Union balks and $14B auto bailout dies in Senate
12-12-08, 12:09 PM
#31
Lexus Fanatic
Agree 
Here's a quick test:
Question:
Who is assembling the majority of US autos?
Answer: Union members
Ok, take that answer... memorize... okay, Question #2:
Why do US automobiles SUCK?
Answer: See answer to question 1 for a reference
Okay, one last question... apply knowledge from Questions 1 & 2... ready?
Question 3:
What is the underlying cause of the downfall of the US auto industry?
Answer:_________________________
Here's a quick test:
Question:
Who is assembling the majority of US autos?
Answer: Union members
Ok, take that answer... memorize... okay, Question #2:
Why do US automobiles SUCK?
Answer: See answer to question 1 for a reference
Okay, one last question... apply knowledge from Questions 1 & 2... ready?
Question 3:
What is the underlying cause of the downfall of the US auto industry?
Answer:_________________________
None of the reliability or quality problems I nor anybody I know have had with their cars had anything to do with or could be tied with the workers putting the car together but it had everything to do with the designs, the door lock actuator, moisture in headlights, ball joint issues, etc had nothing to do with the workers who built my car but had to do with the design faults of the car. All the issues people I know had with their US cars had to do with bad design and cheapening the build quality like the computers not working right, paint not lasting, cd players not working, blown transmissions/engines, brittle trim, rough engines, starters going bad, cooling issues, etc.
The autoworkers just assemble the designs they were given, if the design was good and engineered right the car will be reliable and quality will be there, if the car was poorly designed, poorly engineered, and uses loose tolerances and cheap materials then that car is going to be unreliable and is going to suck. The problem lies with upper management, executives, cost cutters, CEO, designers, and engineers why the big 3 vehicles are so poorly designed not the people assembling their bad cost cut designs. It is true the big 3 spend more on labor so they cost cut elsewhere on the cars but they also like to reap in profits and upper management gets way overpaid for little results.
I am not defending the union as I am not a big fan of them but just because the workers happen to be in a union does not mean they automatically are bad workers and it is their fault the cars they build are so bad. Union/non union or the autoworker has little to do with the reliability/quality of the vehicle, it is all in the design and engineering. Everything is pre torqued and checked and re checked anyways at all auto plants so it is very very difficult for an autoworker to make a mistake that will go all the way into the finished car, someone will see it.
12-12-08, 12:15 PM
#32
Lexus Fanatic
I know alot of blue collar guys that make 140K and well over 140K a year and most are not in the union. There is alot of money to be made in many blue collar jobs especially if you go into business yourself or do alot of sidework and make a name for yourself.
12-12-08, 12:16 PM
#33
Pole Position
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That analogy is way too simple and not true. The poor reliability, poor designs, cheap low quality materials, and lack of focus, shady dealers, shady service departments of big 3 automobiles has absolutely nothing to do with the auto workers putting the cars together, it is not like the autoworkers chose cheap crappy designs to build and were the ones who engineered the cars to a certain lower price point and somehow them being in the union makes them automatically build bad cars. What about Honda Accords and Toyota Camry's which are 2 of the most reliable, highest rated, best selling mid size cars made and they have been made in America by the same type of America workers who work at big 3 plants for a long time, thing is the people who run Honda Toyota would not accept or ask for a cheap design and demand quality be engineered into the vehicles so that they drive, look, and feel a certain way. If your analogy is true then all the rattles and squeaks people are complaining about with the new Lexus GS, IS, and ES and all the other issues like poor shifting trannies, tranny flaring, rough loud engines, premature cheaper interior trim wear, etc are all the fault of the Lexus workers who put the car together and not the designers and engineers but none of those people are union. What about the horrible reliability and quality of most German, Italian and English cars, it can't just be tied to the workers but it is bad designers and engineers who don't design things to last or work properly and have other priorities.
None of the reliability or quality problems I nor anybody I know have had with their cars had anything to do with or could be tied with the workers putting the car together but it had everything to do with the designs, the door lock actuator, moisture in headlights, ball joint issues, etc had nothing to do with the workers who built my car but had to do with the design faults of the car. All the issues people I know had with their US cars had to do with bad design and cheapening the build quality like the computers not working right, paint not lasting, cd players not working, blown transmissions/engines, brittle trim, rough engines, starters going bad, cooling issues, etc.
The autoworkers just assemble the designs they were given, if the design was good and engineered right the car will be reliable and quality will be there, if the car was poorly designed, poorly engineered, and uses loose tolerances and cheap materials then that car is going to be unreliable and is going to suck. The problem lies with upper management, executives, cost cutters, CEO, designers, and engineers why the big 3 vehicles are so poorly designed not the people assembling their bad cost cut designs. It is true the big 3 spend more on labor so they cost cut elsewhere on the cars but they also like to reap in profits and upper management gets way overpaid for little results.
I am not defending the union as I am not a big fan of them but just because the workers happen to be in a union does not mean they automatically are bad workers and it is their fault the cars they build are so bad. Union/non union or the autoworker has little to do with the reliability/quality of the vehicle, it is all in the design and engineering. Everything is pre torqued and checked and re checked anyways at all auto plants so it is very very difficult for an autoworker to make a mistake that will go all the way into the finished car, someone will see it.
None of the reliability or quality problems I nor anybody I know have had with their cars had anything to do with or could be tied with the workers putting the car together but it had everything to do with the designs, the door lock actuator, moisture in headlights, ball joint issues, etc had nothing to do with the workers who built my car but had to do with the design faults of the car. All the issues people I know had with their US cars had to do with bad design and cheapening the build quality like the computers not working right, paint not lasting, cd players not working, blown transmissions/engines, brittle trim, rough engines, starters going bad, cooling issues, etc.
The autoworkers just assemble the designs they were given, if the design was good and engineered right the car will be reliable and quality will be there, if the car was poorly designed, poorly engineered, and uses loose tolerances and cheap materials then that car is going to be unreliable and is going to suck. The problem lies with upper management, executives, cost cutters, CEO, designers, and engineers why the big 3 vehicles are so poorly designed not the people assembling their bad cost cut designs. It is true the big 3 spend more on labor so they cost cut elsewhere on the cars but they also like to reap in profits and upper management gets way overpaid for little results.
I am not defending the union as I am not a big fan of them but just because the workers happen to be in a union does not mean they automatically are bad workers and it is their fault the cars they build are so bad. Union/non union or the autoworker has little to do with the reliability/quality of the vehicle, it is all in the design and engineering. Everything is pre torqued and checked and re checked anyways at all auto plants so it is very very difficult for an autoworker to make a mistake that will go all the way into the finished car, someone will see it.
GREAT points, no arguement here... except listen to the ATTITUDE of a union worker in most any interview and tell me that changes once they punch a clock...so can we agree on this:
(mostly)
CRAP DESIGN + CRAP MATERIALS + CRAP ASSEMBLY= CRAP
ALL OVERSEEN BY CRAP EXECUTIVES
12-12-08, 12:18 PM
#34
Lexus Fanatic
my major concern is the potential loss of all the supporting jobs. parts suppliers, mechanics, sales people, etc. Those jobs being lost bother me personally because i work in a dealership. not a GFC dealer but still, that could be just the beginning of more losses.
the UAW has been overpaid for years, but still these are people who need those jobs as well. what if any previous poster's brother worked there and has no other job skills? how would you feel then? they should take a pay cut but it's not that easy. their lifestyle now depends on them earning nealry $30 an hour plus benefits. imagine if you had to take a significant paycut, whoud you be able to afford your house, car, gym, etc.?
it's easy to say "yeah just cut their pay in half" but there are a lot of things to consider before that can be done.
these are people who work hard every day that we're talking about, not the corporate morons who will be hurt the most. it's not hard to install a windshield 50 times a day if you look at it on a daily basis but over the long term almost everyone who does those jobs ends up with serious physical health issues. while it may not be worth$30/hr. these people are sacrificing their bodies to earn that money.
this is truly the fault of the corporate "smart people" who never looked at the long term big picture. they focused on building high qualtiy trucks, because that's where the profit was, but not on cars. We can build a good comparable small car but at a cost that still leaves the japanese at an advantage. they screwed up and made bad decisions but the people who will suffer the most are thsoe people who do the actual work, put in the sweat and back breaking labor. they had no choice as to what type and quality of vehicle they put together. they will be the ones wondering how to put food on the table while the executives will living off their millions of dollars worth of bonuses.
the UAW has been overpaid for years, but still these are people who need those jobs as well. what if any previous poster's brother worked there and has no other job skills? how would you feel then? they should take a pay cut but it's not that easy. their lifestyle now depends on them earning nealry $30 an hour plus benefits. imagine if you had to take a significant paycut, whoud you be able to afford your house, car, gym, etc.?
it's easy to say "yeah just cut their pay in half" but there are a lot of things to consider before that can be done.
these are people who work hard every day that we're talking about, not the corporate morons who will be hurt the most. it's not hard to install a windshield 50 times a day if you look at it on a daily basis but over the long term almost everyone who does those jobs ends up with serious physical health issues. while it may not be worth$30/hr. these people are sacrificing their bodies to earn that money.
this is truly the fault of the corporate "smart people" who never looked at the long term big picture. they focused on building high qualtiy trucks, because that's where the profit was, but not on cars. We can build a good comparable small car but at a cost that still leaves the japanese at an advantage. they screwed up and made bad decisions but the people who will suffer the most are thsoe people who do the actual work, put in the sweat and back breaking labor. they had no choice as to what type and quality of vehicle they put together. they will be the ones wondering how to put food on the table while the executives will living off their millions of dollars worth of bonuses.
12-12-08, 12:53 PM
#35
Pole Position
The Big 3 & UAW like to keep us blind, but what's really happening here?
Sometimes the truth is fogged in by the rhetoric...
By Ashley Fantz
(CNN) -- With the top U.S. automakers in economic survival mode, "Buy American" is a frequent cry among those trying to save jobs at home.
Georgia trucker Douglas Sullivan says he's concerned more about quality than the origin of a vehicle's parts. But buying a car to benefit the U.S. economy has become an ambiguous, complicated challenge.
"How you define an American car is one of the great conundrums of this world," said Dutch Mandel, the editor and associate publisher of AutoWeek.
Fewer than half of the parts on some Big Three vehicles are made in the U.S.
Looking at a Ford Fusion? It is assembled in Mexico. The Chrysler 300C is assembled in Canada, but its transmission is from Indiana; the brand's V-8 engine is made in Mexico. Engines in the Chevrolet Equinox sport utility vehicle are from China.
On the other hand, Toyota's Camry is comprised 80 percent of parts made in the United States, and 56 percent of Toyota's vehicles sold in the U.S. also are made here, according to Toyota spokeswoman Sona Iliffe-Moon.
The Toyota Sienna and Tundra also have 80 percent of their parts manufactured in the U.S.
"When you have manufacturers from around the world building cars in the U.S. with 85 percent domestic content -- engine, transmission, assembly -- is that an American car?" Mandel asked. Or, he asks, is it considered foreign because the profits go back to a foreign country?
"It's truly a global industry," said Thomas Klier, a Chicago, Illinois, economist who co-authored "Who Really Made Your Car?" an encyclopedic analysis of the auto industry melting pot.
"When you think of buying American, you should focus on three points -- its engine, transmission and where it was assembled," Klier said.
To get that information, read a vehicle's window sticker. U.S. automakers are legally required to detail the origin of a car's parts and its final assembly point.
"Unfortunately, there are few people who know about the sticker or even bother to look at it," said Bernard Swiecki, a senior project manager at the nonprofit Center for Automotive Research in Michigan, which follows trends in the industry.
The sticker's details were news to Douglas Sullivan, 43, a truck driver from Snellville, Georgia. Though he prefers foreign brands, believing them to be of higher quality, he said he used to favor U.S. brands because he wanted to support American workers.
"I wanted to keep the jobs right here," Sullivan said.
Swiecki said many people think about image of a brand, rather than the way that brand has evolved over decades as the market has grown more diverse and competitive.
"They will think, 'I'm buying a GM, I'm getting an American car,' " Swiecki said.
Foreign car manufacturers generate billions of dollars in jobs and community infrastructure in the U.S., but there is a difference between Detroit's economic footprint and that of its foreign rivals.
The Center for Automotive Research says Detroit's Big Three employed almost 240,000 people in the U.S. at the end of 2007. Foreign makers had about 113,00 U.S. employees at the time.
The key difference in how the Big Three and foreign brands support jobs in the U.S. comes outside the factories, according to a 2006 study by the Level Field Institute, a group formed by Big Three retirees in Washington.
"What's driving the difference in jobs ... is investment in research, design, engineering and management," Level Field President Jim Doyle said in a statement on the 2006 study.
The Center for Automotive Research said the Big Three had 24,000 engineers on U.S. payrolls in 2007. The Japan Automobile Manufacturers Association said its member companies had 3,500 U.S. research and development employees in 2007.
Level Field found that every 1,000 vehicles sold by Detroit's Big Three in the U.S. support more than twice as many jobs as 1,000 vehicles sold by foreign nameplates.
Most Americans consumers understand that the industry is global, Swiecki said, and they are more savvy than ever in purchasing vehicles.
"For the most part, gone are the days of people going to a car lot and paying a buck to take a swing of a hammer at a foreign-made car," Swiecki said.
But there are exceptions.
A Savannah, Georgia, Ford dealer sold 15 cars last weekend after he ran a radio ad blaming Japan for Detroit's financial funk.
While 15 was substantially better than weekends before the ad, dealer O.C. Welch said, it was still about half of the business he did a year ago.
"All you people that buy all your Toyotas and send that money to Japan, you know, when you don't have a job to make your Toyota car payment, don't come crying to me," Welch says in the ad. "All those cars are rice ready. They're not road ready."
Sullivan, who was at an Atlanta, Georgia, dealership Thursday to pick up his American brand minivan from the service department, said he has had a different experience.
advertisement
He said the vehicle has given him trouble, and whenever he replaces it, he'll probably go with a foreign brand, regardless of whether any of the parts were made in the United States.
"What I look for is good gas mileage, and when I pay it off in four or five years, it's still running," said Sullivan, who has owned several American and foreign brands. "It seems I get better quality with a foreign car."
(CNN) -- With the top U.S. automakers in economic survival mode, "Buy American" is a frequent cry among those trying to save jobs at home.
Georgia trucker Douglas Sullivan says he's concerned more about quality than the origin of a vehicle's parts. But buying a car to benefit the U.S. economy has become an ambiguous, complicated challenge.
"How you define an American car is one of the great conundrums of this world," said Dutch Mandel, the editor and associate publisher of AutoWeek.
Fewer than half of the parts on some Big Three vehicles are made in the U.S.
Looking at a Ford Fusion? It is assembled in Mexico. The Chrysler 300C is assembled in Canada, but its transmission is from Indiana; the brand's V-8 engine is made in Mexico. Engines in the Chevrolet Equinox sport utility vehicle are from China.
On the other hand, Toyota's Camry is comprised 80 percent of parts made in the United States, and 56 percent of Toyota's vehicles sold in the U.S. also are made here, according to Toyota spokeswoman Sona Iliffe-Moon.
The Toyota Sienna and Tundra also have 80 percent of their parts manufactured in the U.S.
"When you have manufacturers from around the world building cars in the U.S. with 85 percent domestic content -- engine, transmission, assembly -- is that an American car?" Mandel asked. Or, he asks, is it considered foreign because the profits go back to a foreign country?
"It's truly a global industry," said Thomas Klier, a Chicago, Illinois, economist who co-authored "Who Really Made Your Car?" an encyclopedic analysis of the auto industry melting pot.
"When you think of buying American, you should focus on three points -- its engine, transmission and where it was assembled," Klier said.
To get that information, read a vehicle's window sticker. U.S. automakers are legally required to detail the origin of a car's parts and its final assembly point.
"Unfortunately, there are few people who know about the sticker or even bother to look at it," said Bernard Swiecki, a senior project manager at the nonprofit Center for Automotive Research in Michigan, which follows trends in the industry.
The sticker's details were news to Douglas Sullivan, 43, a truck driver from Snellville, Georgia. Though he prefers foreign brands, believing them to be of higher quality, he said he used to favor U.S. brands because he wanted to support American workers.
"I wanted to keep the jobs right here," Sullivan said.
Swiecki said many people think about image of a brand, rather than the way that brand has evolved over decades as the market has grown more diverse and competitive.
"They will think, 'I'm buying a GM, I'm getting an American car,' " Swiecki said.
Foreign car manufacturers generate billions of dollars in jobs and community infrastructure in the U.S., but there is a difference between Detroit's economic footprint and that of its foreign rivals.
The Center for Automotive Research says Detroit's Big Three employed almost 240,000 people in the U.S. at the end of 2007. Foreign makers had about 113,00 U.S. employees at the time.
The key difference in how the Big Three and foreign brands support jobs in the U.S. comes outside the factories, according to a 2006 study by the Level Field Institute, a group formed by Big Three retirees in Washington.
"What's driving the difference in jobs ... is investment in research, design, engineering and management," Level Field President Jim Doyle said in a statement on the 2006 study.
The Center for Automotive Research said the Big Three had 24,000 engineers on U.S. payrolls in 2007. The Japan Automobile Manufacturers Association said its member companies had 3,500 U.S. research and development employees in 2007.
Level Field found that every 1,000 vehicles sold by Detroit's Big Three in the U.S. support more than twice as many jobs as 1,000 vehicles sold by foreign nameplates.
Most Americans consumers understand that the industry is global, Swiecki said, and they are more savvy than ever in purchasing vehicles.
"For the most part, gone are the days of people going to a car lot and paying a buck to take a swing of a hammer at a foreign-made car," Swiecki said.
But there are exceptions.
A Savannah, Georgia, Ford dealer sold 15 cars last weekend after he ran a radio ad blaming Japan for Detroit's financial funk.
While 15 was substantially better than weekends before the ad, dealer O.C. Welch said, it was still about half of the business he did a year ago.
"All you people that buy all your Toyotas and send that money to Japan, you know, when you don't have a job to make your Toyota car payment, don't come crying to me," Welch says in the ad. "All those cars are rice ready. They're not road ready."
Sullivan, who was at an Atlanta, Georgia, dealership Thursday to pick up his American brand minivan from the service department, said he has had a different experience.
advertisement
He said the vehicle has given him trouble, and whenever he replaces it, he'll probably go with a foreign brand, regardless of whether any of the parts were made in the United States.
"What I look for is good gas mileage, and when I pay it off in four or five years, it's still running," said Sullivan, who has owned several American and foreign brands. "It seems I get better quality with a foreign car."
12-12-08, 12:54 PM
#36
Lexus Fanatic
FIrst, realize that i'm not defending the $30/hr workers at all. they're overpaid, bottom line. that being said, most of these people started those jobs wyhen they were fresh out of high school. that was their goal; to land a UAW job that pays well with great benefits. how do you expect them to have other job skills? that's ridiculous. why would they have ever developed anything else when they had what they thought was a secure career? that's like asking a plumber to learn how to repair medical equipment on the side, just in case the plumbing industry falls one day. these people are 35,45, 55 years old, suddenly they should, what, go back to school? become a plumber?
besides that, they really have no control over what they're paid. the uaw decides if they can take a pay cut or not. do you think that they would decline a 25% cut instead of no job at all? i think not; i think most of them would be happy to at least keep their jobs at less pay than not have one.
and yes, it would take a long time to design and build better cars, which is something that needs to be addressed. do they have a plan? not really.
it's very complicated and i just hate to see hard working people lose their jobs when they really had no control over what was built and how badly everything was mismanaged.
besides that, they really have no control over what they're paid. the uaw decides if they can take a pay cut or not. do you think that they would decline a 25% cut instead of no job at all? i think not; i think most of them would be happy to at least keep their jobs at less pay than not have one.
and yes, it would take a long time to design and build better cars, which is something that needs to be addressed. do they have a plan? not really.
it's very complicated and i just hate to see hard working people lose their jobs when they really had no control over what was built and how badly everything was mismanaged.
I think it is a good that there are blue collar jobs in this country that employ many people like auto plants that pay decent wages where the workers can comfortably support their families and not live pay check to pay check. A decent job that you earn a decent paycheck that you can comfortably support you family should not always be a white collar job that requires some 4 year college degree and masters degree, not everyone can go to college nor wants to go to college and they should not be punished to living in the poor house for the rest of their lives if they did not go, college is often a huge rip off these days anyways and does not really prepare you for anything in many jobs. Many blue collar factory jobs pay their workers absolutely nothing and offer no benefits even though they do the same things as other higher paid factory workers, all the profits and money instead just goes to a handful of white collar execs and upper management which is completely unfair where you have some people making $7-$12hr and barely able to afford to pay bills while a couple of higher ups are raking in money for doing much less work then the blue collar workers. I would rather see things be more even and have no problem with manual labor type jobs being paid close to white collar type jobs as long as it is sustainable.
Thing is we often need people to assemble things, fix things, install things, and do the dirty work blue collar jobs alot more then many white collar jobs that require a bunch of degrees yet are not really that important in most peoples lives and often are very wasteful and unneeded.
12-12-08, 01:17 PM
#37
Lexus Champion
once again i agree with you^^^^. just because i fix cars for a living doesn't mean i shouldn't expect to make and deserve to make as much money as someone who sits at a desk and crunches numbers all day. i have to crunch numbers, i have to repair multiplex computer systems, i have to diagnose rattles, leaks, thumps. i have to keep up with every new model that comes out. i went to school to get my job a few years ago, i invested over $10k worth of my own money in tools just to be able to do the job, with more every couple months.
why shouldn't i deserve to make as much money as an accountant? from what i see, i can do those kinds of jobs too, send me to school, i can learn anything and do it well. on theother hand, do you know how many of those people can't even change their own tires, or put air in them? Or figure out how to setup their bluetooth? And they are the ones making all the money....
why shouldn't i deserve to make as much money as an accountant? from what i see, i can do those kinds of jobs too, send me to school, i can learn anything and do it well. on theother hand, do you know how many of those people can't even change their own tires, or put air in them? Or figure out how to setup their bluetooth? And they are the ones making all the money....
12-12-08, 01:32 PM
#38
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Focusing on one are of the issue with GFC is going to be interesting but not very productive. The feeling at this time is that F is OK, at least for the time being. ChryCo is walking dead. And the focus is on GM.
The latest numbers have GM debt at $62B as of today. That is without any government loans. And they are bleeding something on the order of $4B a month. I don't think anyone feels that there is a future for GM by just giving them money and waiting for the consumer to come back buying their cars. So the concept of "restructuring" is introduced.
What does "restructuring" mean? To me it means you have a company that is at death's door and you are looking for ways to stop the bleeding, fix what is wrong, and get them in shape to turn the corner. The deal that was being worked on in the Senate yesterday would require the bondholders, those are the guys holding that $62B in debt, to just say good bye to 70% of their investment and take thirty cents on the dollar. And I think they were to be required to take it in stock. That means just kissing off over $40B of money that they have previously given to GM. And they had agreed. GM currently owes something on the order of $23B to the employee retirement fund, VEBA. They don't have any money for that. And they can't borrow it. The negotiation yesterday was for the UAW to take half of that money in GM stock. GM has a current market cap today of about $2.4B. So if you add up the stock that would be issued to cover debts it is something like ten or twenty new shares for every share currently out there. Essentially the current GM stockholders have their invesment reduced by 90 or 95% if that happens.
In order to have GM survive, everybody associated with it is going to be giving things up. Bond holders who loaned money, management, stockholders, and employees. This isn't just one in a string of concessions and contract negotiations. If it is gotten wrong, GM goes away and nobody gets anything. Including the four retirees that every current UAW employee is supporting in retirement. You sure don't want to agree to more pain than anyone else but there is going to be a whole lot of pain. GM sales are currently down around 50%. You either pay to support the employees and facilities until such time as the sales come back or you cut down to the size that your market is. A sound company would have retained earnings to pay for keeping people on the books in tough times but GM not only doesn't have any, they have $62B in debt. And with the current union contract, GM has a difficult time reducing expenses as laying people off doesn't get them off the payroll. Office Depot announced in the last couple of days that it is closing over 100 stores and laying off over 2,000 people. That isn't much fun. But it is what they had to do. They aren't as big a political contributor as the UAW or car companies.
If you leave that debtt that GM has there and add maybe 20 or $30B more in current taxpayer loans you have to ask yourself exactly how healthy GM is going to get to pay back 90 or $100B in loans? At 3 or $4B a year it is going to take decades including interest. Assuming they can generate that much after tax profit. Paying off loan principal is not an operating expense as the loan is not revenue. And this assumes they have every other part of making cars done right. High build quality, high reliabilty, desirable designs, competitive pricing, etc.
What Senator Corker did yesterday was quit using the handwaving "shall provide plan" nonsense and started getting into the nuts and bolts. And there will have to be concessions from everybody. If you believe the story, the UAW would not agree to accelerate the salary reductions that they had agreed upon for 2011 or 2012 (don't remember which) into 2009 or even 2010. At this point it is getting academic how we got here. If all the parties aren't willing to participate in the blood letting, and right now, then all that will happen is a big waste of taxpayers dollars.
The latest numbers have GM debt at $62B as of today. That is without any government loans. And they are bleeding something on the order of $4B a month. I don't think anyone feels that there is a future for GM by just giving them money and waiting for the consumer to come back buying their cars. So the concept of "restructuring" is introduced.
What does "restructuring" mean? To me it means you have a company that is at death's door and you are looking for ways to stop the bleeding, fix what is wrong, and get them in shape to turn the corner. The deal that was being worked on in the Senate yesterday would require the bondholders, those are the guys holding that $62B in debt, to just say good bye to 70% of their investment and take thirty cents on the dollar. And I think they were to be required to take it in stock. That means just kissing off over $40B of money that they have previously given to GM. And they had agreed. GM currently owes something on the order of $23B to the employee retirement fund, VEBA. They don't have any money for that. And they can't borrow it. The negotiation yesterday was for the UAW to take half of that money in GM stock. GM has a current market cap today of about $2.4B. So if you add up the stock that would be issued to cover debts it is something like ten or twenty new shares for every share currently out there. Essentially the current GM stockholders have their invesment reduced by 90 or 95% if that happens.
In order to have GM survive, everybody associated with it is going to be giving things up. Bond holders who loaned money, management, stockholders, and employees. This isn't just one in a string of concessions and contract negotiations. If it is gotten wrong, GM goes away and nobody gets anything. Including the four retirees that every current UAW employee is supporting in retirement. You sure don't want to agree to more pain than anyone else but there is going to be a whole lot of pain. GM sales are currently down around 50%. You either pay to support the employees and facilities until such time as the sales come back or you cut down to the size that your market is. A sound company would have retained earnings to pay for keeping people on the books in tough times but GM not only doesn't have any, they have $62B in debt. And with the current union contract, GM has a difficult time reducing expenses as laying people off doesn't get them off the payroll. Office Depot announced in the last couple of days that it is closing over 100 stores and laying off over 2,000 people. That isn't much fun. But it is what they had to do. They aren't as big a political contributor as the UAW or car companies.
If you leave that debtt that GM has there and add maybe 20 or $30B more in current taxpayer loans you have to ask yourself exactly how healthy GM is going to get to pay back 90 or $100B in loans? At 3 or $4B a year it is going to take decades including interest. Assuming they can generate that much after tax profit. Paying off loan principal is not an operating expense as the loan is not revenue. And this assumes they have every other part of making cars done right. High build quality, high reliabilty, desirable designs, competitive pricing, etc.
What Senator Corker did yesterday was quit using the handwaving "shall provide plan" nonsense and started getting into the nuts and bolts. And there will have to be concessions from everybody. If you believe the story, the UAW would not agree to accelerate the salary reductions that they had agreed upon for 2011 or 2012 (don't remember which) into 2009 or even 2010. At this point it is getting academic how we got here. If all the parties aren't willing to participate in the blood letting, and right now, then all that will happen is a big waste of taxpayers dollars.
12-12-08, 01:36 PM
#39
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The anti-union Bias is painfully evident here. It was more than fine for the government to give a $700 Billion bailout to wall street hot shots but when it comes to the UAW, or any Union for that matter, or a paltry 2% in comparison bailout to save America's manufacturing base, they all bunch together to have their first stab at organized labor. I have no idea how anybody without blinders on cannot see this for what it is - a blatant attempt by the GOP senators to try and screw with the Union workers, who, by the way, they hold an ideological bias against. I mean, did anybody actually watch the press conference this morning where Gettelfinger read an email sent to GOP senators? It's all too clear what agenda these Republicans are engaging on here. "Their first attempt to subvert President Obama". It's pathetic in every concievable way. I'm suprised so many people are refusing to see what's really going on here.
These same very senators are the same ones with huge foregin transplants in their homestates, all at non-union labor, all subsidized by multi- hundred million dollar tax incentives, tax incentives that the tax payers paid for, which the tax payers were never consulted on, which the tax payer will never be paid back on. They had their utilities provided, land leveled, even firm contracts for a fixed number of their cars to be bought from the State government. It's as if they are out for foreign market share, damn with American wages, damn with unions, damn with anything outside of their own states. I don't hear anyone talking about the highly unionized plants back in Japan and Germany, I don't hear anybody questioning why the American auto workers are the only ones who deserve not to be collectively represented. I don't hear anyone questioning how these foreign firms are so successfull in spite of their highly unionized labor bases.
Some of the arguments I've read here are just sad. Blaming the workers on shoddy designs and materials? Blaming the workers single handedly for the downfall of these corporations? The anti-American, anti-unionized worker bias is overwhelmingly clear. I don't think any of these people really have an understanding of the implications of a collapsing supplier base, much less a spirraling economy, when the bottom falls out.
These same very senators are the same ones with huge foregin transplants in their homestates, all at non-union labor, all subsidized by multi- hundred million dollar tax incentives, tax incentives that the tax payers paid for, which the tax payers were never consulted on, which the tax payer will never be paid back on. They had their utilities provided, land leveled, even firm contracts for a fixed number of their cars to be bought from the State government. It's as if they are out for foreign market share, damn with American wages, damn with unions, damn with anything outside of their own states. I don't hear anyone talking about the highly unionized plants back in Japan and Germany, I don't hear anybody questioning why the American auto workers are the only ones who deserve not to be collectively represented. I don't hear anyone questioning how these foreign firms are so successfull in spite of their highly unionized labor bases.
Some of the arguments I've read here are just sad. Blaming the workers on shoddy designs and materials? Blaming the workers single handedly for the downfall of these corporations? The anti-American, anti-unionized worker bias is overwhelmingly clear. I don't think any of these people really have an understanding of the implications of a collapsing supplier base, much less a spirraling economy, when the bottom falls out.
Last edited by FKL; 12-12-08 at 01:44 PM.
12-12-08, 01:50 PM
#40
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The anti-union Bias is painfully evident here. It was more than fine for the government to give a $700 Billion bailout to wall street hot shots but when it comes to the UAW, or any Union for that matter, or a paltry 2% in comparison bailout to save America's manufacturing base, I have no idea how anybody without blinders on cannot see this for what it is - a blatant attempt by the GOP senators to try and screw with the Union workers, who, by the way, they hold an ideological bias against.
These same very senators are the same ones with huge foregin transplants in their homestates, all at non-union labor, all subsidized by multi- hundred million dollar tax incentives, tax incentives that the tax payers paid for, which the tax payers were never consulted on. It's as if they are out for foreign market share, damn with American wages, damn with unions, damn with anything outside of their own states. I don't hear anyone talking about the highly unionized plants back in Japan and Germany, I don't hear anybody questioning why the American auto workers are the only ones who deserve not to be collectively represented.
Some of the arguments I've read here are just sad. Blaming the workers on shoddy designs and materials? Blaming the workers single handedly for the downfall of these corporations? The anti-American, anti-unionized worker bias is overwhelmingly clear. I don't think any of these people really have an understanding of the implicatins to the supplyer base, much less the economy, when the bottom falls out.
These same very senators are the same ones with huge foregin transplants in their homestates, all at non-union labor, all subsidized by multi- hundred million dollar tax incentives, tax incentives that the tax payers paid for, which the tax payers were never consulted on. It's as if they are out for foreign market share, damn with American wages, damn with unions, damn with anything outside of their own states. I don't hear anyone talking about the highly unionized plants back in Japan and Germany, I don't hear anybody questioning why the American auto workers are the only ones who deserve not to be collectively represented.
Some of the arguments I've read here are just sad. Blaming the workers on shoddy designs and materials? Blaming the workers single handedly for the downfall of these corporations? The anti-American, anti-unionized worker bias is overwhelmingly clear. I don't think any of these people really have an understanding of the implicatins to the supplyer base, much less the economy, when the bottom falls out.
Management can easily ruin a company. So can unions. We have histories of both.
12-12-08, 01:51 PM
#41
FIrst, realize that i'm not defending the $30/hr workers at all. they're overpaid, bottom line. that being said, most of these people started those jobs wyhen they were fresh out of high school. that was their goal; to land a UAW job that pays well with great benefits. how do you expect them to have other job skills? that's ridiculous. why would they have ever developed anything else when they had what they thought was a secure career? that's like asking a plumber to learn how to repair medical equipment on the side, just in case the plumbing industry falls one day. these people are 35,45, 55 years old, suddenly they should, what, go back to school? become a plumber?
besides that, they really have no control over what they're paid. the uaw decides if they can take a pay cut or not. do you think that they would decline a 25% cut instead of no job at all? i think not; i think most of them would be happy to at least keep their jobs at less pay than not have one.
and yes, it would take a long time to design and build better cars, which is something that needs to be addressed. do they have a plan? not really.
it's very complicated and i just hate to see hard working people lose their jobs when they really had no control over what was built and how badly everything was mismanaged.
besides that, they really have no control over what they're paid. the uaw decides if they can take a pay cut or not. do you think that they would decline a 25% cut instead of no job at all? i think not; i think most of them would be happy to at least keep their jobs at less pay than not have one.
and yes, it would take a long time to design and build better cars, which is something that needs to be addressed. do they have a plan? not really.
it's very complicated and i just hate to see hard working people lose their jobs when they really had no control over what was built and how badly everything was mismanaged.
If unions cant take $10 benefit cut to save their company, which will save big 3 billions upon billions, then why should american taxpayers pay for that?
Are their jobs better than others? More important? Guaranteed by constitution?
Because they sure are acting like it...
Under this situation, I really dont see why should rest of the americans pay the wages and benefits for few priviledged ones. Didnt 500,000 americans lose jobs in November? Who is helping them?
12-12-08, 01:56 PM
#42
Wow three pages of responses and most of it dedicated to UAW bashing, I bet very few if any bashers drive American cars and UAW salaries don't affect you one bit so why the hate? If you guys are so secure with your education, life skills and white collar jobs why put all this energy into disregard for your fellow man, they want to make as much as possible just like you.
TARP funds should be used to bail them out, why? They can't get credit from normal lenders because of frozen credit markets, caused by unregulated banks and the Wall St. crowd, free market for one, free market for all, bailout for AIG, Bear Stearns, Citi and all the rest = bailout for the automakers.
TARP funds should be used to bail them out, why? They can't get credit from normal lenders because of frozen credit markets, caused by unregulated banks and the Wall St. crowd, free market for one, free market for all, bailout for AIG, Bear Stearns, Citi and all the rest = bailout for the automakers.
12-12-08, 02:03 PM
#43
Wow three pages of responses and most of it dedicated to UAW bashing, I bet very few if any bashers drive American cars and UAW salaries don't affect you one bit so why the hate? If you guys are so secure with your education, life skills and white collar jobs why put all this energy into disregard for your fellow man, they want to make as much as possible just like you.
TARP funds should be used to bail them out, why? They can't get credit from normal lenders because of frozen credit markets, caused by unregulated banks and the Wall St. crowd, free market for one, free market for all, bailout for AIG, Bear Stearns, Citi and all the rest = bailout for the automakers.
TARP funds should be used to bail them out, why? They can't get credit from normal lenders because of frozen credit markets, caused by unregulated banks and the Wall St. crowd, free market for one, free market for all, bailout for AIG, Bear Stearns, Citi and all the rest = bailout for the automakers.
The UAW salaries will affect every single tax payer in the United States if the big 3 are bailed out. Why should tax payers have to pay for their salaries? Please explain. You really should read everyone's arguments and points.
12-12-08, 02:06 PM
#44
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Wow three pages of responses and most of it dedicated to UAW bashing, I bet very few if any bashers drive American cars and UAW salaries don't affect you one bit so why the hate? If you guys are so secure with your education, life skills and white collar jobs why put all this energy into disregard for your fellow man, they want to make as much as possible just like you.
TARP funds should be used to bail them out, why? They can't get credit from normal lenders because of frozen credit markets, caused by unregulated banks and the Wall St. crowd, free market for one, free market for all, bailout for AIG, Bear Stearns, Citi and all the rest = bailout for the automakers.
TARP funds should be used to bail them out, why? They can't get credit from normal lenders because of frozen credit markets, caused by unregulated banks and the Wall St. crowd, free market for one, free market for all, bailout for AIG, Bear Stearns, Citi and all the rest = bailout for the automakers.
And you're right, I don't get a UAW negotiated salary. I'm not asking for one and I don't expect the taxpayer to pay my paycheck and retirement benefits if I lose my job. I already pay taxes that go to unemployment benefits, medicare, medical, social security, etc., that is all that many people have as a social safety net. Why is a UAW worker deserving of special rights and benefits? If they contribute to a viable company, they make a living. If they don't contribute or the company is not viable, they are out of work. Happens to a lot of people.
If anyone reading wants to view this as union bashing, well, that is your right. As I said, I don't care. I believe that many are saying that if you are against the bailout, you are anti union. I believe you should go back and read more of the thread. GM is a mess and everyone involved is going to suffer. And it may ultimately not do any good. But they are all in it together. And I really don't want to be. Which is why I don't want taxpayer money used. Because then I am in it with them. If that is union bashing, then so be it.
Last edited by RON430; 12-12-08 at 02:09 PM.
12-12-08, 02:10 PM
#45
UAW salaries don't affect me one bit? Were you even saying that with a straight face? They are using MY MONEY (TAX PAYERS' MONEY) to bail out companies that overpay their UAW workers and I shouldn't care? What the...