Which part of "for the same manufacturer" don't you understand?
Your argument involving Lotus and 911 are absurd. We are talking about plebian sedans and hatchbacks, not exotics. For general purpose high volume cars, wheelbase is the starting point of the platform specification. In fact that's the starting point of how a production line is put together ever since the production line method was introduced. You are showing your ignorance of the industry again.
Hey, you're the one who claimed that wheelbase was the main cost driver. Don't say it if you can't prove it.
Your statement was false, as my playful example clearly illustrated. If you made accurate statements, these continual fact checks wouldn't be necessary.
Model-T started sale at $850 when the competing cars cost $2000-3000 in the US . . . by the 1920's Ford was able to sell the car for $300 or less. Europe did not adopt Ford production line method quickly so their prices stayed high. You do the math. With an order of magnitude in price, the market volume would certainly be different. Model-T once accounted for 90% of all cars in the world. It doesn't take a genius to figure out that Europeans did not follow quickly.
If enough taxicabs are available to move a whole corp (some 30k - 45k people) in a timely fashion (back and forth in dribbles would not work for army deployment, where mass mattered), there were obviously a lot of taxicabs . . . hence indicating significant pre-existing market need for motorized small passenger vehicles even in Paris in 1914. Mass number of taxicabs is a good indication for the existence of people need cars but can't yet afford them.
The automotive business in the US was remarkably free wheeling and competitive before the 1930's. There were literally thousands of companies. Government did not intervene in operation of the companies simply because the industry was still very new. It was the info tech industry of its day; government had not learned how to get its hand on it yet ;-)
it is a supposed paradise for all, where everything falls into balance and everyone wins.
Not sure where you heard that. I never postulated a paradise for all. In fact, IMHO, even the attempt at building paradise-for-all is intrinsicly futile and more likely than not to bring distopia. Everything falling into balance? by whose standards? The very nature of competition is that there are winners and there are losers . . . but it still beats the statist pipe dream of paradise-on-earth / everything falling into balance / everyone wins . . . because the statist utopia inevitably turns into a distopia where a far greater per centage of population turns into losers (really serfs) for the benefit of a few in position of monopolistic political power.
You should drop your undoubtedly wildly successful small business and become a college prof.
There is just one not so small problem: with colleges largely funded by government nowadays (even private ones through various department research grants), a professor that bites the hand that feeds would not exactly be popular. Besides, so many stary eyed youths dreaming to make a career out of making the world a better place would be mighty disappointed to hear that hands-off and mind their own business would make the world a better place than trying to mold the world according to their own pipe dreams. I was there myself, a young apprentice elite with a Bohemian background ready to make the world better only if I were given the power . . . until I got hit by 40% tax overall bill telling me that some anonymous bureacrat can use the fruit of my labor better than myself.
Every general rule of thumb has exceptions. If I were to make a toy car by hand, using my own time, it can easily cost more than a real car. Does that mean a general rule that real cars are more expensive than toy cars is false?
I have no faith in an invisbile hand, no faith in those in power to make any decisions that benefit anyone but themselves should all regulations be abolished
So in other words, you have faith in the invisible hand of regulations. Pray tell, where are the ideal regulation enforcers coming from? and the ideal regulation makers? Not the same "those in power"? I'm not suggesting abolishing all regulations. Anti-trust for example is a category that I support. It's not canonic libertarianism, so in fact your accusations of libertarian propaganda does not fit me either.
It's not cool to ask questions when you don't answer those asked of you. I've likely read many of the same volumes as you, and experienced similar education. The theories just never won me over.
I don't remember you asked me what I read; you just went off with diatribes on Rand. I doubt we read many of the same volumes or experieced similar education. I actually spent more time reading Karl Marx than Ayn Rand thanks to government educational requirement when I was overseas; Rand was banned where I came from, along with "individualism" and "freedom-ism" (an "-ism" suffix has to be attached to make a good thing sound bad ;-) . . . I had to make up for that later on my own time after coming to the US. Rand and Mises just found real resonnance from my earlier first-hand life experience living under a society where "paradise on earth" was actually put together for workers . . . a few political leaders and their servants controlled every aspect of life in the name of fairness and equality, leaving the rest of the population as serfs in a modern redition of medieval Feudalism, only with the faith in All-Mighty replaced by all-mighty-big-brother.
The problem is that you make up these "rules of thumb" as you go along, and believe that repeating them makes them so.
At its essence, the core issue is that you go to great lengths to provide The One Answer for these issues, as if everything can be distilled into some uber-libertarian soundbite.
These One Answers of yours are both unsupported by the actual events and politically tinged, which makes it clear that first you chose the ideology, then made up the "rule of thumb" to match. That's the wrong sequence if you really want to get down to brass tacks.
Again, please refrain from the cliched generalizations, and offer supportable facts about the automotive industry, please. You are trying to turn this into a political discussion that trumpets your ideology, which isn't what the topic is supposed to be about. The subject matter is a good one, so try to stick with it.
The exact number was immaterial to the discussion because I already stated that in any case it was a substantial jump even before the error was pointed out to me. The numerical amount of a 25% raise today would indeed be quite immaterial 90 years from now.
Auto factories were not set up in urban areas by that stage of the game. Factories were actually set up in rural areas outside towns where land was cheap and owners could build dorms just like the textile mills did decades earlier.
Not sure autworkers back then actually required more skill than textile sweatshops. Henry Ford was supposed to have picked recruits by fist fight ability over quarters that he threw outside taverns.
If Ford was just competing with others, why did he more than double the existing wage scale? He went a bit overboard, didn't he?
It's not clear at all Henry Ford actually doubled his own previous wage level. What was said was that, his new offer was double what workers in the industry could count on. In any case, if his objective was to attract a mass wave of job applicants for plant expansion, making a splash in the news headlines was the cheapest way to go about it. Driving labor cost sky high quickly was also an effective way to kill off less efficient competition. It was part of the GM-Union game after WWII. Walmart is supporting minimum wage increase for the same reasons, good publicity to the simple-minded and hurt competition at the same time.
Whether Henry had plans for his workers to consumer his products was quite irrelevant because even if every worker purchased a model-T, it would still only account for a tiny per centage of the tens of millions of model-T produced. Not sure why you assumed that I was talking about anything memorized econ class theory. Your own theory that workers spending more money would drive up income in the area and make for more car buyers was actually a bastardized version of Keynsian economics whether you noticed it or not; the problem of your theory of course is that you never sat down and thought through the numbers. All the money Henry handed out as extra could not all come back because there were other things to buy and people saved. Henry would lose money if he was just handing out money for people to buy his cars . . . a very simple concept indeed, no economic theory necessary.
People talk to each other. Some regulation in the market prevents such collusion...make it dog-eat-dog, and I'll wager an awful lot of money we'll lose that.
Lose what? How is it possible for all employers and all potential employers, literally hundreds of thousands of people if not millions, to talk to each other and agree on a wage cap?? Every single one of them has a tremendous incentive to offer just a little more to get the best employee. Business are not in the business cutting costs; businesses need to make money. Hiring an employee is not a charitable act; hiring is done because it's profitable. Suggesting that all employers in a real economy can get together and talk and set a wage cap voluntarily is about as absurd as suggesting that we all boycott all gas stations for a year and thereby driving down gas prices at the pumps. There are practical limits in real life. If someone has that much power to talk every single employer into an artificial wage cap, what's to prevent that same someone from talking regulation makers and regulation enforcers into the same? After arm-twisting millions, what's a couple more?
In fact, economy-wide wage caps have been only possible when it's the government setting it in misguided attempt to fight inflation (stop the run-away money printing press would work much better than price and wage control). Even then, employers handed over extra money under the table and offered special perks for their most valuable employees.
Has this debate really degenerated to a level where we have to debate whether bigger cars from the same manufacturer are usually more expensive as a rough rule of thumb for normal 4-door cars and hatchbacks?? It's getting absurd. What's next, do we have to debate whether cars usually have four wheels?
Uber-libertarian? Not sure if hard-core libertarians would agree with you on that description for someone who supports anti-trust enforcement.
Please do stick to topic instead of discussing other posters. The pro-union camp has been spewing cliches and ideology far more than I have. The very idea that Union was necessary was cliched blind-faith ideology unsupported by the fact that major unions were in industries with high wages not low wages.
Has this debate really degenerated to a level where we have to debate whether bigger cars are usually more expensive as a rough rule of thumb for normal cars??
No, we're discussing how you create data out of thin air, and use that false data as a segue to present the same generalized political arguments that you obviously are motivated to present.
The point is that you want a political discussion, but this isn't supposed to be a political thread. So please talk about the auto industry, and the issues that impact it specifically, that's why the rest of us are here.
We're not discussing you personally, but your desire to discuss politics. Problem is: we don't want to (in my case, not because I don't like politics, but because this is a relatively focused car forum, and I come here for that purpose.) If you could just limit yourself to the subject of the car business, then you can rest assured that we won't need or want to discuss you again.
I come here to discuss union and domestic automakers. You can take your fantasies of world domination with small cars elsewhere. From what you have posted so far, it's quite obvious that you do not know a thing about the car business. I have posted more automotive industry knowledge in one day than you have in the last month. You just parrot whatever is printed in the marketting rags and fits your agenda with no critical thinking whatsoever.
As to politics, you are the ones keep making it into a political discussion by labelling and attacking me personaly, and then insist with no factual support that union was a necessity; i.e. a political necessity. What else can it be a necessity for? obviously not necessary for better cars or cheaper cars. The only "necessity" is in terms of redistribution of wealth, which is politics.
Let's stop making this about each other please. We've been through this multiple times here now.
Please make a little effort to find a way to disagree with each other without the little personal digs.
Everyone's position is pretty clear. No need to hear, yet again, how someone thinks this post is propoganda, or that post is made up. All those comments do is turn this back into the obvious personal beef that this always becomes.
And no "last shots" please. It doesn't matter how right you think you are, or who started it. let's move on and get back to the topic.
Maybe this forum should have a union bashing thread, so libertarians with their fantastic economic dreams can have a place to gloat. Then there'd be no problems elsewhere. Funny how it always involves certain posters (myself included). Lord knows there are more pointless threads.
But yeah, I'm not going to reply to the nonsense...I will just suggest that some study their automotive history. There's an excellent historical text titled 'The European Automobile Industry' by James Laux that contains most data anyone needs to know.
There is no such thing as libertarian fantastic economic dream. Libertarians are dour and don't dream much :-)Competitive market place does not promise paradise to everyone for the simple reason that if everyone is guaranteed to be taken good care of, including those inclined to play harps all day and watch TV instead of working, there will be no incentive to work. The advocacy for free market place is a simple realistic assessment that the alternatives are even worse: serfdom under self-important government officials is where you work hard and still don't get paid well, for the overwhelming majority of population anyway. Frankly I'm very surprised anyone who read any libertarian books would have come away with the impression that libertarianism promises paradise on earth; in fact, libertarians tend to go out of their way to give stark warnings against anyone who makes promises about a paradise on earth.
Just to bring the subject back to the topic of this forum, Unionism is indeed a fantastic economic dream. Somehow workers can be guaranteed high wages and comfy retirement regardless whether their line of work still commands a premium from consumers. It simply does not work: either the consumers have to be forced into accepting choices they would not accept voluntarily (ie. import restrictions therefore forced into buying domestics at prices that domestics want) or the workers have to give, unfortunately, often at too late a stage of their working lives or in retirement when they can not make up for the lost productive years thanks to decades of union promise that eventually turn out to be false.
Some posters indeed need to study their automotive industry history. The US used to have a very competitive automotive industry, made some the most reliable cars in the world at prices that were positively fantasticly cheap when compared to the rest of the world, and workers were paid fabulous wages compared to the rest of the economy, all because Ford, GM and Chrysler, among thousands of others, were engaged in cut-throat competition with each other, both for consumers to buy their products and for workers to work for them. That was before circa 1930. Then the unions took over, setting input price for all existing players and driving away would-be players at the same time, and the industry turned into oligopoly for half a century gradually ossifying, until competition coming from overseas offered American consumers better values.
The best way to bring MFG jobs back to the us it to foster conditions were its in the companies economic interest to manufacture here. The unions do the exact opposite, with nowhere to go the companies were dying, now with NAFTA, they can run to mexico and make a last stand before its too late and the competition robs them of all patents required to make a competetive vehicle in the future.
Am i suggesting tarrifs? Meybe, we can do what japan is doing and have sneaky jovt policy which amounts to tarrifs but by other names. Of course, Japan does not tout 'free trade' and live it like we do. Then again, there is little risk of job losses in Japan for MFG's, compared with the USA.
Isn't that a cryin' shame? I think it is, but we can still do something about it.
All theory and no meat yet again. Funny you mention serfdom...your impossible ideal will produce serfdom under self-important corporate domination.
Indeed, to bring the topic back, instead of whining incessantly about unions, whine about specific UAW issues.
The domestic auto industry has produced many fine cars since the unions came into being. Study the automobile, indeed. Memorizing economic texts and a thesaurus doesn't produce automotive knowledge.
Fin, I'd let it go. He's just looking for excuses to go over his political beliefs, with only gratuitous (and generally factually inaccurate) references to the car industry. If he can't talk about the industry, I'd save the dialogue for others who can.
There you go again, personal attacks instead of any substance. I'm still waiting for the meat of your economic theory: where would consistently honest and fair regulators come from. CEO's are not representatives of the free competitive market place any more than politicians are; they are often the same people. Corporations are legal entities created by governments (exemption from personal responsibility in case of a business failure). If a corporation dominates an industry, as in having substantial price setting power, it's no longer in a competitive market place. In a sense, the government is a big corporation dominating our lives. I'm starting to suspect that, despite your earlier claims claims, you never read much of any libertarian literature. CEO's and corporations that have monoplistic power are anathema to any believers of competitive market place; they are in fact small versions of government and officialdom themselves, and indeed they often behave that way in real life too . . . they just haven't quite achieved total domination like the government has.
Being able to produce a few fine cars once in a while is no proof of efficiency for either the union or the automotive oligopoly. Even the serfs in the former soviet union managed a few stunts like putting the first man-made sattelite into space (the Sputnik). It's the lack of any systematic defense against internal rot that ultimately dooms all those monoplistic systems. The former soviet union was indeed a serfdom created by regulations, as if Henry Ford had actually taken over, making obsolete Lada's year after year, counting them all up as productivity never mind consumers would rather have something else; oh, the "benevalent" regulators gave away the cars too, and increased the serfs' nominal income by declaring Rubles being more worthy than the Dollar. Luckily for Americans, Henry Ford lost his shirt when other manufacturers offered alternatives and beat Ford in his own game, thanks to the existence of a competitive market place for auto industry back then.
UAW has/had many specific issues, many of which have been listed before:
(1) It discourages initiative. If all workers are paid according to seniority instead of the quality or quantity of work, it would take saintly workers coming from a pipe dream to keep working hard and making good products ;-)
(2) It sets price through monopolistic power, not what consumers want to pay or what alternative suppliers would offer. Obviously "scabs" are not welcomed by the UAW, yet they are precisely what would have lowered cost of vehicle production to consumers.
(3) It was against automation when automation became the critical element to vehicle quality and production efficiency.
(4) UAW wages are set company-wide in multi-year contracts, not constantly changed through flexible hiring and firing . . . whereas the money supply by the Federal Reserve is adjusted on a much more frequent basis. The result is domestics' inability to keep pace with changing economic conditions.
(5) UAW job security prevents the workers from searching for greener pasture when manufacturing started to lose its edge in wage premium vs. other industries. The result is stranded ex-workers in their retirement years, who had wasted their earlier productive years in a dying industry when they could have helped themselves by moving to a more productive industry earlier.
(6) UAW job security locking workers in the obsolete line of work also prevents new lines of business from finding workers.
(7) UAW defined benefit retirement and healthcare bankrupts companies and ultimately leaves its own members stranded and helpless just when they need it the most, in advanced age.
(8) UAW high labor cost makes it nearly impossible for domestics to compete in small cars, where labor cost accounts for a higher per centage of production cost.
(9) UAW fixed labor cost (getting paid regardless whether the production line is running or idle) forces domestics to keep the production lines running even if the market says no more is needed. The result is damaged brands and waste of natural resources, just like the Lada's.
(10) UAW labor structure and high cost also prevented the rise of other domestic companies to overtake the leading player of the oligopoly, GM. Chrysler was barely kept in the running and many others failed because they could not absorb the labor benefit overhead designed by collaborations between GM management and the union bosses. The result was further entrenchment of the oligopoly (in effect an extended monopoly by GM).
Now care to give a specific list on why free competitive market is bad to the auto industry, instead of incessant attacks on Rand's supposed dreams? ;-) No diversion into wealth redistribution (i.e. politics) please.
Sorry dude, I'm done, so don't wait up for me. You can find a better use for your time, I'm sure. Go hang out with your new kid. And don't ask questions until you address those asked of you.
You asked for a specific issues list, and I gave you one, a list of 10 issues. Now it's your turn ;-) BTW, thank you for your concern. Voice recognition software works wonders; I can hold the baby sleeping in my arms while talking into the computer, with only occasional typo correction necessary afterwards.
I can tell you never worked in a union shop, let alone a factory, and are beating the anti-union drum you obviously have read in the latest slander column perhaps authored by Ann Coulter. :confuse:
You are as wrong about me as you are on unionism. I have never read a single column by Ann Coulter in my life. Now, can any argument for the union be made that is not pure personal attacks? And factually wrong ones at that? I'm still waiting.
So far we have had repeated assertions of "Union was necessary for raising the living standards of poor and expoited worker." Well, if that were the case, unionism has been counterproductive. Almost all major unions were formed in industries where workers were paid higher than, sometimes way beyond, average worker wage at the time. What unions really accomplished was keeping out workers making less money from having an opportunity of advancement.
All the personal attacks based on bad guesses only goes to show how desperately out of touch with reality the pro-union position really is. In order to really believe in unionism, one has to believe everyone else in the world is stupid: the union bosses are stupid and won't exploit their unique position of monopolistic power; union workers would have to be equally stupid, and they would continue to work hard even as it is known apriori that the quality and effort put forth would have no effect whatsoever on their own pay. I happen to believe that the overwhelming majority of people in the world are intelligent, and perfectly capable of optimizing for his or her own narrow interest. Which brings to my conclusion that union supporters are not stupid; they are just selfishly defending their own interest at the expense of the rest of the society/economy just like any other monopoly and persons in established positions of privilege would . . . either that or simpletons who are too intellectually lazy to think through the details of putting oneself in someone else' shoes yet aspire to be in position of monopolistic power.
Let's not get on the latest media slur kick since they fear Coulter. The reading here's become repetitive like being asked for proof of everything!
I'll change the subject. Will UAW agree to enough savings in pay to keep GM in the US? I don't think so. The UAW still sees stars in its future by giving just enough to maintain its standard of living for a few more years. That's all that counts. Twenty years from now isn't in their thinking ability like a teenager who wants something _now_.
Too bad the old iron maiden, guillotine, does not have good foresight either :-) The original guillotine went through tens of thousands of victims in a few short years, and still failed to come up with a workable "management" for France.
Indeed both the union and the management tend to ossify if left to their own device without constant threat of being overtaken by competition, just like everyone does. The difference is that in a competitive market place, the company management has competition; e.g. when Henry Ford became too full of himself and refused to listen to the consumer demand, both Sloan (GM management) and Chrysler (Walter) leap-frogged him from their original positions of less than 10%, combined, of what Ford had. The nature of union unfortunately precludes that kind of competitive pressure. If thousands of little unions could compete for those jobs (market demand for labor), there wouldn't be the kind of ossification that we are witnessing, but then there wouldn't be a union. Union is by definition an institution of cartelization.
Hint for next time: Gratuitously tossing in a mention of Sloan does not give you license to write much more about "cartels", etc.
As I said, you want to talk about monopolies, cartels and your vision of the free market, and have no interest whatsoever in why General Motors and Ford Motor Company have difficulty competing. Same stuff, different day.
Hey rock - what was with the major detour on US287 going through town? We were coming up from Amarillo and then headed west towards Dalhart on 87 and the cops were taking all the highway traffic on a big detour around town. Was there a parade or something going on?
We usually take a much more southerly route on our yearly vacation to Colorado; but this year we decided to take the kids over to Capulin (sp?) Volcano in NE New Mexico.
"Well atleast some ice cream"
I'll have a pint of Blue Bell Rocky Road tonight in your honor rock.
Unions have raised the standard of living of everyone, including lower management. Even my management is praying we get a good contract next March, so they can actually feel like they are getting a raise, instead of it going to "energy company's". :surprise:
If greedy CEO's, politicians, had it there way only the "elite" would live the good life. This is there "pipe dream" and have somehow successfully maneuvered stealthy using the "smoke and mirror issues" like terrorism, illegal imigration, etc, to squash big labor without main media attention.
Thankfully Rick Wagoner, and Bill Ford have recognize these tatics and know this administration isn't on the sides of the american auto-industry. My only concerns is can the american auto-industry make relavent enough products that are competitive with the likes of Honda and Toyota ????
So far the answer is yes and no...... Depending on the segment and how much R&D was used for development. The Japanese right now have all the advantages in there favor. Ford Motor Company, unfortunatly is going to continue to invest heavy in Mexico, even as the UAW has said they will allow the company to have a flexible workforce.
Unions have raised the standard of living of everyone, including lower management.
You are right, of course, but I found it funny that he was effectively arguing that they actually got a paycut based upon his guessing what a $5 day was worth in current dollars.
If he was right, then those union guys were pretty stupid to negotiate all of those paycuts. Imagine how they must feel to know that all this time that they thought that they had gotten raises that they were actually earning less... :surprise:
Yes on Saturday 6-10 there was the annual "Dumas Doogie Days" parade and carnival. So yes they rerouted traffic. Did you see any fires coming up this way ? We had a blaze last week outside of Amarillo headed straight torwards the Borger Oil fields, but apparently they got it put out.
My wife has been to Capulin several times and is going to take me sometime soon.
Blue Bell ice cream is delicious I however do love Braums just as much. My favorite flavor of Blue Bell is the awesome juicy Pecos Cantaloupe. :shades:
What vehicle did you take to Colorado ? Where did you go ?
What do artificially high labor costs do to the price of the car? Do they somehow magically disappear so the consumer pays NOTHING additional? Does GM have some giant money tree out back to pay the higher labor costs so that the consumer pays the same regardless?
I don't think so. Higher labor costs are reflected in either higher product cost to the consumer, or they are reflected in cost-cutting measures which may be difficult to see. Regardless, those higher labor costs are passed on.
So, what about the standard of living of the consumer paying the higher labor cost? Aren't they then getting less for their dollar?
Well higher labor costs is arguable. The Japanese still make quite a few vehicles over in Japan, thus causing high labor costs to be added to the price of there vehicles. The difference like Socala has repeated over and over is the final product is worth the extra cost.
Dumas Doogie Days? Dang and drat. I don't doubt that was a doozie :P
Nope, no fires. I did note the Canadian River just north of Amarillo looked REALLY low.
We took the Odyssey. Pretty good family hauler (and built in the USA :P ) and averaged around 25.5mpg for the trip (including some banzai runs through the mountains and 80+ on the interstates).
Stayed in Pagosa Springs for the week with numerous side trips (up to Great Sand Dunes NP outside of Alamoosa and a day on the old narrow gauge train out of Chama NM). Kids had a blast.
Ford sells lots of vehicles in Mexico. If I recall correctly, Ford is the number-one selling marque down there. The company has had production facilities in Mexico for many decades.
The UAW is allowing this to happen because union leadership knows that sourcing a fair amount of lower-margin products from Mexico enables Ford to more effectively compete with the Japanese.
Interestingly, Ford does want to build an all-new facility...and word is that it will build this plant NEAR a transplant operation. This gives Ford an all-new, flexible plant in the Sunbelt. Ford needs to break away from the perception that it is tied exclusively to the Rust Belt. At the same time, this new plant gives the UAW a foothold in an area near a transplant - areas that have not been especially hospitable to unionism.
If this comes to fruition, you'd better believe that the UAW leadership was briefed on this and has "unofficially" signed off on it. This new plant was probably offered in exchange for the union agreeing to remain silent on the company's Mexican expansion plans.
"The difference like Socala has repeated over and over is the final product is worth the extra cost."
Yep. Of course, 'worth the extra cost' is a concept that varies tremendously from consumer to consumer.
But that's all shadow boxing. Regardless of the REASON for the higher labor cost (UAW or built in Japan), the point remains that the labor costs are higher.
Consider the Ford Fusion. If Ford built the car in the U.S., using UAW labor, their labor cost would be higher than if they built the car in Mexico. Ford CAN'T just sell the car for 'x' amount of dollars REGARDLESS of the labor cost. The labor cost, like materials cost or R&D or plant investment is reflected in the final unit cost.
If the labor cost is higher (regardless of the reason), the final unit cost will be higher. These costs are passed to the consumer. So, a higher labor cost (again, regardless of the reason) results in higher cost to the consumer for an otherwise identical product - and a lowering of that consumer's buying power.
Now, if you can show that the higher labor cost has MERIT to the consumer, then they are actually getting something for the higher unit cost. Which brings ME full circle again:
What VALUE is added to the product, for the consumer, by the higher labor cost of UAW labor?
Wow, sounds very cool. I'm glad ya had fun. Hey those Odyssey's are nice rides. Maybe one day they will be built by UAW workers :P :surprise: Well truthfully it could happen and is one reason why the american company's want to build new UAW plants near non-union transplants according to the Detroit News to level the playing field. I'm betting we will see the next UAW contract to have 401K only plans for retirements. The healthcare for retirees I won't even begin to speculate on. Hopefully eventually we will get national healthcare which will relieve american buisness's from having to provide all the costs and maybe that would be enough to expand growth in this market.
What VALUE is added to the product, for the consumer, by the higher labor cost of UAW labor?
Quality of final product is the #1 reason why I refuse to buy a mexican assembled car. My mother didn't know her 99' Tahoe 2 door Sport 4x4 was being built in Mexico and it came to the dealership with scratched paint and cracked leather on the drivers seat. Mom and step-dad blew a gasket and I told them to check VIN#'s next time.
You said basically exactly what the Detriot News said pal. You must of read the same article as myself. I think I posted it ?
The UAW is smart by signing off on the deal. OTOH I agree that the Big 3 sometimes needs to build cars outside of the U.S. to reach a certain price point. If they built a Mexican made small car like the Jetta, I can swallow the pill as long as they don't over do it. I OTOH won't buy that mexican built car because #1 I can afford more #2 I want quality #3 I'd rather support american jobs.
"Hey those Odyssey's are nice rides. Maybe one day they will be built by UAW workers"
I glad ONE of us was able to bring that back on topic...
"I'm betting we will see the next UAW contract to have 401K only plans for retirements."
Possibly.
"The healthcare for retirees I won't even begin to speculate on."
Wise move. I wouldn't either.....
"Hopefully eventually we will get national healthcare which will relieve american buisness's from having to provide all the costs...."
Um, in light of our recent commaraderie, I'll try not to go off on a massive diatribe regarding National Healthcare. But I do agree that American businesses should be relieved of that burden. I just think that burden should be borne directly by the individual.
The individual (taxpayer) ultimately bears the burden of health care anyway. I just think it's more efficient for the taxpayer to do it directly by PAYING for health care at the time of service or by having insurance rather than have it paid for through higher taxes and the oh so efficient Federal Government.
Sorry - on this I think we'll also just have to disagree...
"Quality of final product is the #1 reason why I refuse to buy a mexican assembled car."
In other words, UAW assembled vehicles have no defects while non-UAW assembled vehicles do? Or is it a genetic thing with Mexican labor that they ALWAYS screw up something?
You've got to understand that a comment like that is intrinsically NO different from someone claiming that they'll never buy a car assembled in America, even if it is an import brand. You get (understandably) riled up at those kinds of comments. Why should it be any different by implying the Mexican labor simply CAN'T be as good as UAW labor?
Um, in light of our recent commaraderie, I'll try not to go off on a massive diatribe regarding National Healthcare. But I do agree that American businesses should be relieved of that burden. I just think that burden should be borne directly by the individual.
The individual (taxpayer) ultimately bears the burden of health care anyway. I just think it's more efficient for the taxpayer to do it directly by PAYING for health care at the time of service or by having insurance rather than have it paid for through higher taxes and the oh so efficient Federal Government.
Sorry - on this I think we'll also just have to disagree...
I can actually agree with you on this topic, but how are individuals making a middle income salary going to afford healthcare if it comes soley out of there pockets without enough raises to cover the added expense is the real problem.
i.e. Let's say you were making $25 an hour with very good medical insurance. Would it be worth the employer paying you $65 an hour to replace you insurance and company provided 401K retirement or pension ?
This is something some of my UAW family members have calculated out that would save the company ALOT of money and give them "the employee" more money and control of there retirement investments and that's not including overhead to provide oversight of these plans.
Mexican labor isn't even close as good as American labor, let alone UAW labor. A typical mexican factory worker in Mexico, will work a few weeks-few months and quit and go fishing according to engineers at both GM and Delphi. So yes the "experience" of the individual does play a role in building reliable/quality cars free of defects.
Would you have the loyalty if you could walk out one door and walk in another and get the same pay ? It's not like GM or Ford of "de Mexico" is providing these workers with benefits and a retirment. :sick:
If they did any of these, not only I would be proud of them, but I wouldn't have the least bit problem cars being assembled in Mexico.
"...how are individuals making a middle income salary going to afford healthcare if it comes soley out of there pockets without enough raises to cover the added expense is the real problem."
Hey! I think we may be nearly on the same page. I think we BOTH recognize that (theoretically) health care costs should be borne by the individual out of their pocket.
I think we only differ in how to get there. I don't think we'll EVER get there by going to some form of 'National Healthcare'. Then it just becomes another entitlement to be 'managed' by the Feds. And we both know how efficient that is...... :surprise:
Well President Bush, right now is trying to cram this Health Savings Account down our throats for us federal and federal contractor workers. I saw he put $15K in his HSA. :confuse: (Is that going to cover the sniffles ?) He also wants to freeze all pension plans for federal workers.
So basically for federal employees paid by the tax-payers he wants them to have no health insurance, and no define benefit retirements. I'm ok with all of the above as long as he's willing to pay me enough salary. About $60 or $65 an hour would be enough money to provide my family and I insurance and give me enough extra to invest in a roth IRA and play "day trader". I agree it will save the government money and give me more control of my retirement plans. I can do better investing on my own than letting a finacial insitution and my employer decide which "funds" I can put my money in. :mad:
For example I want to buy $10K worth of Delphi stock using my pre-tax dollars. My 401K doesn't allow me to do that with "my money" :mad:
What this has to do with the UAW, is that it would be easier paying a higher salary upfront to eliminate all legacy ties to union employees. Hell it would work for all folks of all stripes. It's efficient for buisness and employee and hopefully "traditional benefits" could be a thing of the past.
Once again, it's hard to make the case for union without resorting to personal attacks, isn't it? ;-) My business is doing better than ever, thank you very much. I actually hired a couple more people in the past month, so that I can have a little more time to bond with the baby.
Competitive market place is not a fantasy. It's what the auto industry was like before circa 1930. When unions, oligopolies and regulations took over that industry, competitive market place brings forth new and more productive industries, like various parts of high tech industry. The competitive markets/industries are always more productive and more efficient.
Unionism, on the other hand, is indeed a fantasy. Unless your idea of union is giving workers an opportunity to waste their time when young and have retirement planning yanked from under them just as they approach retirement or already in retirement, the Union pipe dream of soaking the capitalists and consumers have been a deplorable fantasy.
Comments
Your argument involving Lotus and 911 are absurd. We are talking about plebian sedans and hatchbacks, not exotics. For general purpose high volume cars, wheelbase is the starting point of the platform specification. In fact that's the starting point of how a production line is put together ever since the production line method was introduced. You are showing your ignorance of the industry again.
Your statement was false, as my playful example clearly illustrated. If you made accurate statements, these continual fact checks wouldn't be necessary.
If enough taxicabs are available to move a whole corp (some 30k - 45k people) in a timely fashion (back and forth in dribbles would not work for army deployment, where mass mattered), there were obviously a lot of taxicabs . . . hence indicating significant pre-existing market need for motorized small passenger vehicles even in Paris in 1914. Mass number of taxicabs is a good indication for the existence of people need cars but can't yet afford them.
The automotive business in the US was remarkably free wheeling and competitive before the 1930's. There were literally thousands of companies. Government did not intervene in operation of the companies simply because the industry was still very new. It was the info tech industry of its day; government had not learned how to get its hand on it yet ;-)
it is a supposed paradise for all, where everything falls into balance and everyone wins.
Not sure where you heard that. I never postulated a paradise for all. In fact, IMHO, even the attempt at building paradise-for-all is intrinsicly futile and more likely than not to bring distopia. Everything falling into balance? by whose standards? The very nature of competition is that there are winners and there are losers . . . but it still beats the statist pipe dream of paradise-on-earth / everything falling into balance / everyone wins . . . because the statist utopia inevitably turns into a distopia where a far greater per centage of population turns into losers (really serfs) for the benefit of a few in position of monopolistic political power.
You should drop your undoubtedly wildly successful small business and become a college prof.
There is just one not so small problem: with colleges largely funded by government nowadays (even private ones through various department research grants), a professor that bites the hand that feeds would not exactly be popular. Besides, so many stary eyed youths dreaming to make a career out of making the world a better place would be mighty disappointed to hear that hands-off and mind their own business would make the world a better place than trying to mold the world according to their own pipe dreams. I was there myself, a young apprentice elite with a Bohemian background ready to make the world better only if I were given the power . . . until I got hit by 40% tax overall bill telling me that some anonymous bureacrat can use the fruit of my labor better than myself.
So in other words, you have faith in the invisible hand of regulations. Pray tell, where are the ideal regulation enforcers coming from? and the ideal regulation makers? Not the same "those in power"? I'm not suggesting abolishing all regulations. Anti-trust for example is a category that I support. It's not canonic libertarianism, so in fact your accusations of libertarian propaganda does not fit me either.
It's not cool to ask questions when you don't answer those asked of you. I've likely read many of the same volumes as you, and experienced similar education. The theories just never won me over.
I don't remember you asked me what I read; you just went off with diatribes on Rand. I doubt we read many of the same volumes or experieced similar education. I actually spent more time reading Karl Marx than Ayn Rand thanks to government educational requirement when I was overseas; Rand was banned where I came from, along with "individualism" and "freedom-ism" (an "-ism" suffix has to be attached to make a good thing sound bad ;-) . . . I had to make up for that later on my own time after coming to the US. Rand and Mises just found real resonnance from my earlier first-hand life experience living under a society where "paradise on earth" was actually put together for workers . . . a few political leaders and their servants controlled every aspect of life in the name of fairness and equality, leaving the rest of the population as serfs in a modern redition of medieval Feudalism, only with the faith in All-Mighty replaced by all-mighty-big-brother.
The problem is that you make up these "rules of thumb" as you go along, and believe that repeating them makes them so.
At its essence, the core issue is that you go to great lengths to provide The One Answer for these issues, as if everything can be distilled into some uber-libertarian soundbite.
These One Answers of yours are both unsupported by the actual events and politically tinged, which makes it clear that first you chose the ideology, then made up the "rule of thumb" to match. That's the wrong sequence if you really want to get down to brass tacks.
Again, please refrain from the cliched generalizations, and offer supportable facts about the automotive industry, please. You are trying to turn this into a political discussion that trumpets your ideology, which isn't what the topic is supposed to be about. The subject matter is a good one, so try to stick with it.
Auto factories were not set up in urban areas by that stage of the game. Factories were actually set up in rural areas outside towns where land was cheap and owners could build dorms just like the textile mills did decades earlier.
Not sure autworkers back then actually required more skill than textile sweatshops. Henry Ford was supposed to have picked recruits by fist fight ability over quarters that he threw outside taverns.
If Ford was just competing with others, why did he more than double the existing wage scale? He went a bit overboard, didn't he?
It's not clear at all Henry Ford actually doubled his own previous wage level. What was said was that, his new offer was double what workers in the industry could count on. In any case, if his objective was to attract a mass wave of job applicants for plant expansion, making a splash in the news headlines was the cheapest way to go about it. Driving labor cost sky high quickly was also an effective way to kill off less efficient competition. It was part of the GM-Union game after WWII. Walmart is supporting minimum wage increase for the same reasons, good publicity to the simple-minded and hurt competition at the same time.
Whether Henry had plans for his workers to consumer his products was quite irrelevant because even if every worker purchased a model-T, it would still only account for a tiny per centage of the tens of millions of model-T produced. Not sure why you assumed that I was talking about anything memorized econ class theory. Your own theory that workers spending more money would drive up income in the area and make for more car buyers was actually a bastardized version of Keynsian economics whether you noticed it or not; the problem of your theory of course is that you never sat down and thought through the numbers. All the money Henry handed out as extra could not all come back because there were other things to buy and people saved. Henry would lose money if he was just handing out money for people to buy his cars . . . a very simple concept indeed, no economic theory necessary.
People talk to each other. Some regulation in the market prevents such collusion...make it dog-eat-dog, and I'll wager an awful lot of money we'll lose that.
Lose what? How is it possible for all employers and all potential employers, literally hundreds of thousands of people if not millions, to talk to each other and agree on a wage cap?? Every single one of them has a tremendous incentive to offer just a little more to get the best employee. Business are not in the business cutting costs; businesses need to make money. Hiring an employee is not a charitable act; hiring is done because it's profitable. Suggesting that all employers in a real economy can get together and talk and set a wage cap voluntarily is about as absurd as suggesting that we all boycott all gas stations for a year and thereby driving down gas prices at the pumps. There are practical limits in real life. If someone has that much power to talk every single employer into an artificial wage cap, what's to prevent that same someone from talking regulation makers and regulation enforcers into the same? After arm-twisting millions, what's a couple more?
In fact, economy-wide wage caps have been only possible when it's the government setting it in misguided attempt to fight inflation (stop the run-away money printing press would work much better than price and wage control). Even then, employers handed over extra money under the table and offered special perks for their most valuable employees.
Uber-libertarian? Not sure if hard-core libertarians would agree with you on that description for someone who supports anti-trust enforcement.
Please do stick to topic instead of discussing other posters. The pro-union camp has been spewing cliches and ideology far more than I have. The very idea that Union was necessary was cliched blind-faith ideology unsupported by the fact that major unions were in industries with high wages not low wages.
No, we're discussing how you create data out of thin air, and use that false data as a segue to present the same generalized political arguments that you obviously are motivated to present.
The point is that you want a political discussion, but this isn't supposed to be a political thread. So please talk about the auto industry, and the issues that impact it specifically, that's why the rest of us are here.
We're not discussing you personally, but your desire to discuss politics. Problem is: we don't want to (in my case, not because I don't like politics, but because this is a relatively focused car forum, and I come here for that purpose.) If you could just limit yourself to the subject of the car business, then you can rest assured that we won't need or want to discuss you again.
As to politics, you are the ones keep making it into a political discussion by labelling and attacking me personaly, and then insist with no factual support that union was a necessity; i.e. a political necessity. What else can it be a necessity for? obviously not necessary for better cars or cheaper cars. The only "necessity" is in terms of redistribution of wealth, which is politics.
Please make a little effort to find a way to disagree with each other without the little personal digs.
Everyone's position is pretty clear. No need to hear, yet again, how someone thinks this post is propoganda, or that post is made up. All those comments do is turn this back into the obvious personal beef that this always becomes.
And no "last shots" please. It doesn't matter how right you think you are, or who started it. let's move on and get back to the topic.
But yeah, I'm not going to reply to the nonsense...I will just suggest that some study their automotive history. There's an excellent historical text titled 'The European Automobile Industry' by James Laux that contains most data anyone needs to know.
Just to bring the subject back to the topic of this forum, Unionism is indeed a fantastic economic dream. Somehow workers can be guaranteed high wages and comfy retirement regardless whether their line of work still commands a premium from consumers. It simply does not work: either the consumers have to be forced into accepting choices they would not accept voluntarily (ie. import restrictions therefore forced into buying domestics at prices that domestics want) or the workers have to give, unfortunately, often at too late a stage of their working lives or in retirement when they can not make up for the lost productive years thanks to decades of union promise that eventually turn out to be false.
Some posters indeed need to study their automotive industry history. The US used to have a very competitive automotive industry, made some the most reliable cars in the world at prices that were positively fantasticly cheap when compared to the rest of the world, and workers were paid fabulous wages compared to the rest of the economy, all because Ford, GM and Chrysler, among thousands of others, were engaged in cut-throat competition with each other, both for consumers to buy their products and for workers to work for them. That was before circa 1930. Then the unions took over, setting input price for all existing players and driving away would-be players at the same time, and the industry turned into oligopoly for half a century gradually ossifying, until competition coming from overseas offered American consumers better values.
The best way to bring MFG jobs back to the us it to foster conditions were its in the companies economic interest to manufacture here. The unions do the exact opposite, with nowhere to go the companies were dying, now with NAFTA, they can run to mexico and make a last stand before its too late and the competition robs them of all patents required to make a competetive vehicle in the future.
Am i suggesting tarrifs? Meybe, we can do what japan is doing and have sneaky jovt policy which amounts to tarrifs but by other names. Of course, Japan does not tout 'free trade' and live it like we do. Then again, there is little risk of job losses in Japan for MFG's, compared with the USA.
Isn't that a cryin' shame? I think it is, but we can still do something about it.
Indeed, to bring the topic back, instead of whining incessantly about unions, whine about specific UAW issues.
The domestic auto industry has produced many fine cars since the unions came into being. Study the automobile, indeed. Memorizing economic texts and a thesaurus doesn't produce automotive knowledge.
Word of the day...
Being able to produce a few fine cars once in a while is no proof of efficiency for either the union or the automotive oligopoly. Even the serfs in the former soviet union managed a few stunts like putting the first man-made sattelite into space (the Sputnik). It's the lack of any systematic defense against internal rot that ultimately dooms all those monoplistic systems. The former soviet union was indeed a serfdom created by regulations, as if Henry Ford had actually taken over, making obsolete Lada's year after year, counting them all up as productivity never mind consumers would rather have something else; oh, the "benevalent" regulators gave away the cars too, and increased the serfs' nominal income by declaring Rubles being more worthy than the Dollar. Luckily for Americans, Henry Ford lost his shirt when other manufacturers offered alternatives and beat Ford in his own game, thanks to the existence of a competitive market place for auto industry back then.
UAW has/had many specific issues, many of which have been listed before:
(1) It discourages initiative. If all workers are paid according to seniority instead of the quality or quantity of work, it would take saintly workers coming from a pipe dream to keep working hard and making good products ;-)
(2) It sets price through monopolistic power, not what consumers want to pay or what alternative suppliers would offer. Obviously "scabs" are not welcomed by the UAW, yet they are precisely what would have lowered cost of vehicle production to consumers.
(3) It was against automation when automation became the critical element to vehicle quality and production efficiency.
(4) UAW wages are set company-wide in multi-year contracts, not constantly changed through flexible hiring and firing . . . whereas the money supply by the Federal Reserve is adjusted on a much more frequent basis. The result is domestics' inability to keep pace with changing economic conditions.
(5) UAW job security prevents the workers from searching for greener pasture when manufacturing started to lose its edge in wage premium vs. other industries. The result is stranded ex-workers in their retirement years, who had wasted their earlier productive years in a dying industry when they could have helped themselves by moving to a more productive industry earlier.
(6) UAW job security locking workers in the obsolete line of work also prevents new lines of business from finding workers.
(7) UAW defined benefit retirement and healthcare bankrupts companies and ultimately leaves its own members stranded and helpless just when they need it the most, in advanced age.
(8) UAW high labor cost makes it nearly impossible for domestics to compete in small cars, where labor cost accounts for a higher per centage of production cost.
(9) UAW fixed labor cost (getting paid regardless whether the production line is running or idle) forces domestics to keep the production lines running even if the market says no more is needed. The result is damaged brands and waste of natural resources, just like the Lada's.
(10) UAW labor structure and high cost also prevented the rise of other domestic companies to overtake the leading player of the oligopoly, GM. Chrysler was barely kept in the running and many others failed because they could not absorb the labor benefit overhead designed by collaborations between GM management and the union bosses. The result was further entrenchment of the oligopoly (in effect an extended monopoly by GM).
Now care to give a specific list on why free competitive market is bad to the auto industry, instead of incessant attacks on Rand's supposed dreams? ;-) No diversion into wealth redistribution (i.e. politics) please.
let alone a factory, and are beating the anti-union drum you obviously have read in the latest slander column perhaps authored by Ann Coulter. :confuse:
Rocky
So far we have had repeated assertions of "Union was necessary for raising the living standards of poor and expoited worker." Well, if that were the case, unionism has been counterproductive. Almost all major unions were formed in industries where workers were paid higher than, sometimes way beyond, average worker wage at the time. What unions really accomplished was keeping out workers making less money from having an opportunity of advancement.
All the personal attacks based on bad guesses only goes to show how desperately out of touch with reality the pro-union position really is. In order to really believe in unionism, one has to believe everyone else in the world is stupid: the union bosses are stupid and won't exploit their unique position of monopolistic power; union workers would have to be equally stupid, and they would continue to work hard even as it is known apriori that the quality and effort put forth would have no effect whatsoever on their own pay. I happen to believe that the overwhelming majority of people in the world are intelligent, and perfectly capable of optimizing for his or her own narrow interest. Which brings to my conclusion that union supporters are not stupid; they are just selfishly defending their own interest at the expense of the rest of the society/economy just like any other monopoly and persons in established positions of privilege would . . . either that or simpletons who are too intellectually lazy to think through the details of putting oneself in someone else' shoes yet aspire to be in position of monopolistic power.
I'll change the subject. Will UAW agree to enough savings in pay to keep GM in the US? I don't think so. The UAW still sees stars in its future by giving just enough to maintain its standard of living for a few more years. That's all that counts. Twenty years from now isn't in their thinking ability like a teenager who wants something _now_.
2014 Malibu 2LT, 2015 Cruze 2LT,
Perhaps both sides should be shown the guillotine.
I hope nobody sees that as a "personal attack"...
Indeed both the union and the management tend to ossify if left to their own device without constant threat of being overtaken by competition, just like everyone does. The difference is that in a competitive market place, the company management has competition; e.g. when Henry Ford became too full of himself and refused to listen to the consumer demand, both Sloan (GM management) and Chrysler (Walter) leap-frogged him from their original positions of less than 10%, combined, of what Ford had. The nature of union unfortunately precludes that kind of competitive pressure. If thousands of little unions could compete for those jobs (market demand for labor), there wouldn't be the kind of ossification that we are witnessing, but then there wouldn't be a union. Union is by definition an institution of cartelization.
It is nice to see you admit that management has made errors though.
Ossification...word 'o the day.
The fantasy is not going to become reality.
As I said, you want to talk about monopolies, cartels and your vision of the free market, and have no interest whatsoever in why General Motors and Ford Motor Company have difficulty competing. Same stuff, different day.
Which one; the one involving torches and guillotines? Nope, not going to become reality.....
Gee, a guy goes on vacation for a week and all hell breaks loose in here... :surprise:
Well, that will teach you to go on vacation. What were you thinking???
Trust me - what goes on in here has NO bearing on whether I take a vacation...
Interesting side bit though: a week ago Saturday (6/10), on our way from Texas up to Colorado, I found myself driving through....Dumas, Texas.
Where's rocky? I owe him an apology for not trying to arrange a short, friendly sitdown over a cold beer.
Where's rocky? I owe him an apology for not trying to arrange a short, friendly sitdown over a cold beer.
Well atleast some ice cream
Oh well maybe next time, eh ?
Rocky
We usually take a much more southerly route on our yearly vacation to Colorado; but this year we decided to take the kids over to Capulin (sp?) Volcano in NE New Mexico.
"Well atleast some ice cream"
I'll have a pint of Blue Bell Rocky Road tonight in your honor rock.
Unions have raised the standard of living of everyone, including lower management. Even my management is praying we get a good contract next March, so they can actually feel like they are getting a raise, instead of it going to "energy company's". :surprise:
If greedy CEO's, politicians, had it there way only the "elite" would live the good life. This is there
"pipe dream" and have somehow successfully maneuvered stealthy using the "smoke and mirror issues" like terrorism, illegal imigration, etc, to squash big labor without main media attention.
Thankfully Rick Wagoner, and Bill Ford have recognize these tatics and know this administration isn't on the sides of the american auto-industry. My only concerns is can the american auto-industry make relavent enough products that are competitive with the likes of Honda and Toyota ????
So far the answer is yes and no...... Depending on the segment and how much R&D was used for development. The Japanese right now have all the advantages in there favor. Ford Motor Company, unfortunatly is going to continue to invest heavy in Mexico, even as the UAW has said they will allow the company to have a flexible workforce.
Rocky
You are right, of course, but I found it funny that he was effectively arguing that they actually got a paycut based upon his guessing what a $5 day was worth in current dollars.
If he was right, then those union guys were pretty stupid to negotiate all of those paycuts. Imagine how they must feel to know that all this time that they thought that they had gotten raises that they were actually earning less... :surprise:
My wife has been to Capulin several times and is going to take me sometime soon.
Blue Bell ice cream is delicious
I however do love Braums just as much. My favorite flavor of Blue Bell is the awesome juicy Pecos Cantaloupe. :shades:
What vehicle did you take to Colorado ? Where did you go ?
Rocky
Um, I beg to differ.
What do artificially high labor costs do to the price of the car? Do they somehow magically disappear so the consumer pays NOTHING additional? Does GM have some giant money tree out back to pay the higher labor costs so that the consumer pays the same regardless?
I don't think so. Higher labor costs are reflected in either higher product cost to the consumer, or they are reflected in cost-cutting measures which may be difficult to see. Regardless, those higher labor costs are passed on.
So, what about the standard of living of the consumer paying the higher labor cost? Aren't they then getting less for their dollar?
Rocky
Rocky
Nope, no fires. I did note the Canadian River just north of Amarillo looked REALLY low.
We took the Odyssey. Pretty good family hauler (and built in the USA :P ) and averaged around 25.5mpg for the trip (including some banzai runs through the mountains and 80+ on the interstates).
Stayed in Pagosa Springs for the week with numerous side trips (up to Great Sand Dunes NP outside of Alamoosa and a day on the old narrow gauge train out of Chama NM). Kids had a blast.
The UAW is allowing this to happen because union leadership knows that sourcing a fair amount of lower-margin products from Mexico enables Ford to more effectively compete with the Japanese.
Interestingly, Ford does want to build an all-new facility...and word is that it will build this plant NEAR a transplant operation. This gives Ford an all-new, flexible plant in the Sunbelt. Ford needs to break away from the perception that it is tied exclusively to the Rust Belt. At the same time, this new plant gives the UAW a foothold in an area near a transplant - areas that have not been especially hospitable to unionism.
If this comes to fruition, you'd better believe that the UAW leadership was briefed on this and has "unofficially" signed off on it. This new plant was probably offered in exchange for the union agreeing to remain silent on the company's Mexican expansion plans.
Yep. Of course, 'worth the extra cost' is a concept that varies tremendously from consumer to consumer.
But that's all shadow boxing. Regardless of the REASON for the higher labor cost (UAW or built in Japan), the point remains that the labor costs are higher.
Consider the Ford Fusion. If Ford built the car in the U.S., using UAW labor, their labor cost would be higher than if they built the car in Mexico. Ford CAN'T just sell the car for 'x' amount of dollars REGARDLESS of the labor cost. The labor cost, like materials cost or R&D or plant investment is reflected in the final unit cost.
If the labor cost is higher (regardless of the reason), the final unit cost will be higher. These costs are passed to the consumer. So, a higher labor cost (again, regardless of the reason) results in higher cost to the consumer for an otherwise identical product - and a lowering of that consumer's buying power.
Now, if you can show that the higher labor cost has MERIT to the consumer, then they are actually getting something for the higher unit cost. Which brings ME full circle again:
What VALUE is added to the product, for the consumer, by the higher labor cost of UAW labor?
Rocky
Quality of final product is the #1 reason why I refuse to buy a mexican assembled car. My mother didn't know her 99' Tahoe 2 door Sport 4x4 was being built in Mexico and it came to the dealership with scratched paint and cracked leather on the drivers seat. Mom and step-dad blew a gasket and I told them to check VIN#'s next time.
Rocky
The UAW is smart by signing off on the deal. OTOH I agree that the Big 3 sometimes needs to build cars outside of the U.S. to reach a certain price point. If they built a Mexican made small car like the Jetta, I can swallow the pill as long as they don't over do it. I OTOH won't buy that mexican built car because #1 I can afford more #2 I want quality #3 I'd rather support american jobs.
Rocky
I glad ONE of us was able to bring that back on topic...
"I'm betting we will see the next UAW contract to have 401K only plans for retirements."
Possibly.
"The healthcare for retirees I won't even begin to speculate on."
Wise move. I wouldn't either.....
"Hopefully eventually we will get national healthcare which will relieve american buisness's from having to provide all the costs...."
Um, in light of our recent commaraderie, I'll try not to go off on a massive diatribe regarding National Healthcare. But I do agree that American businesses should be relieved of that burden. I just think that burden should be borne directly by the individual.
The individual (taxpayer) ultimately bears the burden of health care anyway. I just think it's more efficient for the taxpayer to do it directly by PAYING for health care at the time of service or by having insurance rather than have it paid for through higher taxes and the oh so efficient Federal Government.
Sorry - on this I think we'll also just have to disagree...
In other words, UAW assembled vehicles have no defects while non-UAW assembled vehicles do? Or is it a genetic thing with Mexican labor that they ALWAYS screw up something?
You've got to understand that a comment like that is intrinsically NO different from someone claiming that they'll never buy a car assembled in America, even if it is an import brand. You get (understandably) riled up at those kinds of comments. Why should it be any different by implying the Mexican labor simply CAN'T be as good as UAW labor?
The individual (taxpayer) ultimately bears the burden of health care anyway. I just think it's more efficient for the taxpayer to do it directly by PAYING for health care at the time of service or by having insurance rather than have it paid for through higher taxes and the oh so efficient Federal Government.
Sorry - on this I think we'll also just have to disagree...
I can actually agree with you on this topic, but how are individuals making a middle income salary going to afford healthcare if it comes soley out of there pockets without enough raises to cover the added expense is the real problem.
i.e.
Let's say you were making $25 an hour with very good medical insurance. Would it be worth the employer paying you $65 an hour to replace you insurance and company provided 401K retirement or pension ?
This is something some of my UAW family members have calculated out that would save the company ALOT of money and give them "the employee" more money and control of there retirement investments and that's not including overhead to provide oversight of these plans.
Bam problem solved :shades:
Rocky
Would you have the loyalty if you could walk out one door and walk in another and get the same pay ? It's not like GM or Ford of "de Mexico" is providing these workers with benefits and a retirment. :sick:
If they did any of these, not only I would be proud of them, but I wouldn't have the least bit problem cars being assembled in Mexico.
Rocky
Hey! I think we may be nearly on the same page. I think we BOTH recognize that (theoretically) health care costs should be borne by the individual out of their pocket.
I think we only differ in how to get there. I don't think we'll EVER get there by going to some form of 'National Healthcare'. Then it just becomes another entitlement to be 'managed' by the Feds. And we both know how efficient that is...... :surprise:
So basically for federal employees paid by the tax-payers he wants them to have no health insurance, and no define benefit retirements. I'm ok with all of the above as long as he's willing to pay me enough salary. About $60 or $65 an hour would be enough money to provide my family and I insurance and give me enough extra to invest in a roth IRA and play "day trader". I agree it will save the government money and give me more control of my retirement plans. I can do better investing on my own than letting a finacial insitution and my employer decide which "funds" I can put my money in. :mad:
For example I want to buy $10K worth of Delphi stock using my pre-tax dollars. My 401K doesn't allow me to do that with "my money" :mad:
What this has to do with the UAW, is that it would be easier paying a higher salary upfront to eliminate all legacy ties to union employees. Hell it would work for all folks of all stripes. It's efficient for buisness and employee and hopefully "traditional benefits" could be a thing of the past.
Rocky
Competitive market place is not a fantasy. It's what the auto industry was like before circa 1930. When unions, oligopolies and regulations took over that industry, competitive market place brings forth new and more productive industries, like various parts of high tech industry. The competitive markets/industries are always more productive and more efficient.
Unionism, on the other hand, is indeed a fantasy. Unless your idea of union is giving workers an opportunity to waste their time when young and have retirement planning yanked from under them just as they approach retirement or already in retirement, the Union pipe dream of soaking the capitalists and consumers have been a deplorable fantasy.