Im Sick of and Im Fed Up of Unions Being Blamed For Auto Bailout Breakdown!!!!

The problem is in fact that the UAW isn't competitive anymore. If I were a business owner that decided to create an automobile, I could opt to build those cars in America using overpriced labor (not fiscally sound) or I could choose to create those same cars in a third world country without a union where I could pay employees a lower wage thus increasing my bottom line. What would be more economically viable for me to do?

The UAW isn't completely to blame for the problems of the Big 3 but it does have a lot to do with it.

Another problem is in what is defined as the middle class. What we are seeing now is the eventual deflation of the economy thereby increasing what wages are considered middle class. When deflation occurs wages that remain the same will be valued more thereby making more people middle class. What the UAW has a problem with is that they want to retain the same wages for their workers in an economy that cannot sustain such high cost labor.

Prices for goods and services need to fall to an acceptable level and the American workforce has to understand that it also has to take a big chunk out of it's own wages in order to facilitate ourselves being a profitable and viable economy. The reason that jobs are fleeing America is that the American worker is too high priced whereas foreign workers can be paid much less to produce the same product. The other problem here is that taxes on corporations are indeed one of the highest in the world and it makes it more difficult for a manufacturer to produce a product here in the US where they could produce the same product in another country for far less and be taxed far less.

The bottom line is that the American workforce needs to be economically competitive. If an American worker would be willing to work for less, and costs of goods and services were brought down then you would see this economy grow again. It's been inflated far to much too fast and with the additional problems of overextension of credit coupled with toxic loans to those that should not have qualified for them this makes a recipe for a disaster like the one that we are in.

Yes mybigunit the UAW isn't the complete cause of the problems facing the automotive industry it's just a part of the problem. If the UAW workers were willing to be more competitive and work for less we would see that these companies would be able to higher more workers, produce vehicles for less and start becoming more of a viable and lucrative business again. It also wouldn't hurt if the CEOs and the executives of these companies followed suit and paid themselves less and actually started running their own businesses in a better and more competitive way.

reply to post by mybigunit


The peons are worth what they are worth on the open market. A software developer has an innate defensible skill, as does an artist or an engineer. They can add value to their salaries because they can show a track record of excellence.

Menial workers can be replaced by robots or cheaper labour. The quality of work is not an issue.

If someone in China is ready to work for 4 dollars an hour, how the hell could any business rationally choose to pay an American 28 dollars an hour for the same work?

As far as I can see, there really is no debate. Its either work the best paid job you can find, start your own business, or sit hungry and watch as someone from the third world takes your job.

The best quote ive ever read about this was : "When I was a child my parents told me to eat my food as there were starving children in the third world who wanted it but couldn't have it. Today I tell my own children to do their homework... because there is someone in the third world who wants your job"

As far as the execs go- the American auto industry has sub-par execs as compared to the other industries. However you cite 400 X the take home wage of a floor worker... consider that there is only one CEO and there are how many million floor workers? I think if they paid even less to the CEOs, they would have gone bust even sooner. Think about how recruitment and HR works... why would a company willingly pay 20-30 million to recruit a CEO if they could pay them 100k a year? They do it to attract the top talent... simple as that. You can replace an auto worker with a robot or an immigrant; but the pool of people who can manage a company is tiny.

Clearly this doesn't translate across to the Auto industry. There has been a failure in HR across the board by paying floor workers too much at the behest of unions; and recruiting sub-par CEOs.

Comparisons to Ford's business model are risible. When he was around, there was no competition. He literally could do anything he wanted to... he could give each of his workers a pineapple a day to throw into a river, or he could pay them an inordinate amount each simply because he had a monopoly on the car market- if you make a huge amount you can spend a huge amount. Fordism will never work when the same workers who were paid 50k a year can then buy a better quality Japanese alternative rather than buying the cars they worked on themselves.

Originally posted by whatukno
The problem is in fact that the UAW isn't competitive anymore. If I were a business owner that decided to create an automobile, I could opt to build those cars in America using overpriced labor (not fiscally sound) or I could choose to create those same cars in a third world country without a union where I could pay employees a lower wage thus increasing my bottom line. What would be more economically viable for me to do?

The UAW isn't completely to blame for the problems of the Big 3 but it does have a lot to do with it.

You said a mouth full right there. You would do it to increase your bottom line. So what are you going to do with that money from the increased bottom line? Raises for the Execs? Extra perks for the investors? So pay less to increase the bottom line. Your mentality would make it so soon no one could afford to buy the very cars you are trying to sell.

Another problem is in what is defined as the middle class. What we are seeing now is the eventual deflation of the economy thereby increasing what wages are considered middle class. When deflation occurs wages that remain the same will be valued more thereby making more people middle class. What the UAW has a problem with is that they want to retain the same wages for their workers in an economy that cannot sustain such high cost labor.

Prices for goods and services need to fall to an acceptable level and the American workforce has to understand that it also has to take a big chunk out of it's own wages in order to facilitate ourselves being a profitable and viable economy. The reason that jobs are fleeing America is that the American worker is too high priced whereas foreign workers can be paid much less to produce the same product. The other problem here is that taxes on corporations are indeed one of the highest in the world and it makes it more difficult for a manufacturer to produce a product here in the US where they could produce the same product in another country for far less and be taxed far less.

Hehe there is no deflation here. Just a massive sell off of anything and everything to get actual cash in hand. Even if it was a deflationary situation ok so now that dollar is worth a little more. It does no good though with an 18% unemployment rate does it? Eventually they will have to cut your pay to because no one has money to consume the products or services you offer. As far as corporate taxes they are at the lowest they have been in US history. Im with you in cutting taxes I just wouldnt cut the corporate tax Id cut the individual tax. Abolish the 16th Amendment. You want to see a boom do that.

The bottom line is that the American workforce needs to be economically competitive. If an American worker would be willing to work for less, and costs of goods and services were brought down then you would see this economy grow again. It's been inflated far to much too fast and with the additional problems of overextension of credit coupled with toxic loans to those that should not have qualified for them this makes a recipe for a disaster like the one that we are in.

Yes mybigunit the UAW isn't the complete cause of the problems facing the automotive industry it's just a part of the problem. If the UAW workers were willing to be more competitive and work for less we would see that these companies would be able to higher more workers, produce vehicles for less and start becoming more of a viable and lucrative business again. It also wouldn't hurt if the CEOs and the executives of these companies followed suit and paid themselves less and actually started running their own businesses in a better and more competitive way.

Heh the trickle down theory work for cheap and take that money and hire more people right? In theory it works in reality it does not. Because instead of spending that extra money gained in big tax breaks to corporations and by sending jobs over seas for cheap labor on more jobs and higher pay it goes right to the executives and the investors. This is why executive pay in 1980 was around 60x the average employee and now it is 500x the average employee. Reagonamics is a failure and trickle down in reality does not work. What we see today is a direct result.

With other threads like:

www.abovetopsecret.com...

I can see your anger.

The middle class as you spoke of, is disappearing. But hey... I wouldn't feel too bad. you could take the $1,000 a year cut or... Flip burgers like the rest of us.

Originally posted by rizla
3 trillion dollars for Wall Street, no questions asked. Think of all those lucky rich investors. It's Socialism for the rich and hard 'capitalism' (i.e. a system of cartels that fix prices which is not capitalism) for the not rich. We are moving back to the days the Victorian era.

Bingo!
And might I ad.... Are we asking folks that make $50k a year and are barely keeping up with Credit,Motages,loans,etc to suck it up or lose it on top of the Oh yeah your gonna be making half as much now.
Now thats some serious Messed up Stuff folks.
These workers are far from rich and support and spend so much locally and generate so much in taxes and sales etc..
that to contemplate throwing them all and their money too the wood shed and taking away as much is just
And what about the Damn fair trade crap the Gov will not address.
We sell 6000 cars over seas at mega tariffed prices and the importers sell near hundreds of thousands here in the US with little to No $$$ Tariffs/fees?
WTF?
And too use the US/Import MFG mold is Dead wrong. They do well because Japan helps Make them competitive.
Dont blame the Low to Middle classes again folks they are after all the Fiber and Soul of All that goes on in the US Economy without a doubt.



[edit on 12-12-2008 by VType]

I'm not a big union supporter, but even I acknowledge that it was NOT the Unions fault this deal fell apart. After the Govt. basically tells the Big 3 "come back with a REAL plan", that same Govt. springs a last second "string" on the whole deal. "Oh by the way, I forgot to tell you this little detail 3 weeks ago, you need to take pays cuts". I really shouldn't be surprised, it is after all the Govt.

The Big 3 say they need somewhere between 25 and 30 Billion and the Govt. goes "really? We think you can get by on half of that". Usually when a person or business is in financial difficulty they underestimate the hole they are in, but what does our Govt. do? They have the audacity to say "you are really not in that bad of shape , I bet you can scrape along with half of what you have estimated you need, after you have carefully reviewed your plans like I told you to do. If it wasn't actually happening, I would laugh.

Since there are two threads going on this, and since the moderators haven't yet decided to close one of them, let me post research that I posted on the other thread. Here is exactly what I posted on the other thread:

OK, if we're going to discuss this issue, let's first research and get the facts straight. Let's not fall into the trap of just repeating what the MSM tells you about what is going on. Remember the MSM and the election season?

I would like to present what I believe are the facts, without taking sides, because quite bluntly, after seeing the facts, I don't think there can be a "winner" in this situation.

First, the big 3 actual current wage is:

The current veteran UAW member at GM today has an average base wage of $28.12 an hour, but the cost of benefits, including pension and future retiree health care costs, nearly triples the cost to GM to $78.21, according to the Center for Automotive Research.

source:money.cnn.com...

By the way, that figure of $28.12 is consistent, regardless of the reputable source you go to.

As you can also see by the above external source, the total burden is over $70 per hour per employee.

Now let's look at new hire pay, from the same source:

By comparison, new hires will be paid between $14 and $16.23 an hour. And even as they start to accumulate raises tied to seniority, the far less lucrative benefit package will limit GM's cost for those employees to $25.65 an hour.

So, it should be apparent that the NEWEST contract is not out of line with what other companies pay their employees.

So where is the problem?
The problem is in the "legacy" cost burden, that is OLDER contracts that had very lucrative retirement benefits. OK, so now you say "let's just cut those". There you run into big problems. First of all, Federal Law, and the ERISA laws.

For those that wish to see ALL of the ERISA provisions, here is the link:

www.dol.gov...

Now you also run into the PBGC, which is a federal corporation created by the Employee Retirement Income Security Act of 1974.

The PBGC guarantees retirement payments if a company should go bankrupt, with certain limits.

Here is the link which you can go to, if you want the details, which are far too numerous to post here
www.pbgc.gov...
The bottom line is that most of the legacy retirement payments cannot be eliminated, nor I hope, would people want that to happen, because first, the government created a legal agreement not to, and second, because in the long run, the government would end up having to pay in some other way anyway, by law

So there are the facts, and as I see it, there are no winners. We cannot change the past, and the past has dictated the predicament that exists today.

No matter what the "solution" is, no one will be happy. Any way you look at it, it will COST the taxpayer.

You can't alter the facts. Everyone loses.

reply to post by 44soulslayer


Heres the thing my friend. Its not just the menial jobs being sent over seas its also jobs that DO require college educations. Ask my mother in law who works at Franklin Templeton who just had her whole accounting Dept shipped to India. Ok so on the why pay someone $28 an hour when you can pay someone in China $4 an hour. Ok what are you going to do with all that saved money? Where does all that money go? Do you hire more Chinese labor? Do you give those Chinese people raises with the money spent? Where does it go? The fact is it goes right to the top. All those savings goes into the pockets of the execs and to the investor class off the hard cheap work of the Chinese.

So are we to ship ALL of our jobs to China? I mean if what you say is true why have jobs in America or UK? Why not just ship everything over there? We dont need to worry about an economy here do we?

Now as far as the one CEO and top talent obviously as Ill point out once again our big companies have been paying the millions but we havent seen much talent now have we? Not just in the auto industry but almost ALL of the industries. Its not the Auto Industries who werent prepared for this the banking, airlines, construction, just to name a few were ALL partying like Rockstars while this meteor was coming. Talent would of been saving up for this rainy day and preparing instead of using all the company profits to put in their pockets.

What I say to you is there really is no such thing as "top talent" You have very few people who can qualify as "top talent" who can actually make a difference in a company and the rest are just glorified baby sitters. The ironic thing is some of the real talent have not been getting paid what the glorified baby sitters have been getting paid. Like I pointed out above why dont we anymore let people who have worked in companies for many years and who have worked all the depts take a shot at being a CEO? Thats how it used to work. Now its just people who come in who know people and who are part of the good old boy network. They dont know a damn thing about anything but because they have contacts they get the job. Once again where is this talent? Billions of dollars have been paid out to non talent. Those billions would of been better spent giving to the workers who actually spend money into the economy and not sit on it in certain investments like they are doing now.

reply to post by ProfEmeritus


Ok and I wont disagree with you. But here's the thing if we are going to take back from the peon workers who put in their time and were promised pensions and health benefits and what not then are we going to punish the old execs? Not only that some people allowed themselves to be paid lower wages at those times because they were told that they had pensions and stuff coming to them. This is why I tell people when you negotiate contracts negotiate for what you can get paid NOW instead of in the future because you never know what is going to happen and we are seeing it right here. I agree they will have to get rid of some legacy costs but to ask the people now to take a pay cut like what Senator Demint and Senator Corker is asking for is just wrong.

reply to post by WyrdeOne

Nobody should get paid to not work. Nobody.

I agree. Maybe now we have a reason not to pay our politicians. They don't work, they just cause problems. Well, maybe they work, but it certainly isn't for the average taxpayer, is it?

reply to post by WyrdeOne


According to my link after all bonuses are paid Toyota people actually get paid MORE than the UAW peeps. That is after bonuses however.

www.aftermarketnews.com... px



[edit on 12-12-2008 by mybigunit]

Originally posted by ProfEmeritus
reply to post by WyrdeOne

 

Nobody should get paid to not work. Nobody.

I agree. Maybe now we have a reason not to pay our politicians. They don't work, they just cause problems. Well, maybe they work, but it certainly isn't for the average taxpayer, is it?

star for you sir I couldnt of said it better myself. I think the peeps in Washington need a nice haircut also.

Originally posted by WyrdeOne

Your link doesn't work for me.

If they're being paid extra for hitting production targets or something, that's a different story. Merit-based pay is something I strongly support....

Copy the link and put a px at the end. For some reason its not adding the px at the end they just put .as and not .aspx

reply to post by mybigunit


I hear what you're saying, and I don't disagree with most of it, but again, I think the issue is that this seems unrepairable to me now. First of all, we are NEVER going to be able to compete with Chinese slave laborers at $4 dollars an hour, because we do have slave labor laws which prevent that, and I doubt that Americans would accept that.

So what can be done for the FUTURE, since we can't change the past? Well, we might ask Congress to stop dealing with countries like China UNLESS they put the same labor standards in place that we have. Unfortunately, you and I know how far that will go.

You know, no matter from what angle you look at it, how can we NOT conclude that this is heading towards a NWO-one world government, where everyone is slave labor, exvept the elite, who are "herding" us in that direction, with every move that they make. That is not conspiracy theory, IMHO, it is fact.

reply to post by mybigunit


Dont confuse the owners of the company with the management. The owners of the company are the shareholders... and there are millions of them.

Profit and efficiency in business are needed for survival. With the money saved, you :

1. Reduce the cost of the goods, thereby making them more affordable for ordinary people

2. Increase share dividends

Its not the case that a CEO simply strolls in one day thanks to his father having connections; fires all the "working class heros" and sends their jobs to China, then sits back and counts the money rolling into his account.

Im expounding the principle of intrinsic- market determined fair value. The reason why I still have my job is that nobody on earth can do it like I do. I don't mean that in an arrogant way; I just mean that no Indian, Chinese man or Russian could take my job since what they can offer won't be anywhere near comparable. Like I said, any monkey can hold a wrench and screw some nuts onto a car. How many can design live saving drugs; how many can paint a beautiful and unique picture; how many can design a fighter plane?

Its about adding value to your career portfolio. Its about making yourself irreplaceable and undeniably useful. The West still has a massive advantage in that the people are better educated and have access to all manner of facilities. The emerging markets are not just demons that suck jobs away from us; they are also a new opportunity. Take the Scotch Whisky industry or the Swiss watch industry... both have expanded like crazy thanks to the Indians who are drinking single malt while checking the time The West still has a considerable vantage point of superior production and luxury. We need to start exploiting this to a more efficient degree.

To put it bluntly, nobody cares if the glass was made in China- its where the Whisky was made that counts.

Innovation and Design will be retained in the West to a great degree; while manufacturing can just be outsourced. Thats why menial workers need to get educated if they want to survive.

I totally agree that the ranks of management have been completely filled with dunderheads. There needs to be massive retrenchment in middle management too. There is no old boys network with CEOs though... a company chooses the steward they think best to lead the company. There is an old boys network where auto workers introduce their friends into the union though... how about that?

I believe it's a conjoined effort,mis management at the top and blood suckers on the bottom rung,the union with overpaid low incentive workers seems trying to get rid of a worker is impossible when it comes to union,I say cut all their pay in half,if they are getting 28.00 an hour might add at least another 25.00 an hour for their benefits,no wonder cars are so darn expensive now,used to be you would buy a new car every 2 or 3 yrs,now they cost so much some finance for 7 yrs,and people see the foreign cars for the reliability,have to cut your overhead way down

Originally posted by ProfEmeritus
I would like to present what I believe are the facts, without taking sides, because quite bluntly, after seeing the facts, I don't think there can be a "winner" in this situation.

First, the big 3 actual current wage is:

The current veteran UAW member at GM today has an average base wage of $28.12 an hour, but the cost of benefits, including pension and future retiree health care costs, nearly triples the cost to GM to $78.21, according to the Center for Automotive Research.

source:money.cnn.com...

Believing in facts doesn't make any sense. Facts are statements with the highest degree of certainty. We don't BELIEVE that facts are the truth; we KNOW that facts are the truth.

There is surely a difference between how much US auto workers make and how much they earn. In this territory, facts are not easy to come by, especially not under current circumstances.

The New York Times debunks the claim that the Big Three auto workers earn $73 an hour. That number came from the car companies themselves during union negotiations, writes David Leonhardt.

But it isn't completely accurate. Yes, the companies do spend about $73 for every hour of unionized work, Leonhardt writes. Not all of that goes to the worker's pocket.

Here's how it breaks down:

blogs.moneycentral.msn.com...

There is no single reason for the US automakers being in trouble and it doesn't make is any sense to solely blame the union for that. But UAW is largerly responsible for the Senate voting against the bailout. The union leaders know that the rescue money will come from someplace else, and they will not make any concession unless there is no other choice. Anyone right in his mind earning half of what the unionized autoworkers are, should show them the finger. The bailout money is still considered to come from the pockets of other people who were asked to support someone who earns more money. No wonder that there is a tendency to divert attention from this medieval crap and get concerned about how things are in China.

Originally posted by whatukno
Prices for goods and services need to fall to an acceptable level and the American workforce has to understand that it also has to take a big chunk out of it's own wages in order to facilitate ourselves being a profitable and viable economy. The reason that jobs are fleeing America is that the American worker is too high priced whereas foreign workers can be paid much less to produce the same product.

So we should earn a dollar a day and live in a mud-hut like Chinese peasants? Hardly a solution.

There's plenty of money in the system. The trouble is, the moneyed elite is grabbing more and more of it for themselves.

Socialism anyone? 'Cos Capitalism hasn't worked. It's not even capitalism; it's a system of cartels and monopolies.