$14B auto bailout dies in Senate

[ducks]

WASHINGTON – A $14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts.

yep blame the rebublicans:rollin:rollin:rollin:rollin


http://news.yahoo.com/s/ap/20081212/ap_on_go_co/congress_autos

[ducks]

I guess they think bankrapcy is better then getting paid less

[Aggie Hoopsfan]

At first glance, it sounds great.

But now it sounds like Bush and Paulson are going to be little bitches and use TARP funds to cover their tab for the next 2-3 months, then Obama and his merry band of suckass Dems will give the Big 3 and the UAW whatever they want

And we're now well on our way down the slippery slope that was opened up with the bank bailout. Now as each industry in our country starts feeling the effects of the economic crunch, they too will also go to D.C. for funds.

And the Dems will buy their votes for 2010, err, bail each one out on the back of you, me, our kids, grandkids, etc. Can't wait til' we're all paying 60-70% of our income in taxes thanks to the 'leadership' in D.C., or the dollar crashes and isn't worth the paper it's printed on, whichever comes first. :td

It pisses me off to no end that W. is caving in on this and reaching for the TARP funds. Fucking asshole.

[Anti.Hero]

I heard a senator at one of the recent hearings said something like:

Toyota sold 10.4 million vehicles this past year and made 17 billion profit.

GM sold 10.6 million vehicles this past year and lost 39 billion.

I haven't fact checked this but wttttffff

If GM were to become a penny stock, would they then be tempting? :lol





If 15 million in bonuses is too much for a CEO, why isn't $55 an hour too much for a forklift operator?

[Aggie Hoopsfan]

I hope GM hurries up and files for bankruptcy though (I doubt they will with news about Bush reaching for the TARP), nothing's going to change for the big 3 until they get rid of unions.

All you need to know is both GM and Toyota sold roughly the same amount of cars last year. Toyota profited 17 billion, GM lost 40 billion. All thanks to shit like the union job banks, and the bloated pension and benefits for UAW members.

[baseline bum]

At first glance, it sounds great.

But now it sounds like Bush and Paulson are going to be little bitches and use TARP funds to cover their tab for the next 2-3 months, then Obama and his merry band of suckass Dems will give the Big 3 and the UAW whatever they want

And we're now well on our way down the slippery slope that was opened up with the bank bailout. Now as each industry in our country starts feeling the effects of the economic crunch, they too will also go to D.C. for funds.

And the Dems will buy their votes for 2010, err, bail each one out on the back of you, me, our kids, grandkids, etc. Can't wait til' we're all paying 60-70% of our income in taxes thanks to the 'leadership' in D.C., or the dollar crashes and isn't worth the paper it's printed on, whichever comes first. :td

It pisses me off to no end that W. is caving in on this and reaching for the TARP funds. Fucking asshole.

As much as I hate the auto bailout, they sure as hell deserve that money more than those fucking cheats on Wall Street. At least they produce a tangible good, something no one else is doing with the rush to Chinese manufacturing. Pulling $14 billion away from Wall Street to give to lesser douchebag fucks is a lot better option than just printing 14 billion more Washingtons.

[Aggie Hoopsfan]

Anti, I did find this...

http://www.npr.org/news/specials/gmvstoyota/

[Aggie Hoopsfan]

As much as I hate the auto bailout, they sure as hell deserve that money more than those fucking cheats on Wall Street. At least they produce a tangible good, something no one else is doing with the rush to Chinese manufacturing. Pulling $14 billion away from them to give to lesser douchebag fucks is a lot better option than just printing 14 billion more Washingtons.

I still don't think we should have bailed out Wall Street either. Let those banks fail and others step up to take their place.

Where does this madness end? This Big 3 bailout is a Democraptic kickback for the union love for Obama in the election. Bush is just a pussy who doesn't want the Big 3 filing for bankruptcy on his legacy.

Where does this shit end? As each industry in this country contracts (and it's going to happen), they will each take their turn going to D.C. asking for a bailout. And then what happens? I can already promise that the first time an industry gets denied, they'll be filing suit in court over it because Detroit got bailed.

They have a shitty business model and no amount of taxpayer subsidies is going to fix the problem up there in etroit. This is a joke.

[Anti.Hero]

At first glance, it sounds great.

But now it sounds like Bush and Paulson are going to be little bitches and use TARP funds to cover their tab for the next 2-3 months, then Obama and his merry band of suckass Dems will give the Big 3 and the UAW whatever they want

And we're now well on our way down the slippery slope that was opened up with the bank bailout. Now as each industry in our country starts feeling the effects of the economic crunch, they too will also go to D.C. for funds.

And the Dems will buy their votes for 2010, err, bail each one out on the back of you, me, our kids, grandkids, etc. Can't wait til' we're all paying 60-70% of our income in taxes thanks to the 'leadership' in D.C., or the dollar crashes and isn't worth the paper it's printed on, whichever comes first. :td

It pisses me off to no end that W. is caving in on this and reaching for the TARP funds. Fucking asshole.

It's not even the government anymore dude. Americans are brainwashed now into thinking they DESERVE things which they do not.

At the end the same question is always asked, how much longer will this clusterfuck of stupidity and greed be able to sustain itself?

[balli]

These motherfuckers turned down pay-cuts, in exchange for money that would save their employers existence? Talk about cutting off your nose to spite your face. Greedy fucking idiots.

[balli]

This Big 3 bailout is a Democraptic kickback for the union love for Obama in the election. Bush is just a pussy who doesn't want the Big 3 filing for bankruptcy on his legacy.

Well, let's be honest. McCain and Obama were both just suckling at the Michigan teet and both were making all sorts of bailout promises in MI. So let's not pretend like this is a mutually exclusive idea for the Democrats. If McCain had won he'd owe the same auto unions, almost the exact same promises.

[Anti.Hero]

These motherfuckers turned down pay-cuts, in exchange for money that would save their employers existence?

Short term bandaids that will keep the same ol' problems and thinking that led to this debacle in the first place. And who benefits, union leaders and government officials? That's good looking out?


Pay-cuts and a revamped union policy could save their employers existence over the LONG TERM should they survive.

If they don't survive, I guess people will wake up and move to right-to-work states.


The south shall rise again. At least economically. :lol

[Aggie Hoopsfan]

Well, let's be honest. McCain and Obama were both just suckling at the Michigan teet and both were making all sorts of bailout promises in MI. So let's not pretend like this is a mutually exclusive idea for the Democrats. If McCain had won he'd owe the same auto unions, almost the exact same promises.

McCain's a Republican in name only. He's a liberal, just not as far to the left as Obama. I really don't care who whored themselves out for the UAW vote, they all suck ass.

But let's be clear, this little bailout really is about paying the UAW, plain and simple. The Big 3 don't get their money and they have to file for bankruptcy, and then that destroys the UAW power structure and grip over Detroit. Can't have that. And you heard the UAW over the last couple of days saying they won't renegotiate a damn thing.

I suspect that's not just him being brave, someone behind the scenes in D.C. told him not to worry about it, that they'd get their money one way or another.

I really wish there was a way to stop all this by us the taxpayers. Like a lawsuit or injunction or something. It's clear from this that no one is that cesspool of a city in D.C. (well, outside of the Senate Republicans anyway) gives a damn anymore about the rest of this country.

And yes, I know some of them stepped up and voted for the financial bailout. Fuck all them too. Just glad to see someone standing up to Pelosi and Reid in D.C., too bad Bush is going to be a bitch trying to salvage something for his legacy.

[Aggie Hoopsfan]

sorry, that was over the top :lol

[Anti.Hero]

sorry, that was over the top :lol

:lol

God Bless America, I love you Uncle Sam :bking...but I agree hahaha

[ChumpDumper]

So, in the US, how much more does the average union worker for the big 3 auto companies make than a non-union worker for a foreign auto company?

[SpursFanFirst]

I found this...does anyone know if these numbers are right?

http://rightvoices.com/2008/11/18/average-total-compensation-for-a-big-three-autoworker-is-7321-an-hour-toyota-honda-and-nissan-pay-a-still-generous-4420-an-hour-in-total-compensation-%E2%80%94-a-cost-edge-of-nearly-40/

Big 3: 73.21/hr
Toyota, Honda, Nissan: 44.20/hr

[SpursFanFirst]

I also found this. The rates are considerably lower.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4578894#4580080


Q: Are UAW members really paid $73 an hour?
A: No. Wages for UAW members at Chrysler, Ford and GM range from about $14 an hour for newly hired workers to $28 an hour for assemblers to $33 for skilled trades workers.

Typical hourly wages at Honda, Nissan and Toyota are only slightly lower. Due to the effect of profit-sharing formulas, however, there have been some recent years in which a typical Toyota worker has taken home a larger annual paycheck than a typical GM worker.

[DisgruntledLionFan#54,927]

The hypocrisy of it all is pretty amusing.

[DisgruntledLionFan#54,927]

http://cmsimg.freep.com/apps/pbcsi.dll/bilde?Site=C4&Date=20081212&Category=BLOG24&ArtNo=81211106&Ref=AR&Profile=1214&MaxW=550&MaxH=650&title=0

[Marklar MM]

The hypocrisy of it all is pretty amusing.

I agree.

[Extra Stout]

If this were just a principled stand to protect the taxpayer against hapless corporate executives who run their companies into the ground, rather than simply a mix of political theater and naked economic provincialism, one would reasonably have expected the treatment of AIG, among others, to be quite different. As it is, Wall Street executives "misplace" billions of taxpayer "bailout" dollars while wasting their days pampering themselves at luxury resorts and issuing one other millions of dollars in "retention bonuses," when ordinary people with any sense of ethics would be penitently burning the wick at both ends to extract their company from the mess they had created.

Any halfway-decent nation would have constructed a gallows extending the length of Wall Street by now. Perhaps if our government is not up to the task, we could build it for them and add one on Capitol Hill to boot.

[RobinsontoDuncan]

This is the most outrageous example of blatant class warfare I have ever observed.

The Republicans in the senate have been offering generous subsidies to the non-union workers in Toyota plants in Alabama for years withe very little concern for the principles of free market capitalism or the wishes of the US taxpayer.

People need to use some common sense.

Do you honestly believe that union workers in Detroit are making anywhere close to $70 an hour? That's just a nonsensical number that someone over at the National Review pulled out of thin air to account for pensions, health care, etc. And that number has been disputed by everyone, especially the management of the big three.

What exactly do republicans want the UAW to do?

It's not like they get paid substantially higher wages than Toyota workers in Alabama, they have been making concession after concession to management for several years due to the simply reality of the market.

The truth is Republicans hate organized labor. They hate workers rights so much that they are willing to let America's manufacturing base collapse so they can finally kill the only union with any teeth anymore.

What the hell is this country coming to? In the 1930s, when banks came in to foreclose houses in working class and middle class neighborhoods, neighbors would organize and move all of the furniture back into the foreclosed house the same day.

Your grandparents and your great grandparents fought so hard for the right to organize in the workplace for a lot of good reasons. Maybe the people that hate unions so much just don't much about American history, but i suggest some of you look up the gilded age and worker rights back then.

It's really just pathetic how brainwashed this country is. So many people have bought into this bullshit narrative that we're all on our own--it's like no one gives a shit about their peers anymore. Everything is always the fault of the individual, there is nothing that ever comes from systemic abuse.

I guess the UAW should apologize to the nation for the credit crunch. I guess the UAW has a lot of explaining to do w/ regard to the house bubble collapsing.

But thank god those rich motherfuckers in wall street got bailed out though, because without those guys, there's no telling how much further damage the UAW could do this country's finacial sector. I shudder to think of it.

[RobinsontoDuncan]

I have to admit, I am beginning to understand that there are few forms of life lower than the Southern Republican.


Link (http://detnews.com/apps/pbcs.dll/article?AID=/20081212/OPINION03/812120397)


They failed repeatedly to organize the foreign-owned auto plants proliferating down South, even now.

Their political action committee pumped millions -- $1,918,450 this election cycle alone, to be exact -- into the congressional campaigns of Democrats and only $12,500 into Republicans, according to opensecrets.org. In their 1999 contract, they won Election Day off and used it to back their (generally Democratic) candidates, a source of recurring irritation among the southern GOP stalwarts.

They ignored the Republicans, even auto state Republicans, who represent the so-called "New American Manufacturers" in places such as Kentucky, Tennessee and Alabama.

Those are the same states whose senators stood astride the $14 billion auto bailout bill Thursday saying, "No" -- imperiling life as generations of United Auto Workers have known it.

Now a federal bailout for Detroit's automakers appears close to dead, delivering a crushing blow to a Michigan economy reeling from high unemployment, skyrocketing home foreclosures and sagging tax revenue. The obstructionists: southern Republicans determined to use a financial crisis to rework corporate balance sheets and rewrite collective bargaining agreements on their terms and timetables.

Paybacks can be hell when business meets politics, as union leaders, their members and tens of thousands of folks associated with the Detroit-based auto industry are seeing clearly in the wrangling to craft an emergency bill to throw lifelines to beleaguered General Motors Corp. and Chrysler LLC.

Stripped bare and put in the regional context of union vs. nonunion and domestic vs. foreign, the toughened conditions pushed by Sen. Bob Corker, R-Tenn., are legislative cruise missiles aimed directly at Detroit's business model, the UAW's Solidarity House and 70 years of Big Three bargaining tradition.
Radical change for the UAW

How could they be anything else? Immediately match the pay and benefits of foreign-owned automakers operating in the South, his terms say. Reduce your expectations for Big Three contributions to the barely funded retiree health care fund and take some in stock. Eliminate the Jobs Bank and supplemental unemployment benefits.

And if UAW and company bargainers can't get there by a March deadline -- along with concessions from bondholders, management, shareholders and suppliers -- GM and Chrysler must seek federal bankruptcy protection like almost every other private-sector player would under similar circumstances.

That's tough-minded business, to be sure. Understandable, too, given Detroit's glacial pace of change. It's also a naked attempt to use the credit-induced crisis swallowing the Detroit Three to radically restructure their bloated labor costs, rework their debt-laden balance sheets in 60 days or less and, perhaps, put one or more of them into bankruptcy, if not liquidation.

"I don't think the southern senators understand this isn't a Japanese and Big Three thing," says Gregory Raymond, a member of UAW Local 372 who works at Chrysler's Trenton Engine plant. "It's an American thing. All auto companies use the same suppliers and they're all going to suffer if the supply base goes down."

Except Corker & Co. don't buy it and I'm not sure they care. To him and Republican Senate colleagues such as Alabama's Richard Shelby and Kentucky's Mitch McConnell, the minority leader, the desperation of Detroit and the UAW vindicates the superiority of the nonunion, lower-cost, foreign-owned auto industry growing in Alabama and Tennessee even as Big Auto stagnates in the union strongholds of Michigan and Ohio.

Like the green Democrats in the House eager to coerce Detroit into hybridizing entire product portfolios irrespective of market demands, capital needs or oil prices, the southern Republicans see a win for the home team in subjecting the northern competition to the corporate equivalent of chemo: To survive, endure the painful therapy.
No unions, or more unions?

Detroit Bubble, meet the Bigger America. Cynics might suspect parallel agendas in the South's legislative hammer -- agreement on cost parity by March or bankruptcy. How? Because the auto bosses have long wanted to break the union, the thinking goes, and the southerners are happy to oblige.

But there's another possible outcome here, one maybe overlooked by a GOP wing in smackdown mode. Contrary to the tired stereotypes coming daily from Washington, President Ron Gettelfinger's UAW is well on its way to helping Detroit's automakers achieve wage and benefit parity with foreign-owned rivals operating in the United States.

Come next month, amid recession anxiety, job losses and widespread distrust of business, the union and others like it are poised to reap the political benefit of having bigger Democratic majorities in the House and Senate and a labor-friendly Democrat in the White House.

The president-elect and the congressional Democrats all have signaled a willingness to pass labor's top legislative priority -- the so-called "card check" legislation, which would essentially abolish secret ballots and make organizing easier. Everywhere.

If it passes, I'm betting the first stops on the UAW's southern swing will be auto plants in Shelby's Alabama and Corker's Tennessee, soon to be home to Volkswagen AG's first U.S. plant in a generation.

Let the paybacks begin.

[smeagol]

As much as I hate the auto bailout, they sure as hell deserve that money more than those fucking cheats on Wall Street. At least they produce a tangible good, something no one else is doing with the rush to Chinese manufacturing. Pulling $14 billion away from Wall Street to give to lesser douchebag fucks is a lot better option than just printing 14 billion more Washingtons.

Both industries are important for the US economy.

1 in 10 manufacturing jobs depend on the auto industry.

And banks, well they are just essential to the economy. No banks and society as we know it crumbles apart.

[DisgruntledLionFan#54,927]

So we all know Senator Shelby is full of shit, but it's much better when somebody calls him on it. Letter from Peter Karmanos, Chairmen and CEO of Compuware, to Senator Shelby after seeing Shelby on Meet the Press:


The intent of this letter, however, is not to take you to task for the inaccuracy of your comments or for the over-simplicity of your views, but rather to point out the hypocrisy of your position as it relates to Alabama’s (the state for which you have served as senator since 1987) recent history of providing subsidies to manufacturing. During the segment on Meet the Press, you stated that:

“We don’t need government — governmental subsidies — for manufacturing in this country. It’s the French model, it’s the wrong road. We will pay for it. The average American taxpayer is going to pay dearly for this, if I’m not wrong.”

I trust it is safe to say that when you refer to “government subsidies,” you are referring to subsidies provided by both federal and state governments. And if this is in fact true, then I am sure you were adamantly against the State of Alabama offering lucrative incentives (in essence, subsidies) to Mercedes Benz in the early 1990s to lure the German automobile manufacturer to the State.

As it turned out, Alabama offered a stunning $253 million incentive package to Mercedes. Additionally, the State also offered to train the workers, clear and improve the site, upgrade utilities, and buy 2,500 Mercedes Benz vehicles. All told, it is estimated that the incentive package totaled anywhere from $153,000 to $220,000 per created job. On top of all this, the State gave the foreign automaker a large parcel of land worth between $250 and $300 million, which was coincidentally how much the company expected to invest in building the plant.

With all due respect, Senator, where was your outrage when all this was going on? … I certainly don’t recall you going in front of the nation (as you did this past Sunday) to discuss what a big mistake Alabama was making in providing subsidies to Mercedes Benz. If you had, however, you could have talked about how, applying free market principles, Alabama shouldn’t have had to resort to subsidies to land Mercedes Benz. Competitively speaking, if Alabama had been the strongest candidate under consideration (i.e. highest quality infrastructure, workforce, research and development facilities, business climate, etc.), then subsidies shouldn’t have been required.

The fact is that Alabama knew that, on a level playing field, it could not compete with the other states under consideration and, thus, to lure the German car builder to the State, it offered the aforementioned unprecedented subsidies. In effect, Alabama — your state — did exactly what you said government should not do: provide subsidies for manufacturing.

It’s no great mystery why Alabama politicians went to such dramatic anti-free-market measures to secure Mercedes Benz — they did it for the betterment of their state through job creation and increased tax revenues. And who could blame them? Is that so different than what would occur by providing financial aid to help rescue the domestic auto industry? Such aid would save millions of jobs and millions of dollars in lost tax revenue.

[Gino]

The talks broke off when the United Auto Workers refused Republican demands that the union set "a date certain" by which its members would have a lower pay scale, one comparable to such manufacturers as Nissan and Volkswagen.

http://www.washingtontimes.com/news/2008/dec/12/gop-worry-puts-bailout-in-gridlock/

Blame repubs all u want...but it sounds as if the UAW is having a temper tantrum.

[Gino]

Chart 1 shows the average hourly compensation for UAW workers and the average compensation for all private sector workers. These figures are based upon calculations by the Detroit automakers themselves as published in SEC filings, their annual reports, and other materials. According to briefing materials prepared by General Motors, "The total of both cash compensation and benefits provided to GM hourly workers in 2006 amounted to approximately $73.26 per active hour worked."



UAW workers are highly paid, but not all this compensation comes as cash wages. Breaking the $73.26 figure down, General Motors reports that it pays base wages of roughly $30 an hour. At the end of December 2006, the average vehicle assembler at GM earned $28.02 an hour; the average machine repair electrician earned $32.43.[2]

Other provisions raise cash earnings above this base pay. For example, workers at Ford earn 10 percent premium payments for taking midnight shifts and double time for overtime hours worked on Sundays.[3]

Autoworkers put in substantial overtime hours at higher rates, raising earnings above their base pay. GM reported that its average hourly employee worked 315 overtime hours in 2006. Including all monetary payments--base wages, shift premiums, overtime pay, as well as vacation and holiday pay--GM reported an average hourly pay of $39.68 an hour in 2006.[4] About 54 percent of the average UAW employee at GM's earnings came in cash in 2006.

Earned Benefits

The remaining $33.58 an hour of hourly labor costs that GM reports--46 percent of total compensation--was paid as benefits. These benefits include[5]:

Hospital, surgical, and prescription drug benefits;
Dental and vision benefits;
Group life insurance;
Disability benefits;
Supplemental Unemployment Benefits (SUB);
Pension payments to workers pensions accounts to be paid out at retirement;
Unemployment compensation; and
Payroll taxes (employer's share).
These benefits cost the Detroit automakers significant amounts of money. Critics contend that these benefit figures include the cost of providing retirement and health benefits to currently retired workers, not just benefits for current workers. Since there are more retired than active employees this makes it appear that GM employees earn far more than they actually do.

This contention contradicts the plain meaning of what the automakers have reported in SEC filings and in their public statements and would be contrary to generally accepted accounting principles.

Under the accounting rules established by the Financial Accounting Standards Board, the Detroit automakers must report their liability for future benefits as they accrue.[6] The hourly benefits figure includes payments into defined benefit pension plans to provide future pensions to current workers. It also includes the estimated costs of future retirement health benefits that current workers earn today.

Chrysler, for example, reports paying $20.14 an hour in health costs for its hourly employees. That figure includes the estimated cost of their health benefits in retirement, calculated according to Financial Accounting Standard 106.[7] The government does not allow Chrysler to promise to pay tens of thousands of dollars in health benefits in the future without reporting that cost on its balance sheets today.

Excludes Legacy Costs

The hourly benefit figures the Detroit automakers report covers the cost of current and future benefits earned by actively working employees. It does not include the cost of paying health benefits and pensions to current retirees.

Before they requested a bailout, the Big Three automakers specifically explained that their labor cost figures do not include the cost of past work. General Motors states in its filings with the Securities and Exchange Commission that:

GM maintains hourly and salaried benefit plans that provide postretirement medical, dental, vision, and life insurance to most U.S. and Canadian retirees and eligible dependents. The cost of such benefits is recognized in the consolidated financial statements during the period employees provide service to GM.[8]

In other words, GM records the expense for retiree benefits when workers earn the benefits, not years later when they collect their benefits. In less technical language, Ford explains that their total average hourly labor costs include:

(1) All the dollars paid to employees, (2) the cost of contractual benefits for employees, and (3) the cost of statutory payments, such as Social Security and Workers' Compensation--all calculated on the basis of hours worked by employees.[9]

Average hourly costs include the costs of wages and benefits (current and future) to employees divided by the number of hours worked by those same employees. It does not include the benefits paid to retirees.[10] This is in accord with standard accounting principles that require the Big Three to report their costs as they occur. Labor costs are the costs to the Detroit automakers of employing its current workers, not paying former workers for services performed decades ago.

Retirement Benefits Alone Cost $31 an Hour

The argument that retiree pension and health benefits inflate the hourly labor costs of the Detroit automakers cannot withstand basic scrutiny. For instance, General Motors UAW retirement plan paid $4.9 billion to 291,000 retirees and surviving spouses in 2006.[11] That works out to $31.04 an hour when apportioned among active workers.[12] That figure accounts for virtually all GM's benefit costs--before accounting for health care costs, disability benefits, supplemental unemployment benefits, or any of the other benefits GM provides. GM pays too much in retirement benefits to have labor costs of only $70 an hour if that figure included benefits to current retirees.

Labor Costs Similar Despite Retiree Differences

The Detroit automakers pay similar wages at each company despite having very different numbers of retirees to provide for. Table 1 shows the average hourly labor costs for the Big Three and the ratio of retirees to active workers at each company. General Motors has far more retirees per active worker than Ford or Chrysler. For each active worker at GM, there were 3.8 retirees or dependants in 2006. At Chrysler this ratio was half as much: two retirees for each worker. At Ford there were only 1.6 retirees per worker. If the hourly labor costs included retiree benefits, hourly wages at GM would be much higher than at either Ford or Chrysler.



But this is not the case. General Motors did not have the highest hourly labor costs despite having more retirees. Chrysler paid $2.60 an hour more in labor costs in 2006 than GM did. Ford paid only $2.75 an hour less than GM did, despite having half as many retirees relative to workers to provide for. All three automakers had roughly the same hourly labor costs despite having very different numbers of retirees to provide for. Hourly labor costs account for the expense of providing wages and benefits to current workers but do not include legacy costs.

Taxing the Many to Pay the Few

UAW spokespeople have roundly condemned the estimate of labor costs in excess of $70 per current worker hour. They assert these figures include the cost of current retiree pension and health benefits. They have done so, however, without marshalling evidence to support their case.

The Detroit automakers explain in their SEC filings that their benefit expenses are for current workers, not former employees. This is because they follow generally accepted accounting principles in preparing these estimates. If the figures did include current retiree benefits, the average hourly amount would be much higher than they actually report. UAW employees earn far more than most Americans do. Congress should not tax all Americans to bailout the Detroit automakers

http://www.heritage.org/Research/Economy/wm2162.cfm

[spurster]

I think all of the bailouts should be done (should have been done) through managed bankruptcies, where we taxpayers might get some transparency when all the creditors have to come to bankruptcy court and we could more clearly see where the bailout funds are going. With regard to the auto companies, bankruptcy would let them reorganize the obligations which are crushing them right now.

[ChumpDumper]

So which benefits should auto workers live without?

[RobinsontoDuncan]

So the solution is what? strip these people of their health care?

I wonder how many conservatives on this forum get employer provided health care. I bet they are all crossing their fingers that their bosses will tell them to go buy their own health care for the good of the company business model.

In the mean time, let's continue to eschew universal health care since, lord knows, we wouldn't want US companies on a level playing field with the rest of the world.

[Gino]

So which benefits should auto workers live without?


This $29 cost gap reflects the way Big Three management and unions have conspired to make themselves uncompetitive — increasingly so as their market share has collapsed (see the top chart above). Over the decades the United Auto Workers won pension and health-care benefits far more generous than in almost any other American industry. As a result, for every UAW member working at a U.S. car maker today, three retirees collect benefits; at GM, the ratio is 4.6 to one (see chart below).

http://www.economistblog.com/2008/12/01/big-3-vs-foreign-transplants-fantasy-vs-reality/

Obviously employees deserve benefits, but future generations at the big three might have to have benefits comparable to other industries.

[Marklar MM]

Shelby is a royal douche bag. Carry on.

[DisgruntledLionFan#54,927]

Shelby is a royal douche bag. Carry on.

Amazing isn't it? And people are applauding him.

Oh, and can I get a breakdown of the average AIG/Citi/etc. worker's salary/bennys and how much they gave back?

TIA.

[Marklar MM]

Amazing isn't it? And people are applauding him.

Oh, and can I get a breakdown of the average AIG/Citi/etc. worker's salary/bennys and how much they gave back?

TIA.

They do give back bro...multi million dollar bonuses to themselves.

[DisgruntledLionFan#54,927]

They do give back bro...multi million dollar bonuses to themselves.

Yeah, but those are pretty, Hickey Freeman required, white collar jobs in the Big Apple.

These are dirty, grimy, push-a-button, don't have to think jobs in scummy Detroit.

[Marklar MM]

They just brought this up on the radio here, thought it was interesting.

What happens when the southern states start begging for water from the Lakes?

[ChumpDumper]

http://www.economistblog.com/2008/12/01/big-3-vs-foreign-transplants-fantasy-vs-reality/

Obviously employees deserve benefits, but future generations at the big three might have to have benefits comparable to other industries.The blog failed to quantify how much more generous UAW benefits are than other industries. All it quantified was the number of retirees receiving benefits.

[SpursFanFirst]

You must be a member of the UAW, RobinsontoDuncan.

[DarkReign]

Go ahead. Bail Wall Street out for ONE TRILLION dollars.

But run a fucking circus on the auto companies for 15 billion.

I hate this government and the people whom support it. Kill us, please. You can be the Eloi, I will be the Murlock. Whats for dinner?

[DarkReign]

How many hours a week to some of you motherfuckers work, huh?

And when youre at work, what is it you exactly do that you deserve what you make, but auto workers do not?

Some of you are the fucking lowest trash in the world. Especially some elected Southern politicians and their supporters.

I am anti-bailout anything to be sure, even at the expense of my career.

If it was your career at stake, would you be so convinced as well?

I highly fucking doubt it with some of you cowardly, asshats with big opinions but light on facts/reason or conscience.

Come on up to the lazy world of the UAW. Come on, hang out with us. Lets see how long you fucking last, wannabe. Why do you think we can go anywhere in the country and get treated like kings? The only people who can compete with the work ethic of someone from the rustbelt are born-and-bred Mexicans, not you fucking 3rd generation entitlement kids.

My brother, my uncle, my cousin, numerous friend and friends of friends are all told the same thing when they work out of state...."Man, youre a hard worker!"

Thats right. We fucking work. Real work, not shuffling papers from one end to the other, not pushing a pencil or trading money on the market. We produce goods...not services. Tangible product of manufacturing.

So glorify your foreign competitors as saviors, as examples of what American companies should be. Buy your fucking car from whomever you want and in the end, you'll be depending on those same foreign companies to provide the simplest of items because your country will lack the means to produce them any longer.

You fuckers who are sooooo proud of yourselves that "the big bad auto companies" finally get whats coming to them are a fucking joke. And if you had the balls to say some shit like you do here in my presence, you'd be swallowing your teeth.

I dont what part of the third world you fucking live in where you celebrate the destruction of a national industry, but rest assured, in the new world after its death, you'll be next you son of a bitch.

The weak are killed and eaten.

[SpursFanFirst]

Dark Reign=
:soapbox:

But really though...
I have mixed feelings on the bailouts from top to bottom.
Perhaps they were needed, but I think the government jumped way too fast in bailing out the banks.

They should have been forced to make some major changes BEFORE the money was handed to them....and I feel the same way about the auto industry.

What sacrifices should be made? I'm not 100% sure, but some companies are already taking steps in the right direction - scrapping the private jets and cutting compensation and perks for their executives.
I'm sure there are plenty of other areas where fat can be trimmed as well.

Bottom line: these companies need to be held accountable for the mistakes they made.
They have to take a hard look at where their money is going, and make changes accordingly, before they see government money.

[KenMcCoy]

GM needs to die...you can't run any business with losses of $2,500 per item sold. They shoud have cut loose from the UAW long ago and moved to a non union state so they could be competitive with Toyota and Honda.

[RobinsontoDuncan]

You must be a member of the UAW, RobinsontoDuncan.

No, I'm not. Just because I'm not a blue collar worker doesn't mean I think unions are evil, or hardworking people should be exploited by this country's elite class in their quest to role back all of the hard fought victories organized labor has achieved this past century.

I think the problem is that everyone buys into the rhetoric that unions are just evil institutions that lazy people join so they don't have to work, but that's bullshit and anyone that has seen how much autoworkers in Detroit bust their asses to make a living knows it.

[ChumpDumper]

Seriously, why should only union concessions be part of the legislation?

Why not management?

Why not shareholders?

It's grandstanding.

[RobinsontoDuncan]

How many hours a week to some of you motherfuckers work, huh?

And when youre at work, what is it you exactly do that you deserve what you make, but auto workers do not?

Some of you are the fucking lowest trash in the world. Especially some elected Southern politicians and their supporters.

I am anti-bailout anything to be sure, even at the expense of my career.

If it was your career at stake, would you be so convinced as well?

I highly fucking doubt it with some of you cowardly, asshats with big opinions but light on facts/reason or conscience.

Come on up to the lazy world of the UAW. Come on, hang out with us. Lets see how long you fucking last, wannabe. Why do you think we can go anywhere in the country and get treated like kings? The only people who can compete with the work ethic of someone from the rustbelt are born-and-bred Mexicans, not you fucking 3rd generation entitlement kids.

My brother, my uncle, my cousin, numerous friend and friends of friends are all told the same thing when they work out of state...."Man, youre a hard worker!"

Thats right. We fucking work. Real work, not shuffling papers from one end to the other, not pushing a pencil or trading money on the market. We produce goods...not services. Tangible product of manufacturing.

So glorify your foreign competitors as saviors, as examples of what American companies should be. Buy your fucking car from whomever you want and in the end, you'll be depending on those same foreign companies to provide the simplest of items because your country will lack the means to produce them any longer.

You fuckers who are sooooo proud of yourselves that "the big bad auto companies" finally get whats coming to them are a fucking joke. And if you had the balls to say some shit like you do here in my presence, you'd be swallowing your teeth.

I dont what part of the third world you fucking live in where you celebrate the destruction of a national industry, but rest assured, in the new world after its death, you'll be next you son of a bitch.

The weak are killed and eaten.

I certainly understand you emotional reaction to this dark chapter in American history, but I don't think anyone here is going to hear you.

The sad truth about our society is that no one understands the value of producing tangible goods anymore, and soon enough we'll all be paying a steep price for that.

I laugh when people say we can become a service economy and maintain a high standard of living, but it just goes to show how little people actually understand about the difference between a real economy and a fake economy.

[smeagol]

:lol @ the people who make fun of banking.

Without banks, society goes to hell. Without GM, you but Toyota.

For the record, I'm for all bailouts becasue without them, instead of a two year recession, we would be in for a treat . . . 5, maybe 7 years.

I'm also for bailouts because there are very few people that can say they did not benefit from the last twenty years of cheap credit. Ergo, everybody bares responsability, everybody has to chip in.

[RobinsontoDuncan]

link (http://online.wsj.com/article/SB122904130349800105.html?mod=googlenews_wsj)

Wall Street Journal

WASHINGTON -- Sen. Richard Shelby, a jut-jawed lawmaker embodying the hostility many in Congress feel toward the Big Three auto makers, has emerged as the face of the opposition during the debate over aiding the industry.

Mr. Shelby's objections are rooted in the interplay of long-held principle and home-state interest. The Democrat-turned-Republican has always been opposed to bailouts and big government. At the same time, his state of Alabama is home to manufacturing outposts of several foreign auto makers -- including Toyota Motor Corp., Honda Motor Co., Hyundai Motor Co. and Daimler AG's Mercedes-Benz -- that have competed successfully with U.S. auto companies.

Sen. Richard Shelby, left, speaks as Sen. David Vitter listens during a news conference on the auto bailout Dec. 10.

"It's a situation where the senator does not have to worry about cognitive dissonance," said David Lanoue, head of the political-science department at the University of Alabama. "Obviously this is one of those situations where you can follow your philosophy and the interests of your constituents at the same time."

The band of mostly Republican Southern senators who form the heart of the opposition -- it also includes Senate Minority Leader Mitch McConnell of Kentucky and Sen. Bob Corker of Tennessee -- share Mr. Shelby's principle and circumstances. Kentucky is home to a major Toyota factory. The corporate headquarters of Nissan Motor Co.'s North American operations are located in Tennessee, and Volkswagen AG recently announced plans for a $1 billion, 2,000-worker plant in Chattanooga, Tenn.

Foreign auto makers have favored the South in part because of its nonunion, low-wage tradition, and these senators argue that if the Big Three's labor relations more closely resembled those of the Southern plants, they wouldn't be in such trouble.

Mr. Shelby held a news conference Wednesday to call the $14 billion plan a "travesty." It was just a "down payment" on what would probably become billions more in taxpayer-funded aid, he predicted, and without major restructuring, the Big Three would fail anyway.

Mr. Shelby denied that the collapse of the U.S. auto industry would help the foreign-owned plants in his state. "No, no, no -- failure is never a good thing for anybody," he insisted, adding, "If I had five GM or Ford plants in my state, I would oppose this bailout."

United Auto Workers President Ron Gettelfinger recently suggested a double standard in opposition to federal assistance for domestic auto makers while foreign manufacturers reap benefits from state subsidies. "It just seems odd to us that we can help the financial institutions in this country and that we can offer incentives to our competitors to come here and compete against us but at the same time, we are willing to walk away from an industry that is the backbone of our economy," Mr. Gettelfinger said during a late-November news conference. He said states have given foreign auto makers more than $3 billion in incentives since 1992 and singled out Mr. Shelby's home state of Alabama as a major benefactor.

Jonathan Graffeo, Mr. Shelby's spokesman, noted that the senator opposed the Chrysler bailout in 1979 when Alabama had no foreign plants. More recently, Mr. Shelby also fought the $700 billion rescue package for the financial-services industry.

Others make the broader argument that any major blow sustained by Detroit would send further shock waves through the national economy. "I think that the senators from Southern states that have foreign automobile manufacturers in their states are being dangerously shortsighted and, frankly, naive, with regard to the nature of the automobile industry in the United States," said Ohio Lt. Gov. Lee Fisher, a Democrat who is also his state's director of economic development.
—Louise Radnofsky and Mike Spector contributed to this article.

[KenMcCoy]

Seriously, why should only union concessions be part of the legislation?

Why not management?

Why not shareholders?

It's grandstanding.




They already have wording in the house passed version that prohibits bonuses for officers.

[ChumpDumper]

They already have wording in the house passed version that prohibits bonuses for officers.No cutting of base salary or benefits?

Why would anyone in management merit a bonus?

That's just a CYA measure written in because AIG execs gave themselves bonuses after their bailout.

[BacktoBasics]

The only reason they're so hard on the auto industry is because they got rolled by the last bailout. A bailout that not only accomplished nothing but it continued to line the pockets of the very ones who were guilty of the mess to begin with. They couldn't very well go out and repeat the first mess.

Actually they probably could have but surely they didn't want to re-bloody their hands.

So what I'm saying is why get so upset because they weren't willing to revisit the same process of failure again?

Furthermore I agree that at least two of the three need major restructuring but lets not lose site of the fact that if the banking world wasn't falling apart right now the auto industry would be putting along. Basically they're going to have to bailout the auto world because the last bailout of the banking industry failed to loosen up the lending. Attempting to fix the auto world before fixing their primary source of money (the banks not the people) is an exercise in futility at least for the time being. I'm not saying restructure isn't good though.

[SpursFanFirst]

No, I'm not. Just because I'm not a blue collar worker doesn't mean I think unions are evil, or hardworking people should be exploited by this country's elite class in their quest to role back all of the hard fought victories organized labor has achieved this past century.

I think the problem is that everyone buys into the rhetoric that unions are just evil institutions that lazy people join so they don't have to work, but that's bullshit and anyone that has seen how much autoworkers in Detroit bust their asses to make a living knows it.

I'm sure the union people in Detroit are very hard workers, but I don't see a good example of unions at my shop.

In my department, half the people are in the union, and the other half are not. The half that isn't in the union gets paid salaries rather than hourly, we don't get overtime or holiday pay, we have to do yearly reviews which are a large pain in the ass, and we have to set and follow through on goals each year - the union does not.

Now...I have no problems doing reviews and setting goals and whatnot....it's part of having a job, for which I am thankful.
I DO have a problem, though, with the 2 different sets of rules in my department alone.
The people who ARE in the union, with the exception of a couple, are extremely lazy. They come and go as they please...sometimes knocking off a couple of work hours each day and then take long dinner breaks? You add that to the fact that they don't have to set goals and have yearly reviews, but are given raises anyway, and how can I have a favorable opinion of unions?

[DarkReign]

The president-elect and the congressional Democrats all have signaled a willingness to pass labor's top legislative priority -- the so-called "card check" legislation, which would essentially abolish secret ballots and make organizing easier. Everywhere.

If it passes, I'm betting the first stops on the UAW's southern swing will be auto plants in Shelby's Alabama and Corker's Tennessee, soon to be home to Volkswagen AG's first U.S. plant in a generation.

Let the paybacks begin.


Good idea, you southern-fried idiot politcians. You win now only to really lose later. Congratulations, you short-sighted morons.

To be clear, I am against non-secret ballots. But if this is tit-for-tat, we all lose in the end. Fucking dumb, I tell you.

Where do Japanese companies get their parts? Oh, from Japanese companies like NHK, who just-so-happens to own multiple suppliers in the rustbelt (they bought New Mather a long time ago). How are they doing?

2 inches away from bankruptcy. Then they can close the plants and make all of their parts somewhere else besides here, where the populace is dumb enough to buy their products at the expense of their country.

You want to talk about patriotism, lets never discuss Southern politics again.

[RobinsontoDuncan]

I'm sure the union people in Detroit are very hard workers, but I don't see a good example of unions at my shop.

In my department, half the people are in the union, and the other half are not. The half that isn't in the union gets paid salaries rather than hourly, we don't get overtime or holiday pay, we have to do yearly reviews which are a large pain in the ass, and we have to set and follow through on goals each year - the union does not.

Now...I have no problems doing reviews and setting goals and whatnot....it's part of having a job, for which I am thankful.
I DO have a problem, though, with the 2 different sets of rules in my department alone.
The people who ARE in the union, with the exception of a couple, are extremely lazy. They come and go as they please...sometimes knocking off a couple of work hours each day and then take long dinner breaks? You add that to the fact that they don't have to set goals and have yearly reviews, but are given raises anyway, and how can I have a favorable opinion of unions?

and where do you work exactly? I love how conservatives are quick with the anecdotes and short on the details.

I have a feeling that this scenario is either made up, embellished, or both, and i relish the chance to prove it.

[KenMcCoy]

No cutting of base salary or benefits?

Why would anyone in management merit a bonus?

That's just a CYA measure written in because AIG execs gave themselves bonuses after their bailout.

Looking but haven't found anything on the internets...but from my experience it is usually upper management that are the first ones to take pay cuts/reduced benefits. Could be that they already took voluntary pay cuts and it's just not a sticking point like the UAW cuts so no one is reporting on it.

[DarkReign]

Looking but haven't found anything on the internets...but from my experience it is usually upper management that are the first ones to take pay cuts/reduced benefits. Could be that they already took voluntary pay cuts and it's just not a sticking point like the UAW cuts so no one is reporting on it.

No.

http://detnews.com/apps/pbcs.dll/section?category=AUTO01

[RobinsontoDuncan]

Looking but haven't found anything on the internets...but from my experience it is usually upper management that are the first ones to take pay cuts/reduced benefits. Could be that they already took voluntary pay cuts and it's just not a sticking point like the UAW cuts so no one is reporting on it.

blatantly false. upper management tends to walk out with a golden parachute and designer spa sessions in nice hotels. See bailout, AIG.

[Gino]

Do auto workers really make more than $70 per hour?
How much does a UAW member make at a domestic auto plant? Various sites have cited the figure at an average of seventy-three dollars an hour (The Heritage Foundation). Keith Olbermann says that the figure is actually at twenty-eight before benefits, which only add ten dollars to the amount. Other sources indicate that Toyota workers (who are not unionized) made more last year after profit sharing was calculated. So clear it up for us. What's the real bottom line?

A: No. That figure is derived from what the auto companies pay in wages, health, retirement and other benefits, and includes the cost of providing benefits to retirees.
A report from the conservative Heritage Foundation, opposing the auto industry bailout, said that members of the United Auto Workers union "earn $75 an hour in wages and benefits – almost triple the earnings of the average private sector worker." Later in the report, it's phrased this way: "The vast majority of UAW workers in Detroit today still earn $75 an hour."

That figure has caught hold with some conservatives, and it seeps into media coverage from time to time as well. A few examples: At a Nov. 19 House Financial Services Committee hearing on a possible bailout for the auto industry, Alabama Republican Rep. Spencer Bachus said, "Even with recent changes, the average hourly wage at General Motors is still $75 an hour. ..." Two of his GOP colleagues on the panel made similar statements. And in a Nov. 18 column in the New York Times, business reporter Andrew Ross Sorkin wrote, "At GM, as of 2007, the average worker was paid about $70 an hour, including health care and pension costs."

The problem is, that's just not true. The automakers say that the average wage earned by its unionized workers is about $29 per hour. So how does that climb to more than $70? Add in benefits: life insurance, health care, pension and so on. But not just the benefits that the current workers actually receive – after all, it's pretty rare for the value of a benefits package to add up to more than wages paid, even with a really, really good health plan in place. What's causing the number to balloon is the cost of providing benefits to tens of thousands of retired auto workers and their surviving spouses.

The automakers arrived at the $70+ figure by adding up all the costs associated with providing wages and benefits to current and retired workers and dividing the total by the number of hours worked by current employees.


Labor Costs Aren't the Same as Wages Earned


The result is the per-hour labor cost to the automakers, which is very different from "pay" or "wages" or even "wages and benefits" earned by their workers. As David Leonhardt pointed out in the New York Times (countering, in a sense, the earlier piece by Sorkin), the average GM, Ford and Chrysler worker receives compensation – wages, bonuses, overtime and paid time off – of about $40 an hour. Add in benefits such as health insurance and pensions and you get to about $55. Another $15 or so in benefits to retirees (known as "legacy costs") brings the number to roughly $70.

That last figure accounts for the biggest difference between labor costs of the Big Two and a Half and those of the "transplants," as foreign carmakers with manufacturing facilities on U.S. soil are called. Ford, in material it submitted to Congress for hearings this month (see "Congressional Submission Appendix (PPT)"), estimated the transplants' legacy costs at about $3 per hour, a number that has less to do with the level of benefits paid than it does with the fact that the transplants don't have many retirees yet, according to economist Kristin Dziczek of the Center for Automotive Research.

The Ford chart also estimates that, as a result of a historic 2007 labor agreement with the UAW, the legacy costs of the U.S. automakers are expected to fall – to about $3 per hour. That's because the deal calls for a new voluntary employee beneficiary association (or VEBA), a seldom-used 100-year-old tax loophole. A VEBA is a tax-exempt trust that can be used to fund almost any sort of employee benefit, but they are most commonly used to pay for health care expenses.

In an innovative twist, the UAW and Detroit negotiated a VEBA to cover the health care expenses of retired autoworkers. Under the terms of the agreement, GM, Ford and Chrysler were to contribute $30 billion, $13 billion and $9 billion, respectively, to a trust fund to be managed by the union. The UAW would then use the income from the VEBA to cover retiree medical expenses. The agreement would protect retirees’ health care benefits in the event of company bankruptcy, while allowing the automakers to shed the bulk of their legacy costs.

When the new agreement is fully implemented, which should happen in 2010, the U.S. automakers would still bear labor costs of about $9 per hour more than Toyota, but that's far better than the current gap. The 2007 agreement also calls for a new two-tier wage structure and other concessions from workers.

As for whether Toyota workers earn more than employees of U.S. domestic automakers: In 2006, at Toyota's Georgetown, Ky., plant, workers averaged more in base pay and bonuses than UAW members at Ford, General Motors and Daimler Chrylser, according to the Detroit Free Press. The difference was due to profit-sharing bonuses; Detroit's workers aren't getting many of those these days because, well, there's really nothing to share. The transplants don't give out much data, however, so it's hard to tell if this pattern is continuing or even if it applied to all Toyota plants in 2006.

A final note on all this: Labor costs only account for about 10 percent of the cost of producing a vehicle. And it's not the cost of American cars that people complain about; they're already often thousands of dollars less than their Japanese counterparts. Whatever changes may be made in the carmakers' labor agreements, we're convinced, and the recent hearings show, that there are much bigger problems in Detroit.

– Viveca Novak and Joe Miller


Sources
Sorkin, Andrew Ross. "A Bridge Loan? U.S. Should Guide G.M. in a Chapter 11." The New York Times, 18 Nov. 2008.

Leonhardt, David. "$73 an Hour: Adding It Up." The New York Times, 9 Dec. 2008.

Roberson, Jason. "UAW Losing Pay Edge." Detroit Free Press, 31 Jan. 2007.

Sherk, James. "Auto Bailout Ignores Excessive Labor Costs." WebMemo #2135, 19 Nov. 2008.

International Union, United Automobile, Aerospace and Agricultural Implement Workers of America. "Wages and Labor Costs." www.uaw.org, Web site accessed 11 Dec. 2008.

"Stabilizing the Financial Condition of the American Automobile Industry." Hearing of the House Financial Services Committee, 19 Nov. 2008.

http://www.factcheck.org/askfactcheck/do_auto_workers_really_make_more_than.html

So the truth is in the middle. They dont make 70, but 40 is still ridiculous for a low skilled worker.

I also read the average at Hundai is around 21, and the average at Honda was in the high 20s. The article says that at Toyota, the make more than the big 3 but only through profit sharing.

[Gino]

The first category is simply cash payments, which is what many people imagine when they hear the word “compensation.” It includes wages, overtime and vacation pay, and comes to about $40 an hour. (The numbers vary a bit by company and year. That’s why $73 is sometimes $70 or $77.)

The second category is fringe benefits, like health insurance and pensions. These benefits have real value, even if they don’t show up on a weekly paycheck. At the Big Three, the benefits amount to $15 an hour or so.

Add the two together, and you get the true hourly compensation of Detroit’s unionized work force: roughly $55 an hour. It’s a little more than twice as much as the typical American worker makes, benefits included. The more relevant comparison, though, is probably to Honda’s or Toyota’s (nonunionized) workers. They make in the neighborhood of $45 an hour, and most of the gap stems from their less generous benefits.

http://www.nytimes.com/2008/12/10/business/economy/10leonhardt.html?em

[KenMcCoy]

But G.M., the world’s largest automaker for decades, said Tuesday that it was in such dire straits that it would deeply cut jobs, factories, brands and executive pay (http://topics.nytimes.com/top/reference/timestopics/subjects/e/executive_pay/index.html?inline=nyt-classifier) as part of its plea to get $12 billion in federal loans and an additional $6 billion line of credit.


http://www.nytimes.com/2008/12/03/business/03auto.html?_r=1&hp=&adxnnl=1&adxnnlx=1229112308-gWiGHCIgVUw/kPh+5HFL8g

I think most upper mgt has probably already accepted a pay cut.

[smeagol]

Anybody focusing on the fact people are not buying their cars?

[ChumpDumper]

http://www.nytimes.com/2008/12/03/business/03auto.html?_r=1&hp=&adxnnl=1&adxnnlx=1229112308-gWiGHCIgVUw/kPh+5HFL8g

I think most upper mgt has probably already accepted a pay cut.So why did they say they would do it if they already had done it?

Why not put it in the legislation so they can't just change their minds and give themselves the bailout money?

[RobinsontoDuncan]

Anybody focusing on the fact people are not buying their cars?

people aren't buying anything because the credit market is horrid. this isn't a american automaker problem, the major japanese companies are going through the same crisis.

[ChumpDumper]

Anybody focusing on the fact people are not buying their cars?That's definitely the other side of the coin.

[KenMcCoy]

Anybody focusing on the fact people are not buying their cars?

This in the end is what it is all about...stop making crappy cars.

Stop paying your employees (mgt. and laborers) so much that it puts you at a disadvantage. Put those savings into making a better quality car with the same standard features of your foreign, well run competitors.

[SpursFanFirst]

and where do you work exactly? I love how conservatives are quick with the anecdotes and short on the details.

I have a feeling that this scenario is either made up, embellished, or both, and i relish the chance to prove it.

I'm sorry. How can my telling you where I work prove anything to you?

:tu But nice of you to call me a liar when you don't know the first thing about me.

[Gino]

I cant believe that they are making 40 bucks an hours. Salary should be based off how much you would pay someone to do it and how much others would be willing to accept to perform the task.

Are you telling me that percentage of the population capable of working in a GM Factory combined with the percentage of people who are actually willing to do the job equals 30-40 bucks an hour?

Thats ridiculous. I guarantee someone would accept that job for 14 bucks and hour or less.

[ducks]

I know people who bought a car this year
why wanted better gas miledge
they produce a car that gets 50 miles per gallon
not charge an extra 10k for it
they will sell it

[smeagol]

people aren't buying anything because the credit market is horrid. this isn't a american automaker problem, the major japanese companies are going through the same crisis.

People have been shying away from American cars since long before this crisis started.

Try again . . .

[KenMcCoy]

I cant believe that they are making 40 bucks an hours. Salary should be based off how much you would pay someone to do it and how much others would be willing to accept to perform the task.

Are you telling me that percentage of the population capable of working in a GM Factory combined with the percentage of people who are actually willing to do the job equals 30-40 bucks an hour?

Thats ridiculous. I guarantee someone would accept that job for 14 bucks and hour or less.

:toast Simple supply and demand. Unfortunately you don't get that when the union gets involved.

[RobinsontoDuncan]

the big three had record profit a few years ago

[KenMcCoy]

When gas was cheap and they were stuffing things like the Suburban XL and Excursion down everyone's throat. There's no problem with making those types of vehicles but they should have had the insight (like Honda and Toyota) to invest in hybrid technology rather than how they could make their cars bigger.

[SpursFanFirst]

I like how RobinsontoDuncan calls me a liar and then leaves.

[BacktoBasics]

I'm going to echo the point above about people not buying due to the banking industry not the lack of actual buyers. All we hear is how "noboby is buying" and its total bullshit.

Not only do a large portion of my peers work on the sales end of the auto world but I'm in sales myself. I've actually had a better winter than I did summer and its only because I've had a rash of people paying cash or they have 720+ FICO scores. I have no shortage of applications.

Again there is no shortage of buyers only a shortage of lending. I'm not talking about the guy with such horrible credit he shouldn't be out buying the in first place. I'm talking about the guy with average credit that could have bought near prime rate with little to no down who is unable to make a purchase now.

This has nothing to do with a lack of buyers. The banks aren't lending and if they are lending its to people with almost perfect to perfect credit and the average joe is left with no deal or a term so ridiculous it just isn't worth it.

This is why I pointed out earlier that if the banking industry wasn't falling apart the auto industry wouldn't be in dire need of help.

Do they need restructuring yes and yes it might be a blessing in disguise but the fact of the matter is that we wouldn't be hearing about an auto bailout if the lenders didn't freeze the meat of the market out.

[RobinsontoDuncan]

I like how RobinsontoDuncan calls me a liar and then leaves.

?

[RobinsontoDuncan]

http://www.newyorker.com/online/blogs/jamessurowiecki/2008/12/government-medd.html

Government Meddling Is Bad, Except When We Do It

The narrative Senate Republicans are going to try to spin, about the death of the automakers’ bailout, is that it was the fault of the U.A.W. After refusing to support the bill that Congressional Democrats and the Republican White House came up with, some Senate Republicans suggested that they might be willing to support a bill that rolled back U.A.W. wages to the levels earned by U.S. workers at Japanese- and German-owned plants. The union, which had already made concessions on work rules, said it would be willing to renegotiate wages in 2011, when its current contract expires, but not to roll back wages immediately. This was a deal-breaker for the Senate Republicans.

There are a couple of things to notice about this story. First, it has almost nothing to do with the core problems faced by G.M., Chrysler, and Ford. The wage gap between U.A.W. workers and workers at other car companies is no longer that big, and labor costs at this point account for only ten per cent of the cost of producing a vehicle. So rolling back wages was not going to suddenly make G.M. and Ford significantly healthier than they are today, and not getting those rollbacks did not materially change the economic value of the bridge loan. In other words, if you could support the loan with the givebacks, you should have been willing to support the loan without them.

More important, having the government dictate the wages of employees—which is literally what the G.O.P. was insisting on doing—is precisely the kind of government meddling in the marketplace that Republicans normally abhor. There is no reason to think that G.O.P. senators have a greater insight into labor dynamics, the appropriate wage for Ford workers,and how labor-management relations affect productivity than the Big Three’s executives do. Yet the senators were insisting that their judgment on these matters should trump all other considerations. I recognize the logic of saying that if we’re going to offer the automakers a loan, we should have conditions attached. But those conditions should be similar to the ones any lender would attach. They shouldn’t be an attempt to have the government dictate wage levels. What’s next? Price controls?

[SnakeBoy]

Thats right. We fucking work. Real work, not shuffling papers from one end to the other, not pushing a pencil or trading money on the market.

Unskilled workers UNITE!

[byrontx]

I also found this. The rates are considerably lower.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4578894#4580080


Q: Are UAW members really paid $73 an hour?
A: No. Wages for UAW members at Chrysler, Ford and GM range from about $14 an hour for newly hired workers to $28 an hour for assemblers to $33 for skilled trades workers.

Typical hourly wages at Honda, Nissan and Toyota are only slightly lower. Due to the effect of profit-sharing formulas, however, there have been some recent years in which a typical Toyota worker has taken home a larger annual paycheck than a typical GM worker.

The Big 3 have retirees to support, the transplants do not. The Big 3 have long established plants that are in the tax base of communities supporting schools and the like; the transplants have tax-waived status for their plants. The Big 3 have retired American workers that lived up to their obligations and expect their former employers to do the same. The deck is stacked against the American car companies.

At the same time I think Americans are realizing that we can't all sit around flipping paper for a living; we have to start making things again. We should try to save our domestic auto industry.

I am concerned that the Republicans are excited about the prospect of taking out a major American union and are willing to put the best interests of the country aside for political gains.

[SpursFanFirst]

?


and where do you work exactly? I love how conservatives are quick with the anecdotes and short on the details.

I have a feeling that this scenario is either made up, embellished, or both, and i relish the chance to prove it.

[DarkReign]

Unskilled workers UNITE!

Blow me. You dont know what youre talking about, that much is obvious.

[Aggie Hoopsfan]

I am concerned that the Republicans are excited about the prospect of taking out a major American union and are willing to put the best interests of the country aside for political gains.

What political gains is that? They'd be locking in the vote up in Michigan for the Democrats for a long time. For once, they are actually trying to put the best interests of the country ahead of political gains.

Do you have a fucking clue what's in store for this country? Do you realize what taxes are going to be like in our lifetime, in our children's lifetime, to cover the tab for all this shit? And that's without even factoring in Medicare and social security.

Wake up.

[Marklar MM]

What political gains is that? They'd be locking in the vote up in Michigan for the Democrats for a long time. For once, they are actually trying to put the best interests of the country ahead of political gains.

Do you have a fucking clue what's in store for this country? Do you realize what taxes are going to be like in our lifetime, in our children's lifetime, to cover the tab for all this shit? And that's without even factoring in Medicare and social security.

Wake up.

Just think of all the money the government will have to pay in the long run when Ford/GM/Chrysler declare bankruptcy.

[ChumpDumper]

What political gains is that? They'd be locking in the vote up in Michigan for the Democrats for a long time. For once, they are actually trying to put the best interests of the country ahead of political gains.Give me a break. They are protecting their own turf and their own political contributors. The legislation isn't the place to dictate concessions unless it's done for everyone.


Do you have a fucking clue what's in store for this country? Do you realize what taxes are going to be like in our lifetime, in our children's lifetime, to cover the tab for all this shit? And that's without even factoring in Medicare and social security.

Wake up.Considering we're only talking about 2% of what we've already given to Wall Street with basically no conditions whatsoever, that ship has already sailed.

[DisgruntledLionFan#54,927]

What political gains is that? They'd be locking in the vote up in Michigan for the Democrats for a long time. For once, they are actually trying to put the best interests of the country ahead of political gains.

That's odd, considering they focused solely on the UAW and not on these companies as a whole.


Wake up.

I wish you would.

[Yonivore]

http://server1.laborpains.org/wp-content/uploads/2008/12/photo.jpg

Ever wondered what a UAW contract looks like? Here is all 22 pounds of it (in this case, Ford’s 2,215 page 2007 master contract...)

I’ll tell you this much, those 2,215 pages don’t include much regarding efficiency and competitiveness. What you’ll find are hundreds of rules, regulations, and letters of understanding that have hamstrung the auto companies for years.

Most of these rules are deliberately anti-efficiency. You can't move a guy off the (say) window-installation line, where he's not working because frames aren't being put out quickly enough, to the frame-welding line. Because it's the rule. So everything slows down for no good reason.

These rules are mostly put in as coercive tools against management. Want to speed up that frame-welding line by diverting some window-installation workers to lend a hand? Well, maybe: But it will cost you. How much is it worth to you?

This sort of nonsense is killing American industry...not just the Auto Industry. I either read it in here or heard it on the radio but, someone was whining about how the Auto Industry is one of the few remaining industries actually making an American product. Know why? The fucking unions extorted the rest of our industries right out of the country.

The bail out died because the UAW wouldn't concede on this, salaries, or benefits. And, the only way for the American Auto Industry to survive is for labor costs to be brought in line with their competitors. It can either happen by the UAW making concessions or by the Big Three being released from labor contracts by going bankrupt and restructuring their entire enterprise.

I vote for the latter.

If they don't survive, oh well...let someone else build a better mousetrap. If the market demands American made cars, someone will make them. It doesn't have to be Ford, GM, or Chrysler. And, if it isn't...at least there'll be some unused factories and unemployed auto workers to buy and hire to start a new American car company. Everyone should be sufficiently humbled by then.

[Gino]

http://www.newyorker.com/online/blogs/jamessurowiecki/2008/12/government-medd.html

Government Meddling Is Bad, Except When We Do It

The narrative Senate Republicans are going to try to spin, about the death of the automakers’ bailout, is that it was the fault of the U.A.W. After refusing to support the bill that Congressional Democrats and the Republican White House came up with, some Senate Republicans suggested that they might be willing to support a bill that rolled back U.A.W. wages to the levels earned by U.S. workers at Japanese- and German-owned plants. The union, which had already made concessions on work rules, said it would be willing to renegotiate wages in 2011, when its current contract expires, but not to roll back wages immediately. This was a deal-breaker for the Senate Republicans.

There are a couple of things to notice about this story. First, it has almost nothing to do with the core problems faced by G.M., Chrysler, and Ford. The wage gap between U.A.W. workers and workers at other car companies is no longer that big, and labor costs at this point account for only ten per cent of the cost of producing a vehicle. So rolling back wages was not going to suddenly make G.M. and Ford significantly healthier than they are today, and not getting those rollbacks did not materially change the economic value of the bridge loan. In other words, if you could support the loan with the givebacks, you should have been willing to support the loan without them.

More important, having the government dictate the wages of employees—which is literally what the G.O.P. was insisting on doing—is precisely the kind of government meddling in the marketplace that Republicans normally abhor. There is no reason to think that G.O.P. senators have a greater insight into labor dynamics, the appropriate wage for Ford workers,and how labor-management relations affect productivity than the Big Three’s executives do. Yet the senators were insisting that their judgment on these matters should trump all other considerations. I recognize the logic of saying that if we’re going to offer the automakers a loan, we should have conditions attached. But those conditions should be similar to the ones any lender would attach. They shouldn’t be an attempt to have the government dictate wage levels. What’s next? Price controls?

Give me a fucking break. If Im gonna give someone a loan who's having trouble, Im sure as hell going to have some say as to what they need to do so I can get paid back. You dont like it, dont take my money!!!

Private companies going to the federal government asking for a federal bail out are in no position to be demanding cushy salaries.

[Gino]

What political gains is that? They'd be locking in the vote up in Michigan for the Democrats for a long time. For once, they are actually trying to put the best interests of the country ahead of political gains.

Do you have a fucking clue what's in store for this country? Do you realize what taxes are going to be like in our lifetime, in our children's lifetime, to cover the tab for all this shit? And that's without even factoring in Medicare and social security.

Wake up.

Well said. How many democrats know that letting the Big 3 file for bankruptcy would be best but they depend way too much on unions to finance their campaigns?

[Yonivore]

Add bailing the U.S. Car companies out to my list of thing over which I disagree with the President if, as rumor has it, he is contemplating doing what (Republicans in) Congress wisely drove a stake through.

[Cant_Be_Faded]

Bottom line is that if these companies had not been pursuing retarded long term business plans (in response to short term bovine america demand for 6000 SUX's) they would not be in this mess.

It will take decades for the common American to trust the big 3's product like they do Honda, Toyota, etc. And this is their own fault.

And if Republicans did not have a history of trying to suck the life out of unions for political gain, the prospect of tearing the unions down would be far less dubious. All this union bull shit, combined with american's desire for shitty cars, and their executives going for short-to-mid term big bucks is why we are here.

I still tend to agree with the republicans on this one though. Seems like the unions would rather take the whole body down rather than give anything up.

The 6000 SUX. An American Tradition.

[mookie2001]

take it from me even I own a 2009 camry xle

[Yonivore]

Nobel prize economist: Chapter 11 is the only way

I'm told economics is considered a science of sorts. So, there you have it - the US auto manufacturers need to go chapter 11. Its science (http://www.ft.com/cms/s/1a2e2042-c79f-11dd-b611-000077b07658,Authorised=false.html?_i_location=htt p%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F1a2e2042-c79f-11dd-b611-000077b07658.html%3Fnclick_check%3D1&_i_referer=http%3A%2F%2Face.mu.nu%2F&nclick_check=1) not consensus.


...The US car industry will not be shut down, but it does need to be restructured. That is what Chapter 11 of America’s bankruptcy code is supposed to do...

And, one of my favorite economists...

Bailouts and Bankruptcy (http://townhall.com/columnists/WalterEWilliams/2008/12/10/bailouts_and_bankruptcy)


What happens when a company goes bankrupt? One thing that does not happen is their productive assets go poof and disappear into thin air. In other words, if GM goes bankrupt, the assembly lines, robots, buildings and other tools don't evaporate. What bankruptcy means is the title to those assets change. People who think they can manage those assets better purchase them.

[Yonivore]

I still tend to agree with the republicans on this one though. Seems like the unions would rather take the whole body down rather than give anything up.
:lmao nice save!

When have unions not been willing to take the whole body down rather than give anything up?

[Cant_Be_Faded]

Hey, unlike you, i'm not an exaggeration of an political exaggeration.
But I could be wrong. Like I said, if republicans did not have their history of being dicks, I'd be even more on their side.

[Yonivore]

Hey, unlike you, i'm not an exaggeration of an political exaggeration.
But I could be wrong. Like I said, if republicans did not have their history of being dicks, I'd be even more on their side.
Nice, base your reasoning on how you feel about a political party.

[SnakeBoy]

Blow me. You dont know what youre talking about, that much is obvious.

Relax, I was just trying to support and rally the Unskilled Auto Workers union members. I support all of the great US unions that do such a wonderful job for their industry. Auto union, teachers union, airline union are all really good at gettin the job done and showing the rest of the world how to do things right. Yeah baby...USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA!

[Yonivore]

Thursday, December 11, 2008:


"I dread looking at Wall Street tomorrow, It's not going to be a pleasant sight. (http://abcnews.go.com/Politics/Economy/story?id=6439796&page=1)"

Friday, December 12, 2008:

http://ichart.finance.yahoo.com/b?s=%5EDJI
Up 64.59 points.

Can we now say the Democrats don't know fuck about the economy or the free market?

[Marklar MM]

Thursday, December 11, 2008:



Friday, December 12, 2008:

http://ichart.finance.yahoo.com/b?s=%5EDJI
Up 64.59 points.

Can we now say the Democrats don't know fuck about the economy or the free market?

Doesn't Bush/Paulsen coming out and saying they are going to use the TARP also put a positive effect on the market though?

[Yonivore]

Doesn't Bush/Paulsen coming out and saying they are going to use the TARP also put a positive effect on the market though?
Good point. But, it's a steady climb all day, when did they announce they would use TARP?

[byrontx]

Look at the amount of money thrown without strings attached to the financial sector. it appears now that quite a bit of that money has been used to pay dividends to stockholders and not used to free up credit. With the Republicans bitching about the equivalent of 5% of that money unless they can get the hands around the necks of the union it is obvious that they are exploiting the situation to axe a perceived enemy.

I have never belonged to a union (entrepreneur is the best description) but with one out of ten jobs in America impacted by the auto industry I say throw the middle class a bone. The economic elite are doing just fine.

[Marklar MM]

Good point. But, it's a steady climb all day, when did they announce they would use TARP?

I think in the morning, around the 200 point drop.