In summary it is still U.S. tax $'s being used to support an Italian company, while transferring new production to low-cost foreign factories (Fiat could have chosen somewhere in Eastern Europe if it weren't for the added transportation costs).
Fiat will only keep as much U.S. production around as necessary. The lower and middle-class of this country are paying for their own demise thru their tax $'s supporting policies that ship jobs overseas. Nothing new right? We've just been doing it for years. And the result is we now we have a society deep in debt, with few good jobs left - especially for those without a college education.
I think they are all Union in Mexico. They get a decent living wage and health care. Not the gold plated health care the UAW workers get for life. That is why Chrysler is now owned by VEBA and Fiat.
All Chrysler factories in the USA are UAW as far as I know. VEBA is the entity set up by the UAW to pay for health care due the UAW retirees. All the D3 owed VEBA billions to keep it afloat. Obama gave VEBA a large percentage of Chrysler in exchange for that money. So if C survives VEBA will have some money for the retirees HC. If not they go on Medicare like the rest of US. Unless they are younger than 65 then they will have to pay their own HC.
I am sure you are right. The supplement can be very expensive. To have a HC plan with no co-pay as a supplement to Medicare is very expensive. That is my understanding of the UAW retirees HC plan. Think Free Viagra prescriptions. Supplemental coverage can go from $0 per month as I have with Kaiser, to $hundreds per month.
Trickle-down wasn't about shipping our money overseas - that's driven by globalization. Trickle-down was more about letting people keep more of their $ and spending it in this country to stimulate further economic activity. Instead Wall Street in the demand for ever-increasing profits, along with both the Dems&Reps ho are bought and paid for by corporate $, directed the economic activity off-shore.
In theory trickle-down is great and would have been great for the U.S. if the $ stayed in the U.S. Instead trickle down was great for foreign nations. The hose was pointed the wrong way by our leaders.
I was asking if our domestic auto makers' factories in Mexico were unionized by the UAW.
It was my understanding that they moved heavily into Mexico because the UAW had a contract requiring any factory built in the US to be unionized by them... thus pushing our car makers to another country.
To wit, someone replied that the auto factories in Mexico were unionized... so I wanted to know if they were unionized by the UAW or a local union. The UAW has a history of asking for the world - while the former Big-3 had a history of giving it to them.
I don't think there is any affiliation between Unions in the USA and Mexico. They are not near as radical as the UAW. Probably a better balance between labor and management.
A lot of disastrous deadly ideas look awesome "in theory"...
Yes whether it is capitalism, communism, or anarchism, people ruin the ideology. "Trickle down" worked; it's just that people turned the garden-hose of "trickle-down" in the wrong direction, and the poorer people of the developing-world gained, rather than the poor and middle-class of the U.S. Now if "Trickle-down" had some clauses attached to it that kept factories and other services in the U.S. ...
Anyway did you see that Fiat has just reduced the powertrain warranty on Chryslers from Llifetime to 5 year/100,000 miles? A Chrysler spokesman said people really didn't care about the lifetime-warranty. Huh? Wasn't that about the only thing Chrysler did during 2008 to try and differentiate and revive itself? That was their best effort and now it's being given a - "so what, doesn't really matter"? It either makes the corporate execs. look EVEN STUPIDER, or the new owners look like poor liars in an effort to save some $.
Anyway I see either warranty being worth a couple of years, as I don't see Chrysler making it, as they will continue to lose $ and eventually it will be too politically tough to justify keeping the last few jobs.
And the top few of the developed world gained more than anyone....which should serve as a warning for any other wild ideas. No matter who you choose, you lose....the "free marketeers" cry murder when limits and clauses come into play.
I can't see those 10 year warranties being honored in 9 years anyway, even if the company is still around, the obligation will probably be voided. Besides, who keeps those cars so long? Indeed, harping on the offer makes the execs and their cronyistic marketing teams look as foolish as we know they are.
And the top few of the developed world gained more than anyone....which should serve as a warning for any other wild ideas.
I don't know if "gained more than anyone is true". I do know that a lot of poor people in China, India, and other countries - like Vietnam, Thailand, Mexico, Latin America now have substantial middle-classes, where they were much poorer 20-30 years ago. I would guess that at least 100M people world-wide have made major advances from just the losses in U.S. jobs being shifted over the decades.
China for example went from having no middle-class and no auto market 30 years ago, to now having the world's largest auto-market. This is a result of "trickle-down" which stimulated the global economy, which was misdirected from the U.S. economy.
So trickle down was not a Win (wealthy) - Lose (global population) - Lose (U.S. middle class and poor); it was a Win / Win / Lose.
I suspect the gains by the top few in raw dollars exceed other gains. Wealth has consolidated more than at any time since before the depression - this requires some huge fortunes to be amassed. Those middle class claims are also somewhat relative. This wasn't done to help others, but to make a few very very undeservedly richer/
I see it as Win (wealthy) - Pretense of win/ruse of altruism (less developed regions) - lose (average citizen in the first world)
If you're wealthy and willing to invest in a business, and you go thru all the hassles of starting a business, then the workers should be glad to give the "lion's-share" to the owner.
Both win-win, in that the owner makes more, and the worker makes more (than not working). Of course a worker need not work for an owner and can start his own business where he will earn what he can based on his merits and talent.
You're not one of those people who think everyone should be "entitled" are you? That makes no sense - sounds like modern-day union philosophy. IMO unions had valid, justified reasons when they were formed, but most now are distorted-monsters of their origins.
Fiat and Chrysler will fail if they keep doing business with expensive unions producing their cars, and doing business as usual. Fiat is fairly smart in moving to Mexico and other such places, seeing the writing on the wall of global competition. But I am not happy as a taxpayer to help pay for that too! Adding injury to insult!
Real wages have declined in the past 10 years except for those wealthy investor types. So the worker hasn't been making more than he was before. Investors love that, true, but you can only get so far doing that before the workers realize what's going on and stop "putting out" so to speak.
There was one other period in time when that happened...that was the 1920s. You know what happened after that, right? Think maybe there's a pattern?
That concentration also concentrates risk. And even beyond that, people who work harder and produce more ARE in fact entitled to additional compensation for the extra work they put in and the extra product they produce. But they haven't been getting it. Unions were created to counterbalance that tendency (and yes, several of them went overboard in their counterbalancing) but the new counter to the counter is to move production outside the borders. But eventually those people will realize what's going on too.
The workers have always given the "lion's share" to the owners, but the divide is widening with time. There is justice to the owners receiving the bigger piece, but what they do with it must be examined. What they are doing with it now amounts to nothing less than treason.
Merits and talent only get a person so far in a structure based on old money and cronyism.
You're not one of those people who believe the idle irresponsible elite of this decaying society deserve what they have, are you?
Chrysler already builds vehicles in Mexico, still has problems. The problems are far deeper, and I wouldn't bet on Fiat solving them, just adding more interesting vehicles to the drama.
No net change in production then in Mexico. But since Chrysler has cut about a 1/3 of its production and 1/3 of its workers in the last year, do you think there's been a net change somewhere? Where might that be?
Fiat has the choice to make the Fiat 500 in the U.S. keeping a plant open here or making it in Mexico and keeping that plant open. Who's put more money into Chrysler the U.S. government or the Mexican government?
Real wages have declined in the past 10 years except for those wealthy investor types. So the worker hasn't been making more than he was before.
When I was born there were maybe 4 billion people on here. Now there are 6+ billion people. Every 12 years another billion people will be added. The "pie" = the Earth and its resources is pretty well fixed. So this is a rather stiff head-wind in which to bring up everyone's Real-wages don't you think? I consider real-wages to include not just the net $, but how much it buys. Real-wages were very, very excellent 175 years ago when you could head West and stake out 50,000 acres or so in Texas or Oklahoma?
A company today that is competing in a market where they have no technological advantage has to produce in a low-cost area. Most auto companies do not have a technological advantage. If Fiat's or Chrysler's got 2X the mpg, or they knew how to build a vehicle 3X faster, or they had Indestructium parts, then Fiat/Chrysler could survive by using high-paid labor. Since they can't they will go to where people prefer to work rather than subsistence farm. Once one company does that the others must follow or perish.
I can understand why Fiat/Chrysler is keeping their Mexican plant open while closing U.S. plants from a business perspective. They have to to compete. I don't like it, but I understand it. I also don't want to make the situation worse, by having to pay for it again thru my taxes supporting Chrysler.
I'm saying we not only are seeing our jobs/industry go overseas naturally (seeking the lowest cost) from globalization, but our U.S. government now is actually accelerating this by funding the owners to do so (after they have spent the billions they had before bankruptcy)! :mad:
I believe you will find that most of the Mexican auto plants "are unionized". How powerful are they???I do not know>
Strong enough to strike - I can't see the UAW doing that, even if the new contracts didn't have no strike clauses in them.
"Workers at Volkswagen AG's plant in Mexico -- the only one in the world turning out the Beetle -- went on strike Tuesday after negotiations for a salary increase collapsed."
Probably the Mexican autoworkers union doesn't do anything without the consent of the local organized crime family (drug cartel). If going on strike hurts the local growth and movement of drugs to the U.S., the union will quickly lose its leaders. :P
Maybe the local drug-cartel wants the union to win an 8% increase and that will drive an increase of local drug consumption?
When I was born there were maybe 4 billion people on here. Now there are 6+ billion people. Every 12 years another billion people will be added. The "pie" = the Earth and its resources is pretty well fixed. So this is a rather stiff head-wind in which to bring up everyone's Real-wages don't you think?
Not at all: the population has been increasing since the 1800s, and real wages have always increased during that time except for the two periods I've mentioned. The "pie" is not fixed at all, since more people exist to perform more services for more customers.
So tell me: how much does your money buy now compared to 10 years ago. Your pay may have increased but does your new pay now buy as much as your old pay did then? Look at cars and how they've increased in price. Look at gasoline, or food, or even electricity. Even factoring in inflation, they cost more now then they did 10 years ago. That's what declining real wages means.
It also means a lineworker being able to buy the car he makes (a principle of the great Henry Ford) is no longer valid, since the Chinese or Mexican worker can't do that. Even some of the (largely non-union) workers building cars here have more trouble than they used to doing that, and remember: Henry Ford's lineworkers paid cash, and didn't take out 5 year loans...didn't take out any in fact, since Henry Ford didn't believe in payment plans.
A company today that is competing in a market where they have no technological advantage has to produce in a low-cost area. Most auto companies do not have a technological advantage.
You know, they could also..(wait for it)...seek a technological advantage. It can be done, and it has been done. Ford did it. Nissan did it (CVT). Toyota did it. Of course, it's easier to let child labor build your stuff and pocket the difference. :shades:
The workers have always given the "lion's share" to the owners, but the divide is widening with time. There is justice to the owners receiving the bigger piece, but what they do with it must be examined. What they are doing with it now amounts to nothing less than treason.
I think you have left out the biggest piece of the puzzle. We as a country are now paying a much larger government workforce. That is at every level from the small town to the top tier of the Federal government. I do not see any decrease in their wages over the last 30 years. It is the people doing the work at the bottom that have not kept up with all the unionized labor in industries such as automotive and government employee unions. So yes the divide is widening between the upper middle class and the lower class. That is mostly the governments doing.
@gagrice: you don't know what the hell you're talking about.
I am a state employee (college professor, department chair), and in the ten years I have been with my present institution, I have accumulated significant new skills, plus experience, but despite two promotions my inflation-adjusted income remains within 10% of what it was when I started. The people I hire to do the job I used to do make less in inflation-adjusted dollars than I did when I started. Incidentally, that's less than a starting UAW wage for a high-school graduate with zero skills.
So yes the divide is widening between the upper middle class and the lower class. That is mostly the governments doing
Huh? I don't get the correlation between more govt workers (if that is truly fact) and the US standard of living? I don't think government workers make that huge of an income, and they are basically middle class. I think its maybe more like govt leadership and wealthy political contributors pushing globalization on us to up corporate profit margins and screw over workers. Ironically, corporations really have no country citizenship, just base of operations. They're just about maximizing returns (particularly to their overpaid executives). America was much stronger economically years back when senior executives made a far smaller ratio of income versus their workers. Today, those overpaid egomaniacs are just stroking themselves with outlandish greenbacks while American jobs and future are being peddled off overseas to pay those big corporate bonuses. Do you really think a top exec at Citigroup, GE, etc. actually gives a rats [non-permissible content removed] about America? A few years of bloated compensation versus often poor to mediocre performance and they've got it made for life regardless of what they did to their company, its workers, its stockholders or its future. Executives have become totally about themselves, and I think this is a big driver to our economic decline. Its today's bonus, not tomorrow's future any more that drives their decisions and actions. Pathetic!
Nice way for a professor to express themselves in a debate. The largest employer in the State of CA is the University system. They are bankrupting this state. If your pay has not gone up considerably over the last 10 years I would be surprised. If you are a department head and not making $500,000 you must be in a poor school. The pay for the top 1000 professors in the CA university system make a minimum of $250,000. If you do not think this pay scale for college professors is part of the problem, we will just have to disagree. I won't reciprocate the name calling, as that only leads to war.
@gagrice: I can't speak for California. Regarding my salary: try dividing by eight.
Georgia salaries for state workers are a matter of public record. At my institution only one individual--the president--earns the $200k you assert to be the minimum. Deans earn $80-100k, and department chairs are mostly around $60k. Full-time entry-level faculty members start around $40k. If that makes us a "poor school," then congratulations on your isolation from our poverty, but these salaries are consistent with those in other state colleges and universities (aside from the big football schools) in the South.
I have a secretary with twenty years of experience, the best and most dedicated employee I've ever seen, and the institution will not allow her to earn more than $27,700 per year because of salary caps.
Every full-time faculty member in my department is working an overload--we have ten people doing the work of sixteen, and there have been NO cost of living increases or merit raises in the last three years. Even at this rate, which--I repeat--has not kept pace with inflation over the last ten years, we are now facing furloughs (mandatory unpaid leave). Our enrollment is up by fifteen percent over the last three years, but we are unable to hire new full-timers, so we end up staffing classes with part-time employees who receive little pay and zero benefits. Oh, and in case you're curious, starting salary in this area for fully credentialed high school math and science teachers is $33k.
Thus, I believe your position bears little relationship to the financial reality with which I contend on a daily basis. I conclude that you are uninformed concerning this reality.
Those faculty I would consider under paid. Though one of my best friends has a PHD in community agricultural development. He has never made more than $40k in his career. Mostly working in Central America and Africa. Several hitches with the Peace Corps dating back to 1963.
As you can see, my disdain is for government employees, are the ones making a fortune. What has to be taken into consideration is the fact that they are not generating much revenue for the state. That means the tax payers have to make up the difference. Now the US tax payers are paying UAW workers with no advanced training in excess of $100k per year via Chrysler and GM.
I don't think you can claim that 2277 faculty making between $200k and a $million a handful. Here is a little bit more for your reading pleasure from a 2005 article.
When the University of California hired David Kessler as dean of the UCSF School of Medicine two years ago, the university announced he would receive "total compensation" of $540,000 a year.
Turns out he actually got much more.
In addition to his salary, he received a one-time relocation allowance of $125,000, plus $30,000 for six months' rent and a low-interest home loan.
There was more. He was reimbursed for his actual moving costs from Connecticut, and his family received round-trip airline tickets to go house-hunting in the Bay Area.
Kessler is hardly unique. Despite UC's complaints that it has been squeezed by cuts in state funding and forced to raise student fees, many university faculty members and administrators get paid far more than is publicly reported.
In addition to salaries and overtime, payroll records obtained by The Chronicle show that 105,482 employees shared $871 million in bonuses, administrative stipends, relocation packages and other forms of cash compensation last year. That was more than enough to cover the 79 percent hike in student fees that UC has imposed over the past few years.
The bulk of the last year's extra compensation, roughly $599 million, went to about 8,500 employees who each got at least $20,000 over their regular salaries. And that doesn't include an impressive array of other perks for selected top administrators, ranging from free housing to concert tickets. great perks on the tax payer
If that does not make you sick with what little you are receiving I am not sure what would move you. I am not complaining as I have a good retirement after 37 years in the Union and 46 years in the telephone business. I never expected to make as much as a PHD. Many unions such as the UAW feel they should be paid as much as a doctor. It is the entitlement attitude that is pervasive in this liberal society.
I don't think that Georgia is in the same mess as California. So you should be thankful. I am not begrudging anyone a good salary. When it comes from the tax payer there should be some fiscal responsibility.
The thrust of this debate was the rich getting richer. I consider the people in the CA government as those getting wealthy off the tax payers back. I can post link after link of communities facing default with civil servants making 3-10 times the wages you are making in Georgia. Hopefully you do not get buried in the mess our Federal government and SOME state governments are getting US into.
I have a very good friend at Duke and after 15 years I believe she makes $42k in admin. The lady that house sits for us when we travel works in Social Security. She is a top GS12 and makes just under $100k. No doubt there is disparity. And I repeat, the governments have a big hand in perpetuating that disparity.
I get tired of hearing it is the business world that has caused the problems. After all they are paying the bulk of the taxes.
If that does not make you sick with what little you are receiving I am not sure what would move you. I am not complaining as I have a good retirement after 37 years in the Union and 46 years in the telephone business. I never expected to make as much as a PHD. Many unions such as the UAW feel they should be paid as much as a doctor. It is the entitlement attitude that is pervasive in this liberal society.
On that we agree. But I think you are painting with an overly broad brush, by seriously overestimating the earnings of most state employees, around the nation. California is well-known for financial bloating, thanks to the mammoth bureaucracy inspired by the initiative and referendum process, and from what I hear, the UC system is the crown jewel of the bloat. Still, California is also noted for its high housing costs, utility costs, etc. California is the canary in the nation's fiscal mine shaft--any financial difficulties reflecting national trends will show up first in Sacramento.
How much does a typical California DMV clerk earn? What about a state highway patrolman? Public school teachers? Auditors in the state department of revenue? Are those professions engaged in collective bargaining in California? Here, in "right to work" Georgia, Ricardo's "Iron Law of Wages" is fully in action--wages for unskilled and semiskilled labor sink to the level necessary for bare subsistence, and in a regional economy that has limited demand for any other kind of employees, we are clearly in trouble.
There are no effective unions in Georgia beyond perhaps the IBEW and a few other craft unions. This is widely touted as a good thing, because it allows our workers to compete more effectively with those earning $2-3 an hour in Thai sweatshops and Mexican maquiladoras. I agree that the UAW has abused its position, perhaps contributing to the demise of the goose that lays golden Chryslers, but there ought to be a middle ground here.
I do not notice many CEOs volunteering to take a pay cut in order to contribute to the financial stability of their companies, as Lee Iacocca did back in the days of the old New Chrysler Corporation. Instead I see them arranging the professional equivalent of a prenup, so that even if the company fails to turn a profit, their bonuses are protected. Think AIG.
I don't doubt that there are some government employees who are overpaid, or entirely unnecessary. But it seems to me that the corporate raiders are more responsible for the current mess.
I think we have reached an agreement. And the reason GM, Ford and Chrysler moved to Mexico is the fact that UAW members felt they deserved $100k+ per year and a fat retirement. The auto makers buckled during fat times and are now broke.
It is not just CA that is in dire straits. NY, Illinois, and others are overly bloated. As a conservative union member I have debated both sides of the "Right to Work" issue. It is hard to deny those states are less impacted by the current recession. If a professor makes $50k per year and can survive comfortably. There is no reason that an auto worker should make more than $30k per year. I believe the imports are paying close to $50k per year. Which should be a dandy wage for no more than a high school education.
I don't know about all the other state employees here. Most are Union and probably make more than teachers in other states. Our teachers are not well paid to start. And it is difficult to get on full time now.
CEO packages are ridiculous. You have to blame the BOD, that are usually all linked together in one big happy family.
I don't think that Georgia is in the same mess as California. So you should be thankful. I am not begrudging anyone a good salary. When it comes from the tax payer there should be some fiscal responsibility.
Agreed. Georgia, like many states, is required by its own constitution to maintain a balanced budget. Thus we are spared the fiscal disaster faced by California and other states that do not have this provision. But we do have some unique problems of our own.
The state has 159 counties--more than any other state except Texas--and each county maintains its own school system and its own jail, just to name two essential (and somewhat related, I'm afraid) services. Many Georgia counties are positively tiny--the smallest is less than 130 square miles. We could save a bundle by consolidating some of the smaller counties and reducing duplication and overhead. But the powers that be simply will not allow it. After all, the county was named for a family prominent 150 years ago, and great-great-grandfather would turn over in his grave to see his name disgraced by having what was once HIS county merge with another. So instead of having one large, modern high school serving 1000 students, we have five small, poorly maintained, understaffed schools with minimal college-preparatory curricula, outdated science labs, maybe one foreign language teacher, and little or no computer access, each serving only perhaps 200 students. Not to mention the fact that each county school system has its own administrative system, superintendent, office facilities, etc.
Another problem is that politicians are so fixated on "attracting industry" for the prestige it carries that they will give away every possible benefit that could come from it in the bargain--they'll grant exemptions from the property taxes that would fund better schools and roads, they'll even find a way to donate the land itself to a company. By the time these state and local governments break even on the "investment," the factory is closed and the operations moved to Mexico.
As a native Californian, I am appalled at what is happening to the state fiscally.
When I graduated HS in 1982, I felt that the higher education system in CA was the best in the country. Community colleges cost $5/unit, with a maximum of $50 per semester (plus books and fees). Cal State schools were also reasonably priced. UC schools (as gagrice references) were, and still are, for the cream of the academic crop.
Now my son is attending the same CC I did 25+ years ago, but his tuition is much more expensive. How much? I have no idea, as his mom had saved some of the support I sent over the years to cover it.
My dad retired as a firefighter in the early 90's after almost 34 years on the job and his CalPers pension provides him and my mom with about $3000/mo, after taxes. My dad also collects a small SS benefit and a "deferred compensation" check each month, which gives them some walking around money. Despite that, they own their own home, which has gone from a valuation of over $500K a couple of years ago to just over $300K today.
My mom was recently telling me about firemen who have retired in the past few years who are bringing home over $100K in pension benefits. No wonder the state can't pay its bills! Sales tax at almost 9%, other fees have skyrocketed and services have been shrunk to almost nonexistent status.
I guess you see the same problems I have gotten upset with in my moves around the USA. I ran into the fiefdom system in Minnesota. Each county was more like a country all to themselves. With a Sheriff, tax collector and family judges, cross one you have crossed them all.
Trying to buy business usually ends as you have laid out. It seems the way things are done. CA is now scrambling to bring back some of the industry they ran off with impossible regulations and horrible tax structure. The South is getting their day in the sun after 150 years. :shades:
I believe the imports are paying close to $50k per year. Which should be a dandy wage for no more than a high school education.
It depends. Nissan resisted efforts at unionization for many years in its Tennessee operations, while attempting to promote a "teamwork" concept that looked more than a bit totalitarian to me. When I lived in Nashville, Nissan wages at the Smyrna plant were above average for the area, but well below UAW levels, but that was ten years ago and I'm not sure where they are now. With Saturn's Spring Hill plant shuttered, there's not an easy comparison to make.
Kia's Georgia plant isn't yet advertising for hourly workers, but the wage for members of the "production team," (i.e., assembly workers) is listed at $14.90/hr to start, with top-out at $23.50/hr. Absent any overtime, that would mean starting out just short of $31k and topping out close to $50k. As you say, not bad for a high school education--even at the starting number.
I think the UAW has its sights set on Toyota's US operations right now, and I assume Honda will be next. Nissan, Hyundai and Kia won't be targeted as quickly, since their operations are all in the South, where even people who could reasonably expect to benefit from union membership tend to be hostile to the idea.
I get tired of hearing it is the business world that has caused the problems. After all they are paying the bulk of the taxes.
Unfortunately that's another myth. The more money you make, the more loopholes you have to take advantage of. Everyone always pays attention to the gross tax percentage for businesses and the wealthy, and yes, it is high. But there are enough loopholes to make a sponge look like a solid steel block, comparatively, and so that 45% gross tax rate, after deductions and loopholes ends up being a 10% net tax rate.
That's assuming the company is profitable. Guys like GM and Chrysler haven't been paying taxes for YEARS because of lack of profitability. But they're still using the loopholes. So their net tax rate has been something like -20%, meaning our tax money has been financing them for years anyway.
Ahh, if only we had a flat tax. But then there would be no loopholes, so no lobbyist or Congresscritter would go for it.
Chrysler? No? They take every good idea and ruin it. Heck, they couldn't even continue the concept of the AMC Eagle, and ended up handing that whole market segment to Subaru! :shades:
Fiat, maybe. Assuming they made me an offer I can't refuse of course. :P Their designs look pretty decent, and we haven't had Italian cars for the masses in this country for a long time. But the Chrysler part just needs to die, or else they'll screw it up.
Ahh, if only we had a flat tax. But then there would be no loopholes, so no lobbyist or Congresscritter would go for it.
The problem with that is that the poor have to spend every dollar they earn in order to get by. Unless you start with a personal exemption/standard deduction combo to exempt bare subsistence needs, you're taxing nonexistent resources.
And, of course, once you start with that, the next step is to compensate for "lost" revenue by taxing "excess" income at a higher rate. And then come the special interests to say "not me--I'm beneficial to society"--the home mortgage deduction is the classic example of this one. And pretty soon we are right back where we started, trying to decide whether to rob Peter to pay Paul, or vice versa.
So--does anyone think Fiat has a viable platform from which to construct a competitive midsize Chrysler/Dodge sedan for the US market?
It was re-designed in 2005, but the next re-design is probably well along by now and it might be too late to incorporate federalization during the design phase. Still, a 2005 design is more sophisticated than anything Chrysler's currently got. :shades:
Of course, the successor could be federalized afterward, but that might not work so well.
besides which, the thing has advanced engines, a 6-speed auto tranny, can accommodate a V6, optional AWD and limited slip differential. I say federalize the existing model for now, build it here. It's cheap for Fiat since it's from 2005, it's better for Chrysler because the Avenger platform is a total piece of garbage. So when the 159 ends production in Europe, make the minimum necessary modifications to the body and engines to pass muster in the USA, and start building them in Mexico. And in the meantime, they incorporate federalization into the upcoming Fiat and Alfa designs as they design them.
I could be tempted by the Alfa 159 Sportwagon with a 2.0L Diesel engine. They are capable of 50+MPG on the highway. Are they willing to put in the effort VW has to get them certified in all 50 states? Unless they have something to offer that is better than the current best sellers they will likely sit on the lot. Chrysler has to start at the bottom for the most part.
The fact is, leftovers are what they'll probably have to start with no matter what. And, in addition, leftovers are better than most of the stuff they have now (barring Jeep and maybe the 300, old as it is).
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Fiat will only keep as much U.S. production around as necessary. The lower and middle-class of this country are paying for their own demise thru their tax $'s supporting policies that ship jobs overseas. Nothing new right? We've just been doing it for years. And the result is we now we have a society deep in debt, with few good jobs left - especially for those without a college education.
Nothing new here - the rich get richer while everyone else gets screwed subsidizing their exploits. I guess that's why they call it "trickle down".
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Trickle-down wasn't about shipping our money overseas - that's driven by globalization. Trickle-down was more about letting people keep more of their $ and spending it in this country to stimulate further economic activity. Instead Wall Street in the demand for ever-increasing profits, along with both the Dems&Reps ho are bought and paid for by corporate $, directed the economic activity off-shore.
In theory trickle-down is great and would have been great for the U.S. if the $ stayed in the U.S. Instead trickle down was great for foreign nations. The hose was pointed the wrong way by our leaders.
It was my understanding that they moved heavily into Mexico because the UAW had a contract requiring any factory built in the US to be unionized by them... thus pushing our car makers to another country.
To wit, someone replied that the auto factories in Mexico were unionized... so I wanted to know if they were unionized by the UAW or a local union. The UAW has a history of asking for the world - while the former Big-3 had a history of giving it to them.
http://www.explorandomexico.com/about-mexico/6/47/
Yes whether it is capitalism, communism, or anarchism, people ruin the ideology.
Anyway did you see that Fiat has just reduced the powertrain warranty on Chryslers from Llifetime to 5 year/100,000 miles? A Chrysler spokesman said people really didn't care about the lifetime-warranty. Huh? Wasn't that about the only thing Chrysler did during 2008 to try and differentiate and revive itself? That was their best effort and now it's being given a - "so what, doesn't really matter"? It either makes the corporate execs. look EVEN STUPIDER, or the new owners look like poor liars in an effort to save some $.
Anyway I see either warranty being worth a couple of years, as I don't see Chrysler making it, as they will continue to lose $ and eventually it will be too politically tough to justify keeping the last few jobs.
I can't see those 10 year warranties being honored in 9 years anyway, even if the company is still around, the obligation will probably be voided. Besides, who keeps those cars so long? Indeed, harping on the offer makes the execs and their cronyistic marketing teams look as foolish as we know they are.
I don't know if "gained more than anyone is true". I do know that a lot of poor people in China, India, and other countries - like Vietnam, Thailand, Mexico, Latin America now have substantial middle-classes, where they were much poorer 20-30 years ago. I would guess that at least 100M people world-wide have made major advances from just the losses in U.S. jobs being shifted over the decades.
China for example went from having no middle-class and no auto market 30 years ago, to now having the world's largest auto-market. This is a result of "trickle-down" which stimulated the global economy, which was misdirected from the U.S. economy.
So trickle down was not a Win (wealthy) - Lose (global population) - Lose (U.S. middle class and poor); it was a Win / Win / Lose.
I see it as Win (wealthy) - Pretense of win/ruse of altruism (less developed regions) - lose (average citizen in the first world)
My Quest will be ten this December.
Both win-win, in that the owner makes more, and the worker makes more (than not working). Of course a worker need not work for an owner and can start his own business where he will earn what he can based on his merits and talent.
You're not one of those people who think everyone should be "entitled" are you? That makes no sense - sounds like modern-day union philosophy. IMO unions had valid, justified reasons when they were formed, but most now are distorted-monsters of their origins.
Fiat and Chrysler will fail if they keep doing business with expensive unions producing their cars, and doing business as usual. Fiat is fairly smart in moving to Mexico and other such places, seeing the writing on the wall of global competition. But I am not happy as a taxpayer to help pay for that too! Adding injury to insult!
The PT Cruiser is set to be discontinued in 18 or so months so isn't the Fiat 500 production just going to take over where the PT cruiser left off?
Really no net change in production then.
There was one other period in time when that happened...that was the 1920s. You know what happened after that, right? Think maybe there's a pattern?
That concentration also concentrates risk. And even beyond that, people who work harder and produce more ARE in fact entitled to additional compensation for the extra work they put in and the extra product they produce. But they haven't been getting it. Unions were created to counterbalance that tendency (and yes, several of them went overboard in their counterbalancing) but the new counter to the counter is to move production outside the borders. But eventually those people will realize what's going on too.
Merits and talent only get a person so far in a structure based on old money and cronyism.
You're not one of those people who believe the idle irresponsible elite of this decaying society deserve what they have, are you?
Chrysler already builds vehicles in Mexico, still has problems. The problems are far deeper, and I wouldn't bet on Fiat solving them, just adding more interesting vehicles to the drama.
No net change in production then in Mexico. But since Chrysler has cut about a 1/3 of its production and 1/3 of its workers in the last year, do you think there's been a net change somewhere? Where might that be?
Fiat has the choice to make the Fiat 500 in the U.S. keeping a plant open here or making it in Mexico and keeping that plant open. Who's put more money into Chrysler the U.S. government or the Mexican government?
When I was born there were maybe 4 billion people on here. Now there are 6+ billion people. Every 12 years another billion people will be added. The "pie" = the Earth and its resources is pretty well fixed. So this is a rather stiff head-wind in which to bring up everyone's Real-wages don't you think? I consider real-wages to include not just the net $, but how much it buys. Real-wages were very, very excellent 175 years ago when you could head West and stake out 50,000 acres or so in Texas or Oklahoma?
A company today that is competing in a market where they have no technological advantage has to produce in a low-cost area. Most auto companies do not have a technological advantage. If Fiat's or Chrysler's got 2X the mpg, or they knew how to build a vehicle 3X faster, or they had Indestructium parts, then Fiat/Chrysler could survive by using high-paid labor. Since they can't they will go to where people prefer to work rather than subsistence farm. Once one company does that the others must follow or perish.
I can understand why Fiat/Chrysler is keeping their Mexican plant open while closing U.S. plants from a business perspective. They have to to compete. I don't like it, but I understand it. I also don't want to make the situation worse, by having to pay for it again thru my taxes supporting Chrysler.
I'm saying we not only are seeing our jobs/industry go overseas naturally (seeking the lowest cost) from globalization, but our U.S. government now is actually accelerating this by funding the owners to do so (after they have spent the billions they had before bankruptcy)! :mad:
Strong enough to strike - I can't see the UAW doing that, even if the new contracts didn't have no strike clauses in them.
"Workers at Volkswagen AG's plant in Mexico -- the only one in the world turning out the Beetle -- went on strike Tuesday after negotiations for a salary increase collapsed."
Ze Plane, Ze Plane! (Alternate Route)
Maybe the local drug-cartel wants the union to win an 8% increase and that will drive an increase of local drug consumption?
Not at all: the population has been increasing since the 1800s, and real wages have always increased during that time except for the two periods I've mentioned. The "pie" is not fixed at all, since more people exist to perform more services for more customers.
So tell me: how much does your money buy now compared to 10 years ago. Your pay may have increased but does your new pay now buy as much as your old pay did then? Look at cars and how they've increased in price. Look at gasoline, or food, or even electricity. Even factoring in inflation, they cost more now then they did 10 years ago. That's what declining real wages means.
It also means a lineworker being able to buy the car he makes (a principle of the great Henry Ford) is no longer valid, since the Chinese or Mexican worker can't do that. Even some of the (largely non-union) workers building cars here have more trouble than they used to doing that, and remember: Henry Ford's lineworkers paid cash, and didn't take out 5 year loans...didn't take out any in fact, since Henry Ford didn't believe in payment plans.
A company today that is competing in a market where they have no technological advantage has to produce in a low-cost area. Most auto companies do not have a technological advantage.
You know, they could also..(wait for it)...seek a technological advantage. It can be done, and it has been done. Ford did it. Nissan did it (CVT). Toyota did it. Of course, it's easier to let child labor build your stuff and pocket the difference. :shades:
I think you have left out the biggest piece of the puzzle. We as a country are now paying a much larger government workforce. That is at every level from the small town to the top tier of the Federal government. I do not see any decrease in their wages over the last 30 years. It is the people doing the work at the bottom that have not kept up with all the unionized labor in industries such as automotive and government employee unions. So yes the divide is widening between the upper middle class and the lower class. That is mostly the governments doing.
I am a state employee (college professor, department chair), and in the ten years I have been with my present institution, I have accumulated significant new skills, plus experience, but despite two promotions my inflation-adjusted income remains within 10% of what it was when I started. The people I hire to do the job I used to do make less in inflation-adjusted dollars than I did when I started. Incidentally, that's less than a starting UAW wage for a high-school graduate with zero skills.
Now go crawl back under your rock.
Huh? I don't get the correlation between more govt workers (if that is truly fact) and the US standard of living? I don't think government workers make that huge of an income, and they are basically middle class. I think its maybe more like govt leadership and wealthy political contributors pushing globalization on us to up corporate profit margins and screw over workers. Ironically, corporations really have no country citizenship, just base of operations. They're just about maximizing returns (particularly to their overpaid executives). America was much stronger economically years back when senior executives made a far smaller ratio of income versus their workers. Today, those overpaid egomaniacs are just stroking themselves with outlandish greenbacks while American jobs and future are being peddled off overseas to pay those big corporate bonuses. Do you really think a top exec at Citigroup, GE, etc. actually gives a rats [non-permissible content removed] about America? A few years of bloated compensation versus often poor to mediocre performance and they've got it made for life regardless of what they did to their company, its workers, its stockholders or its future. Executives have become totally about themselves, and I think this is a big driver to our economic decline. Its today's bonus, not tomorrow's future any more that drives their decisions and actions. Pathetic!
Nice way for a professor to express themselves in a debate. The largest employer in the State of CA is the University system. They are bankrupting this state. If your pay has not gone up considerably over the last 10 years I would be surprised. If you are a department head and not making $500,000 you must be in a poor school. The pay for the top 1000 professors in the CA university system make a minimum of $250,000. If you do not think this pay scale for college professors is part of the problem, we will just have to disagree. I won't reciprocate the name calling, as that only leads to war.
http://www.sfgate.com/news/special/pages/2005/ucsalary/
PS
The lowest paid professor out of 2277 professors makes $200,000 per year.
Georgia salaries for state workers are a matter of public record. At my institution only one individual--the president--earns the $200k you assert to be the minimum. Deans earn $80-100k, and department chairs are mostly around $60k. Full-time entry-level faculty members start around $40k. If that makes us a "poor school," then congratulations on your isolation from our poverty, but these salaries are consistent with those in other state colleges and universities (aside from the big football schools) in the South.
I have a secretary with twenty years of experience, the best and most dedicated employee I've ever seen, and the institution will not allow her to earn more than $27,700 per year because of salary caps.
Every full-time faculty member in my department is working an overload--we have ten people doing the work of sixteen, and there have been NO cost of living increases or merit raises in the last three years. Even at this rate, which--I repeat--has not kept pace with inflation over the last ten years, we are now facing furloughs (mandatory unpaid leave). Our enrollment is up by fifteen percent over the last three years, but we are unable to hire new full-timers, so we end up staffing classes with part-time employees who receive little pay and zero benefits. Oh, and in case you're curious, starting salary in this area for fully credentialed high school math and science teachers is $33k.
Thus, I believe your position bears little relationship to the financial reality with which I contend on a daily basis. I conclude that you are uninformed concerning this reality.
As you can see, my disdain is for government employees, are the ones making a fortune. What has to be taken into consideration is the fact that they are not generating much revenue for the state. That means the tax payers have to make up the difference. Now the US tax payers are paying UAW workers with no advanced training in excess of $100k per year via Chrysler and GM.
I don't think you can claim that 2277 faculty making between $200k and a $million a handful. Here is a little bit more for your reading pleasure from a 2005 article.
When the University of California hired David Kessler as dean of the UCSF School of Medicine two years ago, the university announced he would receive "total compensation" of $540,000 a year.
Turns out he actually got much more.
In addition to his salary, he received a one-time relocation allowance of $125,000, plus $30,000 for six months' rent and a low-interest home loan.
There was more. He was reimbursed for his actual moving costs from Connecticut, and his family received round-trip airline tickets to go house-hunting in the Bay Area.
Kessler is hardly unique. Despite UC's complaints that it has been squeezed by cuts in state funding and forced to raise student fees, many university faculty members and administrators get paid far more than is publicly reported.
In addition to salaries and overtime, payroll records obtained by The Chronicle show that 105,482 employees shared $871 million in bonuses, administrative stipends, relocation packages and other forms of cash compensation last year. That was more than enough to cover the 79 percent hike in student fees that UC has imposed over the past few years.
The bulk of the last year's extra compensation, roughly $599 million, went to about 8,500 employees who each got at least $20,000 over their regular salaries. And that doesn't include an impressive array of other perks for selected top administrators, ranging from free housing to concert tickets.
great perks on the tax payer
If that does not make you sick with what little you are receiving I am not sure what would move you. I am not complaining as I have a good retirement after 37 years in the Union and 46 years in the telephone business. I never expected to make as much as a PHD. Many unions such as the UAW feel they should be paid as much as a doctor. It is the entitlement attitude that is pervasive in this liberal society.
The thrust of this debate was the rich getting richer. I consider the people in the CA government as those getting wealthy off the tax payers back. I can post link after link of communities facing default with civil servants making 3-10 times the wages you are making in Georgia. Hopefully you do not get buried in the mess our Federal government and SOME state governments are getting US into.
I have a very good friend at Duke and after 15 years I believe she makes $42k in admin. The lady that house sits for us when we travel works in Social Security. She is a top GS12 and makes just under $100k. No doubt there is disparity. And I repeat, the governments have a big hand in perpetuating that disparity.
I get tired of hearing it is the business world that has caused the problems. After all they are paying the bulk of the taxes.
On that we agree. But I think you are painting with an overly broad brush, by seriously overestimating the earnings of most state employees, around the nation. California is well-known for financial bloating, thanks to the mammoth bureaucracy inspired by the initiative and referendum process, and from what I hear, the UC system is the crown jewel of the bloat. Still, California is also noted for its high housing costs, utility costs, etc. California is the canary in the nation's fiscal mine shaft--any financial difficulties reflecting national trends will show up first in Sacramento.
How much does a typical California DMV clerk earn? What about a state highway patrolman? Public school teachers? Auditors in the state department of revenue? Are those professions engaged in collective bargaining in California? Here, in "right to work" Georgia, Ricardo's "Iron Law of Wages" is fully in action--wages for unskilled and semiskilled labor sink to the level necessary for bare subsistence, and in a regional economy that has limited demand for any other kind of employees, we are clearly in trouble.
There are no effective unions in Georgia beyond perhaps the IBEW and a few other craft unions. This is widely touted as a good thing, because it allows our workers to compete more effectively with those earning $2-3 an hour in Thai sweatshops and Mexican maquiladoras. I agree that the UAW has abused its position, perhaps contributing to the demise of the goose that lays golden Chryslers, but there ought to be a middle ground here.
I do not notice many CEOs volunteering to take a pay cut in order to contribute to the financial stability of their companies, as Lee Iacocca did back in the days of the old New Chrysler Corporation. Instead I see them arranging the professional equivalent of a prenup, so that even if the company fails to turn a profit, their bonuses are protected. Think AIG.
I don't doubt that there are some government employees who are overpaid, or entirely unnecessary. But it seems to me that the corporate raiders are more responsible for the current mess.
Any chance we could get rid of both groups???
It is not just CA that is in dire straits. NY, Illinois, and others are overly bloated. As a conservative union member I have debated both sides of the "Right to Work" issue. It is hard to deny those states are less impacted by the current recession. If a professor makes $50k per year and can survive comfortably. There is no reason that an auto worker should make more than $30k per year. I believe the imports are paying close to $50k per year. Which should be a dandy wage for no more than a high school education.
I don't know about all the other state employees here. Most are Union and probably make more than teachers in other states. Our teachers are not well paid to start. And it is difficult to get on full time now.
CEO packages are ridiculous. You have to blame the BOD, that are usually all linked together in one big happy family.
Agreed. Georgia, like many states, is required by its own constitution to maintain a balanced budget. Thus we are spared the fiscal disaster faced by California and other states that do not have this provision. But we do have some unique problems of our own.
The state has 159 counties--more than any other state except Texas--and each county maintains its own school system and its own jail, just to name two essential (and somewhat related, I'm afraid) services. Many Georgia counties are positively tiny--the smallest is less than 130 square miles. We could save a bundle by consolidating some of the smaller counties and reducing duplication and overhead. But the powers that be simply will not allow it. After all, the county was named for a family prominent 150 years ago, and great-great-grandfather would turn over in his grave to see his name disgraced by having what was once HIS county merge with another. So instead of having one large, modern high school serving 1000 students, we have five small, poorly maintained, understaffed schools with minimal college-preparatory curricula, outdated science labs, maybe one foreign language teacher, and little or no computer access, each serving only perhaps 200 students. Not to mention the fact that each county school system has its own administrative system, superintendent, office facilities, etc.
Another problem is that politicians are so fixated on "attracting industry" for the prestige it carries that they will give away every possible benefit that could come from it in the bargain--they'll grant exemptions from the property taxes that would fund better schools and roads, they'll even find a way to donate the land itself to a company. By the time these state and local governments break even on the "investment," the factory is closed and the operations moved to Mexico.
When I graduated HS in 1982, I felt that the higher education system in CA was the best in the country. Community colleges cost $5/unit, with a maximum of $50 per semester (plus books and fees). Cal State schools were also reasonably priced. UC schools (as gagrice references) were, and still are, for the cream of the academic crop.
Now my son is attending the same CC I did 25+ years ago, but his tuition is much more expensive. How much? I have no idea, as his mom had saved some of the support I sent over the years to cover it.
My dad retired as a firefighter in the early 90's after almost 34 years on the job and his CalPers pension provides him and my mom with about $3000/mo, after taxes. My dad also collects a small SS benefit and a "deferred compensation" check each month, which gives them some walking around money. Despite that, they own their own home, which has gone from a valuation of over $500K a couple of years ago to just over $300K today.
My mom was recently telling me about firemen who have retired in the past few years who are bringing home over $100K in pension benefits. No wonder the state can't pay its bills! Sales tax at almost 9%, other fees have skyrocketed and services have been shrunk to almost nonexistent status.
I'm so very glad I live in Colorado now.
Trying to buy business usually ends as you have laid out. It seems the way things are done. CA is now scrambling to bring back some of the industry they ran off with impossible regulations and horrible tax structure. The South is getting their day in the sun after 150 years. :shades:
It depends. Nissan resisted efforts at unionization for many years in its Tennessee operations, while attempting to promote a "teamwork" concept that looked more than a bit totalitarian to me. When I lived in Nashville, Nissan wages at the Smyrna plant were above average for the area, but well below UAW levels, but that was ten years ago and I'm not sure where they are now. With Saturn's Spring Hill plant shuttered, there's not an easy comparison to make.
Kia's Georgia plant isn't yet advertising for hourly workers, but the wage for members of the "production team," (i.e., assembly workers) is listed at $14.90/hr to start, with top-out at $23.50/hr. Absent any overtime, that would mean starting out just short of $31k and topping out close to $50k. As you say, not bad for a high school education--even at the starting number.
I think the UAW has its sights set on Toyota's US operations right now, and I assume Honda will be next. Nissan, Hyundai and Kia won't be targeted as quickly, since their operations are all in the South, where even people who could reasonably expect to benefit from union membership tend to be hostile to the idea.
Meanwhile, thanks for getting us mostly back on track. Folks stumbling into this discussion would likely enjoy reading about Chrysler and Fiat.
/hint
Unfortunately that's another myth. The more money you make, the more loopholes you have to take advantage of. Everyone always pays attention to the gross tax percentage for businesses and the wealthy, and yes, it is high. But there are enough loopholes to make a sponge look like a solid steel block, comparatively, and so that 45% gross tax rate, after deductions and loopholes ends up being a 10% net tax rate.
That's assuming the company is profitable. Guys like GM and Chrysler haven't been paying taxes for YEARS because of lack of profitability. But they're still using the loopholes. So their net tax rate has been something like -20%, meaning our tax money has been financing them for years anyway.
Ahh, if only we had a flat tax. But then there would be no loopholes, so no lobbyist or Congresscritter would go for it.
Fiat, maybe. Assuming they made me an offer I can't refuse of course. :P Their designs look pretty decent, and we haven't had Italian cars for the masses in this country for a long time. But the Chrysler part just needs to die, or else they'll screw it up.
The problem with that is that the poor have to spend every dollar they earn in order to get by. Unless you start with a personal exemption/standard deduction combo to exempt bare subsistence needs, you're taxing nonexistent resources.
And, of course, once you start with that, the next step is to compensate for "lost" revenue by taxing "excess" income at a higher rate. And then come the special interests to say "not me--I'm beneficial to society"--the home mortgage deduction is the classic example of this one. And pretty soon we are right back where we started, trying to decide whether to rob Peter to pay Paul, or vice versa.
So--does anyone think Fiat has a viable platform from which to construct a competitive midsize Chrysler/Dodge sedan for the US market?
What about the Alfa-Romeo 159?
It's about the right size, but isn't it about ready for a total redo?
Of course, the successor could be federalized afterward, but that might not work so well.
besides which, the thing has advanced engines, a 6-speed auto tranny, can accommodate a V6, optional AWD and limited slip differential. I say federalize the existing model for now, build it here. It's cheap for Fiat since it's from 2005, it's better for Chrysler because the Avenger platform is a total piece of garbage. So when the 159 ends production in Europe, make the minimum necessary modifications to the body and engines to pass muster in the USA, and start building them in Mexico. And in the meantime, they incorporate federalization into the upcoming Fiat and Alfa designs as they design them.
Isn't that how Chrysler got some leftovers from the '99 E-Class Benz? Of course they then cheapened those leftovers. . .
One wonders how Chrysler could cheapen a Fiat platform. . .