Obama wants to bail out big 3

[smockers83]

While the UAW isn't the sole reason for the Big 3 going into the tank right now, its a pretty big contributor. Back in the early 2000s when GM wanted to restructure its health benefits with the union, they were saying that just with health benefits, that it adds thousands of dollars to the cost of a car compared to foreign competitors. Thousands. All while at the same time the fact is that these people are overpaid for the work that they do because being in the union puts a markup on the labor costs. In March 2004, this markup was $9.66 on average for the UAW. With approximately 640,000 members, just one hour of work costs the Big 3 $6,182,400 extra compared to non-union, based on that markup. That's one hour of work by 640,000 people. Extrapolate that into a 40-hour work week and we get $247,296,000, further extrapolated into 49 weeks/year is $12,117,504,000. That's the average yearly markup the union puts on the Big 3's labor based on current estimation of members and 2004 wage data. If the Big 3 were to abandon the union and hire all non-union people, no those people would not be paid the wage paid in Mexico. Based on 2004 data, they would be paid, on average, $16.21/hour, $4.11 less per hour than the union. The $16.21/hour is the average market price for US labor in the auto industry. There is a lot of wasted money involved just in the labor aspect of the US auto industry, not just because of the markup but because the UAW's members as well that has been mentioned in previous posts.

Unions were fine and dandy back in the day when they were first created to protect workers' rights and to create fair pay, but this is far from fair pay. Whenever the UAW wants to renegotiate their contracts, everyone that I know in MI hates it and continues to hate it as do I. Unions, as the become bigger and stronger, create a more socialist environment, and when unions start becoming too big and powerful for their own good, they fall apart, which I have a feeling the UAW is coming towards and I can only hope.

GM and Ford are finally getting slightly smarter in that they're bringing European models over to the US. This is smart in a couple of ways. Many European models are nothing like the US models, so its a new model to the US market that doesn't have to be 3 years in the making. They're smaller and more efficient as well.

[AZhitman]

send pics of said accountant to my home address

Got a real good hi-res of the top of her head. Will that do?

[srellim234]

I'm not a fan of the unions, have been on both sides (management and as a member) of the old Retail Clerks, a member of the Teamsters and having dealt with the Teacher's union here in California.

In my experience their attitude has been, "Union first, we don't really don't give a darn about our honest workers, we're going to protect the ones who don't deserve to still be on the job. Honesty, the work to be accomplished or having a partnership with the company for the company to survive is not something we're interested in because after the company folds another one will be there to take it's place." Now it's coming back to bite them with jobs going overseas and cutbacks here.

That said, absolutely the woes of the Big Three are self inflicted. Along with negotiating ridiculous union contracts they negotiate ridiculous contracts with their executives who are non-union. They've succeeded in falling into the same trap as many other companies, namely managing short-term stock prices to protect executive reimbursement through stock prices and failing to actually manage a long term business model.

If the Big Three are in trouble, it is the responsibility of shareholders to get rid of the management and replace them with management that will run the company properly. If shareholders don't, the company deserves to go bankrupt.

A non-union line worker who fails to do his job properly would be replaced, maybe with a couple of weeks' pay as severance. That's all these executives should get and be shown the door. No "golden parachutes" or payouts. They should be terminated for failure to perform their job duties, namely protecting the long term profitability of the company. If their replacements can't turn it around quickly enough there are a lot of companies out there that would love to sell even more cars.

No taxpayer money from the government for this mess.

[telcoman]

I am pretty much dead set against a bail out of the Big 3. If the US Government bails them out what have they learned? Nothing? And I am afraid they will employ the same business practices that they have been using for the past 50 years. I also seem to remember Mitt Romney campaigning in Michigan and calling for Automotive Summit to be held in the first 100 days of his Administration and the government to help assist the Big 3 to get the local Michigan economy rolling again.

I love how pretty much everyone puts the sole blame on the big bad Unions (UAW). You do realize guys, that contract arbitrations are a TWO WAY street? GM, FORD and Chrysler dont have to agree to the demands of the United Auto Workers. Of course then too they then have to deal with strikes, slow downs and work stoppages. We here in Indiana have seen massive parts and manufacturing plant closings (GM and Chrysler) and job lay offs due to the Big 3 moving production and assembly south of the border. It pretty much sucks that most industrial companies have moved production to Mexico or areas with cheap labor. But to all of you that criticize the UAW for trying to secure the best possible contract for its workers, do you propose that auto workers make the same kind of money that works in Mexico do? Cheap labor is like crack to industrial companies. I would also like to point out that the workers at foreign plants here in the US can organize just as easy as the Big 3 shops did years ago. It is the law.

It isnt the UAW that loses billions of dollars on the books for the Big Three. Literally, GM has had quarters where they literally can not account for money lost on their books. Its as if the money just 'disappears' from the books. With accounting like this its no wonder these guys are in trouble. Also, was it the UAW that under funded the Delphi Workers Pension Fund to the tune of 5 billion dollars? Nope, it was GM's ****up. Eliminating the labor unions wont solve the big 3's problems. Nor would under minding foreign competitors. This issue is a lot more complex than just eliminating the UAW and foreign competition. I am pro union, I may not like their stances, but I like the fact that unions protect my (teacher) family members and look out for their best interest.

Wow Bud, for once we agree. Excellent post. Union membership is at at all time low in the United States.What most working people today fail to realize is the benefits that they do have today were fought for by old farhts like me back in the 60's and befoe.Because of the weak state of the unions, companys are reducing benefits while increasing pay to incompatent managers and executives.The union workers are not the problem. It's the unqualified and incompatent management.

Telcoman

[AZhitman]

Capitalism dictates that those who perform get promoted, those who are a liability to shareholders, get the shaft.

And external "meddling" in this process has repercussions, and politicizing the natural flow of the market in pursuit of "control" simply complicates matters.

There was a time when unions were useful. We've come a long way.

[elwesso]

I agree totally.. unions in theory are very good on paper.. what happens when demand goes down for a few months and a line isnt going to be running? Management would want to lay off the people that worked that line instead of finding something else for them to do.

It is definitely a 2 way street.. but like others said, it really doesnt help those who want to work for their money, but rather those who want to milk as much money out of a company as possible for the least amount of work..

Bottom line is.. Supervisors know it happens, management knows it happens, everyone knows it happens.. They arent doing anything about it, but then again, the reason they CANT do anything about it is because its a huge PITA to fire a worthless employee because of the union!

I have no problem of unions protecting the rights of workers who make an honest living, but unfortunately those rights get placed upon people who dont deserve them. if they could come up with a system to patronize worthwhile workers while punishing worthless ones, I'd be all for it.

[Cold_Zero]

They arent doing anything about it, but then again, the reason they CANT do anything about it is because its a huge PITA to fire a worthless employee because of the union!

Wes, I hate to burst your buble, but in Corporate America, its still harder than hell to fire worthless employees because of the risk of a lawsuit. Especially with the EEOC. bud

[AZhitman]

Not in a right-to-work state!

Proper documentation is key, and out of all the hearings I've attended and administrative law judges I've testified before, none have found in the employees' favor.

[elwesso]

Wes, I hate to burst your buble, but in Corporate America, its still harder than hell to fire worthless employees because of the risk of a lawsuit. Especially with the EEOC. bud

I dont doubt that at all, of course I dont have any experience with that (even second hand), so I didnt want to comment on that.

Ultimately, IMO it comes down to the person trying to get something they didnt earn or deserve. that also explains why someone who doesnt pull their weight in a corporation for what their getting compensated for would try and file a lawsuit and get more money...

[confedup]

It's a different kind of lottery. Some corporations will settle instead of going to court due to overall cost. Make the rules where the person filing the lawsuit has to pay back all expenses if it is found as frivolous and you would have less issues.