Saving the US Auto Industry

[ZenGum]

Originally Posted by Aliantha

Might I just say that the Australian industry isn't doing all that much better. No one is buying cars at the moment, but the advantage that we have is that most of our manufacturers make more small cars than large, so they've got half a chance of surviving.

Err, pardon?

Autralia has four car manufacturers. oops, three - Mitsubishi just shut down.

Holden (GM) makes commodores (in Adelaide). 6 or 8 cylinder.
Ford makes falcons (in Geelong). 6 or 8 cylinder.
Toyota makes camrys (near Melbourne). 4 or (I think) 6 cylinder.
Mitsubishi made 380s (in Adelaide, aka deadelaide). 6 cylinder.

While each brand does have smaller cars on the market, they are (AFAIK) all imports. Locally made cars are all medium to large family cars. Which was why Mitsubishi shut down when the price of petrol went through the roof. Ducks, can you confirm?

[lookout123]

Originally Posted by Brianna

I googled UAW average salary and found this one at the top.


According to Forbes:

Labor cost per hour, wages and benefits for hourly workers, 2006.

Ford: $70.51 ($141,020 per year)

GM: $73.26 ($146,520 per year)

Chrysler: $75.86 ($151,720 per year)

Toyota, Honda, Nissan (in U.S.): $48.00 ($96,000 per year)

According to AAUP and IES, the average annual compensation for a college professor in 2006 was $92,973 (average salary nationally of $73,207 + 27% benefits).

Bottom Line: The average UAW worker with a high school degree earns 57.6% more compensation than the average university professor with a Ph.D. (see graph above, click to enlarge), and 52.6% more than the average worker at Toyota, Honda or Nissan.

Labor cost is not the same as earned wage. The issue with the American auto companies isn't necessarily what they are paying current employees, it is the staggering weight of their legacy costs. Every retiree still has medical coverage that is second to non and a pension.

I grew up in a UAW family in a UAW town and I even worked in one of the UAW plants. My father and most of my extended family survive on what the UAW negotiated for them at contract time. Unions paved the way for employee rights we all enjoy today.

The UAW is just as guilty as GM, Ford, and Chrylser management if we really look at their current problems. The Unions pushed contracts in the '70's and '80's that they knew were not sustainable - but they sure looked good at the time. That's all fine and there is plenty of blame to pass around but now the day of reckoning is upon us they want government bailouts? BS. No thanks.

When JI Case, Case International, etc were circling the drain the company and the union went back to the drawing board. The UAW gave concessions (they gave up some benefits) in the name of keeping the company alive so they could at least keep the sustainable portion of their benefits. There was no government bailout.

If the UAW can't figure something out with the big 3 then let them go to bankruptcy. The companies won't close their doors, they'll simply restructure.

No government money for them, not a single penny IMO.

[tw]

Originally Posted by monster

I'm not in favor of taxpayers bailing out private companies, but I don't have an alternative. all i do know is that if the big 3 go under, Michigan dies.

How many times do I remind everyone of what is now monster’s myth? Throwing money like a grenade only destroys jobs. Did Perot teach you anything? Anyone with any grasp of history would know that.

monster - what saved 1979 and 1981 Chrysler and Ford? No bailout. Both companies were finally forced to submit detailed restructuring plans. President Ford also said "Ford to NYC Drop Dead!" Only then was Ford, Chrysler and NYC all saved. Get a grip. Throwing money at GM only guarantees Michigan job losses.

GM's only problem is stifled innovation. How did Chrysler and Ford get saved in only years? Once top bean counters were replaced by car guys, then all jobs were saved by liberating stifled innovation. Only one reason for that stifled innovation. Top executives did not even have driver's licenses. Did you learn from history?

Why is GM still doing no restructuring planning? Because your post (like so many others) endorses corporate welfare and protects Rick Wagoner. Your ‘worry’ or indecision is exactly what Rick Wagoner needs to save his job and to destroy jobs.

You know the difference between Chapter 7 and Chapter 11? Wagoner needs you to be ignorant. He needs you confused - to assume Chapter 7. Therefore his job is protected.

Clinton got all three to design hybrids in the 1990s - as only an American patriot would do. If informed, then you can name those 1999 hybrids - Precept from GM, Prodigy from Ford, ESX3 from Chrysler. Where are they? Oh. Wacko extremists (George Jr et al) said a $100million government investment was Clinton and must be wasted. Of course you remember that mantra. If Clinton advocated it, then it must be wrong. Everyone remembers that.

So wackos especially did not want innovative cars. We want to burn more oil – and even have White House lawyers also rewrite science papers on global warming - to justify stifling innovation. It was by Clinton so it must be wrong. The wacko extremist mantra that protected Rick Wagoner and promoted more Michigan job losses.

So GM still has no hybrids? Fifteen years later, $100million later, 8 years after completed designed were demonstrated? You would even endorse more stifled innovation by throwing $50billion into a company only worth $1.8billion? You would advocate the destruction of Michigan jobs?

Only an ostrich does not know what "70 horsepower per liter" means. Another example of destroyed American jobs. Twenty five years later – monster advocates more cars without 70 Hp/liter engines. More government protection means no 70 Hp/liter engines. monster – tell me no 70 Hp/liter saves Michigan jobs. When do you advocate a solution; not more welfare to stifle innovation?

Give Telsa Motors that money to manufacturer what is more innovative than anything in GM. Or give patriotic companies such as Honda, VW, and Toyota that money to actually save American jobs. Oh. But GM needs that money to start selling a 400 Horsepower Camaro. Monster - why do you approve of a car with as much or more horsepower than BrainR's 80,000 pound 18 wheeler? That is what you advocate.

History repeatedly defines the only thing that saves the worker's jobs. Bankruptcy - ie 1979/1981 Chrysler and Ford.

His name is Rick Wagoner. He created massive losses in GM North America. So they made him CEO. Now all of GM has no profits. This is no exaggeration. And monster would protect him? Sorry. But your protection of those who destroy Michigan jobs is obvious - if you learned from history. Yes, 1970's deja vue. Not stated politically correct. Stated instead with the same supporting facts that also denies those Saddam WMDs - with the same sound byte - deja vue.

[tw]

Originally Posted by lookout123

The Unions pushed contracts in the '70's and '80's that they knew were not sustainable - but they sure looked good at the time.

It's not the union's job to protect the company. That is management's job. If unions were so overpaid, then why was the largest featherbedding in management? Why did management in GM grow to 52 layers? Oh. Unions should take a lower pay because executive salaries were growing exponentially AND GM was adding management layers?

It is management's job to agree to responsible contracts. Why did management agree to those concessions? Because they had already decided those health care costs would be covered by future management. If those union concessions were paid by current management into trust funds, then current management would have not conceded.

I forget the name of the two brothers and a third union executive who negotiated those 1970s contracts. But later they also were appalled at how GM, et al conceded. Appalled, but it was not their job to make concessions or protect the company. They were paid to get unions a best contract. Meanwhile, GM executives took even larger pay increases - a fact that is ignored by lookout123. Corporate management constantly took pay, bonuses and benefits that always were greater than union compensation.

If compensated equally, then unions would have been paid even more. Oh. Unions also made numerous concessions to save the company while top executives are taking increasing and record high bonuses. Why does lookout123 also forget that fact?

Well, when a car guy replaced bean counters, then the car guy took only $1 per year until the company was finally profitable. Why does lookout123 also ignore what good people do? Why does his post not blame GM's only problem - Rick Wagoner?

How bad was GM? Comic pictures were carefully mounted where management could not remove them. GM was claiming profits in the spread sheets. However the spread sheets were manipulated so that the profits did not appear in auto operations. The cartoon showed Chrysler and Ford employees with massive bonuses in wheel barrows. However the GM employee was carrying his wang as a Christmas bonus.

That year, GM claimed a large profit. GM management was reaping record bonuses. But the employees got no Christmas bonus that year. lookout123 also forgets those stories. No matter how much the union was compensated, GM management always took home increasing amounts of money. Large Christmas bonuses even in years that GM lost money and when employees got none.

Rick Wagoner said GM has no plans to restructure. GM, Ford, and Chrysler executives all said the same thing in late 1970s as they campaigned for government restructiion on imports. Deja vue.

When did Ford and Chrysler finally plan a restructure? When bankrputcy threats finally removed America's enemies: Townsend and Richardo in Chrysler and Henry Ford in Ford. Once replaced by car guys, only then did each company get profitable. Bean counters will only protect their incomes at the expense of the company which is what MBA trained management does. Deja vue.

[Aliantha]

Originally Posted by ZenGum

Err, pardon?

Autralia has four car manufacturers. oops, three - Mitsubishi just shut down.

Holden (GM) makes commodores (in Adelaide). 6 or 8 cylinder.
Ford makes falcons (in Geelong). 6 or 8 cylinder.
Toyota makes camrys (near Melbourne). 4 or (I think) 6 cylinder.
Mitsubishi made 380s (in Adelaide, aka deadelaide). 6 cylinder.

While each brand does have smaller cars on the market, they are (AFAIK) all imports. Locally made cars are all medium to large family cars. Which was why Mitsubishi shut down when the price of petrol went through the roof. Ducks, can you confirm?

Mostly 6's because there's not the market for 8's here as much although we know Ford and Holden make their performance vehicles for the rev heads.

Toyota make mostly 4's. (Aurion is the only 6 manufactured here whilst Camry, the 4 is by far the biggest seller)

And of course, Mitsubishi aren't doing so well are they?

My point was that we don't make a whole heap of 4wd's and large specialty vehicles like Hummers for example. Yes we do make 6's and 8's here, but I think in general, most of them are pretty average verging on small compared to US manufactured vehicles.

[footfootfoot]

The US auto industry shouldn't be bailed out. The idea that Michigan would go down in flames is predicated on the belief that the people there are capable of only one thing- working in an auto plant.

Just as a for instance. Why not re-tool all the plants to build rail cars and get the country into feasible rail travel? You know, if I'm not mistaken I'm pretty sure somewhere over in Europe people travel in trains.

[tw]

Originally Posted by footfootfoot

Why not re-tool all the plants to build rail cars and get the country into feasible rail travel?

All patriotic auto companies had retooled their factories 10+ years ago to be flexible as well as build the new models. For example, a Toyota plant in Indiana making Tundras was changed in maybe a month to make Camrys. That was the latest auto industry innovation a decade ago when GM decided to address quality - a 1970s technology.

It takes GM something between three months and one year to retool a factory. Just another example of why GM needs bankruptcy. GM bean counters decided that flex manufacturing would only increase costs.

Remember the first Saturn factory in Spring Hill TN? GM cannot even decide what to make there. Every time a decision is made to make a new car there, the plans get quashed. Management plans to convert the factory to a new car. Long later, GM learns the factory is inflexible - cannot make that car. GM has gone through this 'maybe we will do this' cycle twice. Spring Hill may get closed because GM bean counters stifled another innovation over a decade ago - flexible manufacturing.

[lookout123]

Originally Posted by tw

It's not the union's job to protect the company. That is management's job. If unions were so overpaid, then why was the largest featherbedding in management? Why did management in GM grow to 52 layers? Oh. Unions should take a lower pay because executive salaries were growing exponentially AND GM was adding management layers?

The Union's job is to take care of the union members. Part of taking care of the members would seem to be helping ensure there is a company around to keep paying those benefits out.

You're so busy attacking GM for being a shit company that you don't even take the time to notice no one is disagreeing with you. GM sucks. Now what?

[lookout123]

Originally Posted by footfootfoot

Just as a for instance. Why not re-tool all the plants to build rail cars and get the country into feasible rail travel? You know, if I'm not mistaken I'm pretty sure somewhere over in Europe people travel in trains.

Screw it. Let's re-tool all the factories to produce wargoods and then announce we are defaulting on the US debt. "HAHA China, You're Effed for buying all our debt! Now whatcha gonna do!?!"

[footfootfoot]

That's what I'm talking about.

[tw]

Originally Posted by lookout123

You're so busy attacking GM for being a shit company that you don't even take the time to notice no one is disagreeing with you. GM sucks.

If you were honest, then your post would have addressed GM's only problem - Rick Wagoner and his executives. Unions were never compensated equally. Management was always reaping bonuses and salary increases even when the company was losing money. You conveniently forgot to mention that part while taking a cheap shot at employees.

Employees have taken repeated concessions. GM management has taken none. Meanwhile, only GM management is why GM cars need V-8 engines. GM managment is why GM SUVs feature 1968 technology. Unions did create those high costs. A GM car has so many more parts as to cost more than a compartively equipped Mercedes. When the LA Times noted that problem, GM management took revenge on the LA Times rather than addres their only problem. A problem only made worse by those who would blame the unions - and not Rick Wagoner.

If lookout123 was honest, he would have identified their #1 problem. GM sucks only because bean counters run the company and design the products. But that means lookout123 would have to admit his peers are GM's problem.

[Aliantha]

Well, personally, I'm pretty sure it's got nothing to do with lookout123. At least, no more than it's got to do with tw or UG or Bullit or anyone else that posts on here.

[Shawnee123]

I'm admitting to tail posting, as I need to get to work, but this was on my mind last night.

Bri's tales are similar to tales I've heard around here: many from GM employees themselves.

The wage breakdown is really interesting. Honda, who has manufacturers in our area, pays their employees well. They get paid to WORK. They don't get away with a whole lot of crap: I've heard people say they are just a number there, but that they are a number who gets paid well for working hard. I hear few complaints.

The GM stories I've heard are different. Retirees have told me of days spent playing cards. They make much more than Honda employees, but don't seem to have the accountability...therefore GM is paying people more, to get less production and, it follows, less quality. THough I am sure this is not true of all employees by a long shot...the fact that this environment exists at all has always been troubling.

The problem: the other big employers in this area are suppliers. If GM goes down, they suffer. Honda suffers because they are paying more to make up for business the supplier isn't getting from GM...the trickle effect is quite scary.

I wish I could say let them fail, but I see the job market in this area already.

Obviously, a blank check is not in order. I don't know the solution, but both extremes are not good, imho.

The smartass side of me thinks that perhaps some of the employees could sell their RV that's bigger than my place, their top of the line Harley, their 45000 ton pick-em-up truck, and learn to live like the rest of us schmucks who get by with so much less.

[Undertoad]

The failure of companies is part of the dynamism that makes the US strong.

In the 1950s, Massachusetts was concerned about the tremendous loss of jobs, as their famous textile mills shut down one by one. But a lot of mills were converted to office space where computer companies moved in, and suddenly Mass. had the Rt. 128 corridor, and a mini silicon valley with DEC, Data General etc., fueled by M.I.T. and the minicomputing revolution.

Now those companies have been eclipsed again and now the area turns to newer possibilities such as biotech. But if we had demanded the preservation of the mills in 1950, none of this would have happened... and we would be talking about places like Burlington and Woburn in the same tones as we talk about Flint and etc... dead-end towns with dead-end jobs.

[lookout123]

If lookout123 was honest, he would have identified their #1 problem. GM sucks only because bean counters run the company and design the products. But that means lookout123 would have to admit his peers are GM's problem.

Are you seriously fucking deranged? What peers do I have at GM? When have I ever defended GM management? Learn to read instead of just seeing a post and deciding you have a cut and paste job that will fit nicely behind it.