posted on November 20, 2008 05:35:57 AM new
I was sick to see the CEO's refusal to concede that they were willing to give up their over-the-top perks and compensation to save their companies. I hope that any bail out is contingent on their replacement and a cap on executive compensation.
posted on November 20, 2008 05:58:07 AM new
I live smack dab in the middle of the Midwest. I live in Indiana 2 miles from Ohio and 30 miles from Michigan. My wife has a good job with a GM supply Plant (for now) and I spent over 20 years selling cars so this subject is near and dear.
The arrogance of the Big 3 Ceo's makes me want to vomit. What is just as bad is the local GM plant UAW rep comes on TV and says the union will not make anymore concessions and they wonder why they are going broke.
GM extorts their suppliers by requiring that the supplier give back to GM a percentage of their profits and requires that the supplier reduces its cost per part to go down each year. While the Ceo's and UAW demand more compensation. The Japanese don't do this to their suppliers.
GM is asking for money and turns around and tells my wife’s company (non-union) that they have to move half of their production to Mexico.
The good news is that Toyota just opened a new plant in southern Indiana using US suppliers hmmmm.....
These folks in Detroit just don't get it. Tar and feather the whole lot and run em out on a rail!
posted on November 20, 2008 08:29:30 AM new
Fire management. Spend a few billion dollars retraining workers to make trains, install track, fix potholes, repair bridges, etc. While you're at it, you might want to spend a few billion to retrain fired bankers how to work on infrastructure.
I don't mind spending money to help "save" jobs, but those clowns running things now don't deserve a penny of my money.
How arrogant are they to think that their flying in on separate private jets wouldn't be a PR problem?
And blaming this on the credit system is nuts. They were losing money years ago when credit was loose and money was cheap.
posted on November 20, 2008 09:11:54 AM new
A bailout should be contingent upon a change in management policies including compensation and perks. A bailout would do no good if the Big 3 continue on the path they're on.
Cheryl
Whitman said she and McCain share a philosophy of scaling back the role of government. a point of view partly shaped by her EBay experience. "The EBay model is very Republican in its essence -- it's about making a small number of rules and getting out of the way while not overtaxing the community," she said.
posted on November 20, 2008 09:51:56 AM new
You could pay the CEO 100x the current level and not even make a ripple compared to the major cost: worker compensation.
Oh, and Toyota, Nissan, etc, using those same "suppliers" pay less than HALF the employee compensation of the big 3.
Lefties should be BEGGING for a bailout. The alternative is bankruptcy where the 3 can crush the union and cut contractual benefits to a reasonable level.
posted on November 20, 2008 10:30:01 AM new
Or you could fire the CEO, hire a replacement with a reasonable salary AND put another 300 people to work with the savings.
posted on November 20, 2008 02:05:38 PM new
There is no way for the big 3 to be competitive and profitable without such a massive change that they would, in effect, be new companies.
Since Honda, Toyota, Mercedes, et. al. have figured out a way to produce cars in this country, with American workers, I'm not sure that it's worth the cost to try to preserve the big 3 as they are. During WW II, our car manufacturers quickly changed over to producing military vehicles. Let them learn to make buses, trains, etc., and change the car-centric US to something more in line with what we can afford. Some of them will stay in business to service the existing big 3 autos, some will produce replacement parts, some will work for Honda & others, some will be trained to build buses & trains, some will learn to fill in potholes, some will learn to be schoolteachers, and some will cry wee wee wee all the way home.
And while we're at it, how about we take back the $25 billion we ALREADY loaned them to retool for greener cars; their tools all fly private. There are better recipients for the money. After decades of fighting against better fuel efficiency, car safety, pollution, etc., their mindsets are not pro-change; why not lend the money to people who actually intend to do something with it rather than people who will burn through it in months.
posted on November 20, 2008 02:24:58 PM new
[quote]Since Honda, Toyota, Mercedes, et. al. have figured out a way to produce cars in this country, with American workers, I'm not sure that it's worth the cost to try to preserve the big 3 as they are. [/quote]
The only significant difference between any of these companies is the labor cost. They all use the same technologies and the same suppliers.[/quote]
[quote]Let them learn to make buses, trains, etc., and change the car-centric US to something more in line with what we can afford.[/quote]
You could not afford the infrastructure and mass transit is a very poor method of moving people. The energy usage per person per mile is much higher for these than personal automobiles.
[quote]And while we're at it, how about we take back the $25 billion we ALREADY loaned them to retool for greener cars; [/quote]
They haven't gotten it yet. It was earmarked for the purpose.
[quote]After decades of fighting against better fuel efficiency, car safety, pollution, etc., their mindsets are not pro-change; [/quote]
They sold what the public wanted to buy.
Detroit has models directly matched against the competition in fuel efficiency and pollution and generally better in safety ratings. Quality ratings are also up with several GM divisions and most of Ford rated on par with the Japanese. The major differences are in buyer perception and more important than anything else the cost of production for each unit.
posted on November 20, 2008 06:34:31 PM new
"The only significant difference between any of these companies is the labor cost."
The quality of the management of course is no different between them.
BTW, I'm not suggesting that the UAW doesn't share some of the blame. Labor unions for coal miners whose companies didn't care about safety is one thing; labor unions for people whose all-in comp is $70/hour is another.
posted on November 20, 2008 06:36:52 PM new
"You could not afford the infrastructure and mass transit is a very poor method of moving people. The energy usage per person per mile is much higher for these than personal automobiles."
Where are your stats on that? My impression is that your statement is true only for under-utilized (i.e., half empty) mass transit. If automobiles weren't subsidized, mass transit would never be empty.
posted on November 21, 2008 12:03:21 AM new
I too was disgusted to see those CEOs sitting on their hands when the tough questions were asked about corporate jets, etc.
posted on November 21, 2008 02:28:11 AM new
BTW, GMs compensation was $85/hr a FEW YEARS ago. Which is why there is little empathy in Congress. Even the most dim witted Congressman knows the UAW has to be crushed. W/o a bailout, they can do it w/o being the bad guys.
As a matter of fact there is an editorial in Car & Driver this month about energy costs. Cars are around 3350 BTU/person/mile. If I remember correctly buses are a couple hundred more with ferries at the top at around 15000.
Ever notice that trains were all the rage in engineering pubs years ago? French and German maglevs doing 300mph, etc. Ever wonder why they're not popping up all over??? For the same reason the 150mph Acela in the US only goes a fraction of that: they have to share track with slower trains. You can't travel 150 and chance coming upon another train at 50. And so far the Japanese, Europeans and US haven't determined where to come upon the few trillion needed for the fix of dedicated track.
posted on November 21, 2008 05:08:19 AM new
"As a matter of fact there is an editorial in Car & Driver this month about energy costs. Cars are around 3350 BTU/person/mile. If I remember correctly buses are a couple hundred more with ferries at the top at around 15000."
Squirrel, I'm a bit of a car guy myself, and we can agree that Car & Driver isn't absolutely unbiased on this. I've seen figures of 8500 btu/person/mile for a solitary driver, so C & D must be assuming an average of roughly 2.5 persons in a vehicle, which is high (or were they all driving Toyota hybrids?). I have no doubt that nearly empty buses aren't fuel efficient, but ridership would go up if we did things like congestion pricing (which has won many fans in London) and had better availability of public transportation. My town is very convenient for taking a train into Manhattan, and it is one reason that house prices are holding up. The trains are full (and so are the parking lots), and they've recently converted to double-decker trains. Even prior to that (in 2002), our btu/person/mile on trains is 1597 (see http://www1.eere.energy.gov/vehiclesandfuels/facts/favorites/fcvt_fotw221.html. There is a long waiting list for parking spots at the train station, and I think ridership goes up after more parking is made available and the double-deckers are fully in service (well, if there are still jobs to go to in the city; many of Citibank's 52,000 cuts will be in NYC).
I think my $70/hr figure is after the new UAW contracts. It probably was $85 (or more) a while ago.
BTW, it is nice to have civilized discourse on this. I find that the bailouts (banks, insurance companies, auto, etc.) are one area where political conversations have found unexpected alliances and views.
posted on November 21, 2008 05:12:35 AM new
"Ever wonder why they're not popping up all over??? For the same reason the 150mph Acela in the US only goes a fraction of that: they have to share track with slower trains."
I agree. OTOH, having taken the London-Paris train a few times, there's no other way I'd want to go between those cities.
Infrastructure investment (e.g., new and dedicated track) gives a better return, IMHO, than throwing money at dinosaurs.
American autoworkers are among the most productive workers in the world. According to the U.S. Census Bureau, the typical autoworker produces value added worth $206 per worker per hour.1 This is far more than he or she earns in wages, even when benefits, statutory contributions and other costs are included.
The total labor cost of a new vehicle produced in the United States is about $2,400, which includes direct, indirect and salaried labor for engines, stamping and assembly at the automakers’ plants.
This represents 8.4 percent of the typical $28,4513 price of a new vehicle in 2006. The vast majority of the costs of producing a vehicle and transporting it to a dealership and preparing it for sale – including design, engineering, marketing, raw materials, executive compensation and other costs – are not related to direct or indirect manufacturing labor.
posted on November 21, 2008 07:37:24 AM new
Wow, I am impressed. Some very intelligent conversation going on here. I am the first to admit...I do not understand the complexities of the bailouts and I do not like them, but I really don't have much say anyway, on what is decided. I understand keeping jobs, but there needs to be give on both sides. Flying in on private jets and then holding their tin cups for handouts, seems very wrong to me.
posted on November 21, 2008 08:33:32 AM new
Roadsmith,
"I too was disgusted to see those CEOs sitting on their hands when the tough questions were asked about corporate jets, etc"
To be fair, Nardelli (Chrysler) was prompt in offering to work for $1/year. OTOH, since he recently got $210 Million to leave Home Depot, I guess he can weather the storm.
All in all, CEO comp and their jets don't materially matter, but it presents a miserable picture to the people who would be funding the bailout.
posted on November 21, 2008 09:54:25 AM new
I simply cannot understand the greed of CEOs. How much of that multi-million-dollar salary are they giving to deserving charities? Have they started a foundation? If they believe in heaven and hell, don't they know they'll have to answer to their god for the greed?
Part of the reason has to be that they're comparing themselves with others who make a ton of money, and they want to be at the top of the heap. What a way to spend a life.
posted on November 21, 2008 12:00:24 PM new
"So, Squirrel, your statement that the major cost of auto manufacturing is worker compensation is false. "
In the UAW vs the rest of the planet, I'll take the planet.
And perhaps you should find figures for big 3 UAW contracted vs the USA operations of Honda, Nissan, Toyota, BMW, and VW and not a generic "autoworker" stat.
posted on November 21, 2008 03:42:42 PM new
THIS WAS IN 2006 before contracted increases:
"GM's unionized workers earn an AVERAGE $27 an hour, $56,000 a year without overtime. Benefits increase the hourly AVERAGE to $73."
"David Cole, chairman of the Center for Automotive Research, says buyouts can be an effective way for an automaker to cut costs.
He says it costs U.S. automakers $130,000 a year on average for each active union employee, whether they are working or not. If someone retires early and takes a buyout, the cost drops to $50,000 a year. Once that person is old enough for Social Security and Medicare, the cost drops to about $20,000 a year.
“You can pay someone $80,000 to retire and get payback on that within a year,” Cole says."
A poster on a Dodge forum cites a UAW relative:
"If a UAW worker get's laid off they go into a "reserve pool" where they get paid 91% of their salary...for 2 years! And it's now only for 2 years because of recent "concessions" on the part of the UAW. Yeah, it use to be longer."
The big 3 have contracts with the UAW which gradually bring things to "normal" for new hires which may bring costs close to the rest of US car makers, but not until 2010. This includes the UAW running pension funding.
Huffington Post:
With the possibility of Congress giving 25bil, UAW says "no concessions".
posted on November 21, 2008 04:01:41 PM new
Well, "no concessions" is what the UAW says now. If nothing else works to change that, Chapter 11 will, or a "pre-packaged" bankruptcy.
The UAW is as reluctant to give up its goodies as management is. That's a tough sell to the people who are paying the $25Billion, many of whom don't have health insurance, pensions, 91% of salary when laid off, etc.
posted on November 21, 2008 04:35:42 PM new
Yes but the difference is that people rant on about execs lighting cigars with $50 bills, all 5 of them.
Exec arrogance may lead to lighting cigars with $5 bills. Union arrogance will lead to a few hundred thousand old people with no pension and no medical care with the double whammy that JQ public pays the welfare costs.
An economist said that for each "entitlement" someone gets, somebody ELSE has to take it in the neck. Leaving us with deciding if some HS teacher making $60K should kick in $1K to make sure some lug nut tightener maintains his $75k.
The UAW is severely damaged, with new hires basically in the UPS Xmas rush hires category. But "lug tightening" is not a career and it should not be allowed to become one. The only way to do that is crushing the Unions to size with representing a small skilled workforce with masses of semi-transient "lug tighteners". If the going rate for engineers is $70K, GM should not be forced to pay $100k because someone belongs to a union.
The evolution of an economy leads to unions becoming passe because skillsets become more specialized and valuable.
posted on November 21, 2008 06:24:36 PM new
"An economist said that for each "entitlement" someone gets, somebody ELSE has to take it in the neck. Leaving us with deciding if some HS teacher making $60K should kick in $1K to make sure some lug nut tightener maintains his $75k."
Squirrel, it has been quite a day -- I've agreed with you a few times today. I think it is the right day to buy a lottery ticket.
posted on December 6, 2008 06:15:33 AM new
Just thought I should correct the false information spread by the New York Times and other media that the average GM assembly line worker makes $70 per hour.
"The average GM assembly-line worker makes about $28 per hour in wages, and I can assure you that GM is not paying $42 an hour in health insurance and pension plan contributions. Rather, the $70 per hour figure (or $73 an hour, or whatever) is a ridiculous number obtained by adding up GM's total labor, health, and pension costs, and then dividing by the total number of hours worked. In other words, it includes all the health care and retirement costs of retired workers." Portfolio
In other words, no assembly line worker is making 70.00 per hour. That figure includes money that GM holds to pay costs of workers who retired years ago. It's does not represent the hourly wage of a full time UAW employee....regardless of what the New York Times has eroneously reported.
