I read that and am aware. No disrespect, but I was answering someone else. They claimed that things were just great in Japan for eons now. Since they make great cars, ergo they have a superior economy.
In Austrian theory, the recession is necessary, and once it sets in and bad investments are liquidated, the economy will self-correct. After 10 years, there are still no signs of economic correction. Austrian theory recognizes that time is required for economic self-correction but that the correction can only occur if the market process is allowed to work. Rothbard (2000) summarized the Austrian policy position this way:
If government wishes to alleviate, rather than aggravate, a depression, its only course is laissez-faire—to leave the economy alone. Only if there is no interference, direct or threatened, with prices, wage rates, and business liquidation will the necessary adjustment proceed with smooth dispatch. Any propping up of shaky positions postpones liquidation and aggravates unsound conditions
The bank fails, there is a run on the bank. Since we all know that there only about a 20% reserve requirement. The govt has to fire up the presses. Good ole FDIC insurance. As unemployment reaches 25% social unrest occurs. Foreclosures increase and home prices decline due to the increase supply. We can imagine what happens on Wall Street. If the war ends the war machine adds to less demand and therefore less jobs. You are now in complete meltdown of capitalism.
You certainly can't be serious, we have had this condition before. Washington is already planning public works program to lessen the hardship. Keynes explains this and since the private sector isn't going to be crowded out, deficit spending is allowable as it would be in time of war. Sitting on ones hands isn't going to make the economy recover, somebody has to fuel it. As WWII did.
hey claimed that things were just great in Japan for eons now. Since they make great cars, ergo they have a superior economy
I hope you are not referring to me I have never said Japan has a superior economy (to the US), just that the US Auto companies are not being fair in blaming Japan (or imports) for their problems.
In fact (and as you also point out in a separate post), Japan handled its recession in a very "inefficient" manner - Huge amount of tax money was spent in bailing out dead companies in inefficient sectors (no, it was not Autos - but banks and retailers). As a tax payer in Japan, I resented all this, and most of us cited the US model (US was lecturing Japan very loudly at that time).
It is therefore disappointing to see that the US itself is now repeating the same mistakes Japan committed - more so because US was seen to be the standard bearer of modern capitalism. This is simply going to strengthen the case of socialists in Japan (which means more bad news for tax payers like me....).
There are a couple of differences between Japan and US though.... 1. Japanese debt is all owned by Japanese (who have enormous savings) - So the Govt can simply continue to rob its citizens with low interest rates. In case of the US, it is owned by foreigners, which makes it a lot more unstable (the US can rob them with a massive devaluation of the USD, but that will make future borrowings very expensive, and would thus result in a very painful change of lifestyle). 2. Japan did invest a lot of money on infrastructure (i.e. it was not a direct cash handout to sick companies, but indirectly provided to them through public works) - So the infrastructure now is absolutely top class (unlike the US, which has its roads, bridges and railroads in fairly bad shape).
But no, even now I do not think of Japan as the superior economy. They do well in manufacturing, but have nothing to compare with the Silicon Valley entreprenuership.
Hopefully the czar will really get into the cost of each vehicle and compare to the competition.
Parts (same) Assembly (close to the same) overhead (we are screwed)
Here's an interesting thought experiment (not likely to really happen):
Have Gettlefinger run GM as CEO while he retains the head of UAW! He gets a loan from the government and enough money for 6 months. At the end of six months if the cost structure is not lowered enough to survive then he is fired and GM goes into BK and all UAW contract nullified! Make HIM determine the tough answers to the conflict between costs, product, and UAW benefits. :shades:
If you try Microsofts new MP3 or even Sony's, they are better
That's not what the link you referenced says. That article talks about the hardware, not the entire ecosystem. Kind of like saying the Cobalt has a lot of power but then not noticing refinement, dealer issues, and resale value. The entire system needs to be taken into account.
Yes, I do have both iPod and non-iPod players.
Back to the UAW - are the UAW contracts keeping the D3 from being more flexible and competitive in production, in innovation of the inventory/selling experiences? Why don't we have integrated/automated UAW plants in the US like the highly automated Ford plant in Brazil?
Manegi, thanks for your posts. It's very informative to get a perspective from within Japan and is a good balance to all of us who have a US-centric view.
The whole UAW thing just amazes (and p*sses me off). Unions made sense to protect the children working in the factories during the Industrial Revolution. There is absolutely no reason for Unions to exist in the modern world!
My wife is a nurse and her hospital just unionized and it has to be the worst thing that could have ever happened. Quality of care as dropped through the floor. Nothing like having an entire work force doing just enough to not get fired (which is virtual impossible now). Why bother working hard when there's no longer performance based raises. The nurses aids have actually been found hiding in the bathrooms and closets.
Back to the topic, I'm crossing my fingers the bill gets killed in the Senate and we all get to see the UAW suffer when contracts get "renegotiated".
Then on the other hand it's really not up to you to dictate what kind of car somebody else drives or how another company may operate.., If you are a conservative driver maybe you're mad if somebody passes you up a certain way, and i get mad too at times, but i just get over it, really. I would prefer at times that people conserve more, but people do drive differently and the change is in for the better it just takes a little time.
While you know of a hospital that has bad work habits you have nothing better to do than to be here as a few others like you are here - maybe there is somebody you can call and the hospital could lose a few employees for that.
As for the auto industry - I've been through different plants and they go through inspections, quality is addressed, looks to me as i watched during operations, looks professional to me. looks somewhat tidy.., when somebody new comes around they can act somewhat differently, but they find their place and as for the unions themselves, they have made a few cutbacks from a few years ago, i don't know the extent of that what if the workers themselves wanted to invest more into the unions, that could probably be their choice and not yours. The Banks did get alot of money from Uncle Sam already because they proved that they were lied to, how do you know that the auto industry was not lied to and maybe a few more things than that.
President Bush was making concessions that 25 billion(but asking for 34 billion) was to be given to them and they were expecting it, but it never went through, oh but the banks did get their money. It should have been handed out at the same time, since it was mentioned. i know i dont' have all the facts, but i don't think anybody here has all the facts either. The taxpayers get the loan paid back with interest so there is stimulus.
it's nothing to whine about as most are doing, i've seen worse things than this. what should really happen now is that the banks that misused the 700 billion should instead use that to autoindustry. there is no payback in just handing blank checks to the taxpayers from this money, and that is where most of those opposing votes are coming from.
she says, "We're hoarding our money." The whole family used to eat out five times a week; now, Tina and Mike go out once a week, alone. Tina buys generic brands and has cut back on sweets and snacks. In the past, the family took several vacations; next year, they'll take one. This Christmas they plan to spend half what they spent last year.
Gee, maybe they should have been saving some of that money before.
Two years ago, they were delighted when, with the help of referrals from autoworker relatives, they landed jobs at the Delphi auto parts plant. She made hybrid batteries; he worked in shipping and receiving. They expected to retire from the plant.
But in October, they each accepted $40,000 buyouts from Delphi, which filed for bankruptcy in 2005 and has yet to emerge.
Not bad, on the job 2 years and then get a $40K buyout.
And now my favorite.
Cox says most students lack sympathy for blue-collar autoworkers, an attitude he summarizes as, "You can't expect to make $65,000 for a job you can learn in a month."
Yeah that is a heart breaker for sure. What a bunch of pampered losers. The only time we ever ate out was if we were traveling to relatives and found some cheap greasy spoon to eat in. I remember two times our rich uncle from Chicago came and took the whole family to a nice restaurant at Disneyland. I lived just a few miles from Disneyland from the day it opened and we never could afford to go. I finally went when I was about 20 and working for the phone company.
We are so spoiled in this country. It is just mind boggling how so many young people think they are entitled to a great job paying big bucks. These little recessions are a reality check. The UAW was a good thing when workers were being exploited. I don't see any exploitation of citizen workers in this country, compared to most places around the world. And right across our southern border.
Actually that first family, the "we're hoarding our money" people, sound like they're trying to be pro-active. They're both still employed, but just don't know for how long, so it sounds like they're trying to prepare for that rainy day that's sure to come. Many people would just keep blowing their money right up until they got the pink slip, and then they'd really be screwed.
As for the mother and son who worked for Delphi, at least they're going back to college to get degrees, to make themselves marketable.
I always used to think that if I ever lost my job, I could go back to delivering pizzas or waiting tables or something. Heck, back in my heyday, on an hourly basis, my takehome pay delivering pizzas was more than what it is now at my regular job! (however, I also have health insurance and 401k taken out of my regular job's paycheck, something the part time job didn't have to fund).
But, in a recession, that type of work becomes less profitable, and it could very well be less so this time around. One of my friends works full-time as a waiter/bartender, and he just got cut back from 5 days per week to 4. I'm sure with this economy, there are plenty of people applying for jobs like that, all the while business at restaurants, bars, pizza joints, etc, is diminishing.
My uncle works in construction...I guess if I lost my job, couldn't find a similar one, and things got really bad, I could try getting a job with his company. Although working a desk job all these years has gotten me lazy. I'm sure my body would have a violent reaction to that kind of manual labor! That, and getting up at 4 in the morning. :surprise:
dallasdude: You certainly can't be serious, we have had this condition before. Washington is already planning public works program to lessen the hardship.
Public works programs did not end the Great Depression, or even alleviate it.
And the idea that the federal government did "nothing" after the stock market crash in 1929 until the Roosevelt administration is a myth.
President Hoover supported public works and even approved the creation of the Reconstruction Finance Corporation to bail out failing companies (sound familiar)? The total tax burden - local, state and federal - also increased from 1929 to 1932.
Yet unemployment still hit 25 percent by 1932.
The main difference between candidate Roosevelt and President Hoover was that Roosevelt favored direct relief to individuals (what we today call welfare). President Hoover opposed this.
The Great Depression was "great" because of ham-handed government monetary policy, the Hawley Smoot Tariff enacted by the U.S. in 1930, Roosevelt's foolish tax policies that sought to punish the wealthy and businesses, and silly measures like Roosevelt's National Recovery Act, which the U.S. Supreme Court mercifully declared unconstitutional. Unemployment was in the double digits well into the 1930s, and the 1938 "recession within a depression" was also quite severe.
And from my view of history, WW2 was the only thing that brought US out of the Great Depression. None of the programs did much good. Only left US with a SS program that is unsustainable.
Looks a lot like UAW contracts to me. Signed by GM management with NO CLUE as to how they would be able to keep going if the economy ever took a turn for the worst.
We ( the wife and I ) eat out every Sunday after Church with some members of our Sunday School class. Favorite places are Wendy's, Zaxby's Chicken, Stevie B's Pizza all you can eat for $3.40 (Seniors) and occasionally at a local Buffet all you care to eat for $6.13. Not very extravagant, but the food and company are always good!
When the kids were growing up, a big deal for us was McDonalds once a month. We have a stove a refrigerator and we did and still do use them.
So in effect our life style hasn't changed since I have retired. Our home and land is paid for as well as our 03 Pilot and CR-V, and we have savings enough to last, unless something really caste strophic happened. I never made the money or had the bennefits of UAW worker friends, Delta Air Line friends, and others. But we didn't spend like they did either.
Now many of those friends and relatives are near or at retirement age and still have a house and car note. People tend to spend every penny they make for instant gratification and put away nothing for hard times. But, I recon they have their memories!
I just don't know how those memories could be any better than teaching a son how, and watching when he caught a mess of trout from a mountain stream, cleaned them in that stream, and learned to cook them for supper that night. Then telling stories around a fire and sleeping under the stars. So many wonderful memories that cost so little , but were priceless.
>"Looks a lot like UAW contracts to me. Signed by GM management with NO CLUE as to how they would be able to keep going if the economy ever took a turn for the worst."
I don't think they had a clue even if the economy stayed strong. They have been loosing market share and money for many years.
Favorite places are Wendy's, Zaxby's Chicken, Stevie B's Pizza all you can eat for $3.40 (Seniors) and occasionally at a local Buffet all you care to eat for $6.13.
We also eat out once or twice a week. Most times at one of the local Mexican places. My wife and I rarely spend more than $10 total for a nice Mexican lunch. On special occasions we may go to the Marine Room in La Jolla and pretend we are wealthy. Maybe once or twice per year. I can tell you if we were on a tight budget we would not be wasting money eating out.
Most of our friends and family had jobs as good as ours. They made choices that have left them in a less desirable position than my wife and I are in. We also spent many years doing without things that these same relatives felt they had to have.
When you read stories like the one above and the UAW forklift operator that was distraught because his overtime was gone and he no longer makes $118,000 per year. That is the reason so many in this country have no sympathy for the Big 3 and the UAW workers.
Can you imagine only working two years and getting a $40k severance package. That is criminal. Maybe not to the extent of Ovitz and his $140 million dollar parachute from Disney. It is a wonder that any company is making money when they waste so much from top to bottom.
Can anyone tell me what the IPhone can't do that a lap/desk top can do?
My wife and I use smart phones ourselves, at this point, I couldn't imagine giving up my laptop and only using a smart phone. I'll use my smartphone when on the road, but certainly not when I have my laptop handy.
For one, I don't live in an area that has 3G wireless access so web access is slow to almost unusable depending where I'm located. 2nd lots of software that I use and many businesses use can't be run on a Iphone or other smart phones.
If all you do is get RSS news feeds, minor web browsing, and access email, then a smart phone will probably do everything you need. Still lots of websites that are not mobile friendly.
Last, while I can type pretty fast on my smartphone, it would be frustrating to have typed this entire post on it. My thumbs would be sore.
Back in the late 50's and early 60's when the deals with the UAW were first made, GM ruled the American Automotive world. The accountants then were as good at math as they are today. So how did they get into this fix? The answer is that they simply were not able to imagine a declining market share. They may have gone as far as assuming that Ford and/or Chrysler (or even American Motors) might pick up 10 or 15 percent in a worst-case scenario, but the drop to 25 percent of the market for ALL US makers combined was simply impossible to envision.
The Japanese were non-existent; VW was simply 'not a real car that americans would buy in any numbers'; and the only other competitors were the French and English cars which need not even be discussed.
So, the math worked. The model WAS sustainable..... until the 1970's. By that time the mentality was so ingrained that GM couldn't change it. They tried but major strikes by the UAW made them decide to knuckle under...... the rest is history.
If one defining event was to stand out over the last 20 years of UAW dominance of GM it would be 1998. GM was selling SUVs and PU trucks at an alarming rate. The UAW decided it was a good time to strike. It cost Billions in lost revenue and set them back permanently. GM has never, and will never recuperate from that strike. The only option now is bankruptcy. It was Wagoner's chance to bury the UAW forever and he gave away the ranch. A strong CEO like Jack Welch would have said you want to play that way. We are closing the doors. Then start hiring replacement non union workers. They would be a strong company like GE instead of a wimpy worthless outfit like GM.
A look back at the 1998 strike will clear up some questions about GM, UAW worker featherbedding.
DAVID BRADLEY, J.P. Morgan: Let me step back for a minute and just talk about the issue of export of jobs. From what—from my perspective I don’t see export of jobs as really being an issue in the strike. The strike originated at the stamping plant in Flint, and stampings virtually are never made overseas and shipped back to the U.S.. It looks as if the Delphi East strike is really a sympathy strike supporting that strike. But it’s really about its productivity and competitiveness. Because of that, Flint has been the hotbed of union radicalism for many, many years. Over the years many very arcane work rules have worked their way into the GM factories, making them extremely inefficient. Take for example the stamping plant at Flint. There are 3,000 workers—
ELIZABETH FARNSWORTH: I’m going to interrupt you just one second. Explain what a stamping plant does.
DAVID BRADLEY: A stamping plant has large metal presses to stamp out sheet metal that goes on to form the body of a car, so that one press will make a hood, another press will make a door, and so forth. So returning to the point I was making, the stamping is never done overseas. It’s always done contiguous to the plant in question, as close as possible to the plant in question. But what we have here is a plant with 3,000 workers doing the work that probably 1500 or maybe even 1200 workers could do. At the Ford plant down the road a similar size facility would be using 1500 workers. That’s largely because of featherbedding and arcane work rules. We have a plant where workers on average work four hours a day and get paid for eight hours a day. And, remember, $44 an hour is the total low-end cost for the eight hours, so we’re looking at $88 an hour if we consider they’re only working four hours.
ELIZABETH FARNSWORTH: How do they work four hours a day and get paid for eight? How does that work?
DAVID BRADLEY: Well, I think the union has a negotiated a deal whereby the number of hits per hour that the presses make or hits per minute is only five when it’s actually—the press can run at ten. So then they speed the press up to ten, and they finish early and get to go home. That’s essentially the story at Flint. General Motors, because of it’s relatively uncompetitive on costs, compared to the other auto makers, needs to do something to fix its cost structure. It’s going to start in places like this Flint plant that are working at only half of the rate they ought to be working, and it’s trying to get the workers there to agree to a change in work rules that will allow them to speed up the line and allow—make people put in an eight-hour day. Because of the resistance there, certainly there will be some job losses at the end of the day, and it’s unfortunate, but we’re not talking about jobs going to Mexico here.
lokki: They may have gone as far as assuming that Ford and/or Chrysler (or even American Motors) might pick up 10 or 15 percent in a worst-case scenario, but the drop to 25 percent of the market for ALL US makers combined was simply impossible to envision.
Also remember that Ford, Chrysler and AMC workers were represented by the UAW, so the companies were all paying the same labor rates and saddled with the same work rules.
If anything, the UAW contracts benefited GM (and, to a lesser extent, Ford), because it could spread those costs over more vehicles than its competitors could.
>Well, I think the union has a negotiated a deal whereby the number of hits per hour that the presses make or hits per minute is only five when it’s actually—the press can run at ten. So then they speed the press up to ten, and they finish early and get to go home
Why take the anger out of GM alone. The featherbedding UAW workers from them (that plant is closed now I assume) should be helping the company recover from their injury; let them take a cut in their retirement costs, checks and healthcare. Reduce the huge legacy costs that GM has compared to the other B3 and especially compared to the nonunionized plants where workers are employed part time in some cases so they'er easily dumped, er I mean laid off.
Thanks for the post...now you know why I don't do Chapter 11s...:):):)...
But, knowing that companies like Delta and others DID use Ch 11 to void various contracts, I believe that it CAN be done, assuming that a judge approves it...
Also realize that even the judge only has so much power, depending on the cash flow of the bankrupt company...if they turn around and file Ch 7 (or convert the 11 to a 7) and liquidate, there really isn't much a judge can do to force them to pay anybody, except to take their assets, sell them, and distribute the funds as the judge sees fit...
You just cannot create money where none exists, except if you own the printing press like the Fed...
Hopefully the bailout will mandate just such concessions from the companies and their Unions. There is a place for part time workers. What I don't like to see is companies keeping people part time to avoid paying out benefits that are given to the full time employees. Or stringing them along for years as part time. There are some people that do not want to work full time. That should be allowed as part of the mix. All work rules that are not safety related should be taken out of the contract. The UAW blocking Ford from building a state of the art facility in the USA is not a good thing. Automation is here to stay no matter how much the UAW screams. A new highly modern plant would be a plus for any community. It is only short sightedness that would block it.
Bob, in spite of Dallasdude's reply, ultimately wouldn't the pension monies get turned over to the PBGC and they will run the pension??? Also, any reduction in the retiree's pensions (over 1 mil people) how does that affect the economy???
As far as the relief of debt question, if a bankrupt auto co. is relieved of it's debt to a supplier that is shared by other auto companies, and that supplier is dragged under as well, how do you see that affecting the industry as a whole??
If ever there has beena time that our Senators are failing us, it is now!
I would agree none of us know all there is to know about the reasons the auto makers are in the circumstances they are in. I do know ALL auto makers are having a very hard time, not just the US auto makers. If banks don't loan money, it makes no difference how inexpensive the vehicle is or how much of a discount the car has, it won't sell if no one will finance it!
The people who are are the core of all this financial mess, the blame belongs at the feet of dishonest loan brokers who lied to get loans for people who could not afford a house loan. Greed is the very reason behind all of this crap. The oil companies have their share of the blame as well. As just ordinary everyday typical working people we are headed for a Titanic crash if something is not done real soon.
Perhaps, this might become far deeper then the depression of 1931. I do not know if the adults of today have what it takes to live without credit cards, and electronic games, eating out, and having "fun". We have been duped into thinking happiness is what really counts. I am afraid a lot of us are about to become very unhappy, and learn what is to skimp and reuse something until it wares out, and yes save up until we have the money to buy what we want. Wow, kinda like the Waltons on TV.
"......When you read stories like the one above and the UAW forklift operator that was distraught because his overtime was gone and he no longer makes $118,000 per year. That is the reason so many in this country have no sympathy for the Big 3 and the UAW workers."
I think in that case the bigger issue should be "living on OT". Here, with FIOS going strong in RI, an installer could pull in that kind of money but they'd have to work 10, 12 hrs a day for 6 or 7 days a wk. That's a LOT of OT!!! ANYBODY living a lifestyle based on 50% MORE than their base salary is asking for big trouble.
It's gonna be bad. We just took out $50k from our home equity account (We have LOTS of equity) just to be sure we have enough to live on if we lose our jobs. Money is sitting in safe money markets.
Check to make sure yours is FDIC insured. Not all money market accounts are insured. Something about that came out when they were discussing the $700b bailout. Better safe than sad.
I don't get it. Both my wife and I have fairly stable jobs, make good money, have the seniority to survive massive layoffs, yet I STILL have a big knot in my stomach over the economy.
I wonder, if we let them go bankrupt, is it just the tip of an even BIGGER iceberg than what we are talking about???
But, knowing that companies like Delta and others DID use Ch 11 to void various contracts, I believe that it CAN be done, assuming that a judge approves it...
The main purpose of a "Chapter 11" bankruptcy is to relieve a debtor of debts, thereby providing an opportunity for a fresh start. This is different from a "Chapter 7"bankruptcy, which involves the company shutting down its operations and the company's assetsbeing sold off. In each of the following questions, when the term "bankruptcy" is used, we are referring to a Chapter 11 bankruptcy. A Chapter 11 bankruptcy could also include selling off some or all of the Company's assets. It does allow temporary relief in all areas in the hopes of restoring normal business conditions. Besides, every creditor can and will kick in their legal/accounting fees to the total.
Items such as wages, salaries, and sick leave are considered as normal administrativeexpenses while in bankruptcy. The bankruptcy laws assure that employees will continue to bepaid for their services during the reorganization. In addition, certain "pre-petition claims," for items like unpaid medical expenses and other benefits are given priority status in bankruptcy,meaning that they are paid before any other general unsecured claims. However, under the law,the maximum amount of such claims that can be give priority status is limited to $4,650 per employee.
A company can ask for modification and or voiding of a labor contract.
Section 1113 of the bankruptcy code lays out the rules an employer must follow if it decides to seek to reject labor contracts. It ensures that negotiations between a Chapter 11 employer and a union occur before the company asks the court to allow it to reject a collective bargaining agreement. It lays out the stringent standard by which a bankruptcy court must evaluate an application to reject an agreement, and it establishes a time frame in which the court may make its determination.A collective bargaining agreement remains in effect, and the collective bargaining process continues, after the filing of a bankruptcy petition "unless and until" the company complies with the provisions of Section 1113.
Accordingly, before the court may authorize the rejection of acollective bargaining agreement the company must prove to the court that the following nine (9)requirements have been met: 1. The company must have made a proposal to the union. 2. The proposal must be based upon the most complete and reliable information available atthe time of the proposal. 3. The modifications must be necessary to permit reorganization. 4. The modifications must provide that all affected parties are treated fairly and equitably. 5. The company must provide the union with such relevant information as is necessary toevaluate the proposal. 6. The company must have met with the collective bargaining representative at reasonabletimes subsequent to making the proposal. 7. The debtor must have negotiated with the union concerning the proposal in good faith. 8. The union must have refused to accept the proposal without good cause.9. The balance of the equities must clearly favor rejection of the agreement.If the court agrees that the company has met these conditions, it may authorize the rejection ofthe Collective Bargaining Agreement.Overview of the 1113 Process An explanation of the sections of the bankruptcy code that allows temporarymodifications and permanent rejection of collective bargaining agreements is outlinedbelow.1113 (c) -Total RejectionSection 1113 (c), Chapter 11, of the U.S. Bankruptcy Code. Section 1113 (c) allows acompany to ask a judge to reject, terminate, labor contracts.Section 1113 (c) states:The court shall approve an application for rejection of a collective bargaining I agreementonly if the court finds that - (1) the trustee has, prior to the hearing, made a proposal that fulfills therequirements of subsection (b)(I); (2) the authorized representative of the employees has refused to accept suchproposal without good cause; and (3) the balance of the equities clearly favors rejection of such agreement.By law, a hearing on the 1113(c) petition is to be held within fourteen days from the dateof the filing of the application. However, the court may extend the time for the commencement of such hearing for a period not exceeding seven days.The court is required to rule on the application for rejection within thirty days after thedate of the commencement of the hearing. However, the court may extend the time formaking a ruling for an additional period as the company and the Union may agree to. Ifthe court does not rule on the application within thirty days after the date of thecommencement of the hearing, or within such additional time as the company and union may agree to, the company may terminate or alter any provisions of the collective bargaining agreement pending the ruling of the court.In 1113 (c) applications the judge has only two options when making a ruling; reject the company's application and leave the labor contract intact, or approve the application and terminate the labor agreement completely. The judge cannot impose permanent contract terms on the parties.
Its a bit longer and deal with defined pensions, bargaining in good faith, if and when the agreement is there is a termination of a collective bargaining agreement.
I wonder, if we let them go bankrupt, is it just the tip of an even BIGGER iceberg than what we are talking about???
Depends who you think is more correct. 3 think tank type groups or the Republicans down south with the competitors plants. Heck, even the competitors down south are scared of one of the big 2 going under. There is a rep (Mike Stanton, Association of International Automobile Manufacturers) for all the import brands and I saw him on a show and he said all the imports companies are very concerned and feel we cannot let any of the big 3 go under because it will take the suppliers out with them. But heck, he is in the industry too so he must be biased.
Check to make sure yours is FDIC insured. Not all money market accounts are insured. Something about that came out when they were discussing the $700b bailout.
insured up to $100k. Credit Union
paying 4.2% for the loan and getting 2.5%. Need to look around and see if I can do better on the market account. I was discussing a loan with a broker for a foreclosed house and he asked if my Home Equity loan was cancelled yet. Guess they are cancelling them left and right even if you have good equity. Lack of money to loan. The limit was lowered recently though.
That is the $64,000 question. Right now the country and the World is slowly bleeding. Where do you try to stop it? I never faced a layoff in 46 years working for several companies. All Union jobs and I was in on the start, except for Pacific Telephone. I cannot possibly know what it must feel like to face a layoff.
With the collapse of the price of oil friends and family in Alaska are being hit. My son was a chef at one of the top restaurants and brewery companies in Wasilla Alaska. They went out of business the end of November. I think the building industry has been hurt the worst. I don't hear any talk of bailing out the builders that are going bankrupt.
I can tell you one thing. If I was one of the last UAW workers still on the job the last 10 years. I would be saving every penny and downsizing my life. It did not take a degree in economics to see the loss of market share, especially at GM. When a million of my fellow UAW workers lost their jobs since the 1970s, I would be on a short spending leash. What were these workers thinking when their company was not making any decent return during the SUV boom? Over the last 35 years I was in on a lot of our negotiations. I did a lot of research to see what our company was making and learning their weaknesses. If they were top heavy with engineers and crying no money. I would point that out to them. A couple times they were legitimately hurting and our contracts reflected that downturn. We even took a cut in one contract. That was tough to sell.
The UAW will play a big part in any turnaround at GM. I don't think Congress will give GM any money unless the UAW concedes at least to the competition level. There is no bringing the competition up. Too late for that to happen. We are talking weeks from bankruptcy.
This pension fund is far from underfunded status. Its been prudently operated. We are talking about two different things. Medical coverage/medi gap as opposed to the pension entitlement to present and future retirees. Or am I missing something?
LTV tried to use law to lawfully dump their pension fund. The federal judge ruled, while legal other copy cats would do likewise, and ruled against them. All the while creditors legal and accounting fees amassed. Good plan, bad outcome.
At one time or another they owned National car rental, Wilson sports, Braniff, resorts, and many others in the conglomerate period/era. Much like GE today.
I don't disagree with the article you posted. Sure, the Iphone can replace a laptop/desktop for many users. But to your original question, there are still things you can't do on an Iphone for a variety of reasons. Your not going to find a technical illustrator or graphic designer using an Iphone over a Mac Pro anytime soon.
Back to topic. Things certainly aren't looking good. Guess I'm glad I've got two domestic cars in the driveway just in case displaced UAW and supplier workers decide to take their frustrations out on foreign metal.
I grew up around the steel mills and I still remember watching TV as a kid around 1980 when it was common to see steel workers taking sledge hammers to Japanese cars.
LTV tried to use law to lawfully dump their pension fund. The federal judge ruled, while legal other copy cats would do likewise, and ruled against them. All the while creditors legal and accounting fees amassed. Good plan, bad outcome.
Isn't that the truth. My FIL worked for LTV when they went bankrupt and now gets his reduced pension from the PBGC. Another example of a poorly run company.
That is good. If your CU is insured under the NCUA it is now covered to at least $250,000. That may have come about when the upped the FDIC to that amount. Getting much more than 2.5% right now is tough with any kind of assurance that it is safe.
I would bet that equity loans that were up to 100% are gone for sure. I would think the appraisers are being very careful about over appraising properties for loans. I looked at a foreclosure near me this morning. The bank wanted a minimum 10% down the $540k selling price. That place would have been a bargain last year. I am sure it sold for close to a mil when new in 2006.
I am thankful that I am retired with a fairly good income. So many are already hurting around here. Our church has set up a fund to help those in the church that have lost their homes and jobs. We counsel them to move in with family even if they have to leave San Diego. This is not a good place to be without a job. I realize there is no good place to be when you are down and out.
Comments
Salaried are employees at will. They don't pay dues.
UAW are collective bargaining employees.
http://books.google.com/books?id=YKusFQwuem8C&pg=PA1215&lpg=PA1215&dq=labor+agre- ement+and+bankruptcy&source=web&ots=5fgbNmaLrh&sig=j-omxVU-y7mTnO6i0hdvDp7tI8Q&h- l=en&sa=X&oi=book_result&resnum=4&ct=result
If you enjoyed the piece on Japan, perhaps you'll also like this piece, written in 2005, on Social Security reform.
Social Security Reform: A Free-Market Alternative
If government wishes to alleviate, rather than aggravate, a depression, its only course is laissez-faire—to leave the economy alone. Only if there is no interference, direct or threatened, with prices, wage rates, and business liquidation will the necessary adjustment proceed with smooth dispatch. Any propping up of shaky positions postpones liquidation and aggravates unsound conditions
The bank fails, there is a run on the bank. Since we all know that there only about a 20% reserve requirement. The govt has to fire up the presses. Good ole FDIC insurance. As unemployment reaches 25% social unrest occurs. Foreclosures increase and home prices decline due to the increase supply. We can imagine what happens on Wall Street. If the war ends the war machine adds to less demand and therefore less jobs. You are now in complete meltdown of capitalism.
You certainly can't be serious, we have had this condition before. Washington is already planning public works program to lessen the hardship. Keynes explains this and since the private sector isn't going to be crowded out, deficit spending is allowable as it would be in time of war. Sitting on ones hands isn't going to make the economy recover, somebody has to fuel it. As WWII did.
I don't have anything to do with them. I am not a member, but I'll bet they're still counting me as one.
2014 Malibu 2LT, 2015 Cruze 2LT,
I hope you are not referring to me
In fact (and as you also point out in a separate post), Japan handled its recession in a very "inefficient" manner - Huge amount of tax money was spent in bailing out dead companies in inefficient sectors (no, it was not Autos - but banks and retailers). As a tax payer in Japan, I resented all this, and most of us cited the US model (US was lecturing Japan very loudly at that time).
It is therefore disappointing to see that the US itself is now repeating the same mistakes Japan committed - more so because US was seen to be the standard bearer of modern capitalism. This is simply going to strengthen the case of socialists in Japan (which means more bad news for tax payers like me....).
There are a couple of differences between Japan and US though....
1. Japanese debt is all owned by Japanese (who have enormous savings) - So the Govt can simply continue to rob its citizens with low interest rates. In case of the US, it is owned by foreigners, which makes it a lot more unstable (the US can rob them with a massive devaluation of the USD, but that will make future borrowings very expensive, and would thus result in a very painful change of lifestyle).
2. Japan did invest a lot of money on infrastructure (i.e. it was not a direct cash handout to sick companies, but indirectly provided to them through public works) - So the infrastructure now is absolutely top class (unlike the US, which has its roads, bridges and railroads in fairly bad shape).
But no, even now I do not think of Japan as the superior economy. They do well in manufacturing, but have nothing to compare with the Silicon Valley entreprenuership.
Parts (same)
Assembly (close to the same)
overhead (we are screwed)
Here's an interesting thought experiment (not likely to really happen):
Have Gettlefinger run GM as CEO while he retains the head of UAW! He gets a loan from the government and enough money for 6 months. At the end of six months if the cost structure is not lowered enough to survive then he is fired and GM goes into BK and all UAW contract nullified! Make HIM determine the tough answers to the conflict between costs, product, and UAW benefits. :shades:
That's not what the link you referenced says.
That article talks about the hardware, not the entire ecosystem. Kind of like saying the Cobalt has a lot of power but then not noticing refinement, dealer issues, and resale value. The entire system needs to be taken into account.
Yes, I do have both iPod and non-iPod players.
Back to the UAW - are the UAW contracts keeping the D3 from being more flexible and competitive in production, in innovation of the inventory/selling experiences? Why don't we have integrated/automated UAW plants in the US like the highly automated Ford plant in Brazil?
UAW are collective bargaining employees.
So what?
My wife is a nurse and her hospital just unionized and it has to be the worst thing that could have ever happened. Quality of care as dropped through the floor. Nothing like having an entire work force doing just enough to not get fired (which is virtual impossible now). Why bother working hard when there's no longer performance based raises. The nurses aids have actually been found hiding in the bathrooms and closets.
Back to the topic, I'm crossing my fingers the bill gets killed in the Senate and we all get to see the UAW suffer when contracts get "renegotiated".
If you are a conservative driver maybe you're mad if somebody passes you up a certain way, and i get mad too at times, but i just get over it, really. I would prefer at times that people conserve more, but people do drive differently and the change is in for the better it just takes a little time.
While you know of a hospital that has bad work habits you have nothing better to do than to be here as a few others like you are here - maybe there is somebody you can call and the hospital could lose a few employees for that.
As for the auto industry -
I've been through different plants and they go through inspections, quality is addressed, looks to me as i watched during operations, looks professional to me. looks somewhat tidy.., when somebody new comes around they can act somewhat differently, but they find their place and as for the unions themselves, they have made a few cutbacks from a few years ago, i don't know the extent of that what if the workers themselves wanted to invest more into the unions, that could probably be their choice and not yours.
The Banks did get alot of money from Uncle Sam already because they proved that they were lied to, how do you know that the auto industry was not lied to and maybe a few more things than that.
President Bush was making concessions that 25 billion(but asking for 34 billion) was to be given to them and they were expecting it, but it never went through, oh but the banks did get their money. It should have been handed out at the same time, since it was mentioned. i know i dont' have all the facts, but i don't think anybody here has all the facts either.
The taxpayers get the loan paid back with interest so there is stimulus.
it's nothing to whine about as most are doing, i've seen worse things than this. what should really happen now is that the banks that misused the 700 billion should instead use that to autoindustry. there is no payback in just handing blank checks to the taxpayers from this money, and that is where most of those opposing votes are coming from.
Oh boo hoo for this family.
she says, "We're hoarding our money." The whole family used to eat out five times a week; now, Tina and Mike go out once a week, alone. Tina buys generic brands and has cut back on sweets and snacks. In the past, the family took several vacations; next year, they'll take one. This Christmas they plan to spend half what they spent last year.
Gee, maybe they should have been saving some of that money before.
Two years ago, they were delighted when, with the help of referrals from autoworker relatives, they landed jobs at the Delphi auto parts plant. She made hybrid batteries; he worked in shipping and receiving. They expected to retire from the plant.
But in October, they each accepted $40,000 buyouts from Delphi, which filed for bankruptcy in 2005 and has yet to emerge.
Not bad, on the job 2 years and then get a $40K buyout.
And now my favorite.
Cox says most students lack sympathy for blue-collar autoworkers, an attitude he summarizes as, "You can't expect to make $65,000 for a job you can learn in a month."
We are so spoiled in this country. It is just mind boggling how so many young people think they are entitled to a great job paying big bucks. These little recessions are a reality check. The UAW was a good thing when workers were being exploited. I don't see any exploitation of citizen workers in this country, compared to most places around the world. And right across our southern border.
As for the mother and son who worked for Delphi, at least they're going back to college to get degrees, to make themselves marketable.
I always used to think that if I ever lost my job, I could go back to delivering pizzas or waiting tables or something. Heck, back in my heyday, on an hourly basis, my takehome pay delivering pizzas was more than what it is now at my regular job! (however, I also have health insurance and 401k taken out of my regular job's paycheck, something the part time job didn't have to fund).
But, in a recession, that type of work becomes less profitable, and it could very well be less so this time around. One of my friends works full-time as a waiter/bartender, and he just got cut back from 5 days per week to 4. I'm sure with this economy, there are plenty of people applying for jobs like that, all the while business at restaurants, bars, pizza joints, etc, is diminishing.
My uncle works in construction...I guess if I lost my job, couldn't find a similar one, and things got really bad, I could try getting a job with his company. Although working a desk job all these years has gotten me lazy. I'm sure my body would have a violent reaction to that kind of manual labor! That, and getting up at 4 in the morning. :surprise:
Public works programs did not end the Great Depression, or even alleviate it.
And the idea that the federal government did "nothing" after the stock market crash in 1929 until the Roosevelt administration is a myth.
President Hoover supported public works and even approved the creation of the Reconstruction Finance Corporation to bail out failing companies (sound familiar)? The total tax burden - local, state and federal - also increased from 1929 to 1932.
Yet unemployment still hit 25 percent by 1932.
The main difference between candidate Roosevelt and President Hoover was that Roosevelt favored direct relief to individuals (what we today call welfare). President Hoover opposed this.
The Great Depression was "great" because of ham-handed government monetary policy, the Hawley Smoot Tariff enacted by the U.S. in 1930, Roosevelt's foolish tax policies that sought to punish the wealthy and businesses, and silly measures like Roosevelt's National Recovery Act, which the U.S. Supreme Court mercifully declared unconstitutional. Unemployment was in the double digits well into the 1930s, and the 1938 "recession within a depression" was also quite severe.
Looks a lot like UAW contracts to me. Signed by GM management with NO CLUE as to how they would be able to keep going if the economy ever took a turn for the worst.
We ( the wife and I ) eat out every Sunday after Church with some members of our Sunday School class. Favorite places are Wendy's, Zaxby's Chicken, Stevie B's Pizza all you can eat for $3.40 (Seniors) and occasionally at a local Buffet all you care to eat for $6.13. Not very extravagant, but the food and company are always good!
When the kids were growing up, a big deal for us was McDonalds once a month. We have a stove a refrigerator and we did and still do use them.
So in effect our life style hasn't changed since I have retired. Our home and land is paid for as well as our 03 Pilot and CR-V, and we have savings enough to last, unless something really caste strophic happened. I never made the money or had the bennefits of UAW worker friends, Delta Air Line friends, and others. But we didn't spend like they did either.
Now many of those friends and relatives are near or at retirement age and still have a house and car note. People tend to spend every penny they make for instant gratification and put away nothing for hard times. But, I recon they have their memories!
I just don't know how those memories could be any better than teaching a son how, and watching when he caught a mess of trout from a mountain stream, cleaned them in that stream, and learned to cook them for supper that night. Then telling stories around a fire and sleeping under the stars. So many wonderful memories that cost so little , but were priceless.
Kip
I don't think they had a clue even if the economy stayed strong. They have been loosing market share and money for many years.
Kip
We also eat out once or twice a week. Most times at one of the local Mexican places. My wife and I rarely spend more than $10 total for a nice Mexican lunch. On special occasions we may go to the Marine Room in La Jolla and pretend we are wealthy. Maybe once or twice per year. I can tell you if we were on a tight budget we would not be wasting money eating out.
Most of our friends and family had jobs as good as ours. They made choices that have left them in a less desirable position than my wife and I are in. We also spent many years doing without things that these same relatives felt they had to have.
When you read stories like the one above and the UAW forklift operator that was distraught because his overtime was gone and he no longer makes $118,000 per year. That is the reason so many in this country have no sympathy for the Big 3 and the UAW workers.
Can you imagine only working two years and getting a $40k severance package. That is criminal. Maybe not to the extent of Ovitz and his $140 million dollar parachute from Disney. It is a wonder that any company is making money when they waste so much from top to bottom.
My wife and I use smart phones ourselves, at this point, I couldn't imagine giving up my laptop and only using a smart phone. I'll use my smartphone when on the road, but certainly not when I have my laptop handy.
For one, I don't live in an area that has 3G wireless access so web access is slow to almost unusable depending where I'm located. 2nd lots of software that I use and many businesses use can't be run on a Iphone or other smart phones.
If all you do is get RSS news feeds, minor web browsing, and access email, then a smart phone will probably do everything you need. Still lots of websites that are not mobile friendly.
Last, while I can type pretty fast on my smartphone, it would be frustrating to have typed this entire post on it. My thumbs would be sore.
The Japanese were non-existent; VW was simply 'not a real car that americans would buy in any numbers'; and the only other competitors were the French and English cars which need not even be discussed.
So, the math worked. The model WAS sustainable..... until the 1970's. By that time the mentality was so ingrained that GM couldn't change it. They tried but major strikes by the UAW made them decide to knuckle under...... the rest is history.
A look back at the 1998 strike will clear up some questions about GM, UAW worker featherbedding.
DAVID BRADLEY, J.P. Morgan: Let me step back for a minute and just talk about the issue of export of jobs. From what—from my perspective I don’t see export of jobs as really being an issue in the strike. The strike originated at the stamping plant in Flint, and stampings virtually are never made overseas and shipped back to the U.S.. It looks as if the Delphi East strike is really a sympathy strike supporting that strike. But it’s really about its productivity and competitiveness. Because of that, Flint has been the hotbed of union radicalism for many, many years. Over the years many very arcane work rules have worked their way into the GM factories, making them extremely inefficient. Take for example the stamping plant at Flint. There are 3,000 workers—
ELIZABETH FARNSWORTH: I’m going to interrupt you just one second. Explain what a stamping plant does.
DAVID BRADLEY: A stamping plant has large metal presses to stamp out sheet metal that goes on to form the body of a car, so that one press will make a hood, another press will make a door, and so forth. So returning to the point I was making, the stamping is never done overseas. It’s always done contiguous to the plant in question, as close as possible to the plant in question. But what we have here is a plant with 3,000 workers doing the work that probably 1500 or maybe even 1200 workers could do. At the Ford plant down the road a similar size facility would be using 1500 workers. That’s largely because of featherbedding and arcane work rules. We have a plant where workers on average work four hours a day and get paid for eight hours a day. And, remember, $44 an hour is the total low-end cost for the eight hours, so we’re looking at $88 an hour if we consider they’re only working four hours.
ELIZABETH FARNSWORTH: How do they work four hours a day and get paid for eight? How does that work?
DAVID BRADLEY: Well, I think the union has a negotiated a deal whereby the number of hits per hour that the presses make or hits per minute is only five when it’s actually—the press can run at ten. So then they speed the press up to ten, and they finish early and get to go home. That’s essentially the story at Flint. General Motors, because of it’s relatively uncompetitive on costs, compared to the other auto makers, needs to do something to fix its cost structure. It’s going to start in places like this Flint plant that are working at only half of the rate they ought to be working, and it’s trying to get the workers there to agree to a change in work rules that will allow them to speed up the line and allow—make people put in an eight-hour day. Because of the resistance there, certainly there will be some job losses at the end of the day, and it’s unfortunate, but we’re not talking about jobs going to Mexico here.
http://www.pbs.org/newshour/bb/business/jan-june98/gm_6-19.html
Also remember that Ford, Chrysler and AMC workers were represented by the UAW, so the companies were all paying the same labor rates and saddled with the same work rules.
If anything, the UAW contracts benefited GM (and, to a lesser extent, Ford), because it could spread those costs over more vehicles than its competitors could.
Why take the anger out of GM alone. The featherbedding UAW workers from them (that plant is closed now I assume) should be helping the company recover from their injury; let them take a cut in their retirement costs, checks and healthcare. Reduce the huge legacy costs that GM has compared to the other B3 and especially compared to the nonunionized plants where workers are employed part time in some cases so they'er easily dumped, er I mean laid off.
2014 Malibu 2LT, 2015 Cruze 2LT,
But, knowing that companies like Delta and others DID use Ch 11 to void various contracts, I believe that it CAN be done, assuming that a judge approves it...
Also realize that even the judge only has so much power, depending on the cash flow of the bankrupt company...if they turn around and file Ch 7 (or convert the 11 to a 7) and liquidate, there really isn't much a judge can do to force them to pay anybody, except to take their assets, sell them, and distribute the funds as the judge sees fit...
You just cannot create money where none exists, except if you own the printing press like the Fed...
Here are a couple on articles on the point
Delphi -Judge tried to get the parties to work a deal
http://www.nytimes.com/2006/05/10/business/10delphi.html
United Airlines - The Judge did intervene - at least in pay cut for workers
http://findarticles.com/p/articles/mi_kmusa/is_200502/ai_n13277327
As far as the relief of debt question, if a bankrupt auto co. is relieved of it's debt to a supplier that is shared by other auto companies, and that supplier is dragged under as well, how do you see that affecting the industry as a whole??
I would agree none of us know all there is to know about the reasons the auto makers are in the circumstances they are in. I do know ALL auto makers are having a very hard time, not just the US auto makers. If banks don't loan money, it makes no difference how inexpensive the vehicle is or how much of a discount the car has, it won't sell if no one will finance it!
The people who are are the core of all this financial mess, the blame belongs at the feet of dishonest loan brokers who lied to get loans for people who could not afford a house loan. Greed is the very reason behind all of this crap. The oil companies have their share of the blame as well. As just ordinary everyday typical working people we are headed for a Titanic crash if something is not done real soon.
Perhaps, this might become far deeper then the depression of 1931. I do not know if the adults of today have what it takes to live without credit cards, and electronic games, eating out, and having "fun". We have been duped into thinking happiness is what really counts. I am afraid a lot of us are about to become very unhappy, and learn what is to skimp and reuse something until it wares out, and yes save up until we have the money to buy what we want. Wow, kinda like the Waltons on TV.
These are just my thoughts.
farout
I think in that case the bigger issue should be "living on OT". Here, with FIOS going strong in RI, an installer could pull in that kind of money but they'd have to work 10, 12 hrs a day for 6 or 7 days a wk. That's a LOT of OT!!! ANYBODY living a lifestyle based on 50% MORE than their base salary is asking for big trouble.
Check to make sure yours is FDIC insured. Not all money market accounts are insured. Something about that came out when they were discussing the $700b bailout. Better safe than sad.
http://seekingalpha.com/article/84124-iphone-can-replace-laptops-for-majority-of- -computer-users
I wonder, if we let them go bankrupt, is it just the tip of an even BIGGER iceberg than what we are talking about???
The main purpose of a "Chapter 11" bankruptcy is to relieve a debtor of debts, thereby providing an opportunity for a fresh start. This is different from a "Chapter 7"bankruptcy, which involves the company shutting down its operations and the company's assetsbeing sold off. In each of the following questions, when the term "bankruptcy" is used, we are referring to a Chapter 11 bankruptcy. A Chapter 11 bankruptcy could also include selling off some or all of the Company's assets. It does allow temporary relief in all areas in the hopes of restoring normal business conditions. Besides, every creditor can and will kick in their legal/accounting fees to the total.
Items such as wages, salaries, and sick leave are considered as normal administrativeexpenses while in bankruptcy. The bankruptcy laws assure that employees will continue to bepaid for their services during the reorganization. In addition, certain "pre-petition claims," for items like unpaid medical expenses and other benefits are given priority status in bankruptcy,meaning that they are paid before any other general unsecured claims. However, under the law,the maximum amount of such claims that can be give priority status is limited to $4,650 per employee.
A company can ask for modification and or voiding of a labor contract.
Section 1113 of the bankruptcy code lays out the rules an employer must follow if it decides to seek to reject labor contracts. It ensures that negotiations between a Chapter 11 employer and a union occur before the company asks the court to allow it to reject a collective bargaining agreement. It lays out the stringent standard by which a bankruptcy court must evaluate an application to reject an agreement, and it establishes a time frame in which the court may make its determination.A collective bargaining agreement remains in effect, and the collective bargaining process continues, after the filing of a bankruptcy petition "unless and until" the company complies with the provisions of Section 1113.
Accordingly, before the court may authorize the rejection of acollective bargaining agreement the company must prove to the court that the following nine (9)requirements have been met:
1. The company must have made a proposal to the union.
2. The proposal must be based upon the most complete and reliable information available atthe time of the proposal.
3. The modifications must be necessary to permit reorganization.
4. The modifications must provide that all affected parties are treated fairly and equitably.
5. The company must provide the union with such relevant information as is necessary toevaluate the proposal.
6. The company must have met with the collective bargaining representative at reasonabletimes subsequent to making the proposal.
7. The debtor must have negotiated with the union concerning the proposal in good faith.
8. The union must have refused to accept the proposal without good cause.9. The balance of the equities must clearly favor rejection of the agreement.If the court agrees that the company has met these conditions, it may authorize the rejection ofthe Collective Bargaining Agreement.Overview of the 1113 Process An explanation of the sections of the bankruptcy code that allows temporarymodifications and permanent rejection of collective bargaining agreements is outlinedbelow.1113 (c) -Total RejectionSection 1113 (c), Chapter 11, of the U.S. Bankruptcy Code. Section 1113 (c) allows acompany to ask a judge to reject, terminate, labor contracts.Section 1113 (c) states:The court shall approve an application for rejection of a collective bargaining I agreementonly if the court finds that -
(1) the trustee has, prior to the hearing, made a proposal that fulfills therequirements of subsection (b)(I);
(2) the authorized representative of the employees has refused to accept suchproposal without good cause; and
(3) the balance of the equities clearly favors rejection of such agreement.By law, a hearing on the 1113(c) petition is to be held within fourteen days from the dateof the filing of the application. However, the court may extend the time for the commencement of such hearing for a period not exceeding seven days.The court is required to rule on the application for rejection within thirty days after thedate of the commencement of the hearing. However, the court may extend the time formaking a ruling for an additional period as the company and the Union may agree to. Ifthe court does not rule on the application within thirty days after the date of thecommencement of the hearing, or within such additional time as the company and union may agree to, the company may terminate or alter any provisions of the collective bargaining agreement pending the ruling of the court.In 1113 (c) applications the judge has only two options when making a ruling; reject the company's application and leave the labor contract intact, or approve the application and terminate the labor agreement completely. The judge cannot impose permanent contract terms on the parties.
Its a bit longer and deal with defined pensions, bargaining in good faith, if and when the agreement is there is a termination of a collective bargaining agreement.
I wonder, if we let them go bankrupt, is it just the tip of an even BIGGER iceberg than what we are talking about???
Depends who you think is more correct. 3 think tank type groups or the Republicans down south with the competitors plants. Heck, even the competitors down south are scared of one of the big 2 going under. There is a rep (Mike Stanton, Association of International Automobile Manufacturers) for all the import brands and I saw him on a show and he said all the imports companies are very concerned and feel we cannot let any of the big 3 go under because it will take the suppliers out with them. But heck, he is in the industry too so he must be biased.
http://www.autolinedetroit.tv/show/1242?play
You know the answer to that prediction.
Regards,
OW
insured up to $100k. Credit Union
paying 4.2% for the loan and getting 2.5%. Need to look around and see if I can do better on the market account. I was discussing a loan with a broker for a foreclosed house and he asked if my Home Equity loan was cancelled yet. Guess they are cancelling them left and right even if you have good equity. Lack of money to loan. The limit was lowered recently though.
That is the $64,000 question. Right now the country and the World is slowly bleeding. Where do you try to stop it? I never faced a layoff in 46 years working for several companies. All Union jobs and I was in on the start, except for Pacific Telephone. I cannot possibly know what it must feel like to face a layoff.
With the collapse of the price of oil friends and family in Alaska are being hit. My son was a chef at one of the top restaurants and brewery companies in Wasilla Alaska. They went out of business the end of November. I think the building industry has been hurt the worst. I don't hear any talk of bailing out the builders that are going bankrupt.
I can tell you one thing. If I was one of the last UAW workers still on the job the last 10 years. I would be saving every penny and downsizing my life. It did not take a degree in economics to see the loss of market share, especially at GM. When a million of my fellow UAW workers lost their jobs since the 1970s, I would be on a short spending leash. What were these workers thinking when their company was not making any decent return during the SUV boom? Over the last 35 years I was in on a lot of our negotiations. I did a lot of research to see what our company was making and learning their weaknesses. If they were top heavy with engineers and crying no money. I would point that out to them. A couple times they were legitimately hurting and our contracts reflected that downturn. We even took a cut in one contract. That was tough to sell.
The UAW will play a big part in any turnaround at GM. I don't think Congress will give GM any money unless the UAW concedes at least to the competition level. There is no bringing the competition up. Too late for that to happen. We are talking weeks from bankruptcy.
LTV tried to use law to lawfully dump their pension fund. The federal judge ruled, while legal other copy cats would do likewise, and ruled against them. All the while creditors legal and accounting fees amassed. Good plan, bad outcome.
At one time or another they owned National car rental, Wilson sports, Braniff, resorts, and many others in the conglomerate period/era. Much like GE today.
You can help both GM & yourself.
Back to topic. Things certainly aren't looking good. Guess I'm glad I've got two domestic cars in the driveway just in case displaced UAW and supplier workers decide to take their frustrations out on foreign metal.
I grew up around the steel mills and I still remember watching TV as a kid around 1980 when it was common to see steel workers taking sledge hammers to Japanese cars.
Isn't that the truth. My FIL worked for LTV when they went bankrupt and now gets his reduced pension from the PBGC. Another example of a poorly run company.
I would bet that equity loans that were up to 100% are gone for sure. I would think the appraisers are being very careful about over appraising properties for loans. I looked at a foreclosure near me this morning. The bank wanted a minimum 10% down the $540k selling price. That place would have been a bargain last year. I am sure it sold for close to a mil when new in 2006.
I am thankful that I am retired with a fairly good income. So many are already hurting around here. Our church has set up a fund to help those in the church that have lost their homes and jobs. We counsel them to move in with family even if they have to leave San Diego. This is not a good place to be without a job. I realize there is no good place to be when you are down and out.
They like CTS better that the rice burners.
Apple, Abcrombie Fintch, American Eagle, Dell, Hansen Monster are their picks in the past. How do they do it?