
There was another article in the Detroit Free Press, "7 Myths about Detroit
...beginning with Myth 1: Nobody Buys Their Vehicles. All of these myths are
familiar to me, and I confess that I believed more than one of them.
It's interesting to me that we here discuss the overpaid assembly line
workers who are dragging down their own industry, while in another newsgroup
we discuss the appallingly low pay of retail clerks, whom we expect to be
experts in their fields. It's irrelevant, just interesting.
My own company has switched completely from pension to employee-funded
401(k) retirement plans. This will prevent that company from finding itself
straddled with a growing number of retirees (which, of course, was the whole
idea behind the switch by many, many companies to employee-funded retirement
plans, rather than company-funded, as in the past). Detroit, too late, is
already saddled with a growing number of retirees, and these fixed costs
cannot be addressed. Even if the current workers took a 1/3 cut in pay, it's
a non-issue. The UAW is a distraction, not the root cause of the problem.
Even the automotive offerings of the Big Three compare favorably to other
marks. From pickups and SUVs to fuel-efficient smaller cars, their lineup is
very similar to what the other brands are selling. Other than the sudden
surge in oil prices and the ensuing economic collapse, Detroit could have
soldiered on, trying to build what they thought the American public wanted.
But there was, in fact, a surge in oil prices, and sales dried up quickly.
Detroit never saw it coming and was unprepared. That may have been the big
If Detroit was meeting its sales quotas, we wouldn't be having this
discussion. Now that they are not, we're focusing on the hourly pay scale of
the average UAW worker.
Whenever a Republican politician opens his mouth, I know that I'm about to
hear a distraction. It's their favorite tactic. Rather than address the real
issues, they point to strawmen and fall guys, to draw attention away from
themselves. Republicans of late have spent an INCREDIBLE amount of money,
and we are now supposed to find new respect for them because they balk at
making a $14billion LOAN... And the sticking point? The UAW doesn't want to
come right out and say that they'll cut back their wages by 1/3 by next
The Republican party should be disbanded. Today.
dwight, disenfranchised Republican
It will be if they don't move toward fiscal conservatism. As Ronald
Reagan said about the Democrat Party I now say about the Republican
Party. That is, "I didn't leave the Republican Party, the Republican
Party left me." There are a small handful of Republicans in Congress
that are true fiscal conservatives but they don't stand a chance of
influencing the direction of anything there.
I agree with these statements. I did not read your Seven Myths story,
but if the list did not include the one that the Democrats/Greenists/
Statists are currently disseminating -- that the problem with GM and
Chrysler is that they do not build "the kinds of vehicles that
Americans want to buy" -- it should have. How else does GM retain the
largest market share (albeit a dwindling one) if it does not build
"the kinds of vehicles that Americans want to buy"? How does Ford sell
one million F series pickups every year (as opposed to 170,000 to
180,000 Toyota Priuses, and as opposed to, e.g., the Honda Accord
hybrid, which Honda canceled for lack of interest) if Americans do not
The first statement is self evident. More to the point, if GM and
Chrysler were not coming to Washington asking for a DOWN PAYMENT of
$34,000,000,000,000, just to see them through mid 2009, we would not
be having this discussion. Because they ARE asking for the money, all
aspects of their operations are fair game.
The question is not, should we loan $15,000,000,000,000 GM and
Chrysler to see them through to mid January? The question is, will
they EVER be able to repay the money? Assuming that the total "loan"
principal that the Government finally hands out comes to
$34,000,000,000,000, and assuming that GM and Chrysler sell 3,000,000
vehicles per year for the five years during which they are supposed to
pay it back, that's more than $2,000 per vehicle just to repay the
principle. Add in interest at 5% per annum and the numbers just get
worse. Add to that the $1,500 - $2,000 per vehicle UAW burden (vs.
the wage scales at non-UAW factories), and the $500 per vehicle legacy
costs burden, and you've got a $4,000- $5,000 financial burden
attached to every vehicle, that the competition does not have. There
is simply no way for this to work.
Specifically with respect to the UAW, I am glad they it was able to
win the wage and benefits and retirement packages it has achieved in a
free market over the years. However, I do not want one nickel of my
money to go to prop it up. I work forty to sixty hours per week, and
I do not make $71 per hour in wages and benefits. Nor (at age 54) do
I have any prospect of retiring at age 56 -- or even age 66 -- as many
UAW workers do and have done. Either the UAW rank and file makes the
concessions that are necessary to keep their employers afloat, or
their employers go out of business. It's really simple.
That sure is a collection of nonsense. Let's just agree that, yes, it
was the UAW's unreasonable refusal to agree to make concessions today,
which in any event will kick in in 2010, and which will probably be
made irrelevant when GM and Chrysler do finally go under due to the
UAW's obstinacy, which caused the $15,000,000,000 bailout bill not to
Also, let's remember that, with 60 votes needed in the Senate to bring
the House's $15,000,000,000 bailout bill to a floor vote, the vote
last Thursday was 52-35; that voting "no" were 4 Democrats; and that
voting "yes" were 10 Republicans. If those 4 Democrat "noes" had
joined the 10 Republican "ayes," just 4 more Democratic votes would
have been sufficient to have passed the bill. The 4 missing
Democratic votes include Joe Biden (who evidently cannot leave his
hotel room in Chicago in case someone, ANYONE calls); John Kerry (who
found it more agreeable to be in Poland for photo ops at the latest UN
IPCC global warming hysteria-fest); and Senator Wyden of Oregon (who
has not publicly stated a reason for his absence (out shopping for a
new Prius, maybe?)). Also MIA was President-Elect O!'s Illinois Senate
seat, which remains unoccupied because of the usual DEMOCRATIC morass
of corruption which characterizes his home state's politics.
Also let's not forget that the Democratic leadership in both houses of
Congress found it more important for the membership to begin their
Christmas vacations on DECEMBER 12, than to stick around for another
week and work it out -- something which undoubtedly could have been
So blame the Republicans for the failure of this $15,000,000,000
bailout down payment if you like, but first tell me why they the 32
Republicans were wrong to vote "no," and second tell me why the UAW
and the Democrats were not more to blame than the 32 Republicans.
Wow. Now that would be a great day for our country. I question how
anyone who claims ever to have been a Republican can make that
statement. It's like the Judas Colin Powell, saying he was throwing
his support behind Obama because, among other things, Obama's judicial
appointments were likely to be more to his liking than Senator
McCain's. Anyone who can make that statement was never a Republican
to begin with.
Eh, you should have read it. This would have been covered in "Myth 1: Nobody
Buys Their Vehicles," and "Myth 5: GM, Ford and Chrysler are idiots for
investing in pickups and SUVs."
They should have come to Washington as GMAC, Ford Credit, and whatever
banking arm of Chrysler. They'd have gotten all the money they needed, no
If you don't mind calling up the UAW website in your browser, here are some
startling numbers: http://www.uaw.org/barg/07fact/fact02.php
Look at "active" vs. "retired" and "surviving spouses," and you get a good
picture of what's actually going on with the UAW contract. Problem is, you
can't suddenly tell all of those UAW retirees that, sorry, the deal is off.
Well, you can't do that any easier than telling Americans under the age of
50 that Social Security will be ended prior to their reaching retirement
age... It could be done, but no politician wants to be the one to come out
and say it.
(Neither does anyone in the UAW.)
The union wage scale is NOT that far removed from the non-union shops. That
being said, I don't doubt that the UAW, if pressed, would vote to cut their
own wages, rather than become unemployed. While I have the UAW page up, it
points to a percentage of 8.4 to represent the labor cost of a typical new
vehicle. Obviously, the vast bulk of the cost is related to non-labor
events, from design and marketing to raw materials, "executive
compensation," and more. I'm sure that the UAW would join in to address
lowering the costs, so long as the other 91.6% of the costs are also put
under the microscope.
That sure is a collection of nonsense.
Not, judging by every election cycle in recent memory.
No, I don't agree. I don't agree that the UAW is the cause of the failure of
any auto manufacturer, and I do not agree that the UAW was unreasonable in
Are you trying to argue that the Democrats are just as bad as the
Yes, I believe that you are...
In this instance, in this particular vote, the dissenting Democrats are
every bit as wrong as the naysaying Republicans. At no time did I praise the
The bottom and inescapable line here, and the one which even the reigning
Republican leader has to admit, is that we simply cannot allow any one of
the Three to go into bankruptcy. Not merely for the benefit of the lazy and
overpaid UAW workers ("Myth No. 7," by the way), but to protect ALL of us -
you, me, and the guy down the street. In the current economy, this would
spell widespread disaster, the extent of which none of the experts can
A couple of years ago, perhaps, if General Motors had gone belly-up, we
would have suffered, would have spent far more in resulting costs, but we
would have absorbed it and moved on. To potentially double the unemployment
rate (currently 7%?) today would be an incredible burden for this country.
$15,000,000,000 to even $125,000,000,000 is a relatively small price to pay
to stave off this catastrophe.
Ah, yes... "Judas." The man speaks his mind, gives a cogent, reasonable
explanation for his decision, and he's "Judas." Great.
The Republican Party of just a couple of decades ago is all but gone and
forgotten. The Social Conservatives who have run the party of late have
destroyed everything that the Party stood for, and stand - speaking of "180
Out" - almost diametrically opposed to its principles. . Now that the Dems
have retaken the White House, you see a small number of "true conservatives"
beginning to surface (beware those who seek only to re-label themselves),
talking about taking back the party. I wish them luck.
I hope they refind their fiscal conservatism (NOT in this case, thank you
Mr. Hoover). I hope they seek to restore rights and liberties. I hope they
work to keep government out of my home.
Of course, while I'm hoping, I hope that BOTH parties take a sensible,
long-term approach to the current economic crisis and work to restore full
faith and measure to the U.S. economy. And if they could lower my credit
card interest rates, great.
You are conceding my argument, first that it is the fat UAW contracts
of the past that have led GM to its present state of collapse, and
second that there is no way for the Government ever to get this
bailout money back.
Surely the modification of those fat benefits will be a hardship for
the beneficiaries, but that is not a problem for the rest of us. The
UAW and GM negotiated their contracts at arm's length, and now we see
the results. It didn't work out as they planned. That's too bad, but
it's hardly unexpected. Just look at these figures for GM (as of
2006), from the UAW link you posted: 73,454 current workers; 269,614
retired workers; and 69,288 spouses of retired workers; total of all
three: 412,356. Anyone can see this upside-down pyramid is not
Later in your post you state that $125,000,000,000 would be a
bargain. (I don't know if you are aware of it, but this is the
ballpark number that industry analysts are quoting as the true price
tag to keep GM afloat.) Assuming, again, 3,000,000 vehicles sold over
the next five years, that would come to $8,000 per vehicle, exclusive
of interest. That overhead, combined with the costs of supporting the
400,000 workers and retirees, is a set of numbers which will never
The unavoidable conclusion is that, once we start down the bailout
road, we will either end up writing off all the "loan" principle, or
we will be stuck permanently with a nationalized GM. The good news
with respect to the nationalization scenario is that, with Greenist
whackos like Nancy Pelosi, Harry Reid and Barack Obama dictating
product choices, the entire enterprise will wind down to nothing
within about the same five years as the "loan" payback is assuming.
You don't really expect this crew to keep Uncle Sam in the business of
continuing to produce the current 50/50 mix of cars and planet-
destroying trucks and SUVs (or even the 60/40 target that GM announced
in June), do you?
The correct set of choices is, do we let GM and the UAW reap what they
have sown and take GM into Chapter 11, or do we resolve ourselves
either to a nationalized GM (eventually to be ground to dust by the
Greenist values of its federal overlords), or a taxpayer gift to a
private enterprise (and its workforce) of at least $100,000,000,000?
The correct answer is obvious to me, and apparently to you as well.
However, each of us has a different answer.
Not true. Your UAW web page states this: "In 2006 a typical UAW-
represented assembler at GM earned $27.81 per hour of straight-time
labor. A typical UAW-represented skilled-trades worker at GM earned
$32.32 per hour of straight-time labor." That figure does not include
the cost of benefits or overtime. It also does not define what
"typical" means. The choice of that word, as opposed to "average,"
suggests that the UAW web page is cooking the books, for obvious
That's fine. That's what they should do. But the process should not
involve the U.S. Government.
Your doubling of the unemployment rate -- by an additional 7
percentage points -- is hysterical and has no basis in fact. Detroit
has already eliminated one-third of its UAW workforce in recent years.
Did anyone notice? Another one-third would not be noticed either. A
100% elimination of GM jobs, through a Chapter 11 process, would be
highly unlikely. The truth probably lies somewhere between 50% and
100% job elimination. Tens and hundreds of billions of handouts is
too high a price to pay to save a few tens of thousands of jobs.
Are you implying that Judas did not have "cogent, reasonable
explanations" for his betrayal? As I recall, he did; he wanted to
force Jesus's hand to call down a heavenly army or some such to save
himself. No, Gen. Powell is a great traitor. Furthermore, go find
the Meet the Press podcast where he presented his 15 minute
infomercial for The Chosen One -- uninterrupted of course by any cross-
examination on the part of Tom Brokaw -- and tell me this decision was
based on anything but shared skin color.
While I don't disagree with you on the points regarding the UAW's
culpability in the automaker's troubles, the rest is simplistic and in
error. Concessions from the financial industry workers is not the major
problem with this ridiculous bailout. What frosts me is that congress is
willing to throw Billions with no strings attached at an industry that
cannot stop living high off the hog. Some of these companies are using
taxpayer money to expand their business, continue to fund executive
pay/bonus packages and hold meetings at exclusive resorts. Congress has done
nothing to curb this except continue to fund these practices. Then they
have the gall to rake the auto industry over the coals and demand some
unspecified new business model in exchange for a few paltry (in comparison)
dollars. I find this totally obscene. For decades the UAW (and all other
unions) have voted for Democrats as the "party of the working man". As
these working men get left behind by congress, maybe they will rethink their
position on politics.
One of the things that nearly killed finance is "easy credit".
Not a week went by that I didn't get pre-approved credit card offers in the
mail... in my "in-box".. over the telephone. Companies were desparate for me
to borrow their money.. "Take it!!! Please!!!".
I am uncomfortable owing money... many aren't - and they will constantly
borrow enough money to get in trouble.
While finance ius raking in big profits in interest and user fees. it is
upper management and capital investments that are the winners... The
"grunts" in the trenches... clerks, number crunchers, rank and file
employees don't appear to receive staggering wages....
However.... UAW assembly line workers.... their wage/benefit package is
reported to cost the manufacturer over $70 per hour... "Put tab A in slot B
is worth over $70 per hour"? This is nuckin' futs.... Based on this
principal, a packet of McDonalds french fries would be something like $10 if
not more.... but cooking fries is pretty dangerous what with all that hot
oil and the shop steward might shut down production at any time.
A task is only worth a finite value... to unionize in an attempt to make
that task "worth" more will only serve to artificially inflate the cost of
those goods... fuelling inflation along the way.
So what your saying is a worker putting on parts on vehicles in factory (
tab A into tab B ) requires no skill. ( I did work in a Auto Factory, and I
will say there is one hell of allot more to know than that ). So your logic
dictates that a mechanic at a dealership should only make what a factory
worker should make, after all a mechanic does the same thing, put part on,
and plug in sensors! Most of the mechanics I know are well into the $20/hr
and up range.
On Fri, 12 Dec 2008 12:33:50 -0800 (PST), Millwright Ron
You see Ronnie boy, there is more to it than just "Buy American", how
about building something I want to buy, at a price I can afford. Can't
be done in this here, the unions always demand their pound of flesh.
Unions have outlived their usefulness, there are far more regulations
protecting workers now, so what does the union do? Protect the not
so competant worker...
On Dec 17, 5:23 pm, email@example.com wrote:
A point that is passed over in the debate over wages and benefits, is
that the UAW has also imposed on its victims at GM a 5,000 page
collection of work rules to which non-UAW automakers are not subject.
These 5,000 pages are independently sufficient to guarantee the
failure of GM. But ask the UAW to throttle back to work rule parity
with the non-union shops? Not in this lifetime.
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