The way you said("gave back to the company") made it sound like your grandpa and daddy did not get paid for their suggestions. So they were paid by the company. $40k in 1970 is equivalent to over half a million bucks today! I'd say the company rewarded them handsomely. How exactly did UAW figure in to the picture? Was the payment from UAW not the company?
If running a business entails as much peril as you seem to believe, then business owners deserve to be even more richly rewarded. Workers who do not want to go out a limb on their ows are essentially seeking an unemployment insurance from their employers. The value of that insurance is very much a function of the risk of running a business on your own, isn't it?
I don't understand why you have such a chip on your shoulder against inheritance, and that's from someone who is born to parents who were making less than $5 per month combined back in the 1970's. Why are you bringing up the achievements of your parents and even grand parents at every drop of a hat? Didn't those checks amounting to the equivalent of millions in today's dollars benefit you in many different ways, including the right (however tenuous) to brag about them today instead of having to talk about any achievement of your own? There is nothing intrisicly wrong about parents wanting to give their own children a leg up on other children; after all, you daddy and grandpa did not exactly give all that reward money away to other people's children, did they? What is important is that we need to have a system where if the offspring is less than competent, their hold on wealth (ie. the right to command other people's labor) get transferred to someone else quickly. The free unfettered competitive market place accomplishes that efficiently and admirably. In contrast, all the cozy low-pressure systems like unionism etc. tend to entrench the existing elite and shield them from competition.
You are still not realizing what money really means. $15 more or less is utterly meaningless without knowing what money can buy, and over time indeed it changes dramaticly. In a closed economy (and every economy is closed when you look at the big enough picture), everyone making $30/hr making the same prdocuts and same quantity of products as everyone making $15/hr is not going to make one diddly differnce on living standards for that same pool of people in that economy; aside from the fact that whatever savings they had just got cut in half in purchasing power terms. What UAW historically won for autoworkers in terms of income came straight out of the purchasing power wage of other workers. That's why it's categorically false that unions raised living standards for everyone. Unions raised living standards for a few, at the expense of all others. The market inefficiency in such a previlige-driven system inevitably makes the whole system worse off in the long run.
It's always interesting how your numbers never match up. It's a shame that there is this propensity to exaggerate, and that everything needs to be alternately verified and refuted.
Grandpa got paid very well for his suggestions. Dad worked in the era where they gave you stuff like flashlights. I believe he got a few hundred dollars back in the late 80's when they really reduced the sugestion fund before they went to the dollar store sugestion fund :surprise:
The company, not the UAW paid the suggestions.
The UAW, not raising the standard of living of autoworkers is completely false and we strongly disagree. But I won't keep beating a dead horse since we will never agree on that subject.
Equinox and Torrent are like 70% foreign (China) is just a example. The Fusion also is very foreign. I'd have to check em out on the level field insitute, but it's not listed. anyways it shows plenty of GM cars that have only like 30% domestic content and of course the Torrent and Equinox are part of that picture.
what GM actually needs to accomplish: increasing revenues per vehicle and increasing retail market share.
Either that, or discover Hoffa's corpse on GM premise, with hundreds of tons of gold buried with it. I'm not sure which goal is more realistic. We are in a market where even Toyota is offering rebates and turning out products with more content for less (e.g. new RAV4 matching the Highlander in content, but cost $5k less)
The price of GM products is not affected by legacy costs, they are determined by the market, so the consumer isn't really impacted by these.
Where did I hear purely free market does not exist? GM could afford UAW when it had a leading role in an oligopoly. Now the market place is much more competitive, GM can no longer afford to pass the UAW labor premium to the consumers. That's why like I said, unions are merely entrenchers of overpaid existing workers in companies that had monopolistic power, at the expense of consumers
And the marketplace is actually paying less for GM products than it does for comparable products from rivals
Comparable according to who? Obviously not in the eyes of consumers. If you were in charge of what people can and can not buy, you may be able to force people to pay the same for a Malibu as a Camry, comparably equipped . . . too bad you do not have that kind of power.
They would have likely thrown even more good money after bad at losing deals such as FIAT.
Or make several times as much money on good investments like Hughs, EDS, and Flextronics . . . not to mention GMAC. That's the problem with the whole pro-union stance, a complete lack of quantitative analysis or logic. Advocates seem to be unable to think in details.
Giving them that extra cash would have been akin to giving money to a junkie -- you know that the addict is just going to use it to get another fix, and not use the cash to clean up and change his ways
That's a pretty good characterization of UAW. UAW drains several billion dollars a year from GM. The hocking of family jewles like Hughs, Flextronics and GMAC only served as a temporary cash reserve, to be burned through quickly by the bottomless pit that is union obligations.
Even if GM could get people to work for free, the cars and branding would still be inferior, and the company would still be hitting the wall.
That's simply counter-factual. Brazil workers and Chinese workers are not free, yet GM has been doing quite well making cars in both places.
The bottom line is, even if we accept that the legacy cost is only $1500, that's 10% of revenue. How can the loss of 10% revenue not be a huge factor for a manufacturing business that operates in a competitive market place? The only way GM could afford UAW was because the market place was not competitive . . . in other words, consumers got shafted instead.
Grandpa, got his $40K suggestions in the early 80's. I only met him maybe 5-7 times since he lived at GM, but do remember him telling the story when I was a little kid. I luckily had another grandfather (my dad's father) who also worked at GM and yes put in suggestions and got paid pocket change in the late 80's.
"Well some corporations demand a large amount of 401K purchases be made in company stock as a form of retirement. This of course leaves less diversity in the plan. I'm referring to middle and lower management, I've know that work at large firms."
That's what happened at Enron.
A lot of these posts have been very interesting - even those I don't agree with at all. The one living on $5 a month in 1970 is very interesting.
Like it or not GM is stuck with a certain amount of legacy costs. You have someone that worked 30 years for you under contract you can't say at the end of the contract "oops. Sorry." It's a millstone around their necks but actually 30 years is almost the magic number in where they screwed up.
Just under 30 years ago is when the feds had to bail out Chrysler. It's when Lee Iaccoca famously told the UAW that he didn't have any $18 an hour jobs but he had loads of $14 an hour jobs. It was there to figure out that this really meant that the industry was going to face that one day. Well, that day is here.
The UAW will indeed now have to face that reality with GM. If lower wages won't get them people to build cars in the US they'll build them elsewhere. It's what happened to the electronics industry. Why will cars be any different?
I don't see either GM or the UAW with any firm grip on reality. I truly hope I am wrong.
2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
"I don't see either GM or the UAW with any firm grip on reality. I truly hope I am wrong."
Nope. I think that's pretty spot on.
I think both sides are in denial; the UAW (apparently) believes that concessions (temporary ones) may be necessary now, but that they'll just bide their time and 'get them back' and some later date.
Management may have fixated too long on the UAW as their main problem. But is there anyway for them to focus on other problems as long as they are fixated on the UAW?
Bottom line:
This business is all about building and selling cars. The domestics can build cars without the UAW. But the UAW can't build cars without the domestics.
The domestics can build cars without the UAW. But the UAW can't build cars without the domestics.
They are building cars with Toyota and Mazda as we speak :P Who knows maybe in 10 or 20 years they could build cars with Honda, Hyundai, and more Toyota plants.
"They are building cars with Toyota and Mazda as we speak"
Umm, these wouldn't happen to be joint-venture plants (the GM/Toyota NUMMI plant in Ca or the Ford/Mazda plant in Flat Rock)?
As far as I know, these were domestic/UAW plants FIRST and then joint-ventures between the domestics and their transplant partners. I know this was the case with the Flat Rock plant between Ford and Mazda (built the Probe and Mazda MX-6/626 their in the early through mid 90's).
I don't see any of the imports clamoring for more UAW plants after their exposure to the Union at NUMMI and Flat Rock. I wonder why......
I think both sides are in denial; the UAW (apparently) believes that concessions (temporary ones) may be necessary now, but that they'll just bide their time and 'get them back' and some later date.
I somewhat agree with that. The UAW leadership is just buying time, because hardball is the preferred negotiation style with General Motors.
There have been more concessions made with Ford and DCX because those relationships appear to be more about finding common ground and shared positions, rather than slash-and-burn knockdown-dragout haggling that occurs with GM.
In my mind, this is another core aspect of the problem. How GM treats its suppliers illustrates that this is fundamental to how GM does business -- GM was the pioneer of this squeeze-the-supplier model that it has been using for the last two decades. Compare that to Toyota and Honda, which actually pay more for their parts, but trades those higher prices for better quality and more stable deliveries. So when GM "rewards" its employees in one of its best facilities in Oshawa that it is destined for shutdown, it reflects their willingness to forsake goodwill in the name of costcutting.
As Ford did with worker wages, the Japanese makes realized that higher prices can be a good trade-off for other benefits: more efficient inventories, better QC at the supplier level, more ability to adapt the supplier's business to the company's JIT mode of doing business. Pinching pennies doesn't make a lot of sense if you lose dollars because of it.
socala4: I somewhat agree with that. The UAW leadership is just buying time, because hardball is the preferred negotiation style with General Motors.
Also remember that the UAW recently elected a new slate of officers.
Mr. Gettelfinger wasn't about run on a platform that told union members (i.e., voters) to accept a cut in wages or benefits anymore than a U.S. Senator is going to run on a platform advocating more taxes or cuts in Social Security checks.
With the election over, there will be lots of changes in the next year, especially if GM's financial condition worsens, which I think is a distinct possibility, as I'm not seeing anything all that exciting in the future products file.
The full-size pickups should do well, but GM has a history of success in this area, and the competition is getting brutal in this segment with the new Toyota Tundra on the way, so I look for very few conquest sales (which is what GM needs).
The passenger car offerings are getting stale pretty quickly (the Cobalt looks old next to the Civic, and the G6 and Malibu look old next to a Fusion, and don't drive nearly as well), and there is still a fair amount of deadwood in the lineup (Trailblazer clones, minivans).
I don't think GM is that worried about Ford stealing sales. Ford has enough problems of it's own. Who'd waste there money on a unsafe Ford Fusion anyways ?
That's a good analysis, on all counts. This really nails it:
The full-size pickups should do well, but GM has a history of success in this area, and the competition is getting brutal in this segment with the new Toyota Tundra on the way, so I look for very few conquest sales (which is what GM needs).
The passenger car offerings are getting stale pretty quickly (the Cobalt looks old next to the Civic, and the G6 and Malibu look old next to a Fusion, and don't drive nearly as well), and there is still a fair amount of deadwood in the lineup (Trailblazer clones, minivans).
I see the same problem. I survey the lineup, and I see little hope for any sensational turnaround, particularly if fuel prices stay at current or near-current levels over the next year or so (which is uncertain, but wouldn't surprise me.)
The HHR seems to be doing well, but I suspect that will follow the same path as the Beetle and similar PT Cruiser -- hot to begin with, but too retro and quirky to go the distance of a 4-6 year model cycle, because almost everyone who wants one will buy it during the first couple of years. The Solstice and Sky are flying off the shelves, but they don't seem to be serving their true mission: to sell other GM cars to those in lust with droptops they can't afford or use. There's just no product that can be used to mount a turnaround, I just wonder whether the UAW leadership notices the same thing?
And for those who would spurn the interesting small car concept, it would appear that Dodge may have a hit on its hands with the newCaliber. Too bad GM didn't take an intellgent risk, and use creative styling and packaging to offer something different not available from the Civic, Corolla et. al.
Socala why doesn't GM make a Acura RDX type of vehicle using that turbo 4-cylinder ? Use a 6-speed auto and make a 6-speed manuel a option. Hell they could sell it under the pontiac brand to breathe new life into the brand if they want to save it. Instead we have that POS Torrent. :mad: The vibe, What ever another POS !!!! :mad:
rocky, just get the Fusion with the side air bags (standard for 2007, from what I've been reading).
The Fusion is far more attractive than either the G6 or the Malibu, and, unlike GM with the Epsilon platform, Ford managed to retain most of the goodness of the Mazda6 platform when it adapted it for the domestic nameplate.
As for the Saturn Aura? It looks like a Dodge Stratus with Opel styling cues. Color me unimpressed.
Right now, the Fusion with side airbags is the only domestic mid-size family sedan that interests me.
High gas prices may sustain the HHR. It does offer utility, and it is a cut above the usual humdrum offerings in the economy car market. A few thousand Solstices and Skys are not going to turn around GM.
The new crossovers may fill the gap left by sinking SUV sales, although GM didn't initially plan to give Chevy a version, so now it has to rush one into production.
I really have a problem with the Cobalt, as it symbolizes alot of what is wrong with GM. GM took a DECADE to come up with a new small car...and it looks like a facelifted Cavalier and can't best a five-year-old Ford Focus in comparison tests?
Read BLS' own disclaimer on CPI. It is only one of many possible ways of measuring inflation, and not necessarily a good one at it. It's put together by the government that has a debt obligation to SS recipients that has to be adjusted according to it. Any wonder it under-estimates inflation? Gold was at $35/ounce for inter-government exchange (before Nixon closed the gold window in 1973), and $50 or so on the black market as Americans were forbidden from owning gold from 1933 till 1986. It is close to $600/oz as of today. You do the math. As usual, your accusasions of my inaccuracies reflects more on you than on me.
grbeck with all do respect the fusion isn't as stylish as the G6 IMO. Take my advice and put some glasses on. :P J/K
I guess I'm unimpressed with fords sedans, they lack excitement. My wife needs glasses to since she loves the Mercury Milan and I tell her I'm not buying that POS made in Mexico :mad: She's still convinced I will get her one. I tell her okay.
Socala why doesn't GM make a Acura RDX type of vehicle using that turbo 4-cylinder ?
Rock, I honestly don't understand the management team at all, I really don't. They seem content in taking baby steps, while everyone else is running a marathon, and don't seem to realize that when everyone else is running while you're crawling, you still end up behind. If they have a sense of urgency, they hide it very well...
rocky, I had LASIK surgery, and my vision is better than 20/20.
As Edsel Ford I used to say about a design that didn't impress him - "They tried to hard."
He could have been talking about the Pontiac G6. (With the Malibu, I don't think they tried at all.)
Sorry, but it takes more than a beaky grille and sloping roofline to make a car "sporty." Especially when all of this is perched on wheels that are too small and a track that is too narrow, and the drivetrain is shouting anything BUT "sport."
The Fusion has a distinctive, classy look, and it is entirely appropriate for this class of car.
There's more to a car than figures. In the past, GM cars have produced numbers that look good on paper, but aren't so impressive with regards to "feel" or real-world performance. From what I've read, the G6 GTP isn't any different. The reviews I've read aren't too impressed.
Well because of the anti-GM press, GM will never build a car good enough. People that live where inclement weather will appreciate the G6's FWD capability and performance. Sure it's more expensive, but it's better than having a Mexican made unsafe car like the fusion. :P
You are exaggerating again. Gold price rose from $269 at the beginning of 1979 to $512 at the end of that year. The $800 was not reached until the following year's mania. While exact commodity price of gold on a given day may be influenced by speculation, the long term running average gives a decent estimate of inflation. Gold has been trading between $260 and $730 in the past decade (i.e. I did not exactly pick a peak day price for reference), compared to $35-50 in 1970. Gold just happens to be the original constitutionally defined money. The Constitution made no reference to BLS.
Another bad idea from the backseat drivers. Honda/Acura uses turbo-4 because the Honda Empire has excess 4-pot production capacity, and the only 6-pot with decent toque is the 3.5, which is already in short supply, filling the bays of many models. GM on the other hand has more than enough production capacity for 6-pots, but relatively small capacity for good 4-pots.
In the GM empire, Saab and the erstwhile Subaru are the turbo specialists. From owning the Saab with a 4-pot turbo and the Highlander 3.3 V6, I'd pick a V6 over a turbo 4 for any SUV. I don't think RDX will do very well if Toyota offers a luxury version of its RAV4.
The UAW, not raising the standard of living of autoworkers is completely false and we strongly disagree. But I won't keep beating a dead horse since we will never agree on that subject.
I see that you have narrowed "everyone" to "autoworkers." That may have to be further narroewd down to "domestic autoworkers who are union members." That may be true for a few years to a few decades, at the expense of everyone else in the same economy who are not autoworker union members. The union members will also get their come-uppance when company filing for bankruptcy in their retirement catch up with them for their cushy life earlier when they could do something about finding a more productive job.
I'll take a Honda made engine over a Toyota IMO. I think everyone agrees that Honda does know engines. Even my father says Honda probably has the best engines in the world overall. Sure Nissan and Toyota have very good engines and one can make a argument about a certain engine being better. I guess it's a matter of opinion and preference brightness.
The UAW, not raising the standard of living of autoworkers is completely false and we strongly disagree.
I frankly don't see how anyone could possibly disagree that unionization in general (not just the UAW, but the collective effective effect) raised the standard of living. Ironically, it's one of the things that bothers the anti-union crowd the most, even if they don't connect the dots -- unions create wage growth above the inflation rate, which is why those who don't like them oppose them in the first place.
It comes down to this -- when unions were a prominent part of the workforce, they were able to negotiate higher wages than the workers would have been able to get individually. These higher wages caused non-union shops to also raise their wages in order to compete for these same workers. Even if the non-union shops don't pay quite as much, they still have to pay more than they otherwise would have in order to find workers.
In turn, these workers have more disposable income to spend or invest, and a higher capacity to borrow money (banks require borrowers to have income). What they save provides the banks with capital to loan to others, what they borrow helps industries sell products thanks to the increased spending power of the borrower, and what they spend helps businesses to create products that raise our living standards and provide employment that makes more contributions to the cycle.
You could argue that these higher wages increase unemployment levels -- that is classic microeconomic theory -- but when you look at American economic history, the unemployment rate here has generally been so low so much of the time that it's hard to argue that this generally applies in a country such as the US where growth is constantly being stimulated and encouraged. Again, an increase in costs doesn't matter so much if it is offset by revenue growth, which is exactly what happens in a mixed economy such as ours that is expanding most of the time.
That was intellegently said pal. That is basically what one of my economics teachers said after school one day when we were talking about unions and there affect on the economy.
If you pay people more, they do stuff with the money. And since unemployment in the US is not generally an issue on a macro level, the wages don't seem to be so high that companies don't grow or stop hiring people.
By the way, that doesn't mean that I love unions or the UAW, and that is not an opinion about what the unions should or shouldn't do. But it's pretty obvious that if we all agree that wages increased because of unions (and who can argue that they didn't?), then it goes to follow that the living standard increased with it. Just a historical fact, not a judgment on whether that was the best way to do it.
Well the UAW did a study several years ago that showed that a average autoworkers spendable income switched hands (7) times.
I know my UAW/IUE/Teamster family members all have spent, invested, there incomes back into the local and national economy. Well the old saying goes for the middle class especially: "The more you make, the more you spend"
I frankly don't see how anyone could possibly disagree that unionization in general (not just the UAW, but the collective effective effect) raised the standard of living
Let's imagine the entire country is unionized - the same way as UAW. What do you think will happen?
It's always interesting how your numbers never match up
That is true. The home we bought in 1970 for $25k is worth over $600k today. The home my wife bought in 1978 for $105k is now worth at least a million. Probably 1.5 million. Those figures are not always accurate. Wages have not kept up with the cost of cars or housing in parts of the country.
Let's imagine the entire country is unionized - the same way as UAW. What do you think will happen?
I'll give you a hint. USSR.
I'd tell you this much we wouldn't have any poor folks, assuming we had a economy where there were suffcient jobs to employ all these folks.
The fact remains that some countries do have UAW-ish type economy's and there citizens all do quite well. You basically have a wealthy and a very large middle class. The poor are basically ones that don't want to work period. Free Education for all it's citizens allows the populus to contribute to the economy and yes labor unions are very strong and accepted as part of the system.
Good or Bad for us americans ? I guess that depends on your political beliefs and your individual personality of what you believe in.
I however disagree with one using the UAW and USSR in the same breath. Unions and Communist is a political spin put out by some individuals that are anti-union, but I'm not going to beat that dead horse again. We've been through that topic several months ago :sick:
I'd tell you this much we wouldn't have any poor folks, assuming we had a economy where there were suffcient jobs to employ all these folks.
I'll tell you this much. If the entire world is unionized like the UAW is, and the system does not change, mankind would be extinct in about 200 years.
So what your saying is union workers are to blame for GM losing market share, and not the product itself, and/or trade laws on the books we have in this country and are neglected. hmmmmmmm...........interesting
I'd tell you this much we wouldn't have any poor folks
Unions would not eliminate the poor. Some people are not interested in working. They would rather be warehoused in front of a TV waiting for the next election. Unless of course a Hurricane comes along and washes them all over to Houston. There is hardly a business in San Diego that is not looking for people to work. The problem is housing is too expensive for those that do the lower paying jobs. If you had a Union at McDonald's it would give no incentive to get a better job.
Comments
If running a business entails as much peril as you seem to believe, then business owners deserve to be even more richly rewarded. Workers who do not want to go out a limb on their ows are essentially seeking an unemployment insurance from their employers. The value of that insurance is very much a function of the risk of running a business on your own, isn't it?
I don't understand why you have such a chip on your shoulder against inheritance, and that's from someone who is born to parents who were making less than $5 per month combined back in the 1970's. Why are you bringing up the achievements of your parents and even grand parents at every drop of a hat? Didn't those checks amounting to the equivalent of millions in today's dollars benefit you in many different ways, including the right (however tenuous) to brag about them today instead of having to talk about any achievement of your own? There is nothing intrisicly wrong about parents wanting to give their own children a leg up on other children; after all, you daddy and grandpa did not exactly give all that reward money away to other people's children, did they? What is important is that we need to have a system where if the offspring is less than competent, their hold on wealth (ie. the right to command other people's labor) get transferred to someone else quickly. The free unfettered competitive market place accomplishes that efficiently and admirably. In contrast, all the cozy low-pressure systems like unionism etc. tend to entrench the existing elite and shield them from competition.
You are still not realizing what money really means. $15 more or less is utterly meaningless without knowing what money can buy, and over time indeed it changes dramaticly. In a closed economy (and every economy is closed when you look at the big enough picture), everyone making $30/hr making the same prdocuts and same quantity of products as everyone making $15/hr is not going to make one diddly differnce on living standards for that same pool of people in that economy; aside from the fact that whatever savings they had just got cut in half in purchasing power terms. What UAW historically won for autoworkers in terms of income came straight out of the purchasing power wage of other workers. That's why it's categorically false that unions raised living standards for everyone. Unions raised living standards for a few, at the expense of all others. The market inefficiency in such a previlige-driven system inevitably makes the whole system worse off in the long run.
According to the BLS, it's worth about $209,000.
It's always interesting how your numbers never match up. It's a shame that there is this propensity to exaggerate, and that everything needs to be alternately verified and refuted.
The company, not the UAW paid the suggestions.
The UAW, not raising the standard of living of autoworkers is completely false and we strongly disagree. But I won't keep beating a dead horse since we will never agree on that subject.
Rocky
http://levelfieldinstitute.org/docs/lfi-domestic-content.pdf
Rocky
Either that, or discover Hoffa's corpse on GM premise, with hundreds of tons of gold buried with it. I'm not sure which goal is more realistic. We are in a market where even Toyota is offering rebates and turning out products with more content for less (e.g. new RAV4 matching the Highlander in content, but cost $5k less)
The price of GM products is not affected by legacy costs, they are determined by the market, so the consumer isn't really impacted by these.
Where did I hear purely free market does not exist? GM could afford UAW when it had a leading role in an oligopoly. Now the market place is much more competitive, GM can no longer afford to pass the UAW labor premium to the consumers. That's why like I said, unions are merely entrenchers of overpaid existing workers in companies that had monopolistic power, at the expense of consumers
And the marketplace is actually paying less for GM products than it does for comparable products from rivals
Comparable according to who? Obviously not in the eyes of consumers. If you were in charge of what people can and can not buy, you may be able to force people to pay the same for a Malibu as a Camry, comparably equipped . . . too bad you do not have that kind of power.
They would have likely thrown even more good money after bad at losing deals such as FIAT.
Or make several times as much money on good investments like Hughs, EDS, and Flextronics . . . not to mention GMAC. That's the problem with the whole pro-union stance, a complete lack of quantitative analysis or logic. Advocates seem to be unable to think in details.
Giving them that extra cash would have been akin to giving money to a junkie -- you know that the addict is just going to use it to get another fix, and not use the cash to clean up and change his ways
That's a pretty good characterization of UAW. UAW drains several billion dollars a year from GM. The hocking of family jewles like Hughs, Flextronics and GMAC only served as a temporary cash reserve, to be burned through quickly by the bottomless pit that is union obligations.
Even if GM could get people to work for free, the cars and branding would still be inferior, and the company would still be hitting the wall.
That's simply counter-factual. Brazil workers and Chinese workers are not free, yet GM has been doing quite well making cars in both places.
The bottom line is, even if we accept that the legacy cost is only $1500, that's 10% of revenue. How can the loss of 10% revenue not be a huge factor for a manufacturing business that operates in a competitive market place? The only way GM could afford UAW was because the market place was not competitive . . . in other words, consumers got shafted instead.
Rocky
That's what happened at Enron.
A lot of these posts have been very interesting - even those I don't agree with at all. The one living on $5 a month in 1970 is very interesting.
Like it or not GM is stuck with a certain amount of legacy costs. You have someone that worked 30 years for you under contract you can't say at the end of the contract "oops. Sorry." It's a millstone around their necks but actually 30 years is almost the magic number in where they screwed up.
Just under 30 years ago is when the feds had to bail out Chrysler. It's when Lee Iaccoca famously told the UAW that he didn't have any $18 an hour jobs but he had loads of $14 an hour jobs. It was there to figure out that this really meant that the industry was going to face that one day. Well, that day is here.
The UAW will indeed now have to face that reality with GM. If lower wages won't get them people to build cars in the US they'll build them elsewhere. It's what happened to the electronics industry. Why will cars be any different?
I don't see either GM or the UAW with any firm grip on reality. I truly hope I am wrong.
Nope. I think that's pretty spot on.
I think both sides are in denial; the UAW (apparently) believes that concessions (temporary ones) may be necessary now, but that they'll just bide their time and 'get them back' and some later date.
Management may have fixated too long on the UAW as their main problem. But is there anyway for them to focus on other problems as long as they are fixated on the UAW?
Bottom line:
This business is all about building and selling cars. The domestics can build cars without the UAW. But the UAW can't build cars without the domestics.
They are building cars with Toyota and Mazda as we speak :P Who knows maybe in 10 or 20 years they could build cars with Honda, Hyundai, and more Toyota plants.
Rocky
Umm, these wouldn't happen to be joint-venture plants (the GM/Toyota NUMMI plant in Ca or the Ford/Mazda plant in Flat Rock)?
As far as I know, these were domestic/UAW plants FIRST and then joint-ventures between the domestics and their transplant partners. I know this was the case with the Flat Rock plant between Ford and Mazda (built the Probe and Mazda MX-6/626 their in the early through mid 90's).
I don't see any of the imports clamoring for more UAW plants after their exposure to the Union at NUMMI and Flat Rock. I wonder why......
I somewhat agree with that. The UAW leadership is just buying time, because hardball is the preferred negotiation style with General Motors.
There have been more concessions made with Ford and DCX because those relationships appear to be more about finding common ground and shared positions, rather than slash-and-burn knockdown-dragout haggling that occurs with GM.
In my mind, this is another core aspect of the problem. How GM treats its suppliers illustrates that this is fundamental to how GM does business -- GM was the pioneer of this squeeze-the-supplier model that it has been using for the last two decades. Compare that to Toyota and Honda, which actually pay more for their parts, but trades those higher prices for better quality and more stable deliveries. So when GM "rewards" its employees in one of its best facilities in Oshawa that it is destined for shutdown, it reflects their willingness to forsake goodwill in the name of costcutting.
As Ford did with worker wages, the Japanese makes realized that higher prices can be a good trade-off for other benefits: more efficient inventories, better QC at the supplier level, more ability to adapt the supplier's business to the company's JIT mode of doing business. Pinching pennies doesn't make a lot of sense if you lose dollars because of it.
Hey, I'll still take it!
Also remember that the UAW recently elected a new slate of officers.
Mr. Gettelfinger wasn't about run on a platform that told union members (i.e., voters) to accept a cut in wages or benefits anymore than a U.S. Senator is going to run on a platform advocating more taxes or cuts in Social Security checks.
With the election over, there will be lots of changes in the next year, especially if GM's financial condition worsens, which I think is a distinct possibility, as I'm not seeing anything all that exciting in the future products file.
The full-size pickups should do well, but GM has a history of success in this area, and the competition is getting brutal in this segment with the new Toyota Tundra on the way, so I look for very few conquest sales (which is what GM needs).
The passenger car offerings are getting stale pretty quickly (the Cobalt looks old next to the Civic, and the G6 and Malibu look old next to a Fusion, and don't drive nearly as well), and there is still a fair amount of deadwood in the lineup (Trailblazer clones, minivans).
Rocky
The full-size pickups should do well, but GM has a history of success in this area, and the competition is getting brutal in this segment with the new Toyota Tundra on the way, so I look for very few conquest sales (which is what GM needs).
The passenger car offerings are getting stale pretty quickly (the Cobalt looks old next to the Civic, and the G6 and Malibu look old next to a Fusion, and don't drive nearly as well), and there is still a fair amount of deadwood in the lineup (Trailblazer clones, minivans).
I see the same problem. I survey the lineup, and I see little hope for any sensational turnaround, particularly if fuel prices stay at current or near-current levels over the next year or so (which is uncertain, but wouldn't surprise me.)
The HHR seems to be doing well, but I suspect that will follow the same path as the Beetle and similar PT Cruiser -- hot to begin with, but too retro and quirky to go the distance of a 4-6 year model cycle, because almost everyone who wants one will buy it during the first couple of years. The Solstice and Sky are flying off the shelves, but they don't seem to be serving their true mission: to sell other GM cars to those in lust with droptops they can't afford or use. There's just no product that can be used to mount a turnaround, I just wonder whether the UAW leadership notices the same thing?
And for those who would spurn the interesting small car concept, it would appear that Dodge may have a hit on its hands with the newCaliber. Too bad GM didn't take an intellgent risk, and use creative styling and packaging to offer something different not available from the Civic, Corolla et. al.
Rocky
The Fusion is far more attractive than either the G6 or the Malibu, and, unlike GM with the Epsilon platform, Ford managed to retain most of the goodness of the Mazda6 platform when it adapted it for the domestic nameplate.
As for the Saturn Aura? It looks like a Dodge Stratus with Opel styling cues. Color me unimpressed.
Right now, the Fusion with side airbags is the only domestic mid-size family sedan that interests me.
The new crossovers may fill the gap left by sinking SUV sales, although GM didn't initially plan to give Chevy a version, so now it has to rush one into production.
I really have a problem with the Cobalt, as it symbolizes alot of what is wrong with GM. GM took a DECADE to come up with a new small car...and it looks like a facelifted Cavalier and can't best a five-year-old Ford Focus in comparison tests?
I guess I'm unimpressed with fords sedans, they lack excitement. My wife needs glasses to since she loves the Mercury Milan and I tell her I'm not buying that POS made in Mexico :mad: She's still convinced I will get her one.
Rocky
Rock, I honestly don't understand the management team at all, I really don't. They seem content in taking baby steps, while everyone else is running a marathon, and don't seem to realize that when everyone else is running while you're crawling, you still end up behind. If they have a sense of urgency, they hide it very well...
Rocky
And it was $800 back in 1979. Is everything 25% cheaper than it was back then? I guess we've had deflation, we've just never noticed it!
As Edsel Ford I used to say about a design that didn't impress him - "They tried to hard."
He could have been talking about the Pontiac G6. (With the Malibu, I don't think they tried at all.)
Sorry, but it takes more than a beaky grille and sloping roofline to make a car "sporty." Especially when all of this is perched on wheels that are too small and a track that is too narrow, and the drivetrain is shouting anything BUT "sport."
The Fusion has a distinctive, classy look, and it is entirely appropriate for this class of car.
Rocky
There's more to a car than figures. In the past, GM cars have produced numbers that look good on paper, but aren't so impressive with regards to "feel" or real-world performance. From what I've read, the G6 GTP isn't any different. The reviews I've read aren't too impressed.
Well, given GM's record with high tech engines, would you really want to buy the first year of their new turbo 4? :confuse:
Rocky
Rocky
Rocky
Rocky
You are exaggerating again. Gold price rose from $269 at the beginning of 1979 to $512 at the end of that year. The $800 was not reached until the following year's mania. While exact commodity price of gold on a given day may be influenced by speculation, the long term running average gives a decent estimate of inflation. Gold has been trading between $260 and $730 in the past decade (i.e. I did not exactly pick a peak day price for reference), compared to $35-50 in 1970. Gold just happens to be the original constitutionally defined money. The Constitution made no reference to BLS.
In the GM empire, Saab and the erstwhile Subaru are the turbo specialists. From owning the Saab with a 4-pot turbo and the Highlander 3.3 V6, I'd pick a V6 over a turbo 4 for any SUV. I don't think RDX will do very well if Toyota offers a luxury version of its RAV4.
I see that you have narrowed "everyone" to "autoworkers." That may have to be further narroewd down to "domestic autoworkers who are union members." That may be true for a few years to a few decades, at the expense of everyone else in the same economy who are not autoworker union members. The union members will also get their come-uppance when company filing for bankruptcy in their retirement catch up with them for their cushy life earlier when they could do something about finding a more productive job.
http://money.cnn.com/2006/06/23/news/companies/gm_buyouts/index.htm?cnn=yes
Rocky
Rocky
I frankly don't see how anyone could possibly disagree that unionization in general (not just the UAW, but the collective effective effect) raised the standard of living. Ironically, it's one of the things that bothers the anti-union crowd the most, even if they don't connect the dots -- unions create wage growth above the inflation rate, which is why those who don't like them oppose them in the first place.
It comes down to this -- when unions were a prominent part of the workforce, they were able to negotiate higher wages than the workers would have been able to get individually. These higher wages caused non-union shops to also raise their wages in order to compete for these same workers. Even if the non-union shops don't pay quite as much, they still have to pay more than they otherwise would have in order to find workers.
In turn, these workers have more disposable income to spend or invest, and a higher capacity to borrow money (banks require borrowers to have income). What they save provides the banks with capital to loan to others, what they borrow helps industries sell products thanks to the increased spending power of the borrower, and what they spend helps businesses to create products that raise our living standards and provide employment that makes more contributions to the cycle.
You could argue that these higher wages increase unemployment levels -- that is classic microeconomic theory -- but when you look at American economic history, the unemployment rate here has generally been so low so much of the time that it's hard to argue that this generally applies in a country such as the US where growth is constantly being stimulated and encouraged. Again, an increase in costs doesn't matter so much if it is offset by revenue growth, which is exactly what happens in a mixed economy such as ours that is expanding most of the time.
That was intellegently said pal. That is basically what one of my economics teachers said after school one day when we were talking about unions and there affect on the economy.
Rocky
If you pay people more, they do stuff with the money. And since unemployment in the US is not generally an issue on a macro level, the wages don't seem to be so high that companies don't grow or stop hiring people.
By the way, that doesn't mean that I love unions or the UAW, and that is not an opinion about what the unions should or shouldn't do. But it's pretty obvious that if we all agree that wages increased because of unions (and who can argue that they didn't?), then it goes to follow that the living standard increased with it. Just a historical fact, not a judgment on whether that was the best way to do it.
I know my UAW/IUE/Teamster family members all have spent, invested, there incomes back into the local and national economy. Well the old saying goes for the middle class especially: "The more you make, the more you spend"
Rocky
Let's imagine the entire country is unionized - the same way as UAW. What do you think will happen?
I'll give you a hint. USSR.
That is true. The home we bought in 1970 for $25k is worth over $600k today. The home my wife bought in 1978 for $105k is now worth at least a million. Probably 1.5 million. Those figures are not always accurate. Wages have not kept up with the cost of cars or housing in parts of the country.
100% agree. The difference between then and now is people today are on 70 year notes, interest only notes, and are in debt up to there eyeballs.
Rocky
I'll give you a hint. USSR.
I'd tell you this much we wouldn't have any poor folks, assuming we had a economy where there were suffcient jobs to employ all these folks.
The fact remains that some countries do have UAW-ish type economy's and there citizens all do quite well. You basically have a wealthy and a very large middle class. The poor are basically ones that don't want to work period. Free Education for all it's citizens allows the populus to contribute to the economy and yes labor unions are very strong and accepted as part of the system.
Good or Bad for us americans ? I guess that depends on your political beliefs and your individual personality of what you believe in.
I however disagree with one using the UAW and USSR in the same breath. Unions and Communist is a political spin put out by some individuals that are anti-union, but I'm not going to beat that dead horse again. We've been through that topic several months ago :sick:
Rocky
I'll tell you this much.
If the entire world is unionized like the UAW is, and the system does not change, mankind would be extinct in about 200 years.
Rocky
Unions would not eliminate the poor. Some people are not interested in working. They would rather be warehoused in front of a TV waiting for the next election. Unless of course a Hurricane comes along and washes them all over to Houston. There is hardly a business in San Diego that is not looking for people to work. The problem is housing is too expensive for those that do the lower paying jobs. If you had a Union at McDonald's it would give no incentive to get a better job.