Saving the US Auto Industry

[xoxoxoBruce]

$55 and hour plus some insane benefits

Not true.

[Pico and ME]

Nope not true at all. We live on an autoworkers salary and although we live in ease...we are barely into middle class.

[classicman]

Got any numbers then? What is the average? Anyone?

[Trilby]

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.

[xoxoxoBruce]

That's what the automakers claim each UAW employee costs them, including all the lawyers, accountants, clerks and hot nurses in the dispensary, it takes to service them.

Some of it are projected costs if they live to be the average actuarial age, collect a pension equal to the average worker at retirements years of service, has a spouse with survivor benefits that lives to the average actuarial age.

Some is services the company is willing to provide, even if the employees don't choose to take advantage of them.

There are plenty of people making more and plenty of people making less. But they make a good living because thanks to the union, they are getting a fair piece of what the company makes on their labor. They are the middle class.

If they chose to be garbage collectors or college professors, they would get what that was worth to their employers.

[smoothmoniker]

Originally Posted by Brianna

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.

In all fairness, the average UAW worker actually produces something useful.

[tw]

Originally Posted by Brianna

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)

A highest paid union worker was making somewhere between $70,000 and under $100,000 annually (stated by him and his peers). Why? He would take all overtime he could get - about 80 hours per week. Once a union worker is offered overtime, he goes to the bottom of a list. Since GM had so much overtime work and since so many workers were turning down overtime, then this GM employee got plenty of overtime.

I don't know where those Forbes numbers come from. It probably included money GM is supposed to put in pension and medical benefit funds (and did not), health insurance, etc. The numbers imply that is salary without overtime. Numbers probably include all costs including those that GM was not funding (which explains another myth called 'legacy costs').

Meanwhile, unions have made so many concessions that new union employees are now paid $14 per hour. GM is successfully lowering the American standards of living.

Before those concessions, Japanese workers were sometimes paid more than American auto workers - a number that varied with currency values, etc. Why do Japanese products routinely cost so much less to build? All previous posts forget to add more important facts.

How much labor goes into a car. For an expensive and unprofitable vehicle - maybe 40 man hours? Do the math for a $20,000 car. Why does everyone forget that labor is not the major car cost? Because some want to blame the unions rather than first see GM's real problem.

How much labor in the profitable cars? Last estimates were 26 man-hours for the entire vehicle.

Massive vehicle expenses include design, number of parts - even that the car is so anti-American as to need wheel alignment. No wonder GM does everything to dump warranty repair costs onto dealers who in turn must do anything possible to deny a warranty repair. All cost increases directly traceable to bean counter top management. Same costs that Iacocca in Chrysler and Petersen in Ford fixed to go from record losses to record profits in but years. Excessive costs were not the unions. Excessive costs directly traceable to stifled innovation.

So anti-American is GM management as to require two extra pistons in each engine. So many more parts that - well blame the unions so that a Cellar majority did not calculate the horsepower per liter number for and did not know what makes the GM car cost so much.

What was the horsepower per liter for that new Chevy Cobalt that was recently touted as the new GM?

GM cars are so badly designed as (rumored) to cost more to build than to sell. Sales so bad that 25% of all sales are to employee and supplier families at reduced prices. What the Economist suggested should be called socialism. Massive losses masked by $5000 per vehicle profits on SUV - vehicles with minimal engineering and 1968 technology engines. Last number I saw when GM was claiming profits - GM's average profit per vehicle was only $200.

Why does a Honda or Toyota cost less to build? Routine: when employees do the designs and make changes, then products cost less. Now there is no need for massive layers of management. I would see this in the GM plant where union workers loved what they did - because they made things work. They had control of their job - unlike those in assembly plants.

At one point, I had to get something fixed. The engineer had to get permission from management who would deny it due to technical ignorance. So I found a union worker, who threw a disparaging arm salute at the direction of a mythical boss, and then went off to solve the problem - now. How did I get things accomplished in GM? Find a union employee who knew what was involved.

In that GM plant, an employee (probably) setup the machine improperly. When I got there, another employee had just corrected the problem. I asked him why he entered a room full of HCl gas. He said he held his breath and solved the problem before the problem became massive. Wacky? Well he knew what was necessary to protect the production line. In other plants, the union guys probably would have walked away since they had no control over their job and would wait to be told what to do.

Later I got dragged into a meeting called by the plant manager. Maybe 50 people in that meeting - except a guy who made the original connection and a guy who fixed the problem. Even in a productive GM plant where inspired union employees would solve problems - still the plant manager was only interested in having a meeting. Imagine how much worse it is in GM assembly plants.

A meeting resulted in nothing - just wild speculation and no conclusions. But because she was an MBA, then the meeting had solved everything. Nobody knew why that failure happened. But she did what any bean counter dummy would do - have a meeting - CYA.

I talked to those who created(?) and solved the problem. I knew what happened. And I knew the problem was solved only because union guys were empowered. They loved working at a job where they could take charge - not in an assembly plant where everyone had to wait for an MBA to tell them even when to go to the bathroom.

I saw a sign that used the word "employe". One day, the sign read, "employee". I noted that someone had finally learned how to spell. No. The sign was changed because Roger Smith had resigned two days ago. All signs in GM had to be misspelled because Roger Smith could not spell employee. And all signs changed back when he was gone. Even spelling employe was more important than the product. No wonder union workers get a bad attitude. Some pet dog got treated with more respect. Treat them like dogs. Then their pay must be higher. Then get member of the Cellar to blame union workers rather than Roger Smith or Rick Wagoner.

[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 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.

[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?

[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.

[Trilby]

I never serviced no auto worker.


...steel workers, now, that's a horse of a different color...

and just to stir the pot some more: if an IEU member (our plant was International Electricians Union) got a speeding ticket in the city the plant was in, a union member went to court for them to get the ticket thrown out. I know you think I'm making this stuff up, but, honey, you couldn't make this stuff up!!

[xoxoxoBruce]

Originally Posted by Brianna

if an IEU member (our plant was International Electricians Union) got a speeding ticket in the city the plant was in, a union member went to court for them to get the ticket thrown out. I know you think I'm making this stuff up, but, honey, you couldn't make this stuff up!!

I assume it was a union official that got the ticket squashed, for the member. Good, don't you wish the people you voted for would take care of you?

Oh, from another forum...

I'm laid off again, about the 14th week this year. We just laid off another 250 hourly employees permanently! We now have laid off, permanently, more employees than we currently have working in the plant. We also let go a very good maintenance supervisor, so we could move a supervisor with no maintenance experience to that position, because he has the right friends. Why worry about keeping highly productive, quality people when you need to make sure the popular guy stays?

G.M. top dogs came in to evaluate our progress on our new 010I Duramax Project. This is their way of thinking. We machine our own heads, cranks, rods, and blocks here in Dayton, Ohio. They want us to package them up and ship them to Detroit, so they can have their "experts" inspect our quality. Then they will repackage these parts and ship them back to us for assembly. It is nice to know people actually think my insurance and benefits are what is killing G.M. and not the idiots that throw away ten times that amount of money taking care of their buddies in management.

My plant has had competitive wage and benefits agreements given to them by the union in every contract since before I hired in, yet G.M. has done nothing but waste those savings!

All together now... 85% of all...

[Bullitt]

Originally Posted by xoxoxoBruce

I assume it was a union official that got the ticket squashed, for the member. Good, don't you wish the people you voted for would take care of you?

Oh, from another forum...
All together now... 85% of all...

Shoot him he's chokin me!
-No shoot him! He's chokin me!

[xoxoxoBruce]

By Al Lewis
Dow Jones Newswires

A government bailout of General Motors Corp. is an all-American vote of confidence in CEO Rick Wagoner.

"What the industry needs now is the most competent, most experienced, most capable leadership team they can have at each of the companies," Wagoner said in video interview with Automotive News on Monday. "And I think we have a great team at GM."

This great team led the industry with a 45 percent plunge in October car sales.

GM's stock recently hit a level not seen since 1943, a decade before Wagoner was born. And soon taxpayers may be forced to cover the $2 billion a month GM is guzzling like a rusting fleet of Chevy Suburbans.

So Wagoner — despite his clean- shaven face, neatly parted hair and self-professed greatness — was asked whether he should consider resigning.

"The issue hasn't come up, and I expect it wouldn't come up," Wagoner said, even though the issue had just come up in the interview.

And then Wagoner declared that U.S. taxpayers should trust him best to run GM.

"Any support we get is going to be based on the fact . . . that it's a good investment on the part of the taxpayer," Wagoner said. "That the business will actually be better in the future. And one of the key aspects of that is to make sure you have the strongest possible leadership in the company."

Wagoner has said he's willing to accept limits on golden parachutes and even executive compensation. But getting rid of him? "It's not clear to me what purpose would be served."

Hmm. Now there's a puzzler.

Let's go back. Way, way back. To seven weeks ago, when Wagoner appeared certain his perennial turnaround efforts were finally complete, despite whatever rocks an avalanching economy might dump on the road ahead.

"GM is here to stay," he declared, announcing a new 4-cylinder engine plant in Flint, Mich., on Sept. 25. "And today we celebrate the latest evidence."

A few weeks earlier, on Aug. 18, Wagoner was on PBS's Charlie Rose Show, boasting of a $26 billion liquidity position that would carry GM through at least 2009.

"We believe, under conservative market scenarios . . . we're good through '09," he told Rose. "And we've got capability to work beyond that. . . .

"At this point, I think the message I would like to leave you with here is GM is here to stay. . . .

"We've put together plans based on conservative industry, economic and market forecasts, conservative oil prices," he continued. "And under those scenarios that we look at, the answer is GM is going to be around and healthy and robust."

Can a CEO this wrong be trusted with shareholders' money, let alone taxpayers' money? What's wrong with a basic bankruptcy reorganization?

In a Nov. 7 interview with Fox Business News, Wagoner said consumers will simply stop buying GM cars if the automaker files Chapter 11.

"We would not be talking about reorganization," he said. "We would be talking about a liquidation. It would be a catastrophe."

But millions of U.S. consumers have filed bankruptcy themselves. Perhaps they would understand. After all, they spend money at bankrupt phone companies, bankrupt retailers and bankrupt airlines. Right?

"Sure," Wagoner conceded in the Fox interview. "So they buy a $300 ticket and use it three days from now. It's quite a bit different from paying $25,000 and planning on getting service and support for the car you just purchased for the next five to 10 years."

So I guess if GM is forced to file bankruptcy, its CEO has already put consumers on alert that he doesn't expect them to buy his cars.

Even if they are great cars.

Back to the Nov. 10 Automotive News interview:

"People will say, 'Well, boy, you can't do great cars,' " Wagoner said. "People who say that today are just not looking at the facts. They're not looking at Chevy Malibus or Cadillac CTSs or other products."

I hate when an entire market is wrong.

"Let's be honest," Wagoner said. "This industry is running at 11 million units today (as opposed to the 14 million Wagoner had expected), not because the OEMs (manufacturers) all of a sudden began to deliver poor products. We're running at 11 million units because the credit system in the country has failed. . . .

"It seems a little silly to use problems that come as a result of the credit crisis as an excuse to wipe out, really, the most important industry in the country."

Not to mention a great management team.

So for these reasons Wagoner wants another big piece of the American Pie. But maybe we should play him a verse from the song, "Drove my Chevy to the levee, but the levee was dry."

Al Lewis: 201-938-5266 or al.lewis@dowjones.com

See tw, it's not his fault.