Big 3 Bailout

[Cheetam]

Got the following link from a friend (yep, from the auto industry).  Interesting stats (of course, each side can present info to support their argument). 

http://www.levelfieldinstitute.org

There are a lot of factors that have led to where the domestic auto industry is today.  We can point fingers at unions, administrators, health care costs, "free" trade, bonuses...does it really matter?  We're here, let's look for solutions.  Let's just get some smart dudes together and come up with a plan to fix the problems (whatever they may be).

[dashaver63]

The CEO of our parent corporation was in our plant today and shed some light on some very interesting points, mostly about Ford. The projected "bailout", for Ford anyway, is not a bailout at all. Ford today asked Congress for access to a loan for 9 Billion "just in case". It all depends on the economy and car sales if the Detroit 3 are to survive, plain and simple. If for some reason congress denies the requests of GM, Chrysler and Ford, it would not only hurt those 3 but all auto manufacturing in the United States. Automotive suppliers are heart and soul of the auto industry, and very few are dedicated just one auto maker. So if a supplier loses orders from 1 or 2 manufacturing facilities, there is not enough capital left to survive on and they end up closing and going bankrupt. So then, when GM and/or Chrysler/ cancels orders, Toyota , Honda , Mitsubishi or who ever else had contracts with them also loses a supplier. It's a vicious circle that could have disasterous effects. I apologize that this thing seemingly took on a life of it's own and became a big debate about Union labor. There are so many underlying problems that you can't put blame on just one area. The big problem lies in the sum of the many parts involved.
WHEW! I agree Don, LET'S GO FISHING! (for a looooooong time, maybe when we get back things will be better.) Like getting put into a chemical coma untill the pain goes away. Saw that on House.

[1javelin]

Nice link, now tell them to explain why "domestic" is in quotations, what they mean by domestic, and why the same style of car costs more than a foreign made one?  Our R&D may be top of the line, but we invest so much into higher end research that it outweighs the end result.  I recently was talking to a driver for Reliable, who transports vehicles for a living.  He opened up the back for me to see inside and what did I see?  2 Tomahawk motorcycles, which they simply use for corporate gatherings, an oversized big wheel (yeah, the one you rode as a kid) with a hemi motor built into it, simply because they can.  When and where is any of the dollars these 2 items cost going to even itself out?  It's not.  It's our bigger, better, faster ego getting ourselves into trouble.  Drop the toy design and give me a truck that gets 30 miles to the gallon, and I think more people would buy a Chevy than a Toyota.  My opinion.

1Jav

[cr]

Jav thats what I tried to say in my first post ,how management spends money on stupid stuff like that , and worse , then turn around and blames the high cost of labor for the price of cars ......Nothing to apologize for D63 , I enjoyed the subject and thought everyone handled it pretty well,or almost everyone. Its a complex problem with no easy answers. I love a good debate and hearing new ideas or thoughts , even when they are different than mine . I'll leave it at that though , for now , lets fish and let fish !!!  

[dashaver63]

So Chrysler is shut down for 4 extra weeks to save money, but yet they are paying their workers 95% of their pay? Doesn't make a bit sense to me.

[motocross269]

That 95 percent figure shows you how skewed the media and public hype is..Kind of reminds me of the 75 dollar an hour figure that I have seen some right wing bozos drive up to over 100 dollar an hour...I am not blaming you Doug that is just a figure that the media and guys Like Rush have put out there...
The real figure is 85 percent..Which isn't really factual either...

360 dollars for maximum unemployment...Then 300 plus for subpay...but you have to pay taxes on top of that...So let's say 700 dollars minus taxes takes it down to around 450 dollars....The average line worker probably takes home around 700 dollars on a forty hour paycheck...So take home on subpay is less than 60 percent...

What is the benefit for the company???  The company paid into a Sub pay fund as part of negotiations that gave the big 3 the freedom to outsource jobs..They only have to pay the subpay portion of the draw..You the taxpayer in combo with unemployment insurance paid for by the company pick up the rest..That is why pretty soon the 15 billion dollar LOAN will feel like a steal compared to the amount the Taxpayers are going to have to foot as part of any bankruptcy or failure..

Trust me when I tell you 99 percent of us would rather be working than drawing any type of monies through lay offs...It is a scary time for us all..

[motocross269]

One other point to make, for the non-union workers...With NAFTA, and now Bush pushing CAFTA, and a big push in Korea now for a free trade agreement before Bush leaves office do you really think things are going to get better without true representation...With the Global trade agreements our wages will continue to self-level with the rest of the world until we are all making poverty level wages....With the outsourcing of manufacturing both union and non-union jobs will become fewer and fewer. There are only so many "would you like fries with that" jobs out there in the service industry and who can feed their families on those wages anyway..
If the American, blue collar working, middle class don't stand up pretty soon it won't be long before the division of the classes looks like it did before the industrial revolution...

[dashaver63]

Hey Motocross, good to hear from you. The President came through with the money, now lets see if any thing changes. About the jobs leaving the country, 99% of all the parts we make leaves the country, Canada and Mexico.

[motocross269]

Doug...(I reread my post and see that I called you Dave.... early day)  Hopefully things turn around for all of us soon...
My brother-in-law lost his automotive job in the Grand Rapids area early this year.  He was making 10 bucks an hour..It isn't like he was overpaid yet they shipped his job overseas.  A big part of outsourcing is due to government regulations and restrictions...

[dashaver63]

Yes, that is a big problem, outsourcing our jobs. and the government is concerned about 4 million unemployed workers?
Hopefully GM and Chrysler can make the changes they need to make to get back on track. Ford said "no thanks" to any kind of government help, but they should also start looking to making cuts now before they do.

[Skulley]

So Chrysler is shut down for 4 extra weeks to save money, but yet they are paying their workers 95% of their pay? Doesn't make a bit sense to me.

I don't expect the non-auto worker to understand this.  So let me explain................

These plant closings are subsidized by another fund.  The hourly employees get 90% of their pay before taxes.  That means they get 90% of their net take home.  Also add in unemployment compensation.  So that is 90% of their net plus unemployment.....which actually means they collect only about 70% of their pay.  This also includes any medical that the UAW now picks up.......not the company.  I am a UAW Salary Chrysler employee of 23 years.  This money is paid to the Bargaining Unit (BU) employee through insurance that the company pays into as a premium.  So the company actually doesn't have that much cost....so it does save lots and lots of money.

It is amazing to me how many people only know what the media tells them.  Until one eats, breathes, and sleeps this stuff I would advise that the uninformed ask the informed so that they can understand exactly what this stuff means.  The uninformed are on the outside looking in.  I live it everyday.  I will be happy to explain this to anyone interested.  After all, I am a negotiator for the Union in my roll. 

These temporary plant closings do not include engineering and the truck plant in St. Louis.  So that being said, I have to go to work since I am in engineering.  All the Salary Bargaining Unit (SBU)personnel report as usual. 

On another note, being in Engineering and a negotiator in Engineering, I get to rub elbows so to speak with Chryslers top management.  I assure the general uninformed (persons not working in the industry who only know what they get from the media) non-automotive public that Chrysler Management and the UAW are doing all they can moving forward to maintain viability.  If we are not a viable company then we will be in deep do-do.  Chrysler and the UAW are meeting daily and have been for months about how to get through this.  Remember, everything is negotiable.  Ron Gettlefinger has already in a news conference last week told the American public as well as our elected officials in Washington what this all means.  I would suggest anyone to visit the UAW Website at www.uaw.org to listen to the news conference and understand what this stuff really means. 

I am proud to be Union as the Union raises the bar for working families to preserve the middle class.  If the middle class is not preserved then we will all be the "working poor". 

Feel free to PM me with questions or even blog them here and I will do my best to answer them so that those that don't really know, do know and understand how this works.  I also have extensive knowledge of the "job bank" and how it works.  It is nothing like the Senators and Congressmen think.  Like Ron said,  "Legislators should stay away from the "collective bargaining table".  Weeks and weeks of work go into collective bargaining. 

Remember, we the Union people negotiate what we negotiate and a lot of others benefit from what we negotiate.  We keep the bar high.

Solidarity, Solidarity, Solidarity Forever!!!!! 


BD             

[BryanP]

First of all let me state I have not worked in an automotive environment.  However a good number of family and friends have, both as union and non-union members.  My friend worked at the Chrysler plant in Perrysburg and Twinsburg as a union member and hated everything about the union.  He told me daily about the laziness of fellow union workers and how they did as little as possible and in many cases sabotaged machines so they could shut down the lines and not have to work.  My Dad worked at Ford and also a Ford supplier as a production worker, and then in Managment/Supervision and talked constantly about the same shenanigans that went on and how it's basically impossible for a union member to get fired for doing stupid stuff that anyone in any other stitatuion would get fired on the spot for.  And another good friend was the supervisor at the Jeep plant who got shot and killed by a union worker almost 4 years ago, and I had to listen to UAW members talk about how they're surprised it hasn't happened sooner and that I have no idea how bad they have it--as in killing someone is justification for having to put up with a supervisor trying to get them to do their job?  I have many more examples but it would take too long to type.  I get that the labor costs on the news are somewhat skewed because the foreign manufacturers don't have the legacy costs that the Big 3 do.  And I think the upper management is as much at fault as the UAW for this situation since they've all been looking out for what's best for themselves and not what's best for everyone and the survival of the company.  Now they're all in a panic, their backs are against the wall, and their jobs are at risk.  The UAW claims they've made all the concessions they can. BS!  The job bank was on it's way out so that's a non-issue.  They've agreed to delay the Big 3's contributions to the health care plan--big deal, they'll still have to pay it later.

Say what you want about the demise of the auto industry having a ripple effect that will hurt the entire country, but I say let them go bankrupt and lets take our chances.  It's their own fault, both Upper Management for failing to adjust to changes in the industry, poorly negotiated contracts with the UAW, and paying themselves rediculous salaries; and the UAW for handcuffing the companies ability to do what's necessary for the survival of the company and imposing rediculous demands.   Chances are we'll be giving them more money again in March, and I'll bet Chrysler will be gone by the end of the year, whether it gets sold off piecemeal or goes bankrupt.  So much for "Solidarity".

[Durand Dan]

Both Big Dog and Brian P have valid points. As a former Production and Maintenance Supervisor for GM I have seen the sabotage that brings down a line or creates overtime and I have witnessed the teamwork that goes in to building a product.
It's not a secret that the Automotive Manufacturing businesses run by the US companies need reorganization. But do we have to completely decimate the middle class to do this?  The manufacturing base in the US has to thrive in order for us to succeed. We cannot live on service industry wages.
As far as some of the problems that need to be overcome?  Just today I saw a commercial put out by GM for ONSTAR that states GM has 50 different models.  Why do they need 50 different models? They don't need Chevy, Pontiac, Buick, Cadillac, Saturn, Saab etc. One offering can easily provide the variety needed to bring in customers.
The car companies are going to change the way they do business. But we certainly don't want them to fail.

[motocross269]

Brian P...I have worked both Union and Non-union and also spent some time in the Army on both active duty and Reserves. (Retired last year)...Your comments are based on stories of ancient history and heresy.  Things have changed dramatically in the plants and the stories that you are talking about are far and few between..
In over 10 years of working skilled trades in an automotive plant I have never seen any sign of sabotage...I worked another 10 years prior to that building and installing machinery in union plants all over the country and never saw any sabotage in that capacity either.
You label all union workers as bad because some bozo killed his supervisor...I would bet that murder of ones superior has happened way more in the military, does that mean all soldiers and the organization are bad...
I have worked with great people that are genuinely concerned about their job in Union and Non-union jobs...For you to lump a few bad apples together and Label unions and Auto employees bad is a mistake...I would consider it on the same level as racism...
I wish I could give you a tour of my plant and you would see Union, management and engineers working together to build a world class product...My plant was rated number one in quality in the country for manufacturing by quality magazine....We beat out hundreds of plants around the country both union and non-union...The success of our plant would not be possible without all parties coming together....To include the union..

[dashaver63]

Being involved in the UAW for nearly 20 years, both directly and indirectly, I too have seen both sides. I remember when a new machine was brought in to our plant to drill the bolt holes into the end of a crankshaft, it sat idle for almost 3 months because the Union had not got with the company to put a rate on the machine, and the ones scheduled to run it refused to run it with out the piece rate. Thats just one example of why I got out. My dad retired from the same plant after 35 years of service. I was even able to make 2 trips to Black Lake to the UAW center up there. I guess the thing that really gets me is that with what ever consessions the Union has to make, they are going to paint the picture that they are being singled out again, they are being persecuted by the government. Thats not the case at all, I already know that the suppliers are going to be hardest hit with new contracts. GM and Chrysler are going to want price cuts for their parts, knowing the suppliers really have no choice but to comply if they want to stay in business. That will cut into workers already making $10 to $12 dollars an hour and paying large sums every week for benefits. We already give back 6% of cost every year, and now we'll be losing even more. You don't hear about that on the news, we are the very bottom of the auto industry, and the UAW the executives of the Big 3 want to make sure we stay there. I'm sure the UAW and auto execs will take token conessions just to show they did something, but believe me, the suppliers will take the real hit when its all over.
All I hear about is preserving the "middle class", but at what expense? Someone will pay for this, and I'll bet it won't be the Union and thats just not right. We all ready don't have much, and to think we'll have to give up some of what do get so that UAW workers can preserve their way of life? How is that fair?

[cr]

FAIR    Whats fair got to do with it ? Is it fair ?  Life is not fair , it's A fair so make sure you ride all the rides. Most of these suppliers jobs your talking about are ex-union jobs that were outsourced in the last economic slow down in the 1970's . In 1979 my plant manager took his severence pay , built a building , and installed the exaust manifold line that I just got layed off from two weeks before . They made me work 12 hour days to for months build up inventory so as to not run out of stock . His name was Bob Carpenter and his company was Carpenter Enterprise . My younger brother hired in for minimum wage doing the job I was layed off from . This is just one example , I know of many others . At one time everthing was done in house before managers figured out how to outsource "union" jobs . Was that fair ?  Why are so many people ready to blame the union workers .? Dash , your example of how the union did'nt get with the company to rate the machine doesn't make sense . Shouldn't the company have got with the union ahead of time ? They must have known the machine was coming , isn't that their job? To plan ? There are  two sides two every story . The union isn't perfect , I've said that before , but back when GM was the icon of america the union was there .

[dartag]

You could definitely see the President was not happy to loan the money.  His own party let him down when they did not vote for it.  I am sure he did not want to go down in history as the President who started the next depression.  It is sad to see the southern states that are supported by the foreign automakers be able to dictate the lives of the rest of the US.  They are hurting also.  Toyota is delaying completion of a plant to build the Prius in Alabama.  There stock is half of what it was a year ago.  When they start cutting back I bet you see those states begging for assistance.  Hopefully all parties will get this straightened out so we can get back to talking about fishing. 

for some interesting reading check out. 

http://www.boycottalabamanow.com/


Good wishes to all this Holiday season.

[motocross269]

http://www.msnbc.msn.com/id/28239206/

Ed Wallace does a great job puting the LOANS into perspective and getting to the heart of why there is a battle going on in DC...

Billions of dollars a month going to countries over seas that hate everything the US stands for yet when we have the opportunity to help ourselves Politicians and US citizens balk...I don't get it..

Doug is right on the battle that vendors have to face...But I believe part of that battle is a tool to lower wages through the threat of sending jobs overseas...Doug I would like nothing better for all the suppliers to make a fair wage and get good benefits, that would make all of us stronger..

[Buckeye]

This is my take on the union/non-union position.  I have seen both good and bad unions, been a part of each, and was glad to have their representation when it was good...and glad to get outof Dodge when it was bad.

I think what is really hurting the union in this whole discussion is legacy costs.  I just wonder, being a college graduate in sociology, if anyone, either on management's side or the union's side, took into account that people would live longer.  I mean that's what is really killing Social Security (add in gov't tapping into it, and people receiving it who didn't pay into it).  I think it's possible that no one allotted for the growing population of retired people. 

I hope this bailout works.  I do.  But if you look into history, it was all the meddling by the Roosevelt administration that extended the Depression for 10 years.  My wife just had an all hands meeting at GE.  They are cutting 8% in her sector, but thnakfully her department was running lean already.  Her department is exempt.  There is apparently a hiring freeze inside and out at GE.  We are tightening our ship at home,and hope to spend enough to help, but protect ourselves as well.

We can argue about it all we want, but at the end of the day, I hope you all take time to pray for your fellow man, one and all.  IMO, we have become a selfish people, and now it's coming back to haunt us.  I increased my giving to the United Way this year,and just went shopping for our food and toy drive at work.  Then out of the blue, a co-worker lost her home to fire, and her daughter lost everything.  This little ten year old girl not only had zero Christmas presents, but no clothes or shoes.  My wife and I bought her shoes, socks, a pajama set, and a toy last night.  Some say we are wealthy, and I agree we live comfortably.  But I will never live comfortably enough to watch someone else do without.

God bless!

Eric

[BryanP]

Motorcross, if the past 5 years are ancient history, then yes it is ancient history.  I could name many more examples like the guy I know whose job was driving cars off the line.  He was drunk at work regularly, and crashed enough cars that he was removed from a job, but not fired.  And he was proud of that!  Or how about the guy I used to fish with who worked at the GM foundry in Defiance who bragged about how he would spend his day, most of it consisting of parking his forklift, reading the newspaper, drinking coffee, and hiding.  Of course he's also the guy who complained about how bad he had it and tried to justify the killing of the supervisor at the Jeep plant, saying "you don't know what its like to have some hot shot young supervisor telling you what to do all the time".  I realize not all union members are bad, but this mentality is.

I don't think we should be sending billions of dollars overseas either, but unfortunately that's never going to end.  And we have Bill Clinton to thank for NAFTA which opened the floodgate for overseas outsourcing.