Uaw

[Rand]

Did you know that labor costs are only 10% of the cost of an automobile?

[Alex Franke]

wow... this thread has a lot of questions...

Ed62, I think you have it figured out.

[gjat]

Did you know that labor costs are only 10% of the cost of an automobile?

That's a random "factoid" that doesn't mean anything. Does the 10% include labor benefit costs to fund pensions and legacy retirement plans? How does that compare between Ford vs GM and vs Toyota and Kia made in the US?


Did you know that diamonds have less than 1% labor cost or that Tequila is one of the most expensive labor costs?

[shoottx]

Did you know that diamonds have less than 1% labor cost or that Tequila is one of the most expensive labor costs?

Yeah and one gets you out of the trouble the other one gets you into!

[430752]

Yeah, I was riled up, and still am. Not because the Union will have to give concessions, they will and they should.

I'm just riled up because in all this fiasco Joe Union Workingman is the Bogeyman. I asked the question and will ask again, why do the Union members have to give up wage cuts by Congressional demand when no others are being demanded? No Senator ever said I'll bail out Citigroup (twice) if Citi agrees to cut its accountants wages. No Sentaor ever said that the only way detroit is getting a dime is if the midlevel execes agree to a wage concession. The only other wage-cut demand made by Congress that I'm aware of is of CEO/Executives in the finance sector, and they were the ones in charge of the meltdowns! I'll be the first to vote for any bailout when Congress requires that everyone involved in this mess must take a flat 10% or 15% haircut. Can you get on board with that?

Someone answered that in the banks they're at will employees and can be cut anytime. This may be true (I don't believe brokers are unionized, perhaps secretaries?) but it doesn't answer my question. Why didn't Congress mandate that they take pay cuts? After all, it should be easier than with a union since no contracts involved. What, Congress was willing to take the banks on their word for $700 billion but won't let Detroit work it out on their own for only $25billion? Why not say everyone in the autobiz must take a pay cut? Why not everyone in the banking industry from the secretaries up through the brokers to the Exec levels? I just see hypocrisy and unfairness, that's what I'm all riled up about.

Make it fair and we can all get on board.

[ragswl4]

Let the Big 3 go into bankruptcy, that's the American way when a company or individual cannot control their finances. What's wrong with that? Does anyone really think that we will stop making automobiles and trucks? I don't think so. The CEOs, Congress and the Media are hyping this up as armagedon, ain't so. Let the market place figure this out and we will all be better for it. What's worse, the Big 3 going under or the whole country? My $.02.

Edit: Where do we stop with these bailouts?

[cgallery]

Let the Big 3 go into bankruptcy, that's the American way when a company or individual cannot control their finances. What's wrong with that? Does anyone really think that we will stop making automobiles and trucks? I don't think so. The CEOs, Congress and the Media are hyping this up as armagedon, ain't so. Let the market place figure this out and we will all be better for it. What's worse, the Big 3 going under or the whole country? My $.02.

Edit: Where do we stop with these bailouts?

So the big three typically take 45-days to pay their suppliers. The steel they receive today won't be paid for for another 45 days.

If the big three claim chapter 11, those suppliers (unsecured creditors) will not see a nickel of payment for anything delivered during that 45-day cycle until all the secured creditors are paid. This means they likely won't get paid at all for that 45-days of output.

The report I heard today seems to indicate a large percentage of their suppliers that are already working on super-slim margins would be unable to absorb such a loss without themselves having to go chapter 11.

And that is why chapter 11 at the big three could tip us into a depression.

[Ed62]

The CEOs, Congress and the Media are hyping this up as armagedon, ain't so.

I think the "Fear factor" was played with Wall Street, and that doesn't seem to be working out very well in most people's minds. So I understand where you're coming from. I would support helping the auto industry, but only under certain conditions. It can't be easy.

Ed

[gjat]

Yeah, I was riled up, and still am. Not because the Union will have to give concessions, they will and they should.

I'm just riled up because in all this fiasco Joe Union Workingman is the Bogeyman. I asked the question and will ask again, why do the Union members have to give up wage cuts by Congressional demand when no others are being demanded? No Senator ever said I'll bail out Citigroup (twice) if Citi agrees to cut its accountants wages. No Sentaor ever said that the only way detroit is getting a dime is if the midlevel execes agree to a wage concession. The only other wage-cut demand made by Congress that I'm aware of is of CEO/Executives in the finance sector, and they were the ones in charge of the meltdowns! I'll be the first to vote for any bailout when Congress requires that everyone involved in this mess must take a flat 10% or 15% haircut. Can you get on board with that?

Someone answered that in the banks they're at will employees and can be cut anytime. This may be true (I don't believe brokers are unionized, perhaps secretaries?) but it doesn't answer my question. Why didn't Congress mandate that they take pay cuts? After all, it should be easier than with a union since no contracts involved. What, Congress was willing to take the banks on their word for $700 billion but won't let Detroit work it out on their own for only $25billion? Why not say everyone in the autobiz must take a pay cut? Why not everyone in the banking industry from the secretaries up through the brokers to the Exec levels? I just see hypocrisy and unfairness, that's what I'm all riled up about.

Make it fair and we can all get on board.

Exactly. Make it fair. People in a bank and secretaries don't make $29 an hour plus gobs of benefits. People in a bank and secretaries don't have a 90% pension, 95% lay off benefit in a 'job bank', etc. Most people, to make $60k a year, plus benefits, are working much more than 45 hours a week in a factory and don't have Union Stewards who will raise **** if the line foreman asks someone to stay and extra 15 minutes to finish up a project.

[Richard in Smithville]

For what it matters, if the big three go belly up( as some are suggesting that they should) it would cost only a few hundred thousand jobs up here in Canada but it will cost around 4,000,000 jobs in the US. This is the result of the ripple effect. So a lot of people who figure themselves far detatched from the auto industry will also be out of work .

[jackellis]

There seems to be a push to reduce wages and eliminate retirement benefits for many industries. I agree that a little less pay is better than no pay, but to what end? Where does it stop? Who will be left when it happens to you?

The reason wages for many jobs are either stagnant or declining is that there's someone, somewhere in the world who is willing to do those jobs for less money. Until the rest of the world enjoys American living standards, that's going to be the case and there's nothing we can do about it without making things much worse. Simply cutting off all trade would stop imports and exports, it would raise the prices of many things we buy cheaply from abroad to the point where most people could not afford them, and it would increase unemployment in industries that export over $1 trillion worth of goods each year..

If you're in one of those jobs that can be "exported", you can either take less money, or hope you won't be laid off, retool yourself for a better paying job that can't be exported, at least not yet.

Unemployment rates in the US are typically lower than in places like France and Germany, in part because we have flexible labor laws. Those flexible labor laws create a lot of uncertainty and it constantly forces those of us who don't have skills that are in scarce supply and high demand to constantly reinvent ourselves, but it has to be better than the high taxes and chronic unemployment that plague many European countries.

[LCHIEN]

I've seen that 10% labor content in a car figure. I've also seen quotes saying big3 makers with UAW labor are at a $1400 disadvantage per car to other automakers like oyota's U production. I've also see claims that GM is spending $1000 of each car for labor entitlements - that is benefits for current and past employee obligations.
I can't seem to find much to prov or disprove those claims, although the 10% cost figure only applies to final assembly... not the entire auotmobile manufacturing costs what we call a roll-up of costs in all components of the auto.
So I can't really argue one way or the other abot all these facts.

I do think one thing is obvious, as the economy deteriorates, lots of people are being asked to make sacrifices for the auto industry. Among them:
Suppliers - being pressured to lower prices
Taxpayers - being asked to loan and or guarantee loans for the auto makers
Auto makers ( and by extension the millions of stockholders and investors who own stock in GM/Chrysler/Ford such as you and me in personal folios and 401K plans) - forgoing profits selling inventory at a loss, giving up dividends etc. - Untold value in my stock portforlio has been destroyed

So I don't see why the UAW should be exempt from a little suffering. As a stockholder, I'd rather see the company go bankrupt and lose the rest of my value (what little is left) than to be a taxpayer and finance this company for the benefit of UAW workers when the UAW refuses to suffer some along with me.

[JR]

So I don't see why the UAW should be exempt from a little suffering. As a stockholder, I'd rather see the company go bankrupt and lose the rest of my value (what little is left) than to be a taxpayer and finance this company for the benefit of UAW workers when the UAW refuses to suffer some along with me.

Curt's point is that of all those constituencies, only the UAW has been singled out by the legislature. The proposed auto bailout makes specific reference to worker's wages.

The UAW needs better PR, man.

JR

[bigstick509]

Living in the heart of the auto industry has always been a cyclical way of life. Good times and then layoffs are a way of life. I could not agree more with 430752 point of view on this subject. A long time ago Henry Ford built his company on the premise that he would build a car that his workers could afford. If the average workers wage is cut to the point that he can no longer afford to buy what he makes the only long lines are going to be at the unemployment office and not at he car dealerships.

[OpaDC]

Can you say Catch 22? The whole things stinks. Most every comment seems both right and wrong at the same time. One thing I do wonder is if the lack of real concessions from the banking industry bailout is part of the reasoning for the auto industry concessions being asked for!