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The performance of GM Brazil and GM China, where UAW is non-existent, however, seem to indicate that GM management is actually a cut above its peer groups. Whether both are co-incidences is perhaps debatable.
If you see something you disagree with here, it's time to stop calling it propoganda or lies, or anything else that tends to be more about the poster than the posting. If we can't stay away from the characterizations here, it may be time to shut this one down.
http://www.detroitnews.com/apps/pbcs.dll/article?AID=/20060612/AUTO01/606120399
A good read....
Rocky
Since when is anyone in America driving a car imported from Argentina? Much less made by workers making 30 cents a day there? Brazilian wage is obviously not 30 cents a day either, not in today's debased dollars anyway.
If none of the items Bob listed is imported, would he like to make shoes, flashlights, tablecloth, betl buckles, cars, silk dress, pearls, dog collar, flower pots, furniture, etc. all by himsef? Someone has to make them or is he giving up on all life's amenities? Or is he proposing the item prices should be so high that only multi-millionairs like himself should be able to enjoy them?
If 30 cents a day (never mind the actual wages are much higher than that in those countries) is slavery, why isn't the removal of that particular choice even worse for the workers who would otherwise be scraping a living with even less? If 30 whatever units a day is too little, why doesn't the the multimillionair singer offer them a better choice, like 60units a day? Guess what, nobody would be willing to work for 60 cents a day; people in Argentian and Brazil are making far more than that. The only way they'd be willing to work for Bob Dylan for 60 cents a day would be if all other opportunities paying more than 60 cents a day had disappeared. That's in essence what the song is advocating: remove all free market opportunities in those countries so that they will be grateful of our handouts. It's the elitism of the worst kind: condemning entire populations to abject poverty so that the elite themselves would be treated like kings and queens when they go and bestow hand-outs, a la Namibia, where the local totalitarian government locked down the whole country for some other members of our cultural elite class.
It's the same old same old lie, wage slavery is bad, so we will give you real slavery in the name of something sounding good. I won't plague the forum with full-text quotations like the previous poster did; here is a simple link to rebutt the nonsense from Dylan http://www.mises.org/story/2179
Written decades ago by someone who was in full posession of his faculties unadulterated by drugs.
The company and employees can both make good money.
Rocky
If you have something to say about the UAW and the domestic automakers, great. But it's time to drop the personal interaction and off topic stuff about who's leaning what way politically and all the other tangents that are coming up.
http://www.detroitnews.com/apps/pbcs.dll/article?AID=/20060613/AUTO01/606130374
Rocky
P.S.
Gettelfinger quote in article.
"As we've said many times, these companies cannot downsize their way to profitability,"
Socala, even he gets it.
http://www.detroitnews.com/apps/pbcs.dll/article?AID=/20060613/BIZ/606130347
Rocky
http://www.detroitnews.com/apps/pbcs.dll/article?AID=/20060613/OPINION01/6061303- 07/1148
Rocky
Sooooo, you mean all those top execs won't be getting those multimillion dollar paychecks plus stock options plus lifetime healthcare at the auto companies expense? That's great to hear.
2014 Malibu 2LT, 2015 Cruze 2LT,
Rocky
With all this talk of stock options I would be willing to bet that more than half of the readers are in a "fog" to explain the concept. Tell me how IF I give you half of your compensation in a stock and have that issue valued three to four times its current worth is it a bonus ?
Stock options are a write off for the company. They do NOT always provide a windfall for those who receive them.
Sidebar: Stock option is the right but not the obligation to purchase a stock at a pre-determined price up until a certain future date ("Call Options"; obviously "put options," the right but not the obligation to sell at a pre-set price, are hardly ever used explicitly in compensation although pension plans, golden parachutes etc are in effect "put options"). That pre-determined price is call "strike price." If the market price of a stock is higher than the Call Option Strike Price, the option is in-the-money; otherwise it's out-of-money. Even out-of-money options have current cash value until its expiration if it is not tied with continued employment because it gives the right but not the obligation up until a certain future date; it's a form of insurance policy. The money for employee option exercise ultimately comes from the shareholders through dilution and increased number of stocks outstanding when the option holder exercise the option and buy the stock below market price for a quick flip. Restricted stock options that require vestment period is non-marketable, therefore in the accounting rules employee stock options are not expensed because technically it does not cost the operating company anything (the shareholders will pay for it later through dilution if the company does well the stocks rise in price). That's why it's a win-win situation, a very effective way of profit sharing with employees. If company does not do well and the stock tanks or never reaches the strike price, everyone goes home empty-handed (loss for shareholders, nothing beyond salary/wage for employees); none of this compensation nonsense to fight over as in the fixed wage and benefit in down turn scenerio that we are witnessing.
Most CEO pay packages with high figures do not even touch healthcare much less lifetime healthcare.
Rocky
Sure, the workers can keep their signing bonus and company-paid training back when they joined the company too if they are willing to take $1 per year salary, going forward, zero bonus, zero severance, zero pension plan, and no other similar entitlements whatsoever.
Sure the workers will take a $3 million dollar signing bonus each and work for $1 dollar a year over the life of the next contract. :P
What is your point brightness ???? You want the autoworkers to make a dollar a year while the fat cat Steve Miller reinstates the $987 million dollar bonus he wanted to pay his executives during the Bankruptcy filing ?????
Perhaps you obviously see nothing wrong with this picture :confuse: Oh they are college graduates and deserve this right because they have a degree. Most of whom went to college on Moms or Dads bankroll and never worked a real job in there life and don't have the slightest clue on what it takes to run a machine, but are going to manage the company from the high horse. The company-paid training "OJT" is done by fellow UAW members and they are working on the job producing a product. It's not like supervision is showing them how to run machinery and training them. They don't even know where the "on" button is, let alone risk getting grease on there new tie.
But yeah I think it's a great idea to give a each UAW member a $3 million dollar signing bonus and they work for a dollar each year of the contract, and they'd be glad to give up all benefits.
Rocky
And if wages really are out of line, it's usually symptomatic of larger issues relating to overall poor management.
At GM (and, by extension, Delphi, which was once part of GM), high wages were offered to pacify the blue-collar workforce instead of addressing underlying issues.
Granted, the UAW was happy to take those wages, so it isn't completely innocent in all this. UAW leadership really didn't want to address those underlying issues, because doing so would have weakened the power of the union (workers would have had less to gripe about).
Plus, management wanted the blue-collar workforce to have higher wages, because then management salaries were raised, too (managers should make more than workers).
What do you mean by training done by fellow UAW members? Do you think fellow UAW members would be the least bit interested in training newbies if they are not paid to do it? The natural of signing bonus is to pay for an employee's experience . . . something that obviously has value. Something that the company therefore can save time and money on. If you want to get a bigger signing bonus, feel free to go to school or otherwise acquire a skill that is valuable, whether production skills or management skills. It's ludicrous to suggest that somehow everyone deserves the same signing bonus too even if he has no specialised skills and not the slightest interested in taking on positions of responsibility. Gee, plenty bums and winos off the street would love to get paid the same as your security job; do you think they deserve that too even if they are not interested in ever having to take the risk of confronting terrorists? or even showing up on time rain or shine?
And if wages really are out of line, it's usually symptomatic of larger issues relating to overall poor management.
At GM (and, by extension, Delphi, which was once part of GM), high wages were offered to pacify the blue-collar workforce instead of addressing underlying issues.
Granted, the UAW was happy to take those wages, so it isn't completely innocent in all this. UAW leadership really didn't want to address those underlying issues, because doing so would have weakened the power of the union (workers would have had less to gripe about).
Plus, management wanted the blue-collar workforce to have higher wages, because then management salaries were raised, too (managers should make more than workers).
Excellent post. You, sir, have scored a bullseye with that one.
How many raises can a company afford to give faithful union members who hang in there through thick and thin? If it's a company like GM, which has lost face with much of the American people and is offering slop for cars, it can't afford to give raises when stock prices are not rising and profits are not being made.
Is the union at fault? The monster was created decades ago. Is it really fair to blame today's modern union member for this shortfall?
Unions aren't necessary. If pay isn't satisfactory then go look for work elsewhere where you can make what you feel you are worth. Unions start a snowball of pain that slowly grows out of control. All you need to do is look at the UAW and GM for a nice example. Sit back, crack open a nice Diet Coke with lime and watch what happens the next few years at the big 'ole General.
Medical care for one and for all? Healthcare may be more of GM's pain than the UAW. Must drugs cost so much? It's all adds up to a situation that is oppressive and out of control and evil. Very evil. :surprise:
2021 Kia Soul LX 6-speed stick
Shortsighted unions combined with shortsighted management (Detroit has plenty of both) spells doom. The collapse really has been fascinating.
And in the end, one side will bear the brunt of all the blame.
Union movement, at least that of the American history, is about dividing the spoils of monopoly. Once it was clear that big automakers were no longer owned by shareholders (ownership becomes quite meaningless if property right is not enforced), monopoly was strengthened as no new investment became available for start-ups in the industry. After WWI, the number of carmakers mushroomed in response to consumer demand; by contrast, after WWII, despite a more propsperous economy, no major carmaker was ever founded because would-be investors knew clearly that if their company ever achieve any degree success it would cease to be their property.
Once it was clear that shareholders were merely pretending to own their companies and management were mearly pretending to be managing, and workers pretended that they had to work, poor product quality became inevitable. Shortsightedness is human nature.
In the end, when we look back decades from now, I hope neither union nor management bear the brunt the blame. It's the government's failure to enforce laws that led to the sorry outcome.
IMHO, if not for the living/dying examples of how unionization can drag down even the erstwhile most successful companies in the world (Ford, GM, PanAM, TWA, US-Steel etc.), Microsoft and Walmart would have unionized in the past few years. Both have the ingredients of financial success and growing monopolistic power. It may yet happen to Toyota North America. It's about the spoils.
So now we can blame the government for the design of the Cavalier? I believe that Reagan was president at the time, so the culprits must be Republicans!
Then again, they continued to sell them while Clinton was president, so perhaps we should blame the Dems...Or maybe it was Ross Perot's wacky charts and graphs, except he was never elected....
Obviously, you can't blame Reagan, Clinton, Bush, Nader, Perot or even Harry Browne for the Cavalier (unless these guys had jobs at GM that I didn't know about.)
You can blame GM management that decided years ago to dedicate its business model to selling the same second-rate rental car at a discount under several different names. Uncle Sam had nothing to do with it.
Quite the obsession there.
So Franklin Roosevelt was responsible for the Cavalier? Thanks for the insight, I had no idea that he played such a pivotal role in 1980's automaking...
Delphi stock should then shoot through the roof since it only filed on it's North American Operations and will shut down 21 out of 29 plants. I wouldn't be suprised at all if Delphi becomes a 100% foreign firm with only having offices in Troy. It's very sad. :sick:
Rocky
Those 100,000 hands are all steering the ship right into the iceberg.
Then again they may be needed. Without the UAW breathing down the necks of Toyota would they pay as well as they do? I don't think so. UAW will need to make compromises to survive. So will GM & Ford. The future of Detroit is not real bright.
Looking at the salaries of top executives is not relevant. That is for the stockholders & board of directors to be concerned with. The Union needs to look at the overall health of the company. Executive pay is not an indicator of corporate health.
I have a sneaking suspicion that the Feds didn't know what to do in that situation. After all, it had never occurred before, as far as we know, that a union had an illegal sitdown strike, eh? Add some more news to this reporting if you would for us. I'd really like to know.
I'm not saying that they should have been allowed to sit down and force a resolve. Isn't that robbery, not necessarily at gunpoint to grab part of the big 'ole spoil? Isn't that what was going down? I mean, why should Henry Ford and family and close friends get all the take, right?
2021 Kia Soul LX 6-speed stick
Of course mistreatment of workers took place in some industries and some countries, just not nearly prevalent in the US auto industry or relevant to the alleged necessity/success of unions. Otherwise, we'd see agro-workers and sweatshop unions far bigger and far more successful than auto industry unions as those were industries where workers were really exploited. If you examine the UAW history closely, you'd notice that the seminal event that led to the successful unionization of American autoworkers was the GM Flint plant sitdown strike of December 1936. The point of contention was pay scale, not treatment at all. It took place at the Flint plant and was successful because GM was the most successful carmaker at the time and the Flint plant made the carbody for the volume sales leader from the company. An illegal strike by less than 2000 workers held up production by hundreds of thousands of workers for 44 days. Eventually the management gave in because the FDR administration had made clear to Sloan/Knudsen that the feds were not going to enforce laws against their union clients.
The extraordinarily high union pay really came after WWII, when Reuther pushed through a 17.5% wage increase, the largest single-increase ever. Once again, no mistreatment was cited, not even a provocation of outrage necessary. It was simply pushed through on the ground that the companies could afford it, and Reuther's anticipation that GM would not want its books open to public examination.
Like I said, unions, especially successful ones like UAW, are about slicing and dicing the monopolistic profits, at the ultimate expense of the consumers. Mistreatment and "necessity" is just a fig leaf for the soft ears. It's like towns raising taxes in order to pay for teachers and police; in reality, the revenue hardly ever goes to the sectors really need them. Workers in industries most heavily exploited, like agricultural workers and sweatshop workers, hardly ever had successful unions. It's the industries with monopolistic profits where workers that are already being paid way above average, like steelworkers, autoworkers and airline pilots that historically had successful unions.
In the real world, few are really honest or benevolent on their own accord (except for short moments of magnanimity at gallas). That's why competitive market place is necessary to enforce the best interest of the consumers.
In reality, multi-million dollar pay for CEO's is merely a fig leaf for the faithful. If we reduced Rick's salary to Zero, the savings would mean less than $10/yr for each GM worker. What difference does it make? If you are really critical of how the management is doing, perhaps more pay is necessary to attract better talent.
Ford was more than a "small potato" in the years prior to World War II. It was still the third largest car maker in the country, and well ahead of the "great independents" - Studebaker, Nash, Hudson and Packard. (And it may have still been the second largest car maker in the world, as its international holdings were much larger than Chrysler's at that time, although I don't have exact figures.)
brightness04: The extraordinarily high union pay really came after WWII, when Reuther pushed through a 17.5% wage increase, the largest single-increase ever. Once again, no mistreatment was cited, not even a provocation of outrage necessary. It was simply pushed through on the ground that the companies could afford it, and Reuther's anticipation that GM would not want its books open to public examination.
Are you referring to the Treaty of Detroit, agreed to by the UAW and GM in 1950? GM agreed to that contract in exchange for a multi-year (five, if I recall correctly) time span, and labor peace. At the time it was hailed by a wide spectrum of liberals and conservatives as a bold, visionary move by GM and the UAW.
The simple fact is that both the UAW and management (best personified by GM, which ruled the roost from 1940-1980 in the automobile market) were actually quite happy to keep paying high wages and allowing restrictive work rules to remain.
Why not? GM had over half the market. There was no real competition except for Ford, which wasn't inclined to rock the boat. The high wages and work rules seriously weakened Chrysler and AMC (and drove Studebaker out of business). They also hobbled the small-car efforts of GM and Ford, but let's face it - their hearts weren't really into it (and still aren't).
I hate to get in the middle of an argument here, but I just believe that both sides share a fair amount of blame. I'm "union neutral" - if the UAW and GM (or Ford) can build a car that I like, I'll buy it. I don't care if the workers make $200,000 a year for four days of work, with the entire month of August off as a vacation.
On the other hand, if they don't make something I like, I won't. UAW members have to stop acting as though I (and other car buyers) have some sort of obligation to support them in the style to which they have become accustomed. Spare me the "buy American" nonsense - these are global companies with manufacturing and engineering facilities around the world.
It's pretty simple:
-If the company doesn't offer products that people want, it will have a hard time selling them.
-When you make cars that are more suited for a rental fleet operator than a regular customer, then you end up with bland products that earn low prices and with dying brands.
-Products sold to discount buyers generate lower revenues.
All of these elements impact the Big 2.5, particularly GM. These circumstances are caused by short-term thinking led by management.
I don't particularly like the union, but it didn't create the bad designs or branding. You can spin it as you like, but that's the basic reason why GM can't sell cars.
People do feel emotionally about their reduced nominal income even if purchasing power of income does not change. Unions capitalize on that.
FDR administration, being beholden to both unions and bankers, simply refused to enforce property rights.
Workers work in a factory by contract; they have no more right to occupy the stations and refusing to work and preventing anyone else from working than tenants have the right to occupy an apartment while refusing to pay rent.
BTW, Ford was a relatively small player in 1936, being out-competed by GM and Chrysler for nearly a decade; Henry as a person however had a larger-than-life figure in the public imagination.