The auto makers

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Re: The auto makers

Postby kiryan » Fri Dec 12, 2008 10:13 pm

double
Last edited by kiryan on Fri Dec 12, 2008 10:51 pm, edited 1 time in total.
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Re: The auto makers

Postby kiryan » Fri Dec 12, 2008 10:14 pm

Sarvis wrote:Or maybe Kiryan's just full of shit: http://www.payscale.com/research/US/Job ... ourly_Rate

Looks more like $46k-60k...

Actually, I saw some things where it's not full time until you have a couple years experience so it's not even really $46k.


or maybe kiryan does know what he's talking about dipshit.

http://archive.ilwu.org/solidarityday/N ... 021125.htm
The wage increases in the package are more modest than the pension increases. The longshoremen's basic wage, $27.50 an hour, will rise by $3 an hour, or almost 11 percent, over six years. With premiums, night differentials and overtime added, longshoremen now earn nearly $100,000 a year on average.

http://archive.ilwu.org/solidarityday/C ... 021015.htm
Not so with the International Longshore and Warehouse Union, whose members didn't want to strike but were locked out by the Pacific Maritime Association. President Bush has been wooing the Carpenters Union and the Teamsters since he ran for president, hoping to weaken the Democratic base, but when push comes to shove, big business didn't have to push hard to have the MBA president fall its way. Much has been made of the fact that a longshoreman's salary can reach $100,000 a year. Evidently, the working class can't be the working class if it earns upper-middle-class wages.

http://articles.latimes.com/2004/aug/18 ... portjobs18
Hundreds of thousands of applications have poured in for 3,000 temporary jobs at the ports of Long Beach and Los Angeles – about 10 times as many submissions as expected – underscoring just how hungry people are for high-paying work in a weak labor market.
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Re: The auto makers

Postby kiryan » Fri Dec 12, 2008 10:26 pm

I agree that some of those are myths.

Myth #2, They build unreliable junk. There are plenty of car and driver and industry surveys that back this up. They may not all be junk, but under objective measurements, in general, the big 3 are not as high quality as the foreign cars.

Myth #3, they build gas guzzlers... The big 3 dominated in SUVs and Pickup trucks. Those are gas guzzlers. Basically, the big 3 lived on their gas guzzlers and their "fleet sales". The fleet sales is part of the reason that they have such a poor reputation, they sell low end cars to rental agencies who flood them onto the market after 2-3 years of service. This creates low resale values which pisses people off who bought retail and contributes to a reputation of poor quality because these fleet cars have been abused.

Myth #4, They already got a 25 billion bailout. What exactly do you call a 25 billion government loan to retool their factories to produce green cars. How much of this 25 billion did the foreign makers get? Did Japan give them money to retool for hybrids? Why don't they have 25 billion to invest in themselves...

Myth #7, Their union workers are lazy and overpaid

The oft-cited $70-an-hour wage and benefit figure for UAW workers inaccurately adds benefits that millions of retirees get to the pay of current workers, but divides the total only by current employees. That's like assuming you get your parents' retirement and Social Security benefits in addition to your own income.

They are overpaid and the $70 figure is justified. Yes it is exactly as you described, but you want to discount that their retirement benefits are going to have to be paid for some day. They may be paying them now for the others, but eventually someone will be paying for theirs. More and more it looks like its going to be us, the american tax payer.
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Re: The auto makers

Postby kiryan » Fri Dec 12, 2008 10:45 pm

http://www.cnn.com/2008/WORLD/americas/ ... index.html

Zakaria: There are really two different U.S. auto industries. And only one part of it would have qualified for the bailout that was just rejected by the U.S. Senate -- the inefficient part that is headquartered in Detroit. There is another auto industry in the United States and it is healthy. While it is obviously going through tough times because of the economic crisis, it has not gone begging to Washington for taxpayer help.

(he's talking about the foreign car makers)

Zakaria: No. But the reasons the CEOs of Ford, GM and Chrysler present -- that they will restructure, they are still competitive, they will change -- are bogus; they won't. The best argument for the bailout is that it is the most cost-effective jobs program that the government can run in the short term.

Spending on infrastructure to create jobs will take months, maybe years. However, keeping the Big Three afloat will keep hundreds of thousands of jobs in place quickly and easily. It's true the companies will eventually go bankrupt, but by then hopefully the economy can withstand it.

--

shouldn't we just let them fail and pay them unemployment instead? Everytime I'm tempted to think, we should bail these guys out, I think about people who have been making $20-30 bucks an hour for years and are still living pay check to pay check. Why are we bailing out workers who have been making good money and getting great benefits? So they can get $100k + buyouts as factories are closed over the next 2 years? THIS IS A UNION BAILOUT, not an automaker buy out.

If Americans don't go back into car buying frenzy, how many of these jobs are going to be saved? There is a very real possibility that consumption patterns have had a fundamental shift. Imagine if people start driving their cars for 10+ years instead of the 4-7 yeras that is current... Thats a lot fewer cars that need to be made.
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Re: The auto makers

Postby Lathander » Sun Dec 14, 2008 4:38 am

Seems to be alot of chatter for Mitt Romney for Car Czar. We should have elected him as President but I think he'd be great at restructuring the auto industry.
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Re: The auto makers

Postby kiryan » Sun Dec 14, 2008 7:24 am

Mitt Romney I think would've been a solid choice for president. I think he'd be good as a car czar. Not too brutal on the unions, and definitely able to reorganize the businesses as they need to.

I think Ron Paul should get a lot of credit for what he said in the presidential debates even if his ideas were basically impossible to implement.
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Re: The auto makers

Postby Corth » Sun Dec 14, 2008 8:53 pm

Ron Paul should get credit for being the only politician elected to Federal office who currently understands what caused the 'credit crisis', and in fact warned about it and attempted to prevent it years before it occurred. We would be a lot better off if his colleagues would listen to his suggestions at this point.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth

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Re: The auto makers

Postby Lathander » Sun Dec 14, 2008 11:40 pm

Brutal to the unions? They are at the heart of the problem. They demanded these crazy retirement benefits that the companies have no chance of paying and now there is one worker for every two retirees.
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Re: The auto makers

Postby kiryan » Mon Dec 15, 2008 5:12 pm

yea... instead of all the other presidential candidates openly laughing derisively at Ron Paul on stage during the debates. his answer to why oil prices are up was genius. the only one who answered that question even remotely well.

and the stupid management that agreed to those crazy union demands figuring they could just raise prices, cut quality and milk it forever.
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Re: The auto makers

Postby avak » Sun Dec 21, 2008 7:54 pm

Corth wrote:It is the enormous labor expenses (including pensions and health benefits) that are crushing GM.


I just heard today that even the all-inclusive compensation figures (~$75/hour avg) only account for 10% of the Big 3's expenses. Cutting expenses down to those of Honda and Toyota (roughly $45/hour) would save $800 per vehicle, but the Big 3 already list cars at an average of $2500 less than the comparable Honda/Toyota vehicle.

Which, of course, goes back to the fundamental point...it is not the labor unions (in fact, this is largely a free-money-grabbing, union-busting exercise)...but piss poor management and crappy cars.

If I were Obama, I would help orchestrate the sales of the collapsing companies. Orderly bankruptcy, as Bush calls it.
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Re: The auto makers

Postby kiryan » Sun Dec 21, 2008 8:38 pm

I read something about labor being only 10% of the price of a car recently... you probably read the same article.

I find that figure highly questionable. I bet they are using even more selective math to arrive at that number than they did to arrive at the $75 per hour #. I doubt they are including any kind of overhead costs and just coming up with the best # they can. Sounds like bullshit to me.
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Re: The auto makers

Postby Corth » Sun Dec 21, 2008 9:20 pm

Avak,

We can quibble all day about why they aren't making money. I point out again that in 2007, GM sold more cars in the US than any other company, barely beating out Toyota. Yet they lost a ton of money, and Toyota was very profitable. People buy the cars, and yet GM loses money. Something is wrong. Either the cost of labor, the cost of their factories, the pricing point of their vehicles. Whatever. One way or another they need to change their business model or whatever bailout money they are given is just delaying the inevitable.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: The auto makers

Postby Lathander » Sun Dec 21, 2008 9:32 pm

The seventy dollar an hour figure comes from incorporating pensions and other benefits to retirees that the unions got from management in the 70's and 80's. This is why the companies need to go through a bankruptcy to get rid of those anchors around their neck.
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Re: The auto makers

Postby Corth » Sun Dec 21, 2008 9:35 pm

Yeah, it really seems to me that bankruptcy court has the tools to reorganize the manufacturers into profitable companies. I don't buy the argument, either, that people will stop buying vehicles from them once they enter bankruptcy. Its not like people have any confidence in their long term viability right now...
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: The auto makers

Postby avak » Sun Dec 21, 2008 9:56 pm

Corth and Lath

That is the point. The labor expense is clearly not definitively the issue. Until you examine the entire model you can't justify pointing fingers at one part of the equation (ie. labor or benefits).

The Big 3 are doing a bang-up job of convincing the public (and some here, obviously) that the labor unions are greedy and self-destructive and ultimately to blame for the crisis. Fine, that may even be the case, but the facts that I presented, from a couple of sources, do not support that theory.

As an analogy, if my businesses started to fail I would look like a dope blaming minimum wage laws. Minimum wage=collective wage bargaining=unions contracts. Why? Because there are abundant examples of businesses within my industry that are successful. That is about the last place I would be looking (or anyone else, for that matter) if I went belly up. Management, product quality, location selection, customer service, support, perceived value, etc etc etc....

And, as I have stated since the beginning, I definitely support reorganization of these companies. Whether that is through controlled collapse or a stiff buy out/bail out from the gov't.
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Re: The auto makers

Postby Corth » Sun Dec 21, 2008 10:53 pm

So your position is that the Big 3 are going under because of the quality of their product. I wouldn't disagree completely. On the other hand, GM, like I mentioned, still was the sales leader in the US as of last year. People buy these vehicles, regardless of the perceived quality. Perhaps because they are sold at a discount, which would reinforce your argument. On the other hand, the foreign manufacturers do not have the same legacy pension and health benefit expenses as the Big 3. $800 per vehicle, when you are selling millions of them a year, kind of adds up.

I think, as usual, the truth here lies somewhere in the middle. Labor and benefit costs are higher, which puts the Big 3 at a disadvantage, and at the same time, the vehicles are not well designed and sell at a discount, again putting the Big 3 at a disadvantage. When all is said and done, they are getting trounced by their competition. What SHOULD happen when you can't compete is that you go under. What WILL happen here is that taxpayers will subsidize the poor business decisions of GM management. And within the definition of poor business decisions, I am including the labor costs that GM management agreed to pay.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: The auto makers

Postby kiryan » Mon Dec 22, 2008 1:48 am

benefits were $3,000 per car at the domestic producers, at least thats what i read about 2 years ago.

The $75 an hour is justified because when these guys retire, someone will be paying for their retirement. If you actually accounted for it correctly, then big 3 would be payign $150 an hour. Its just like social security, although last year they struck a deal to make the UAW resposible for their own benefits after getting 16-30 billion dollars in a lump sum.
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Re: The auto makers

Postby Sarvis » Mon Dec 22, 2008 2:11 am

kiryan wrote:If you actually accounted for it correctly, then big 3 would be payign $150 an hour.



Are you kidding? If you _really_ work it out, they actually pay like a kajillion dollars an hour!
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Re: The auto makers

Postby Lathander » Mon Dec 22, 2008 11:16 pm

You can't strip out the retirement benefits that the big 3 pay, that is part of their costs. The only way to get out of it is to go bankrupt. That gets them out of the contract and then the government gives some maximum benefit from the PBGC that is something like 30K a year or so.

Avak, what part of their model do you think they are getting wrong? The reason they made big vechicles is because that was the only place to get the big profit margin they needed to keep going. They don't have the cost structure to compete with foreign companies on a small, low priced car.
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Re: The auto makers

Postby Tasan » Tue Dec 23, 2008 12:40 am

The Toyota manufacturing method has been adopted by several big name companies for a reason. Is it any wonder they can mop the floor with stupid American companies?

Most of the savings come from logistics, which is quickly becoming one of the highest expenditures for most businesses these days as the cost of producing and transporting goods continues to rise.
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Re: The auto makers

Postby kiryan » Tue Dec 23, 2008 3:13 am

To elaborate on the primary driver of Toyota's success... Its about quality. Toyota has put in processese and developed a company culture that emphasize quality; sigma six. To build a quality product, you have to get quality parts. So while it is logicistics, its more about quality management which does involve the supply chain.

Also, one of the biggest subleties that people don't understand is the composition of the sales. The domestics sell ALOT of their smaller cars to rental companies... so called "fleet sales". So GM lost the lead quite a bit before they officially lost it if you ask me. Fleet sales are the worst.

Think about how fleet sales affected them. These cars are sold at a steep discount because you are dealing with volume. Also, the way these fleet cars are used is much harsher than the average consumer and results in a car that doesn't last as long. So these companies sell the cars after a couple of years (maintenance and lost business costs them more than buying another new car every 2-3 years).

Now these used cars end up in used car lots, but at a low price since they didn't pay much to start with, they've been abused harder and they have a lot of cars to liquidate (reverse of the benefit of buying in bulk), and these typically weren't loaded either. These cars then get sold to consumers who are surprised when they break down. This most directly results in a lower resale value which leaves people who paid retail feeling jacked... It probably also results in a reputation for poor quality that may or may not be deserved.

There is a lot of management culpability in the strategies they employed, the terms they agreed to with unions regarding hiring, firing and work stoppages, and the long term benefits problem. Toyota is winning more than just because they supposedly have a higher quality product... they get the parts from the same place when you think about it so there really can't be that much difference in quality.
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Re: The auto makers

Postby avak » Tue Dec 23, 2008 5:15 pm

Lath, that is a great question. I have no idea what the actual cost breakdowns are for the Big 3. I tried to do some basic net research and didn't find much.

It seems obvious to me that the foreign automakers have figured out a production method that allows them to be profitable. It is equally obvious that the Big 3 have been resistant to innovation to the extent that it has made them noncompetitive. What is not obvious are all of the reasons. Fleet sales? Fine...could they not see the results of that? A shift away from SUV's due to fuel prices? The big 3 lose money on all midsized and small car sales. It all just seems like bad business to me.

The irony of these union busting tactics is that the unions built an american middle class...the middle class buys american cars.
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Re: The auto makers

Postby kiryan » Tue Dec 23, 2008 6:14 pm

They at times tried to adjust their fleet sales strategy, how do you think I learned about it... but it was probably a question of pride (being supplanted as the #1 car maker by sales), economics, relationships plus wondering about the marketing affect of having people drive your cars. Also you have to consider, that maybe you make 500 million with fleet sales, but it would cost you 500 million to shut down the factories and furlough the union workers making those cars... Sometimes its better to continue operating at a loss than to go through shut down costs.

I would argue that all of these choices made sense to them at the time with their understandings of the market and predictions for the future. They did not forsee a day where auto sales would fall by 50% in a matter of a month nor did they forsee huge spikes in gas prices that decimated sales of their most profitable vehicles. Management I believe got caught up in micro issues and ignored or didn't plan for fundamental changes to their industry until just 2-3 years ago.

Stare this decision down as a CEO... The union might be making unbelievable demands, but it'll cost you $1 billion in lost profit if they strike. It will probably knock 10-15% off your stock price, plus reduce your equity leaving you a weaker company and with smaller market share. Now remember, your job as CEO is to increase share holder value (read share price). In retrospect you should've stuck to your guns... every 3,4,5 years when the union contract expires you go through this again.
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Re: The auto makers

Postby Kifle » Tue Dec 23, 2008 8:50 pm

avak wrote:The irony of these union busting tactics is that the unions built an american middle class...the middle class buys american cars.


The real irony is that the union workers are now buying upper class cars and biting the hand that feeds them. I'm pretty pissed about this whole auto bailout business. I honestly don't think I've been this mad at my government since the invasion of Iraq was announced on the TV.
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Re: The auto makers

Postby teflor the ranger » Tue Dec 23, 2008 9:46 pm

"Yes, I would like the moonroof, the six way speakers, and the paying-for-two-generations-of-union-labor-from-the-past."

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Re: The auto makers

Postby Lathander » Sat Dec 27, 2008 12:35 am

So the auto workers union needs a bailout for the industry, but they own a club resort???

http://www.foxnews.com/story/0,2933,472304,00.html
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Re: The auto makers

Postby Kifle » Sat Dec 27, 2008 7:14 pm

Lathander wrote:So the auto workers union needs a bailout for the industry, but they own a club resort???

http://www.foxnews.com/story/0,2933,472304,00.html


This is really an outrage. The union should be there to protect jobs and get livable wages for their members. At this point, they're getting paid more than college educated people, better benefits than even government workers, and their leaders are living it up by scaming their members. The government should have demanded concessions before even thinking about handing over 17 billion dollars. This is just sick.
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Re: The auto makers

Postby kiryan » Sun Dec 28, 2008 7:00 am

I hate how Bush handled this. Time was on the side of the Republican philosophy. If he had done nothing, GM supposedly would've had to move forward with a bankruptcy (more than likely they would've found a way to survive to Obama's inaguration). Instead, he used executive power to loan them enough money to make it to Barack's administration. The contengiences he placed on the loan can be 100% altered by Barack on Jan 20th. Contengiences that include basically telling the Union in no uncertain terms they would have to find a way to lower their labor costs to equivalent of Toyota/Honda or go bankrupt. The union has already rejected the terms publicly and vowing to fight; they are basically counting on the Democrats to preserve the middle class, the union workers.

I don't know whether he's playing politics, letting Barack and the democrats choose between the outrage of the American public or the outrage of the Unions who donate hundreds of millions of dollars and millions of votes to Democrats, or he seriously believes that this must be done to "protect" the country from chaos or that government is finally overtly worried about their profits, i mean taxes revenue... No matter how I look at it, I'm pissed. You don't do shit because you can get more taxes, you are not here to get more taxes for the government. And I'm tired of these fucking political games between republicans and democrats so you better not be f*ing off so you can gain inroads with unions or energizing the base for 2010. The scary thought and the one that worries me is that maybe, they are so worried about the economy, about the whole American dream, that they are truly scared about what could happen if the automakers fail. It looks really bad now... but maybe its worse than we understand... I mean think about it, if the stock market takes 5-10 years to recover, we're fucked right now because of the baby boomers who will be on SSI/Medicare/Medicaid instead of drawing from their private funds.
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Re: The auto makers

Postby kiryan » Sun Dec 28, 2008 7:49 am

http://www.time.com/time/business/artic ... 07,00.html

This article talks a little about how the bailout/loan would work and a little about why Bush did it.

"Borrowing heavily from features of the failed House and Senate plans, the Treasury plan requires that labor costs be on par with those of the nonunionized automakers but gives the companies until the end of 2009. It eliminates the job bank and requires that half of the future payments to the retiree health-care trust, VEBA, be made with stock. Further, it requires that debt be cut by two-thirds through a debt-for-equity exchange. Though these are terms of the loan, they are described as "targets," meaning exceptions can be made if there is deemed to be a good reason to do so."

-- its very important to note the "payments to the retiree health-care trust, VEBA, be made with stock". Basically this is the retirement entity that the union and the automakers (I think just GM) agreed to create and that would be funded with huge initial infusions of cash (on the order of 30 billion I think with the first payment being 8 billion and the second being 16billion). The salient point here is that instead of getting these infusions in cash, they are getting stock which now makes their future extremely reliant upon the automaker and gives them even more skin in the game once the restructuring and bailouts are approved under Obama.

Two other articles
http://www.time.com/time/business/artic ... 15,00.html
http://www.time.com/time/business/artic ... 37,00.html (this one has links to the business turn around plans they submitted at the bottom)
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Re: The auto makers

Postby Vigis » Sun Dec 28, 2008 11:44 am

Tasan earlier mentioned logistics and Corth earlier mentioned greed.

I work in the transportation industry (trucking). While my company does not directly service the automotive industry, we have seen the collapse coming. We saw more trucking companies come into the retail, food, and manufacturing businesses. Thankfully, my company planned for it and we contracted early and set a wage freeze for anybody over $40,000 annually (which I am not thrilled about) to ease the pain; it comes down to supply and demand.

2008 is the worst year on record for logistics. More trucks have left the industry than any 2 years combined. 2001 through 2002 saw more trucking companies go out of business, but 2008 has seen larger trucking companies going out of business = more trucks.

If the big 3 fall, more competition will enter the marketplace in retail, food, and manufacturing for logistics; that directly impacts my career and definitely impacts my employees; I may be the guy that gives them the farewell.

Expand that and you start to see the picture of what will happen if we let the big 3 fail:

Truckers don't have a job anymore (historically, they've gone to construction, but that has gone to hell)
People who manage truckers don't have a job anymore.
People who use truckers initially see lower costs but will see higher cost as the supply diminishes because trucking companies cannot keep up with their own costs
The cost of your goods go up
Then, you either see higher wages to keep up with cost of living (if you are lucky) and inflation results or you have to find a second job (which was already filled by a trucker that didn't have a job).

It could be bad. I'm not a huge fan of bailing them out, but there are several other scenarios I could go through just from a logistics point of view and several more I could go through from a consumer point of view.
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Re: The auto makers

Postby kiryan » Mon Dec 29, 2008 4:51 am

I'm pretty familiar with the trucking industry, not as much as vigis, but my dad has driven truck during several periods of his life. The problem with the trucking industry is not going that the automakers may go out of business. Its that the model that existed in the era before heavy government regulation and it doesn't work now. Regulation has added a ton of inefficiency into the trucking business (which means increases the cost), but the industry has not been able to pass enough of those costs on yet... so small trucking companies (1 - 20 drivers) have been absolutely crushed. Oil over the past 2 years certainly hasn't helped either.

At least that is what is going on on the west coast.
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Re: The auto makers

Postby Ashiwi » Mon Dec 29, 2008 1:31 pm

Kiryan, a years-long cultivated inability to think in terms of consequences and fiscal responsibility has led up to this issue... why would you think that would change now? We've been hypothesizing for years what kind of impact maturing baby boomers are going to have on the rest of our culture in terms of retirement, healthcare and taxpayer burden. Why in the world should we start thinking proactively now?

I almost threw up my hands on NPR the other day and switched back over to my alternative music station. They were airing a piece on the moral responsibility and Americanism of spending beyond our means, and SUPPORTING people still going out and buying beyond their means because not doing so now at a time when our economy is in such dire straits from those same practices is un-American, morally and ethically wrong.

And people really buy into this. Intelligent, cultured, college educated, over-their-heads-in-credit-card-debt people.

That's what somebody needs to explain to me, because I am just not equipped to understand this kind of thought process. Why are we expected to continue a self-destructive model of behavior in order to shore up a crumbling system built on a self-destructive model of behavior?
Last edited by Ashiwi on Mon Dec 29, 2008 4:15 pm, edited 1 time in total.
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Re: The auto makers

Postby Corth » Mon Dec 29, 2008 2:36 pm

Ashiwi,

Finally we agree on something. That drives me SO freaking nuts. We have an unsustainable consumption driven economy caused in large part by artificially low interest rates. This leads to debt, and finally a debt crisis. So what is, apparently, the solution? They want us to go into even MORE debt. Its insane stuff. They are so scared of deflation that they don't even realize that its exactly what we need right now to force people to establish savings, pay down debt, and thus rebalance the economy. In the absence of banks lending and consumers borrowing, it looks like the powers that be will just drop money from helicopters so that at least the existing debt can be repaid easier as the currency is eventually debased. Sucks for savers.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: The auto makers

Postby Tasan » Mon Dec 29, 2008 4:41 pm

Can anyone explain the deflation process in a way that I, as someone who could care less _usually_ about financial/economic problems, would understand?

I was under the false assumption that inflation, like taxes, was inevitable. Deflation seems like a foreign concept...
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Re: The auto makers

Postby Corth » Mon Dec 29, 2008 4:47 pm

Jim Jubak on Deflation

That video explains what deflation is and why policymakers are so scared of it. A tougher question is how it arises, especially in a fiat currency. Thats not something that can really be answered in layman's terms. My take on it is that inflation is essentially an expansion on the money supply, and deflation is a contraction. If you interpret money broadly as including credit, which is how it is usually interpreted, then destruction of credit is deflationary, as supply of money decreases. In our current 'credit crunch' credit is being destroyed at a faster rate than money can be injected into the economy by the government, hence deflation.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: The auto makers

Postby Ashiwi » Mon Dec 29, 2008 10:24 pm

Think in terms of "what the market will bear."

Markets will take greater risks and offer more credit to people who won't pay as long as you and I are out there throwing our money around to buy products at greatly inflated rates that support lenders' losses. When hard times hit, lenders can decide between continuing to raise their rates and face the potential loss of their remaining potential capital pool, or they can reign it back in, cut their overhead, drop their risk level, and attempt to hammer a plug into a spewing artery of financial loss. If they continue to inflate the cost to the consumer, they run the risk of losing everything. If they find ways to raise the appeal of spending for their markets, they can close some offices, lay off a herd of workers, cut costs and corners, and hopefully make it through to the other side of the economical downturn mostly intact.

I use the term "lenders" loosely, since it incorporates all forms of business who work with imaginary assets. Everything from the local vegetable market who offers a line of credit to the Pizza Hut down the street, to Foley's who gives 10% off to everybody who opens a new credit card account, to banks and investment brokers.

If the market will bear the risk, lenders recoup their losses through you and me. If we're not out there spending, then no amount of inflation will keep a risky lender afloat. Deflation occurs as markets attempt to not only lure back lost revenues, but also keep those remaining potential sources of revenue from going into even more of a panic than they are already in. If properly managed without being too late, the market will stabilize before it hits freefall.

That's about as simplified as I can make it, and I'll be perfectly honest about the fact that I understand very little of it. I'm hoping Corth will correct all my glaring errors and omissions, as I can't access his touted video.
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Re: The auto makers

Postby Corth » Mon Dec 29, 2008 10:34 pm

I think Ashiwi is more or less describing the symptoms of deflation. How people react to it. My feeling is that both inflation and deflation are monetary phenomenons. Inflation is usually misunderstood to mean an increase in prices, and deflation the opposite. While prices are likely to increase during an inflationary period, or decrease during a deflationary one, its not always necessarily the case. Rather, the better way to understand inflation and deflation is that inflation is simply an increase in money supply (money defined broadly as including credit), and deflation is a decrease in money supply.

Certainly, the real life consequences of inflation and deflation are of the utmost importance, otherwise who cares, right? But really to start out you need to understand what is physically happening in the economy. Right now, whats happening is money is being destroyed at a faster rate than its being created. This means that there is less money out there, so the existing supply of money becomes more valuable.. you can get more for it. Meaning, generally, that prices are coming down. This is a horrible situation for borrowers, as they pay back loans with more valuable money than they originally borrowed. In fact, although rates are low right now, the real cost of borrowing money is higher since the value of the currency you are repaying increases over the course of the loan. This tends to discourage borrowing, encourage saving, and forces a drastic slowdown of a consumption driven economy that is addicted to new debt creation.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: The auto makers

Postby Ashiwi » Mon Dec 29, 2008 11:33 pm

Actually, to me it seems like both inflation and deflation are part of a tidal balance effect, where the thing and the symptoms of the thing are both cause and effect. Every day the ups and downs are typically so small that the majority of consumers will never notice them, but in this situation the balance has tipped substantially to the left, setting up a noticable wave. The more it tips to the left, the more water spills to the left, the more it will move to the left, until either the right is empty or force is applied to the right to stabilize it, whether that force be standard consumerism once the levels come more into balance or forced governmental regulation.

Forced governmental regulation simply to support the market would be a huge mistake, as it doesn't fix the problem and will only contribute to a heavier spill to the left. Consumerism alone won't correct the problem in any immediate future, as the spill to the left sets up a pattern of domino effects from the secondary impacts of a falling market, which also contribute to the leftward spill, as consumerism drops in a capital-tight market.

Reduced access to capital->reduced profit->reduced overhead->reduced workforce->reduced spending->reduced access to capital

Consumerism for years has been inflated based on imaginary access to spendable money/credit. It was such a recklessly built house of cards that once it started to shake it set up a chain reaction that rippled over into every aspect of finance, which finally impacted even Joe Blow enough to the point where there was a broad reaction. The reaction, just like an old-fashioned run on a bank, creates an ongoing problem that keeps the chain reaction going, building on itself.

I don't think we disagree as much as it might seem ... I think we just describe our part of the elephant differently.
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Re: The auto makers

Postby Corth » Tue Dec 30, 2008 12:38 am

Yes, we're basically describing the same thing. You are looking at it more in terms of balance and relations. Like, you know.. drunkeness and hangovers go hand in hand, right? So the world was drunk on credit, and invariably woke up with a nasty credit hangover. I think, interestingly enough, we agree on the solution.. which is to cut back on the excessive drinking rather than once again spiking the punchbowl. Better for our livers that way in the long run. The government, apparently advocates the 'hair of the dog that bit you' solution.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: The auto makers

Postby Corth » Tue Dec 30, 2008 6:14 am

Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: The auto makers

Postby Ashiwi » Tue Dec 30, 2008 7:48 pm

Dangit!!!

Can you type it out longhand? With emoticons for emphasis?
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Re: The auto makers

Postby kiryan » Tue Dec 30, 2008 11:17 pm

Was it really being drunk on credit or was it counting on wealth that didn't really exist / inflation that didn't really register officially...

I blame the fed a lot for the last 2 bubbles, dicking around with interest rates... But you also have to look at the increase in the money supply represented by the stock market and house prices which was driven by investors. Investors drove down the interest rates on loans by paying more for securities... Investors drove up share prices by over valuing revenue. Stocks were trading at historically astronimical P/E ratios, warren buffet came out about 3 years ago and flat out said US companies were over valued and he was taking his money overseas to find companies to invest in. Turns out he was exactly right.

I mean really, if you own stocks that you bought at $10 a share and the price goes up to $100 a share... would you really feel that you were overspending by borrowing $40 against it? You're only spending ~50% of the money you made... If you're house appreciated $150k, wouldn't you feel like you could afford a brand new $40k car? and still be "saving" 110k?

I mean in some sense we saw hyper inflation and now hyper deflation...
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Re: The auto makers

Postby Corth » Wed Dec 31, 2008 12:03 am

Kiryan,

Your saying that the bubble was due to increased consumption due to inflated asset prices. I think though that you are putting the cart before the horse. The reason for the inflated asset prices in the first place was the availability of cheap and easy credit. More than a real estate bubble or a stock market bubble, it was a credit bubble.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: The auto makers

Postby kiryan » Wed Dec 31, 2008 1:12 am

I don't know that I agree its putting the cart before the horse. The price run ups in the stock market were partly a result of people willing to pay a lot more for shares in a company than they were 20 years ago and partly the influx of money from 401k retirement programs. This literally created trillions of dollars and essentially expanded the money supply although on paper.

Does that have a lot to do with credit? Sure it takes credit to expand business, but business could and would only expand by borrowing or issuing stock because their share prices were high. The investor market was rewarding companies for increasing revenue... its just they were probably rewarding them too much.

Then people treated all these paper gains as real money and overspent mostly on credit, but is it really overspending if you have the assets to back it up... unless of course the market drops out from underneath you. If you make $10k in stock gains, is it crazy to blow 5k on a vacation? Apparently it was very dumb, but 2 years ago I doubt anyone would've thought so... including banks.

Whats happened is all this wealth people had and were borrowing against, disappeared over the course of a couple months to a year... To simply say they overborrowed because of a credit bubble I think is simplifying it too much. We got duped into believing stock market and house prices would always go up.

I'm still working on this theory...
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Re: The auto makers

Postby Nokar » Wed Dec 31, 2008 2:58 am

I am curious... All these theories, opinions, etc.
Does any of you work in a union for the big 3?

If you only knew what goes in the plants.
If you only knew how many programs under several different acronyms they have implemented to get the workers input on how to make things better just for the worker to get shot down when he/she tells them an honest answer, something the execs do NOT want to hear.
The plant I work at has been so mismanaged it is pathetic.
I don't make $70+ dollars an hour.
Those "generous benefits" people keep talking about. I know people on medicaid and medicare that have better insurance than I do. They don't have to get a referral approved just to friggin have surgery.

All total when I asked my benefits rep what our (meaning local 685) benefits were worth for a year she said approximately 30-35K a year.
Now if you break down 35K a year working a full time job which is 40 hours per week(35000/52=673.08) (673.08/40=16.88) now add the average hourly wage of everyone(NOT INCLUDING SKILLED TRADES PEOPLE) at my plant since the implementation of the Workplace Organization Model $28.63/hour. ($28.63 + $16.88= $45.51) That is a far cry from 70+/hour.
Toyota employees make right around 24-27/hour and they have better benefits.
We as one of the big three are only a couple dollars shy of being right at the "competitive" wage.
If they restructured the big execs(fired their asses and replaced them with people who actually know how to run a automotive business) we would actually be making a profit.
The other thing is that the foreign manufacturers have no Legacy costs because they haven't been around long enough to incur such things. As well as they have such a high turn-over rate, they also use temp agencies, they don't have unions. They don't let a certain percentage of their workers reach full-time status.
There are other things wrong with my company, I know that. But for people to sit there and blame the hourly workers is a fuggin slap in the face. We have very lilttle control over what the company as a whole does. We can effect our machine area, our work area, hell maybe even in our department if enough workers stand togethor. But the corporation, BAH! Not going to happen. Management dictates what happens.
You also need to actually see our local contract, hell even our international contract. ANY new workers for my company as well start out at a "non-core" rate which is right at 13.75 to 14.25 an hour.
As mentioned above, the average hourly worker (NOT INCLUDING SKILLED TRADES OR SPECIALTY CLASSFICATIONS) makes 28.63. Non-skilled hourly workers at all four plants are separated into 2 classes, team members and team leaders. Team members make the 28.63 an hour team leaders make 29.23/hour.
Skilled trades people make a little more depending on their trade. I don't know the exact figures because I am not skilled trades.
Doesn't anyone remember when almost the same damn thing was happening in the late 70's early 80's?
The workers took the wage cuts, not management! Well this time the union is also asking for management(clear up to the top) to make concessions as well. Give me a break Bob Nardelli just started working for $1/year blah blah blah.. That was 2-3 weeks after he received a $33,000,000 friggin bonus. before that he made $25M a year. That is not including what other investments he has from other places as well as stock options in GMAC and other such financial institutions. So please don't tell me that labor cost of the hourly worker are a big issue. If you don't believe my numbers look them up. Talk to people who actually work in one of the big 3's factories. Talk to the people who work in subsidiaries. Toyota just changed their work policies for a lot of their subsidiaries, the only thing they didn't do was cut wages. They just made it a hell of a lot easier to fire people for any little thing so that when the crunch really starts to hurt them they don't have to deal with anyone like the union they can just say due to blah blah blah your services are no longer needed. They get stuck with a severins(sp) I can't remember how to spell that word, package that's a one time cost. Then when unemployment contacts them they deny the claim so they have to pay nothing.
I've rattled on enough and have probably made several grammatical errors. At this point I don't care.
It saddens me that at one time Americans no matter what color, race, creed, religious denomination bought american and were proud to. You just didn't disrespect your country or it's workers. Chrysler motors built tanks and other such things for WWII, we helped keep our freedom!
Any now some of you say, BAH! let them suffer along with the rest of us. When the damn government allowed $700 BILLION dollars to go out unaccounted for to the friggin financial industry. NO LOAN just fuggin gave it to them. We asked for a loan and now we're getting beat down like you wouldn't believe. I can understand putting stipulations on it for management! Hell yeah! but why beat on the worker. What the hell did we do?

Let the flaming begin.

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Re: The auto makers

Postby Corth » Wed Dec 31, 2008 3:26 am

The main difference between the foreign and domestic manufacturers is the legacy costs. As Nokar points out, it doesn't seem like the blue collar workers for the foreign manufacturers are getting paid very much more or less than those who work at the domestic manufacturers. On the other hand, the big 3 are paying for health care for about 10 retired workers for each current one. Its impossible to compete under those circumstances. And quite frankly, I blame management more than the union too, because they AGREED to this. They knew that somewhere down the line it would make them uncompetitive, and yet they kicked the can down the road and made it the next CEO's problem.

The big three should be allowed to go bankrupt because thats what happens to companies that are run incompetently.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: The auto makers

Postby kiryan » Wed Dec 31, 2008 3:54 am

agree corth, especially managments fault for kicking the can down the road. However, the unions kept asking for outrageous protections and threatening with a big stick. I can hardly blame them for not going through another showdown every 5 years.

nokar... can i say job bank? seriously, your benefits aren't htat good? How much do you pay for them? Are they guaranteed or are you at the mercy of the stock market... I'd like to find out about vacations, pto, sick time, religious time, bereavement, holidays... and breaks, shift differentials and overtime. $28 an hour is damn good money for no degree.

The proof is really in that they have to pay you guys huge bribes to voluntarily quit... Seriously, buyouts in the 80-120k range. Why would a company do that if it didn't have to... if it wasn't cheaper for them... why shouldn't you guys deal with it the way the rest of us who get 2 weeks of severance do? And I bet that with a buyout, you get a lot of points towards retirement as well so you get to retire early and a cash payout. Don't be coming around here and trying to tell us you guys don't have it that good. You guys have it damn good or the price of a buyout would be $10k because everyone would accept it.

and those protections from being let go. thats a huge part of the problem. you can't ramp up headcount becaues then you're stuck with the employees if there is a slow down, you can't ramp down the headcount because you have to pay them anyways... the business needs to be flexible and all those protections stop them from being nimble. Hell I bet there has to be umpteen rounds of training and meetings on any product changes or procedures ect...

another thing that kills me. Poor autoworkers will be out of a job. They made $28 an hour. How about everyone else who was making $13 an hour and lost their job. At least you guys had the opportunity to save money for the future.

I despise the unions of today and I'll be the first to admit at least part of it is jealousy.

and management is screwed up and paid too well. They should get their salaries knocked way down and even more should be fired for getting into this situation in the first place. you might ask, if the workers are paid too much and the mangement is all screwed up and you have huge future liabilities / debt... why wouldn't you just let them go out of business. you guys are damn lucky we are in the middle of a recession/depression and they just voted a bunch of democrats into office.

you don't deserve this bailout as a company or as a union.
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Re: The auto makers

Postby Nokar » Wed Dec 31, 2008 6:21 am

The job bank was used as a tool/weapon against the company from exporting industry jobs to mexico or whatever other slave labor country there is. I was all for the idea in the beginning. But now, I dislike it because the people in the jobs bank are getting paid way to much and have full benefit coverage.
I feel it should be like anyone else. once the benefits run out thats it. That's what happened to a lot of people in the 70's and 80's. I'm all for getting rid of it.

As far as our benefits, I am speaking on health insurance, are so friggin screwed up right now. Granted we don't pay out the ass for them, it's not like they used to be when I hired on in '94. We took a concession in our benefits this last contract and now we are paying more for them. I don't know the exact amount since we no longer get a paper check stub it is on line and most of us that are off right now can't access our company on-line records. But, Back then you could go to any hospital, doctors office and get treated no muss no fuss. Now there is so much friggin red tape just to get a specialist, have surgery, god forbid your children or spouse need something. I know that there are people who abuse the system. The easiest solution to that is to get rid of those people. It is for that reason that I'm not fully siding with the union. I
have watched some of the most laziest, dead beat, system abusing people retain their job. Any place else and their arses would have been fired!

As far as vacations, it is based on your corporate service time spent active. Currently with my time served I get 3 weeks vacation but only get paid for 2 1/2 weeks (100 hours). That is comparable with Toyota and Isuzu. Some of the foreign competitors have even more paid vacation and sick time. Provided you work the time needed to earn the time. They are allowed to spend it differently than we are.
Religious time, I guess I'm not quite sure I understand that part of the question since I don't deal with that. Bereavement is pretty much screwed up as well. You're only guaranteed 3 days paid. But, you can take more time off depending on what type of family member has passed on. For parents, spouse, and children I think it is up to 2 weeks for grandparents up to 1 week. Past that I do not know. I think you're allowed for aunts and uncles. Past that on the family tree you get nothing.
Holidays, the typical holidays pretty much stay the same but other holidays always change from contract to contract during negotiations.
Breaks? In the almost 15 years I've been at my plant I have only had 2 weeks not including this last bout of down weeks this year.
As far as break times as in lunch and such. We get 2 12 minute breaks and 1 18 minute lunch. If it is a department with only 1 or 2 shifts you get a 30 minutes non-paid lunch and you get off work a half-hour later.
As far as $28 an hour being pretty good money for no degree. I will definitely agree with that. But due to some of the bad apples in my company that abuse things most people think all we do is sit on our asses. Well I do not have that luxury. I earn my money. I work my arse off from the time I punch in till the time I punch out.
I would have been all for a cut in people due to lack in car sales. That would have been logistically sound to do. There again. I can't control that. The buyouts where something that I don't understand why they did that. I never even thought abotu taking a buy out.
As far as early retirements, only people past a certain age (I don't remember what the age was) with at least 10 years of service got such a package.
As far as having the buyouts and the early retirement packages. I guess I feel that they did that to make room for new hires once the job banks are eliminated to hire people at a lower rate.
As far as a cash payout for early retirements not everyone got that. And most used that cash payout for their insurance benefits to pay for them so they would last. Meaning that they would have a normal full-time workers benefits not a retiree's benefits which are different. I don't know how much different because I am not a retiree. Also, if you took a buy out that was it.. You got no points for retirement.. You no longer worked for the company therefore you get no pension and only 6 months of medical. After that your done. The only ones who may have gotten points bridged to qualify for retirement were some of the early retirement incentive packages.
As far as paying for employess in the jobs bank. The only thing the company is paying is for their benefits. The union is paying their sub pay. Not the company.

I don't blame you for being upset with the unions.. Hell I am a union member and I am upset with the decisions they have made. I never said I didn't make good money. I am glad I make the money I make. I don't flaunt it. I don't gloat about it. I don't rub it in anyones face.
But when I am place in the bucket with everyone else and labeled lazy, I make too much money, getting beat down when I have no control over what the company does or what I get paid by the company it really pisses me off. I am lucky to be working where I do. But don't chastise me when I'm not the one who makes the decisions. I work on the floor.

Provided management actually gets their head out of their asses why shouldn't the company get the bridge loan?
It is not a bailout... The money is not just given. The company asked for a loan.. Not free money.

How does the union not deserve it? What did the union do wrong? They negotiated for the workers.
I don't feel the financial industry should have gotten free money with no stipulations. Those people put the auto industry to shame with the amount of waste they have on a daily basis.

All the auto industry execs have to do is listen to the customers and the workers to find out what is wrong with the process and fix it. Things would be a hell of a lot better than what they are now.
As far as the people making $13 and hour that lost their job... I feel for them. I wish there was something I could do.
Something else that the big 3 could do is not have "Pensions" as they are now. They should allow people to have 401k's and match up to a certain percentage in it. That's what Toyota and it subsidiaries as well as some of the other foreign automakers do. I would much rather have it that way than how it is now. That way I know I will definitely get what I saved. Not have to hope that every time a new contract comes around that I don't get screwed out of it.

As far as asking for outrageous protections I need specifics on what you are asking instead of just a broad term. Hell this last contract(locally, I don't keep up on the international contracts that much) we asked for safety items in the plants to get fixed due to the injury rates and deaths we had. We asked for holes in the roof to be fixed so we don't have rain coming down on a huge 480vac 3phase panel box. We didn't ask for a wage increase. Hell we took a concession in insurance as well as our COLA. We took concessions last contract as well.
Overtime, What overtime? It was mandated in June of this year that there will be no weekly o/t and only on emergency situations that we work on a saturday. And that is only for the departments needed to build the assembly room for a specific Transmission.
Shift premiums, 2nd's get a 5% and 3rds gets a 10%.
It is also comparable at our foreign competitors.

Me as a worker and I can speak for a few other people in my department felt it was a huge mistake to build the big gas guzzling trucks and take away the neon. But the big thing at the time was the bigger trucks. Gas prices shot up truck sales went down. We had nothing to compete in the economical compact range like our foreign competitors. Kinda like the same thing that happened in the 70's 80's. They came back with the Omni and the K-Car. The workers took a pay cut and a pay freeze untill they got out of their slump.

I am sorry you feel the way you do about unions. I am damn near to that point. But I can't just turn my back on them either.
When you hire on in the big three you aren't given a choice as to whether or not to be in the union. You are told to work here you will be in the union or you won't work here. So there again it was not my choice.
Well I guess it was but at the time I could not turn down the chance at making the money I am now. I started out at 12.75 and got to top pay within 3 years.

The only thing that should be straight on this is the big three did not ask for free money. They wanted a bridge loan.
Another thing on the buyouts past 100lk, That was only for the 2 plants they closed the doors on. The people had the choice of going into a job bank to transfer to a different plant, displacing lower seniority people or to take the buyout and no longer work for the company.

PTO, not sure what you are meaning there. We get 1 week of PAA(Paid Absence Allowance)a year provided we choose not to use it as a vacation week. That is 40 hours that can only be used as a half or a whole day off. Unlike other companies that allow the workers to split up their vacation time accrued into days or half days off. We have to use vacation 1 week at a time.

I never said that we don't have it that good. I said What the hell did the hourly worker do? Meaning not a management person, not a union official. The actual guy/girl working on the floor busting their ass everyday.

As far as product changes, hourly save for engineers, has no control over that. The union has no say in product changes. The only thing the union can do is try to negotiate for new work if it comes down the pipeline to be put in certain plants that have the space and manpower to do it.
It wasn't until this last ratification that the union was even allowed to put a bid on contract work that is done in the plants. We were also just this last ratification this month, that the union could even put a bid in for new product to be competitive to get it back in our plants instead of being outsourced.

Not to sound like a cold hearted S.O.B. but how did the person making $13 an hour not have a chance to save money for the future? We may have made more and more than likely, barring piss poor money handling skills had a little better chance at it. This boils down to another thread on here about living within your means. Which also could pertain to my company. It did not live within its means.
I will not discount your opinion. I even agree with part of it. But you should research more what the unions actually got this time around and what they lost. There may be only one international UAW but there are a lot of local unions that have different contracts. The international doesn't dictate what everyone gets there are some places that get more or less than others. That's why there are International contracts that cover a broad spectrum and local contracts that cover specifics at certain plants or certain regions.

L8r all,
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Re: The auto makers

Postby Corth » Wed Dec 31, 2008 6:57 am

Nokar,

They DID ask for free money, and it IS a bailout.

Let me put it this way. Say you have a low credit score and need to qualfiy for a $200,000 mortgage so you can buy a house. If you apply to a bank, you are only going to qualify for loans with very high interest rates. Lets say, 10%. That would mean that you are paying close to $20,000 in interest in your first year. Now lets say the government started a program where it made loans to borrowers with poor credit at 5%. Is that not free money being given? Now you have the same loan, but are only paying about $10,000 in interest in the first year.

Let me ask you this. If you were an investor that purchased notes from lenders, would you pay even money for loans made to sub prime borrowers at 5%? Of course not. For a loan in the principle amount of $200,000, you might pay.. $150,000 for that debt. Certainly you wouldn't pay $200,000, for the right to be paid back $200,000 plus 5% interest from a subprime borrower. The return isn't worth the risk! The difference between the loan amount and the market value of that loan is the extent of the transfer of wealth from taxpayer to borrower.

The loans to the domestic auto manufacturers are an identical scenario.

At the moment, GM, Chrysler, and Ford couldn't even get money from a private institution due to the enormous risk of default. Even if they could, the rates would be extremely high to make up for that risk. Now the government steps in with loans at 5%. The government is obviously not receiving a sufficient return on its investment to justify the enormous risk of default. For instance, if the government wanted to sell that debt on the open market, it would get pennies on the dollar. So really, from day one there is a quantifiable transfer of wealth from the taxpayers to the corporations. The difference between the loan amount and the market value of those loans, is the free money being given to the manufacturers. In this case, the market value of those loans, if the government chose to sell them to investors, would be a small fraction of the loan amount.

Granted, if the manufacturers actually turn things around and become profitable, the value of those loans might end up increasing. Conceivably, the manufacturers could recover enough that the loan could be sold for par value. That would be great for taxpayers. However, on day #1, those loans could not be sold for even money, so as of right now, it is an immediate loss to the taxpayer in exchange for a subsidy to the corporation. Wishing and hoping that the manufacturers turn things around does not increase the value of their debt obligations today.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



Goddamned slippery mage.
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Re: The auto makers

Postby Nokar » Wed Dec 31, 2008 4:40 pm

Corth,

This last time the big 3 went to congress they asked for a bridge LOAN. They did not ask for free money like the financial institution's did and received.

I friggin work there. This is what our Union and the company told us. It was also what was said on the spot they had on msnbc or cnn I forget which one. I do not know where you are getting they wantd free money. The only part of Chrysler LLC and GMAC that wanted part of the bailout was the financial arm of the companies. GMAC was given bank status so they are entitled to part of the $700B bailout. Cerebus was not granted this same thing save for the 49% they own of GMAC.
These are 2 different things.
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