Last week's deal was supposed to hold both the managers' and unions' feet to the fire. In handing out the taxpayer money, the White House insisted the auto union cut worker pay roughly to the levels of their successful competitors, Toyota, Honda and Nissan.For $17 billion in emergency bailout cash and possibly much more later, it was a reasonable request. As President Bush said, "The time to make the hard decisions to become viable is now — or the only option will be bankruptcy." He added that a deadline of March 31 for the industry to prove its "viability" and other limits "send a clear signal to everyone involved."
Well, if so, the United Auto Workers didn't get it.
Just days before Christmas, the UAW let it be known it'll fight any concessions on wages and benefits. "An undue tax on the workers" is how union boss Ron Gettelfinger described it as the UAW reneged on the deal almost before the ink was dry.
This will go down as one of the most cynical acts of political manipulation ever. The UAW agreed to one thing with President Bush, knowing full well President-elect Barack Obama and congressional Democrats were big recipients of union largesse and would let them slide. They read the situation correctly.
h/t
What doi you think the coalition was about. Layton was supposed to be Industry Minister, in this environment that means Minister of Bailouts. You think the unions didnt want a fanboi there?
And we're supposed to be surprised? This A******S will keep on doing what they're doing until they don't have a job. And, even then the American taxpayer will get stuck for their pension benefits.
What a joke!
Well I guess they don't care too badly about saving their jobs. Why then, should we??
Get ready for the contract ON America. And Canada, for that matter.
I can only do what an individual can do in this case: If the Unions do not accept that they have to take pay cuts I will not ever again buy a Big 3 product. I drive a 2005 GMC half-ton, fourth in a row since 1994, but it will be the last.
The Toyota Tundra looks pretty good to me.
North americans can vote with their vehicles when it is time to trade in. Drive into the lots of the Toyota's and Honda's of the world. Seems that the auto workers unions just don't want to wait for the asteroid.
In that case:
You get NOTHING! YOU LOSE! GOOD DAY SIR!
I cannot picture anyone, who has a distrust for unions, ever buying car again from one of the U-S auto companies.
The union bosses attitude seems to be "We will concede nothing except our own jobs," and the next contract will weigh 44 pounds instead of 22.
TOB, Americans already are unfortunately, which is one of the reasons the auto manufacturers find themselves in their current unenviable situation. The media has done everything possible to undermine American manufacturing. I, on the other hand, will buy GM products until there are none left to buy. At that point, hopefully there are still Ford products. Otherwise, I'll be the 80-year old woman peering over the hood of her 20-year old Deville Touring Sedan.
This is about claiming the spoils after they (one or all of big 3)go belly up. Fairness and doing what is morally right has nothing to do with this gang(Ron Pullmyginger and the UAW)
I have spoken with my local MP and was quite clear on the matter. Any Federal bailout for the car companies must contain concessions on the part of unions. Otherwise my days as a political activist for the CPC are ended.
Why support any part that has little or no fortitude? One can only sit in the middle of the road for so long.
Two brand new North American Auto Plants,(Toyota in Woodstock Ontario, and Honda in Indiana) are ramping up with flex lines capable of building what the market wants. I have no doubt that that modern companies such as these are poised to take over the market share if, and more likely when, one, two, or even three of the Detroit three fall.
These large multinational(affiliates) unions will not give an inch. Reason they are terrified of the certainty of there demise. The dollars per hour to be cut,and there will be cuts, is the dollars that are going directly to the unions to run their "programs" such as community-worker-feel-good group-hug isn't socialism wonderful(for us)spiritual sessions, as well as the gold plated pensions for union hierarchy( please note here Buzz Hargrove). Does it not seem odd that Buzz retired from his union chief job when this crap started coming down, instead of staying to fight the GOOD fight for the union membership, for the first time his membership needed him and Buzz went for retirement. With these unions gone the worker costs would be more comparible to the "transplant" workers costs.
I don't blame the unions for this. It's exactly what I would have expected. The fool's are the CPC (spelled NDP) government we elected and Canadian taxpayers.
"An undue tax on the workers" is how union boss Ron Gettelfinger described it as the UAW reneged on the deal almost before the ink was dry."
It's hard to believe the arrogance of this executive! "An undue tax on the workers"! What in hell does he think the whole bailout is!
It's an undue tax on all the rest of us, to keep him and his cronies fat and sassy.
Cut off the bailout, let'em go down the drain.
It's time to rethink the whole bloody system. Welcome to the Great Depression, part 2.
The whole thing is just a bizarre crooked poker game with the taxpayer tied in one chair and with everyone else bluffing and BS-ing while stealing from his stack.
The union establishment isn't fighting to build cars, they want early retirement and medical plans on the taxpayer's dime. What they really don't want is bankruptcy, new management, new young workers, and a fresh start with them and their old management buddies out on their asses.
The problem here in Alberta is, we need trucks to do business. Only the big 3 can provide suitable trucks. Nissan and Toyota have both flopped on their first attempt. Maybe they'll build some better stuff in the future, but for a couple of years, we need to keep those big 3 plants working.
You office zombies can fart along in your little hondas, but the people doing the actual work out there need real work vehicles.
Most of the people in my social strata will never buy anything but Detroit iron. I'll probably only buy a few more vehicles, and I doubt they'll be "foreign", but you never know. Any trucks certainly won't come from across the pond(s).
So, who are "we" angry at? Well, it's a long list. We're angry at Detroit management for taking so long to respond to market situations. We're angry at greedy union bosses for not having the foresight to realize they were destroying their members future. We're angry at government for allowing foreign companies to "dump" products into our economy. And most of all, we're angry at all you zombies who blindly believe that foreign is better. You remind me of those aging tarts that hook up with some guy with an accent. You don't catch on that he's just looking for a free pass into the country.
Ford will survive a bit longer, but Chrysler is gone. GM will have to be restructured because they are no longer a "car" company ... more like a retirement haven for fatcats.
We will see only two US-based car companies soon ... and their product lines will be heavily rationalized to get rid of the excess and losers.
Factories will be closed because there is large over-production capabilities. Canada will lose more car factories and we will represent much less than 20% of the production.
By 2010 we will have a new and smaller US car industry ... and Ontario is gonna hit the skids big time. Forget about equalization payments for the Maritimes, socialist Manitoba and bloated Quebec now ... it's gonna be "throw them off the boat and let them swim on their own" time ....!!!!
Picture this circle of cash:
North American taxpayer buys GM/Ford/Chrysler/ Vehicle.
A percentage of that purchase goes to the employees who built the vehicle.
The employees then pay a percentage to the UAW.
The UAW sends some of that money to lobbyists in DC as well as campaign contributions to key Democrats.
Campaign contributions help elect Obama and other democrats.
Elected officials then dig back into north american taxpayers' pockets - even those who have never purchased a vehicle from Ford/GM/Chrysler - to help keep them alive.
A portion of this is then given to the workers, who give to the unions, who give to the lobbyists and elected officials, and so on.
How can one NOT envy the UAW?? This is a completely brilliant (and apparently legal) scam. All we need now is Madoff to manage their money.
Odd that no one says much about the 570,000 members of CUPE .
I can't speak for what Obama will do but I think that Bush made it pretty clear that the Big 3 and all stake holders have until March/09 to get their stuff together - or the loans get called. I think he is serious (and I think that Obama will be just as tough). I think that all stake holders are trying to draw up initial battle lines.
It is my understanding that the average total compensation for Big 3 workers is about $71/hr. This includes legacy costs of about $16/hr (which - maybe for tax purposes - is divided among the active workers - these are pension costs). The Big 3 also have more generous health plans.
The total average compensation for the Japanese is about $49/hr. The legacy costs are about $3/hr (and I am not sure if it is included as part of a workers compensation). Note that the first Japanese plants arrived in the late '80's and so they do not have a lot of pensioners. However, their pension plans are supposed to be skimpier and their health plans are skimpier.
In terms of actual wages for example, Toyota actually has an average wage of $31/hr, followed by GM at $29/hr (which I think is representative of the Big 3), followed by Honda at about $27/hr. The base wages for a new worker at Toyota is slightly higher than the Big 3 or Honda at about $16/hr - because they are trying to attract better workers.
Mike in White Rock, This is a while ago but I read that the Ontario Government is on the hook for Big 3 pensions (this needs to be checked out - but some sort of pension guarantee agreement was worked out when the Big 3 got into trouble a long time ago - and this is probably similar in some US states). This means that the Ontario taxpayer could be paying up to $2.2B a year until these pensioners die off. Also, Ontario collects over $600M a year in taxes from these pensioners (and I think that Ottawa gets almost as much). So I think I understand why places like Ontario and some US states are so big on some sort of bailout/loan thing.
I only drive fords, btw.
Stop payments to the corporate welfare bums. Let them sink!
Those assholes of the political and union class always seem to forget one thing, it's my god damn money they are spending. In my latest 2 ½ year venture at 65 years of age and using my retirement money, nearly 350k to date, are they going to bail me out if things don't work out as expected? We all know that answer to that, not in a frosty Friday in hell.
One thing I know for sure, unless there is one big attitude adjustment in this Country, Harper included, I will as I did during the cretien years, pack up and head the hell out, again. Both classes seem to forget, money does talk, with it’s feet, and my tolerance of both is very short fused at this point.
Western Canadian- Where ya gonna run to this time? I've been thinking about leaving too, but can't think of a single English speaking country that's any better off. Personally, I think Switzerland is the best bet, but they're a little strict on immigration. What do you know?, maybe that's why they're so desirable?
The CA was beginning to change its tune, based on the idea that the UAW was going to collapse and offer concessions.
This is somewhat about tactics. The public will be quite angry if any of the three, possibly 4 stakeholders dont cooperate...those are
1) Bondholders, need to turn into equity to relieve the cash drain and improve th ebakance sheet (ultimately to allow more borrowing)
2) Unions, workers need to take an hourly paycut and/or reduce the workrule restrictions to decrease the effective wage. Also cut in bennies. Point is ot make a car that is less expensive to produce. Decreased workrule restrictions would help the car companies without reduing actual per hour wages, but that only goes so far
3) Management - foregoing of bonuses, decreased bennies and defintiely decreased numbers. Probably freezes on salaries if not reductions in salary.
4) Pensioners, have to take cuts in benefits...in the US thi smeans that the payments into VEBA will be reduced significantly....there is a theoretical point that if VEBA was cut lose today that would generate "x" reduction in benefits. There are 10's of billions in payments due to VEBA over the next 2 years from GM alone.
Public sympathy probably is highest with retirees and lowest with bondhodlers...although none of the players is held up as a paragon of virtue.
I m not sure how this plays out...other than if the union dosnt concede anything they really are done for as a force with any public support. This means they are on their own completely for the future...whcih could be only 6 mnths from now.
Small tidbit. The car lots are completely full, no more can b shipped here and the domestic production cant sell what they make. Here, and in europe. Expect major major sales on cars in the next 6 months, I am talking 50% off new vehicles, and until that inventory starts to move, those car plants arent being called back into production.
Once people get used to a lower price they arent buying again at a higher one. UAW would be better placed to cut a deal now because without it it is only going to get worse. The Auto companies would love a strike, because they dont need to produce and they pay nothing to idled workers.
The bill to the taxpayers is only going to go up. Bush and Harper were trying to provide bankruptcy financing wihout the judges gavel. First sign of instransigence the government should eithe rwihdraw the financing, which leads to insolvency or look at a more radical solution
The radical solution is
Take complete owenership into a new company. Hold it there for a day. Spin out the assets into a newco, make an offer to the old worlers at a wage and contract without a union, keep all liabilities in the government entity.
Once assets are spun out, shouldnt take lone, declare new entity insolvent. 9.9% government ownership in newco funds whatever to pay liability holders.
1) Forces liability holders to deal
2) Breaks the union
3) Preserves the assets
4) Does it quickly (which is key)
This is the only solution if the industry is as important as everyone is saying, including the union. If it isnt then this solution snt required, but then no other solution is required either.
All stakeholders compromise or the very brutish and ham handed fist of government will impose a solution. This threat must be real and credible, and must be swift if done.
My bet, labour, like other constituencies that backed Obama, are in for a bit of a surprise. This guy is a politician and if there are more votes staring down the union, he'll do it. Unlike some I dont think he is in anyones pocket other than his own self interest. There was no agenda there as far as I could tell.
Who cares what brand a car is if it is the best value? If you toss money at a company that is grossly over-charging for it's products because they need to pay for the zillions of retired union workers ... well that's up to you. There is little value in that ... I called that being a sucker.
I quit buying Detroit 'junk' about twenty years ago when I realized that Japanese cars were a far better value.
I hate that we are tossing tons of tax-payer money at this quagmire of greedy unionism and corporate stupidity.
dp it isn't English speaking and isn't particularly a pleasant place to live, but it has it's advantages. What you have to pay to do business is considerably less than taxes here and the single biggest advantage, you don't have to put up with idiot simple servants every time you want to change the way you do things. Where, sorry, for obvious reasons.
Thanks suckers. Chrysler spent $100k on an ad thanking taxpayers for their money.
Did you have a choice? No.
The unions are only one piece of it, and management are doing their part in the theft of taxpayer cash.
Thanks Cons - for revealing yourselves as the corporate welfare specialists. Buttering your buddies buns with other peoples cash is fun, no?
http://nalert.blogspot.com/2008/12/chrysler-thanks-suckers-chrysler-spends.html
Thanks Cons - for revealing yourselves as the corporate welfare specialists.
When was that ever in doubt, hardboiled? There is also the bitter class hatred shining through. But it is funny that one never hears the call for means testing when the friends of the right waddle up to the trough for a bailout.
Besides,here in Canada the talk is of a loan, not a bailout, if I'm not mistaken.
harboiled, but soft of brain, if the Conservatives hadn't agreed to short term loans for two of the big three you'd be screaming that they were letting the workers down.
"Buttering your buddies buns with other peoples cash is fun, no?"
That line is a perfect example of Leftist Mental Disorder, your sick dude.
95% - Chance that the UAW was going to pull this little trick.
0% - Chance that I was going to be surprised by it.
"There is also the bitter class hatred shining through."
More Leftist Mental Disorder, a little too much Christmas Kool Aid?
A little off topic, but didn't Ontario Premier Bill Davis cut the PST on Ontario made vehicles to stimulate car sales and the Ontario (Detroit) car factories survived? Would this not be a better free market 'hand up' then the 'hand (loan) out'?
" here in Canada the talk is of a loan, not a bailout"
You're not mistaken about "the talk", it's just irrelevant. Here's a timely comment I just picked up a few moments ago.
"...while the bailout comes in the form of loans that are to be repaid, Prime Minister Stephen Harper said the public money is “obviously” at risk"
Obviously at risk. Did you get that? Insolvent manufacturers are getting billions in so-called loans and supposedly they'll be able to pay them back while getting themselves profitable. Try that idea at the bank if you need a loan.
Stupid fools! They're determined to go to extinction like the approx. million unionized unsustainable high-pay-and-benefits jobs lost in the demise of the American steel industry. Isn't the definition of idiocy repeating the same thing and expecting different results?
Ulianov--it is NOT government money--it is taxpayer money. The government has no money to give out except what it taxes from us.
Ulianov hasn't been paying attention, has he? Most commenters agree that management and the unions have to take a cut in pay if these companies are going to survive.
The UAW will refuse, management will lay off workers or keep plants closed, the union will go on strike, the company will go bankrupt then no more union jobs at these plants. It's happened before and it will happen again.
I know this - if the UAW/CAW unions do not step up, I will never buy another vehicle made with their labor.
Yes, Ulianov, big 3 execs need to take a big hit. My suggestion is they be forced to resign, so somebody who knows how to lead a business, rather than run it into the ground, can take over.
It's repulsive to me that executives get this compensation for losing $billions. Having said that, even if all senior executives worked for free, it wouldn't stave off bankruptcy, unless labour costs, particularly legacy costs, are brought under control. It seems that big 3 can compete for workers on hourly pay, and they do actually make some good vehicles, particularly heavy duty and light trucks.
Their survival depends on doing a better job of identifying their markets, focussing on their product strengths, and getting their benefits costs reduced or at least under control. Their competitors' legacy costs will surely rise, which will eventually inflate the cost of their vehicles; but, will big 3 be around when that happens?
I am not at all optimistic they can survive; so, the taxpayer will be wasting their money, and still end up paying more for their cars. Somebody else will have to make trucks. Auto workers will pine for the days when only a quarter of their total income was "taxed" away.
Stephen, I hope, for the sake of beleagured big 3 shareholders, they don't swap (if that is possible) bonds for shares. Wouldn't that mean a double dilution of the stock - first, when bond actually issued, followed by further increase in share volume, with same/more debt level with new bond, or other debt, issues?
Like I said, I think they're screwed, and the UAW has zero choice but to take a big hit here.
Most commenters agree that management and the unions have to take a cut in pay if these companies are going to survive.Posted by: Bruce at December 26, 2008 2:46 PM
Hey bozo - if a for-profit enterprise can't exist without handouts from politicians - transferring money from one to another by force - then how why should that same for profit company exist?
The unions (bless their envious, angry, and greedy little hearts) are only part of the story. Crap management and shitty product are the rest of the story.
So, taxpayers get to pay for favored and irrelevant industries - for a short period.
Do it with your own money bozo - and buy their shares. No? Then you are just another faux-con prancing around pretending to be smart. Professional apologists to be sure.
Try Ayn Rand for a good read. It'll help dilute the partisan bailout brain you have.
I opened my wallet to give to the Salvation Army a couple of days ago, and there was a lying Con running around in there. Who knew?
ulainov
please, please, please, quit demonstrating your absolute and all encompassing ignorance
if you read a little in here you'll see that YES we do condem managment waste and stupidity (wages and percks)
also I'm a little more informed than most (you) about union supported waste in production
and as to your % of labour cost per vehicle, you lefties have no problem supporting a 0.000158% impact of man made CO2 on the climate, but 8-10% wage impact on auto production is irrelivent. This just shows you are ignorant of fact and understanding of manufacturing. You see a 1% factor CAM make the difference in many cases, especially when you consider ACCUMULATED effect.
Ken Lewenza email- cawpres@caw.ca Let him know what we think.
Ulianov,
I dont know anyone thinking that the whoile problem is solved through labour alone. But if direct labour is 7% of cost ot dealers (gving you a break on that one as opposed to cost to consumer) then there it still represnets about $1300 in costs. Even knocking it back by 20% or down to 5.5% of cost reduces cist by about 350....multiply that by 15,000,000 (number f cars they sell in NA) you get a significant annual contibution to salvaging the company.
As for whether or not they provided concessions in the past...who cares....they go benefits in the past....who cares....its about what life is like going forward.
The workers past (health and pension) and present (wages and bennies) are two of the 4 legs of the stool. Bondholders (suppliers of capital) and management are the other two. They also need to and will take cuts.
If the companies need a government handout then none of the stakeholders can say they are fine and arent to contribute anything. Clearly the companyies, as they are currently structured and costed cannot stand on their own. The CAW and UAW face the bleak choice of the jobs at lower wages or no jobs. Even at 80% of pay most of those workers are making more than would make in any other alternative they face.
The most damning piece of evidence is that other assemblers pay their work force less and face fewer restricitions on work rules and production. Unless you can point to the CAW acheiving higher levels of productivity and quality then the premium isnt jusified. Sucks to be them but other companies have faced similar situations and didnt get any money from the taxpayer.
This problem has been brewin for over 20 years, it is now at a boiling point, but all parties have been ignoring the inevitable.
If the union thinks being intransigent is helping the members it has a twisted view of help. Once those jobs go, they Are not coming back. The transplants will setup anywhere other than Oshawa because they dont want to have to deal with a thick headed union membership and its leaders. Thats just reality.
Keep the jobs you have for 80% of pay or have no job at all at even that rate of pay. The union is best to accept the reality, minimize their loses and ensure that there is a healthy employer and employment environment left when it is all over with. None of the stakeholders will be spared, and if any of them think so then none of the stakeholders will survive.
All contribute or all lose everything. I dont like it, its just the way it is.
Further to the 3:13 post, if you are a union member, include your union local and number.
hardboiled, soft brained, where did I say that I agreed with the short term loans? I didn't.
I think that GM and Chrysler should go into bankruptcy protection, that way the executive suite can be swept clean and the union contract will be toast.
And you are one sick dude.
They have two options:
1) Allow concessions voluntarily, and be part of the solution to the problem(although the problem is much larger then just autoworker pay)
2) Do not agree with concessions then the big 3 go to bankruptcy court. Then the judge forces them to make concessions (northwest air anyone?)
Either way, autoworker pay and benefits are going to go down.
And people are surprised by the UAW backpedalling because... ?
Michael Ramirez nailed it Dec. 19.
Limbaugh was correct: the $17B bailout wasn't a rescue of the Big 3, but of the UAW. They are about to find out the hard way the simple economic law that any good or service priced higher than market pricing leads to a surplus of that good or service.
It's a pity the Big 3 didn't tell congress to shove off with their handout with idiotic restrictions, and file for bankruptcy on their own. They could still operate this way, but could restructure, address the crippling legacy costs, and put their labour costs in line with the transplant competition. Then, if congress would get rid of idiotic CAFE standards and other business-hampering laws, the automakers could perhaps concentrate on making cars that people want to buy, rather than moronic little putt-putt golf carts that lie optimistically in lots, waiting for a sale.
The best thing congress could do for the Big 3 would be to ease oil drilling restrictions. More cheap gas = more large vehicles that (North) Americans prefer, vs. the H-O scale vehicles the government is trying to shoehorn everyone into.
mhb23re
at gmail d0t calm
For those who seek historical parallels, google the History of The British Motor Inductry. Unions demanding and getting government bailouts for unproductive industries due to bad work-force practices. Ultimately, of course, the bad workforce is the result of bad management; but I digress.
A quick Q: Why is Ford doing so well in comparison to GM and Chrysler?
tj, I ignore you. Now, what were we talking about?
Ulianov
Everyone here knows they all screwed up, except perhaps, you. Union members, management and politicians are all complicit.
Tell us something we don't know. There are people out there whose wages are one-third of that of UAW and CAW members make. Yet their taxes are expected to pay for those who refuse to make concessions to save their own jobs. Quit your whining and sell your propoganda to the EU.
Ulninov
Wheather you like it or not it is up to the OWNERS how they run thier companies not the employees.
This does not give the employers the right to ask the public for bailouts to keep over payed employees employed.
If empoyees do not like thier employment than they should seek new jobs in other sectors.
Having a JOB is a privlage not a right.
Survival is a right and you dont have to have a job for that.