I remember my second real job at a auto parts/service store doing oil changes, tires etc. Pay was 7.50/hour (better then McDonalds but low for the area). I look at my first pay check with a co-work and look at all the deductions (taxs etc), and one was for a some sort of union. WTF? apparently they take credit for raising the wage to the highly 7.50, only to deduct from it. Mean while, I could've work for competitor (farther way), whoes wage was also 7.50 with no union deduction, i love it!

 

Silver : So am I to understand your philosophy to support the idea that we work for $8.00 an hour to build vehicles that are priced relative to the market so only the 2% of the world's population that control all the worlds wealth can drive one ??

I have never earned less than $16.00 per hour on the job for the positions I held in 25 years and it had nothing to with any union . For 15 years I worked where 4 employees manufactured and supplied explosives on site to the tune of $6,000,000 annually and our wages were progressivily raised to reflect the efforts we extended to maintain and keep these contracts with foreign suppliers including some from the US banging at the door to steal them every year .

From that to working my way up from field maintenance to maintenance foreman and then shop foreman for a major oilfield service company who also paid me in excess of $25.00 per hour but expected me to be joined at the hip 24 /7 to the Company to protect their investment and make a profit .

I have no idea where you live but for $8.00 per hour you do not maintain and heat a place to live where I am located let alone look at the price of beef or gasoline . One would not require gas as you would be on foot not even riding transit .

A good grasp on the reality of living in a major Canadian Urban Center is Toronto's economic review for 2004 where they place the average household income at $85,000 and the poverty level at $18,500 . This too has nothing to do with any unions but is geared to the cost of living in a city where the average new house costs between $250,000 and a half million .

I'm sure I could survive on $8.00 if I were to live in our frozen north in an igloo and heated with whale oil and survived on blubber and seal meat and Arctic Char and the wife chewed enough hides to make us warm clothing but we have progressed to the point in the last 100 years that we expect a little more than that from life and would at least like to maintain a comfortable standard of living and maybe even be able to send a child to university to train for one of these new high tech jobs that are going to materalize that no foreign markets are goimg to do cheaper when they are living at the top of their standard of living at $1.80 a day . Not!

A qualified programmer with 5 years experience is worth $14.00 US in New Delhi India but would demand $54.00 in the US and so goes the rest of the story in most every field .

We have somewhere in the area of 30 friends or family that work for Honda or Toyota here and they are to the last one completely happy with the way they are treated like family members and team players where their suggestions are listened to and implemented and rewarded if practical and profitable . No unions as they have all been turned away more than once and the average starting wage on the floor is $16.50 and there still seems to be enough profit to satisfy the companies .

The Japanese could care less about any protection hurdles placed in their path as we all seen when they told us they would no longer buy our beef and simply purchase it somewhere else cheaper in most cases just as they will do with any other product we would care to sustain in a bubble .

By the way have you looked around home lately to assertain how many major corporations and economy driven industries the Japanese have purchased
from greedy Americans in your own back yard while we were still percieving them to be the struggling vanquished of the second war selling us cheap junk
untill they had built one of the strongest economies in the world ?

They were playing this off shore game before Mr. Walton for Wally World or any American or Canadian corporations ever dreamed what could be gained by
being competitive in a "Global Marketplace". What are we,about 60 years late to grasp this concept .

We may as well get used to watching our standard of living slide south towards Mexico for the next 20 years if these are the kind of producers we are going to be competing with . And they are part of NAFTA which was supposed to insure a stable market for all the Americas . Yeh Right .

Participation in NAFTA will only funnel more profits from any industry left here to the same few bank accounts that will bankrupt the country if necessary to maintain their power and grip before we come to the conclusion they are all selling our lives away for cheap labour and cheaper still products where the $1.80 a day guys could also care less if your Ford brings you home from the bush without breaking down as long as their piecework parts bin is full at the end of the day when they go home . Thats a 12 hour day for the most part as well .

 

Because they improved the livelihood of the everyday union worker, they also imprved the livelihood of everyone else.
Even if you weren't a union member, you would have seen a lot of the benefits of the unions.
However, IMO unions are becoming more defunct, as corporate responsibility becomes ever more important, and greater regulations are in place, the role of the union is no where near as important as it was in the last 30yrs

 

Lots of abuses by Unions, lots of abuses by employers. I still believe in Collective Bargaining, not for the mom and pop small business's but for the large corporations I think it's helpful. Still only if the majority of the workers want it.
It's been said here before, and I believe it's true, if employers treated their help right there would be no need for unions. That is seldom the case in the real world. There is plenty of greed to go around. There are companies that give benifts as good or better then those with a union, however It was the unions who originated the idea and won those benifits. Such as 40 hour week, etc. Most benifits were won by organized labor.
I expect half the world will disagree with the above.

 

I think the big three are too use to taking advantage of the customers, based on the the big tariffs imposed on the import vehicles.its the only way they could compete with the inferior product they were offering.their to reliant on this principle of business and are having trouble changing, sure they have improved but not near enough, and now its catching up to them. can you imagine what the price of a quality import would be with no tariff. without tariffs the big three would be sunk, but even though I love my Ford.what else would I do with all my spare time if I wasn't working on my truck

 

I think you guys are forgetting the biggest single cause of the labor expense difference between the big three (actually, the big two) and the Japanese- retirement and healthcare benefits. General Healthcare...oops, Motors pays out $3800/vehicle for those two items. The Japanese don't have that expense because they have a younger workforce, and the government picks up the tab for the rest.

 

polarbear: GM in this country does not put out one thin dime for their health care package and pension benifits except the money they contribute to match employee contributions to the pension plan which is now and has always been invested in the money markets and makes enough profits to support both plans .

Only the equity amount it would take to support the payout of existing employees is required to be in trust and the rest is invested . The plan passed the point of accomplishing that years ago .

This is why our Goobermint passed laws in 1986 to assure that all profits made from invested Company Pension Plans has to back into the plan and to the men
and women that contribute to the plan . Before that major companies were raking in millions of profits from their pension investments and were before then not required to make any contributions to the plan untill its employees were vested or had 10 years service and were 45 years of age or some similar formula that was written into the plan . They pay in now every 30 days just like everyone else and all employees are vested with 2 years service .

This is one more little thing the unions here accomplished by squeezing the Gov.for 10 years and finally challanging the plans in court .

 

polarbear: GM in this country does not put out one thin dime for their health care package and pension benifits except the money they contribute to match employee contributions to the pension plan which is now and has always been invested in the money markets and makes enough profits to support both plans .

Unfortunately, that's Canada- not the US. Great article in Barron's this week about GM. A couple of quotes (can't link- it's a subscription):

"Indeed, the company is America's largest private health-care provider, buying more from Michigan Blue Cross than it does from any other supplier. Its medical costs rose 8.5% in 2004; GM expects to lay out $5.6 billion for medical care this year, and it sees medical costs rising at a double-digit clip for years to come."

More chilling, this line:

"If the union and the retirees won't yield, GM might have no alternative but to enter Chapter 11, where the courts might let it make unilateral adjustments."

 

Ok, then, let me ask this. You buy a house, and you take out a mortgage at a variable rate. You use gas to heat it, and you use electricity and water as well. When you buy the house, things are looking good. Then, the interest rates change, the utilities go up, and you haven't gotten a significant raise at work because your performance reviews are mediocre at best. You squandered your money when times were good and now you have no savings. What happens when you can't pay your bills? They shut off the power,the gas, the water, and then, if you still can't make ends meet, they forclose on your home, and you take up new residence in a cardboard box in an alley right off of Main St. Maybe GM should have kept it's contractual agreements in mind before awarding obscene salaries and bonuses to it's CEOs, CFOs, COOs, etcetera,and maybe they should have invesed more in quality design and materials instead of pinching pennies on everything to make the stock holders happy in the near term. Maybe if they hadn't felt it neccessary to swindle money from their customers all these years, and they had offered a quality product to their customers, the folks buying Toyotas and Hondas and Nissans and Mazdas would still be buying Chevys. As I stated previously, I am fully aware that the problem is a two way street, and indeed, the unions share the blame. However, the manufacturers certainly are not anywhere near blameless on this issue. In fact, it is quite the opposite. When the CEOs, COOs, stockholders, etc. take pay cuts and a reduction in their benefits, then I feel that the unions should look at what they can do to help the manufacturer to not go under. However, it should not be asked of the retirees or of the workers if the upper management and stockholders who siphon off money from the corporate coffers like it was water tighten their belts and do what is in the interest of the company as well, as opposed to doing what is in the best interest of their wallets and bank accounts.

 

Argo
I agree that upper level management in many companies make obscene salaries; however, what they take away from the company is miniscule when compared to the wasteful labor practices forced on them by unions.
Dumping on the shareholders is ridiculous. Most shareholders are common folks like you and I, individually they have no say in how the company is run. Only those with enough stock to affect the make up of the Board of Directors can influence corprate decisions.
Instead of complaning why dont you join the "gravy train", as you seem to believe it is, save a few bucks and buy some shares.

 

Argo-

those are legitimate points you bring up, but they're moot. I've posted before that I feel there a war going on right now, being waged on your retirement and health benefits. What's at stake here is not just the health and future of GM- Ford is tied to the outcome as well. Why? Worst case, GM does go Chapter 11, and greatly reduces it's benefit liability. Does Ford have any choice but to follow, since it's primary competitor would now have a tremendous cost advantage? We're watching this scenerio unfold right now in the airline biz.

Phydeaux88-

I wouldn't touch that stock with a 10-ft pole. If Chapter 11 wound up being in the cards, the shareholders will become the bagholders. Just ask anyone who held K-Mart stock before the BK.

 

polarbear I was commenting on argo's assertion that the stockholders are ripping the company off and invited him to join the action if it was as lucrative as he believes. I would not own GM, Ford, or Daimler-Chrysler stock either.

The figure you quoted of $3800/vehicle to pay for health and retirement benefits is staggering. Perhaps it is because of mismanagement in the past but it most certainly has to do with unreasonable requirements forced on the companies by collective bargaining agreements. the US automotive industry didnt have any serious rivals when the time the foundation of these agreements was being established. Now that the Japanese and other Pacific Rim countries have become a serious challenge, largely because of their huge advantage in labor costs, American Labor refuses to get competitive and blames it all on the companies. Thats a big part of why so many companies are moving labor intensive operations overseas. The Unions have to wake up and smell the coffee or the whole country is going to lose.
Your point about the government picking up most of the healthcare and retirement costs in many other countries has one slight inaccuracy instead of government you should say taxpayers.

 

"I was commenting on argo's assertion that the stockholders are ripping the company "

Ah- I missed that.

"Perhaps it is because of mismanagement in the past but it most certainly has to do with unreasonable requirements forced on the companies by collective bargaining agreements. the US automotive industry didnt have any serious rivals when the time the foundation of these agreements was being established."

Just demographics, unfortunately. Of course, if they had planned ahead instead of wishing the stock-market bubble would continue, it wouldn't be an issue.

re: taxpayers. Yep- and that's who'll pick up the tab here if the whole train derails off of the tracks.

 

That's not at all what I'm saying. Building vehicles is skilled labor and the wage should reflect that. Sweeping the floor is not skilled labor, but they can still make the same money as a skilled position. The janitor that makes $25/hr is the kind of thing that needs to stop. And wage increases should not be made based on the official union wage and benefit table. Raises and promotions should be based on performance. Using your logic, every worker should make enough to drive a Rolls Royce. Where would that put us as a country? Like I said, our Constitution does not guarantee you the right to drive a vehicle just because that's what you want.

[sarcasm]You mean you were paid based on you skill level and work ethic instead of just because a union said you needed to get more? Wow, what a concept![/sarcasm]

Then that would be good motivation to advance. $8/hr will go a long way here. That's about $16k/yr per person, so possibly $32k/household. Sounds like decent money to me. I know lots of people that live on less and still manage to have some left over.

$32k is considerably higher than that.

So no union labor in the auto industry isn't the end of the world.

 

Personally I think the big three are already making changes so they stay the big three. Dodge already introduced their longer warranty (not sure but think 5 year 60000miles). I imagine GM and Ford won't be behind for long on that. All of them have made several body style changes in various models and cut and introduced new models.

The pricing is similar between most manufactures, in fact allot of the time you can find the basic American made models cheaper than the similar imports. As an example, a 2005 f150 XLT Supercrew built (nothing fancy, just a basic xlt) according to Fords website came up as $34,000. The Toyota Tundra with the same basic options came up as $37,000. The Chevy, $35,000.