From cnn.money today: "States and cities around the nation are already slashing budgets and services as the deepening economic downturn shrinks their coffers. To close their budget gaps, governments are cutting public health programs, reducing aid to public school and universities, and laying off workers.
Problems in the auto industry are only exacerbating this turmoil. Not only have nearly 800,000 people lost car-related jobs this year, accounting for 40% of the increase in unemployment, but auto sales are at a 26-year low and at least 660 dealerships have closed their doors.
This means state and local governments are collecting less in personal income taxes, corporate business taxes and sales taxes -- all critical to funding their operations. State tax revenue fell 2.6%, when adjusted for inflation, in the third quarter, according to preliminary figures from the Rockefeller Institute of Government.
"If we see a significant falloff in employment and a continued decline in auto sales, the states are really going to see it and feel it," said Scott Pattison, executive director of the National Association of State Budget Officers. "It just hits so many sources of revenue."
Collapse would hit states hard Any additional weakening of the auto industry would further reduce government revenues, while increasing the amount the public sector has to lay out for unemployment benefits, welfare and Medicaid, experts said.
A 50% reduction in the Big Three's domestic operations, for instance, would result in 2.5 million people losing their jobs, according to the Center for Automotive Research. That would drain $20.5 billion in personal income taxes at the federal, state and local levels in 2009, while forcing the public sector to spend an additional $11.9 billion in benefits.
Every state would feel the impact. Even if only GM, the most troubled of the automakers, shut down, 914,000 jobs would be lost nationwide, according to the Economic Policy Institute. This includes people who work in the plants, in auto suppliers and in businesses that support the industry, such as nearby restaurants and shops.
Of course, Michigan, Indiana and Ohio would be among the hardest hit, losing 2.5%, 1.4% and 1.1% of each state's total employment, respectively, the institute found. But all would see some decline in jobs, with Alabama losing 1.1% of its state workforce and New Hampshire shedding 0.6%."
Keep killing American auto industry
When we are all devastated, at least we can be glad we didn't buy the '74 Vega
Go tell the UAW and Mr. Scuttlefinger that. Apparently, they would rather see the losses you mentioned rather than be prudent. No wonder he is a labor class guy. If he had settled for an instant paycut, they would have had the loan as we discuss this.
As retired UAW worker I kinda doubt half you jerks know how long a grind it is for a blue collar in a factory hs to pick crap with the chickens before he/she gets to a UAW factory job that pays that "$23-28" an hr. And how many times they have had to stand the picket lines in blizzards/blistering heat to get a contract that will provide a good living for their families, pay taxs so less fortunate can have a roof and a jar pf peanut butter. When these figures are thrown around consider the fact that most is derived from incentive workers busting butt, whistle to whistle, 8-10-12 hrs a shift. Think you could do it for 30 years on concrete???? Some come out of there like busted up football players and you think they should not have a decent retirement pension and insurance ? Believe it, by far, it's not a FREE LUNCH JOB. I gave up many hourly pay raises for retaining the insurance, pension benifits that I have today. I live in a mobile home and our nuwest car is a 2003 BUICK, 98 Linc.TC, 92 Jeep, 90 Olds...GET IT! See any foriegn names there.
If he had settled for an instant paycut, they would have had the loan
I don't think so. I think "three little words" Senator Corker (TN) has it in for the unions and would have come up with a couple of more words if Gettelfinger had agreed to a date certain. Like "drop dead."
And Sen. Shelby (AL) would be right there singing in the chorus.
If they're raking in $100K, then they must be working TONS of OT
I am sure they are. There base is closer to $65k. It would only take about 15 hours per week OT to break $100k. I worked 70+ hours per week the last 25 years on the job. 15 hours per week is nothing.
I used the combined Honda, Toyo, and Nissan
I added all the Japanese and miscalculated. It was only 290k. The bottom line. 746k vehicle sold and only 332k were domestic. That is about 44% for the home team.
A 50% reduction in the Big Three's domestic operations, for instance, would result in 2.5 million people losing their jobs, according to the Center for Automotive Research.
Last article from that group said if all three went down we would lose 2.5 - 3.0 million jobs. Now if operations are cut in half we lose 2.5 million jobs. Well sales are off close to 40% so we are already screwed according to their calculations. There is nothing on the horizon to make US believe we will gain back that percentage in the next few years if ever.
Even if only GM, the most troubled of the automakers, shut down, 914,000 jobs would be lost nationwide
We have already lost 800k auto related jobs. So if only GM liquidates that is only 114,000 more job losses. Ever get the idea none of these experts have a clue as to what will happen if GM shuts down?
I can tell you I will never vote for any Congressman or Senator that voted for any of the bailouts. It is all a travesty. Next they will be wanting to give money to those fat cats in Florida that lost their money to Madoff's Ponzi scheme. I say too bad so sad. Stupid rich people.
There was NO sense of conceding to a call for lower wage package in return for the bailout. Gettlefinger wants to string the tax payers along with regular bailouts. He is trying to hold the Federal Government hostage just as he and the UAW have done with the Big 3 for the last 70 years. The time has come to call their bluff. We need a Ronald Reagan with some guts to tell them enough is enough. A line worker at the Big 3 should NOT make as much as an engineer at the Big 3. EVER....
You know that Patco is still alive and well, right?
Well, alive anyway. They have to compete with NATCA.
I doubt that members of either union will be going on strike anytime soon, assuming it's still illegal for them to do so, but the unions are still organizing controllers.
Sounds like a case of dueling Unions. We had a no strike clause at Alascom because of being the long distance for the whole state of Alaska. Yet we had to pay 35 cents per hour into a strike fund. It was always a bone of contention. We also had to walk picket line when Jesse got cross ways with Odom and his Anchorage Cold Storage strike. Walking picket in Anchorage during the winter, when it is not your contract, is a pain. It was that or be fined. I was impacted by the PATCO strike so I was not sympathetic at all. There are certain services that need to be maintained for the safety of the citizens. Fire fighters, Police, mass transit should all be treated as the air traffic controllers. Go back to work or lose your job.
before he/she gets to a UAW factory job that pays that "$23-28" an hr
Welcome to the Forum it is good to have first hand accounts.
How long was the wage progression when you went to work in the UAW? I am sure we all have stories of how difficult our job was or is. I can recall splicing cable in the Arctic at -40 degrees with wind chill at minus 115 degrees. And the oil company bosses hanging around in their heated PU trucks wanting to know how long it was going to take to get them back in service. We were outside NO heated tent. I also gave up raises to have a better pension. Then after 20 some years of paying in we were told that not only the age requirement for retirement went from 45 to 57 years old, we were not going to get paid health care after we retired. The truth is the retirement fund would be broke if we had pushed for that benefit. Just the same as GM is broke trying to keep up an unsustainable health care program for the retirees. So when I retired I paid my own health care until I was eligible for Medicare. Just part of life.
I worked the last 25 years in the Arctic on Ice 8 months of the year. My schedule was 21 days straight 10+ hours per day. Our outside work was mostly in the winter when some trainee front end loader operator would cut one of our telephone cables. I would not like your job and you would probably not like mine.
This "bail out or no bail out" debate has far bigger implications than just the Auto industry in the US.
Here in Tokyo, I watched today a couple of very popular televised debates on a Japanese version of the same theme ("should government provide some kind of safety net for workers that are being made redundant"). It is fast becoming a debate between protectionist/socialists vs. free market capitalists - and belonging to the latter group, I am alarmed to see that the former is now citing US as the example why their case is stronger ("If it is not working out in the US, then why should Japan continue to push for that?").
I worry that large scale bail outs continuing in the US are going to trigger similar moves in other large economies, and we know where that is going to lead us - an unraveling of the global free markets, leading to a lower standard of living all around....
It would be very unfortunate if that is how it turned out to be. While there might be a lot of different opinions about what ails the B3, there cannot be any doubt that competition provided the consumer the best choice - everyone today drives a much better car because of that.
Not sure if we will be able to say this five years from now.....
Same here! It will be used domestics from here on out. Gee, it's gonna be pretty wild still driving my 65 year-old 1988 Buick Park Avenue in the future. I just hope I'm there to see the Japanese big three fall to Hyundai-Kia, Tata, and Shanghai. Then we will be hearing the import fanboys bemoaning the loss of their beloved Toyota and Honda.
Without the Big Three around anymore, I can only imagine the import dealers will become even more obnoxious.
Customer walks onto Toyota dealer's lot.
Salesman, "Yo, whatchoo lookin' at? You gonna buy a car or not, deadbeat?"
Customer, "Uh...I was just looking."
Salesman, "Yo, loser! Why don'tcha just take a picture it'll longer! Why you wastin' my time?"
Customer, "Well, I was thinking of trading in my 6 year-old H...."
Salesman, "Gimme dem keys to dat hooptie!" (Tosses keys onto roof of dealership) Now you ain't goin' nowhere sucker!"
Customer, "That does it! I'm calling the police!"
Salesman, "What cops, fool? There ain't no tax base left to pay the po-po! You is stuck, man!"
Customer, "Oh, man! Uh, what's the MSRP on the base Corolla?"
Saleman, "The stripper Corolla in 'Flat Puke Green' primer is $45,000! You get no radio, no heater, no turn signals, but since you're such a great guy, I'll throw in a reverse gear for only $2,500!"
Customer, "Uh, I think I'll catch the bus and look elsewhere!"
Salesman, "Whatchoo talkin' 'bout? There ain't no buses left 'round here no more! No money to pay the drivers, fool! And don't be thinkin' 'bout going to Honda, Nissan, or Hyundai! We all part of the same dealership group. That Fit is $47,000, the Versa is $50K, and the Elantra is $46 grand! This strippo Corolla is your best deal! Take or or leave it!"
Customer, "What about financing?"
Salesman, "We got an easy payment plan! You pay me $850 a month for eight years at 25% or I break your face! You can't argue, dere's no easier payment plan den dat!"
Not me! I can't wait until they work the bugs out of the Genesis. For the price, I'm in one before any Caddy (or Lexus or Acura) because it looks better to ME! That is, until the new Caddies are built for a decent price after the cataclysm.
As the housing market prices adjust, watch the auto market. Perfect opportunity for Chinese auto concerns to make their mark.
I don't know what these pea brained laborers think of themselves. Barely able to finish school and want the pay of an engineer or more? Get real.
Please, get real. Bell Helicopter, Boeing, and many other salaried are represented by the UAW or other unions. To stereotype UAW membership as an uneducated is myth. I hold two under graduate degrees (math and physics) in science and an MBA. I also have a friend in Janesville's, Wisconsin, who later on in life attained an electrical engineering degree and is just as happy working in the factory. While most of the rank and file may make $100,000 (or close to) a year if they opt to work overtime. This is another misconception, its got to be from the mouth of a idiot. Please tell me where you heard that?
If a firm making widgets decided to offer overtime and not hire additional workers. They do so to save money. They don't give out addition vacation/personal time for overtime hours worker. Neither do they pay the retirement, holidays, or medical insurance that hiring that additional employee would entail.
The intelligent class of people create the business/work. The labor class only provides the means to get the work done. To even think that they deserve more than the people who are responsible for creating work for them is utterly delusional.
Education is an asset and most certainly will get you more out of life. The great minds, those who can do the math and science, aren't just a matter of going to school. Lets face it, most under graduates change majors after one semester/year in college. This is where the business and other schools within the universities get their students. Rare is a student like my oldest, who enters college wanting to be a chemical engineer and leaves a chemical engineer. I would estimate 5% to 10% have this God given gift. My wife explained this to me when I just couldn't understand why my youngest was struggling with algebra.
In having said that. Its these engineers/science folks and not the 70% of business majors who create IPOD, cell phones, flat screens, and all those products that have made life a bit more tolerable. I would go further in stating that those who pay tuition, play sports, and do other things a universities are there to support the small select group gifted few with brilliant minds.
There is a place for the everyone in a society. Each can make a contribution. If you want to envy someone, I might suggest a brilliant mind as opposed to someone whom has profited from the ideas of the intellectual class. Because my friend, test don't lie, and on that test the mind is exposed.
By the way, I paid no tuition, books, room, or board for my oldest. They even kicked in a lap top on the first year. Why do they complain about the high cost of higher education? Remember ignorance is curable, stupidity is terminal.
I would move out of any neighborHOOD where people talk like that. It was a funny scenario, but highly unlikely. As was mentioned before the Koreans, Chinese and Indians are all waiting to take market share from the Domestics, Japanese and Germans. The Future is HERE for any auto maker. We will have a competitive wage work force coming on line in less than a year. New factories will be started before the old GM and Chrysler plants are even cooled down. There is money to be made building cars in the USA. Just not with the way GM runs their business. You will hear some screaming from the UAW & Detroit when 12 million new citizens start applying for positions in auto factories in the "Right to Work" states.
Well, here's what I think will happen if we "lend" money to the Big 3.
After burning through the 1st installment with nothing to show for it, the domestic car makers demand tens of billions in additional "loans", saying that if they're not allowed to "borrow" more, they can't possibly repay what they "borrowed" previously. They get everything they ask for but go down the tubes anyway because they can't control labor costs while building affordable, attractive cars.
The government, broke & with no hope of recovering this money from the now-defunct Big 3, raises income & excise taxes through the roof.
Taxpayers, their disposable income a fraction of what it once was, stop buying new cars. Soon, the import dealerships go out of business. Only used-car lots survive, but not for long.
State & local governments, starved for revenue because they're no longer collecting taxes on new car sales, hike income & property taxes. Now taxpayers can't even afford to buy used cars, & soon the used-car lots fold up.
But in every cloud there's a silver lining, & a vibrant new industry emerges: used shoe stores, which cater to taxpayers who can't afford cars & must now walk everywhere. The largest of the used shoe retailers is...Lemko's Quality Footware Emporium, which offers a full range of certified pre-owned shoes as well as easy financing. ("No Credit? No Problem! We Won't Let You Leave Barefoot!")
Lemko, now the wealthiest man in the greater Philly metro area, can finally afford to indulge his childhood fantasy. He imports a glossy black Mercedes Benz S600 V-12 & moves into a mansion once occupied by a hedge fund manager.
In having said that. Its these engineers/science folks and not the 70% of business majors who create IPOD, cell phones, flat screens, and all those products that have made life a bit more tolerable.
True, but but the business/sales people are needed to create the market/value of the product produced. I know lots of engineers and no doubt most are very smart and gifted, but several I know have the personality of a pencil. The IPOD's success has more to do with Apples marketing machine than engineering of the product. I've worked with many small manufacturing companies where the top sales people are compensated much higher than the top engineers.
Congrats on the accomplishments of your eldest son. While I was a management major and my wife Pharmacy (very similar studies to Chem E with an extra 2 years), we attended a school that has a huge engineering program and we hung around many engineering students. Chem E is definitely a demanding program and anyone who earns a Chem E degree is not lacking in intelligence.
Yeah, math is not a universal ability. I always struggled with math. My wife breezed through it. In college, she would keep taking calculus classes as electives because she was good enough at it to not go to class and still able to ace the exam. She did that with 3 or 4 classes in calculus. It made me sick that she would attend the first week of class, get the lesson plan for the semester, and only show up on the days of tests and the final exam and get A's. I OTOH, would attend every class, go to study sessions and squeak by with a C. So far it looks like our daughters got her brains. Thank god.
UAW worker files for bankruptcy when his overtime is cut and he is only making $87,000 per year. My heart bleeds for him, sheesh. That is where the term PEA BRAIN should apply.
DETROIT -- Oscar Gray achieved the good life during 28 years of hard work at Delphi Corp. -- a six-figure income, a nice home in Holly and two vehicles.
But as Michigan's auto industry tanked in recent years, the forklift operator lost huge amounts of overtime pay and gradually sank into financial ruin. Saddled with $469,000 in debt, he declared bankruptcy last month.
Gray didn't lose his job. His health isn't failing, and he is not going through a divorce -- the typical reasons many declare bankruptcy.
Gray has been losing overtime. His gross pay was cut $16,000 one year, sliding to $87,000, and may dip again because Delphi is considering a Chapter 11 filing.
"You count on something your whole life and then it gets jerked around," Gray said.
While layoffs have soared, it's often autoworkers still on the job who are drowning in debt.
Some interesting stuff how the decline of the UK automotive industry from 1945-2005 is paralleling lots of stuff going on here.
1945-2005 During the war all production was concentrated on war materials. After 1945 Britain became the world's largest automobile exporter, providing 52% of the world's exported vehicles in 1950. In 1953 Morris merged with Austin to form the British Motor Corporation (BMC), becoming the UK's largest producer. BMC specialized in small, economy sedans and sports cars, with 4 cylinder engines.
By the late 1950s, West German automobile manufacturers were benefiting from the Economic miracle and rapidly gained market share, followed soon by the French and Italian producers, and the UK lost most of its continental market through neglect and stagnation. At the end of the 1950s, the Rootes group acquired Singer. In 1966 BMC merged with Jaguar Cars and Pressed Steel to form British Motor Holdings, which then merged, in 1968, with the Leyland Motor Corporation, which had by then acquired the Rover Company and the Triumph Motor Company, to form the British Leyland Motor Corporation (BLMC) as Europe's fourth largest automaker.[9] Chrysler UK finished acquiring the Rootes group in 1967, a process it had started in 1964.
By 1970 Japanese firms identified the British market as the first major European market to attack because of the relative weakness of the domestic car industry.[10]
Stiff competition from Japanese and German cars, a reputation for shoddy workmanship and a breakdown in labor relations brought the British companies to near bankruptcy by 1975. The UK government effectively nationalized the bankrupt BLMC in 1975, rationalising the company into British Leyland, which produced 40% of the cars sold in Britain. The government provided £11 billion (in terms of 2008 £, or $16.5 billion in 2008 $) in bailouts. Wildcat strikes consumed more than 32 million worker-hours in 1977. Management cut employment in half, from 200,000 to 105,000 to cut expenses. In 1977 Chrysler sold its European interests to Peugeot, with Chrysler UK being renamed Peugeot Talbot.
After a decline in the UK market's significance for multinational automakers, Japanese manufacturers hoping to get around EEC trade restrictions established manufacturing plants in the UK. Nissan, Toyota and Honda all manufacture passenger cars in UK factories, primarily for car markets in Europe, Africa and the Middle East.
After a series of divestitures, British Leyland was renamed the Rover Group, which was eventually acquired by BMW, then split up into various divisions that were sold separately. MG Rover finally went bankrupt in 2005, ending the era of mass production by UK-owned automobile manufacturers. The remnants were bought by the Chinese government-owned manufacturers, SAIC and NAC, which later merged. Former British Leyland car brands include Jaguar and Land Rover, now owned by Tata Motors, MINI, owned by BMW and MG owned by SAIC/NAC. Only 22,000 workers remain employed at successor firms.
True, but but the business/sales people are needed to create the market/value of the product produced. I know lots of engineers and no doubt most are very smart and gifted, but several I know have the personality of a pencil. The IPOD's success has more to do with Apples marketing machine than engineering of the product. I've worked with many small manufacturing companies where the top sales people are compensated much higher than the top engineers.
I wasn't trying to champion the intellectual class, but rather trying to point out that each has God given gifts. Son number two has his gifts too. Fact is they are more visible and he is living the life of the super star/idol which this society worships. The GQ/Madison Ave looks, sports/basketball abilities, and others which I'm not able or have yet to see. The subtle nuances I do see, such as the manner females do a double take are obvious. I'm not a pushy sports parent, but I sired that prime time display/entertainment, and my ego gets massaged, but I keep that in check. Many have come by to say that he could be a starter in many colleges and or offer scholarships. The trick is getting into a Division 1 school.
All that being said we then too must acknowledge that being human entails flaws as well. Many folks are quick to point out these flaws and or lack of character, rather than looking for the positive. A smart man/woman would do some behavior modification, positive reenforcement, and or something subtle to encourage the positive or discourage the negative traits/behavior. We all can change things if we set our minds to it. Employers can create an atmosphere that respects others for their differences and brings people together to innovate. My employer stresses that I should never forget whom I work for. I work for that soldier out in harms way. Hence, we have common ground and I'll go above and beyond their expectations. Refuse to envy others and or pass judgment on coworkers. Its been a blessing to work with others who nurture one another's ideas, all the while respecting differences. Belittling anyone is just another way to massage ones own ego and counter productive.
All that being said we then too must acknowledge that being human entails flaws as well. Many folks are quick to point out these flaws and or lack of character, rather than looking for the positive. A smart man/woman would do some behavior modification, positive reenforcement, and or something subtle to encourage the positive or discourage the negative traits/behavior. We all can change things if we set our minds to it. Employers can create an atmosphere that respects others for their differences and brings people together to innovate. My employer stresses that I should never forget whom I work for. I work for that soldier out in harms way. Hence, we have common ground and I'll go above and beyond their expectations. Refuse to envy others and or pass judgment on coworkers. Its been a blessing to work with others who nurture one another's ideas, all the while respecting differences. Belittling anyone is just another way to massage ones own ego and counter productive.
Some interesting stuff how the decline of the UK automotive industry from 1945-2005 is paralleling lots of stuff going on here.
I'm not opposed to change and or the evolution of things to come. However, not in such a rapid manner that doesn't allow the transition to go more smoothly. One can look at manufacturing moving south to avoid unions/high wages, only to become unionized again. The rust belt did not shut down. Do you think that China has aspirations of becoming the manufacturing country of the world? How long will it take China to dominate the auto industry?
Maybe you have a better term to describe that kind of IGNORANCE. It is giving too much money to someone ill equipped to manage it.
Unfortunately financial intelligence is not universal either. That is a problem across all levels of income and educations. To many scenarios like that plaguing our economy.
About 6 years ago I was selling boats as job between jobs and I remember trying to finance people with 6 figure incomes that didn't have the credit left to charge a pack of gum. Many of these were business owners, doctors and lawyers. I remember a surgeon knocking down $35k/mo that was trying to finance a $200k boat. He was in debt up to his eyeballs and I couldn't get him financed. This type of scenario was common, I spent more time trying to get banks to finance loans than I did trying to sell features of boat, which I enjoyed, not calling low life bankers. Many times I just wanted to say, you have no business buying anything, much less a boat, but that wouldn't help me pay my bills.
Maybe you have a better term to describe that kind of IGNORANCE. It is giving too much money to someone ill equipped to manage it.
Come on Gary. They pick one case. A black man at that. If he make top scale $28 and hour. Thats less than $60,000 a year. So therefore he must still be working overtime, just not as much. I'm starting to believe they like to sensationalize news in order to sell newspapers.
There are lots of folks out there who live beyond reason. To say that the UAW workers are the only ones or that all UAW workers mismanage their money is just not true. I know many who have up-wards of a million in their 401K plans. I personally wrote a hardship letter for a UAW member with five children. So that his family could get a five bedroom home and move from their 1300 square foot (paid off) home. He had over a half a million and wanted to use $200,000 of his 401K money to give his family more room. So some UAW workers live an frugal lifestyle. This is the very reason privatization of social security is a bad idea. While many could and would do well, some would self destroy.
Financial ignorance isn't limited to one out of tens of thousands of UAW workers. My girlfriend's brother-in-law has an Ivy League education, lived in a posh Greenwich, CT neighborhood, sent his kids to fancy prep schools, and tried keeping ahead of the Jones at every chance possible.
Today, he is unemployed, living in my girlfriend's mother's house, his fancy house in CT has been foreclosed, he's in massive credit card debt, his wife is leaving him, his kids won't talk to him, his E-Class Mercedes was repossessed, he has to take the bus or get a ride in my hooptie, is dirt poor and living on our charity, and our patience with him is wearing thinner than an apple peel.
Come on Gary. They pick one case. A black man at that. If he make top scale $28 and hour. Thats less than $60,000 a year. So therefore he must still be working overtime, just not as much. I'm starting to believe they like to sensationalize news in order to sell newspapers.
On the flip side, I remember an article about several years ago, maybe like 10, about a black fork lift driver for Ford that was in his 70's making $100k with the o/t he worked. I think it may have either been in WSJ or Detroit Free Press, I can't remember. He drove a 10 year old Escort, put all of his kids through college and donated nearly $1million to some black college, even though he himself didn't graduate from high school. It was a great article.
Here, this is not the original article I remember, but it describes this very generous and I think incredible person.
"A 50% reduction in the Big Three's domestic operations, for instance, would result in 2.5 million people losing their jobs, according to the Center for Automotive Research"...
On its face, this may be true, but at the rate folks are deserting the Big 3 (for quality, UAW or management, I don't care why) for what they believe to be the "better" imports, those same jobs will be lost any way...
On the flip side, all that does is try and justify giving the money to the Big 3 simply to maintain the FACADE of a manufacturing company, who will continue to make a product that no one wants to buy...so, as millions of cars line up on dealers lots that no one wants, how soon before we simply tow the new cars to a landfill (the City of Detroit might as well be used, it has been a toxic waste dump since 1980 when I was there) and let them continue to keep the lines running so people look like they are working??????????????
It has to end sometime...they need to file Ch 11 and dump the UAW...the cost of their cars will probably drop by 25% overnight, and with all the illegals making the cars, they at least have a work ethic, and could be trained to make a better product in about a week...
The "entitlement" attitude of the average auto worker would put the average sports hero to shame...they think they can do no wrong, when they are about to be jettisoned to find out they will do nothing anymore...
If ever a lump labor force needed elimination, it is the UAW...
The auto industry will survive just fine, but the union must go...it is kinda like a cruise ship...just get rid of the people drilling the holes in the hull, and the remainder of the ship will do just fine...the UAW is the "hole driller"...
lol, and Waggoner is at the helm (the Titanic was a cruise liner eh?).
I sort of picture the UAW workers as the grunts down in the engine room who keep pumping oil on all the camshafts. All of a sudden they wonder what the big grinding noise coming from topside is, while the ship slows down.
Guess who's in the life rafts with the parachutes? :P
I sort of picture the UAW workers as the grunts down in the engine room who keep pumping oil on all the camshafts. All of a sudden they wonder what the big grinding noise coming from topside is, while the ship slows down.
LOL, well not really.
I would add the UAW in the radio room frantically sending SOS messages on the Marconi telegraph until overtaken by incoming seawater.
Meanwhile there are a couple of guys from the Deep South manning the telegraph station who wouldn't know a bergy bit from a growler wondering what the problem is and why someone is sending out an SOS.
And just as he was trying to leave the office, the harbormaster has to go bail out his dingy and try to find his oars.
It's true, the ship is sinking but the boys in the engine room had nothing to do with the problems that are making the ship sink. That's their story and they're sticking to it. Evil, lazy and corrupt management. Got it. People who would sell out their own country to save a buck by buying foreign cars. Got it.
However, the ship IS sinking. We all agree on that. The question now is are the boys in the engine room willing to do anything to help the ship from sinking or are they just reminding the Engine Room Chief to make sure that they get paid on time, while waiting for someone to rescue them?
I have yet to see anything from the UAW supporters that suggests that they are willing to lift a finger to save themselves.
The rest of us owe it to them "because the UAW created the middle class 100 years ago."
The post was in reference to you not believing UAW workers making way above the National average. That in itself is not the issue. What is at issue is bailing out with tax payers money people that are making way more than the average. GM and the UAW need to come up with a plan to save the company without taxing those less fortunate to do it. The low income suppliers deserve the bailout more than GM and the UAW.
The 1944 GI Bill gave America a 40% college graduate rate. The other competing nations were 25% at most. So this is more or less agreed to as the reason we have enjoyed the highest standard of living. Number one in innovation/new processes in technology. So what did those other 60% of Americans do? They had jobs created by our superior system. UAW or not the jobs were out there. To some extent the college graduate was somewhat dependent on the 60% of workers. Supervisors, managers, and the supporting cast required lead the manufacturing operations create a codependency.
Today in the global economy we are behind in producing college graduates as compared to other nations. The high cost of education and other concerns have eroded the worlds best system. One would ask why other nations don't have this situations? The safety net or lack of provided by our nation is cited as the number one reason. National health in many countries has produced a higher college graduate rate. It stands to reason if someone doesn't have to enter the work force to obtain health insurance, they might stay in the schools longer and may even graduate.
This would concern me more than if America loses its auto making industry. With long term implications and bleak prospects for those who fail to secure college educations. Will America stand for being a second rate nation? This is happening and for those who detest unions, this will cause hardship, which in turn social unrest, and the rebirth of the union. More or less the same logic used in the political arena as the pendulum has swung the other way just as far as it had to the right.
In any case thats my thinking and welcome any thoughts. I've often enjoyed economics of any given situation. While I was burned during the dot com bust, I did see opportunity there after and exploited it. Rewarded beyond my wildest expectation. I'm looking at a rather bleak situation and many folks out there with few investment options.
Do you think that China has aspirations of becoming the manufacturing country of the world? How long will it take China to dominate the auto industry?
I suspect we almost all agree that we would want the US to be able to compete on a world scale and not allow anybody else to be the world class auto manufacturer. We just see different ways to achieve that.
One way is protectionism and propping up industries in this country that frankly, aren't even near world-class today. Will incremental changes be enough to make the huge paradigm shift that needs to occur?
Another way is to allow big pain now with the hope that we can emerge from the ashes with a new sense of strong competitiveness - we will be the BEST, we will be COMPETITIVE. To do that we need to be flexible and open-minded.
Do you think incremental changes with the way the GM management has been operating and the way the UAW behaves with their work rules and 2200 page contracts are really going to provide the massive change that we need to get to that vision? It's taken 30 years since the Vega, 20 years since the Citation and Chevette, and we are not nearly there. No evidence that the current formula is working.
I must say that with an outsider in charge of Ford (Mulally), there are signs that they are doing some impressive things. He has been pruning other models and brands from Ford, and the 2010 Fusion is looking very impressive based upon the Edmunds first look. I wish GM would get with it without it being forced down their throats by their own insolvency.
Fancy professional name. Who funds them and their research? Are they subject to peer review?
On the flip side, all that does is try and justify giving the money to the Big 3 simply to maintain the FACADE of a manufacturing company, who will continue to make a product that no one wants to buy...
Plenty of folks out their products and will continue to do so. I'll give you that they have some losers, model which are not as great as they could be. However, they have many more which are world class.
The "entitlement" attitude of the average auto worker would put the average sports hero to shame...they think they can do no wrong, when they are about to be jettisoned to find out they will do nothing anymore...
A person working all this overtime is just someone trying to do right by their family. Time off is the most expensive thing they can give themselves. While Madison Ave and this society bombard them with all the creature comforts which they would be better off with, they are taken in. Yeah they could cut off the cable TV, do away with cell Phones, internet service, and the many other non essentials. Then there would be less economic activity and thats by no means good in a capitalist system.
You have the Big Three offering the overtime. They do it in order not to hire the additional employee. The UAW has recognized that people need time off, family time. So to discourage overtime they have a fund. $1 for each hour they work a UAW employee is put into this fund and the UAW/GM NASCAR is funded. I would consider it corporate greed/business sense in their not wanting to hire that additional employee to give the workforce relief.
It stands to reason if someone doesn't have to enter the work force to obtain health insurance, they might stay in the schools longer and may even graduate.
I know it's been almost 15 years since I've been out of college, but I remember having access through the university for fairly cheap health insurance if I would have needed it. I know our current employer provided insurance will cover our kids until 24 years old. I can't see that as being a reason why people decide not to go to college.
The 1944 GI Bill gave America a 40% college graduate rate. The other competing nations were 25% at most.
I don't believe 40% of high school graduates went on to get a degree during the late 40's. I've read where nearly 1/2 of the WWII surviving veterans took advantage of the GI Bill, but the GI bill wasn't just for education, as it provided low cost mortgage loans etc.
This is from the census bureau in 2004. Last year, 85 percent of adults age 25 and over had completed at least high school, an all-time high, the U.S. Census Bureau reported today. Also in 2003, 27 percent of adults age 25 and over had a college degree, another record.
One way is protectionism and propping up industries in this country that frankly, aren't even near world-class today. Will incremental changes be enough to make the huge paradigm shift that needs to occur?
Pick your poison. I would consider a BMW before any Toyota/Honda product. I'm a realist. China is subsidizing an inefficient steel industry and thereby making the more efficient producer go out of business. Thats a communist country. High level communist and their families are getting rich. They have one metric"JOBS". this assures the status quo and no uprising/social unrest. That might redistribute the wealth/income. If these multi national want access to one-fifth of the future consumers they must tolerate whatever China demands. Level that trading field. It has a slope which drops like a cliff. Competition is all and good in the text books, but this is a real world. All I see is a one way street and all manufacturing going to China.
All the while corporate America/multi nationals have to suffer the unrighteous indignations and put up with them. That is if they someday want to have access to one-fifths of the future consumers of the planet. Patents, intellectual property, copy rights, and other silly western notions are violates daily. Violate as much if not more than human rights, child/prison labor, environmental crimes, and you name it. Many companies in China make product by day and knock offs by night. Why would we trade with China, by far a greater abuser of human rights than Cuba? Cuba doesn't have the one-fifth of the worlds future consumers. The population of China and India (Chindia) have one third of the futures consumers. If they tell a multi national to move a plant to the main land, they can't move it fast enough.
The only thing I agree with you on is that those model were dogs. However, you have to consider the Toyota offering in the early days too. You don't even want to see their Matrix thread here on Edmund's.
The winds of change might call for sympathy strikes. Maybe by all union and non union. Folks are reasonable as long as you treat them fair.This is the 2000's and not the 30's, 40's, or 50's.
The winds of change might call for sympathy strikes.
There are legitimate strikes. No UAW strike in the last 10 years comes under that cover. GM has been bleeding red ink for 20 years. Every time GM comes up with a winner the UAW has tried to take advantage with a strike. Bailing out that kind of greed is criminal. Striking for parity against a company making a legitimate profit is what good Union leaders do. The UAW have leaders that need to be taken out and beat. They have destroyed the good jobs that were built over decades.
"Meanwhile there are a couple of guys from the Deep South manning the telegraph station who wouldn't know a bergy bit from a growler wondering what the problem is and why someone is sending out an SOS.
And just as he was trying to leave the office, the harbormaster has to go bail out his dingy and try to find his oars."
It seems to me that our host has trouble staying on topic...30 lashes, matey, and ye shall walk the plank (or, if you like physics, walk the Planck, as in Planck's Constant)...
"I am telling you there are over 100,000 people in Tennessee – people exactly like you and me -- who are getting ready to be horribly and brutally affected by the automotive industry collapse."
Gettelfinger, often a harsh Bush critic, said he hopes to avoid a rerun of the Senate showdown in which "organized labor was singled out."
It's not only automakers in trouble, but their suppliers. Fitch Ratings put seven on ratings watch last week because of vulnerability to GM, including American Axle, ArvinMeritor, Hayes-Lemmerz, Johnson Controls, Tenneco, TRW and Visteon."
The blurb - "The UAW says that a double standard has operated by which the South has attracted investment from foreign car companies, with more than $3 billion of state subsidies since 1992 — while denying help for the North."
businesses are so intertwined these days that you can have victims in the unlikeliest of circumstances. For instance, one of my friends is a waiter at a restaurant chain that is one of the holdings of Sun Capital, the same company that owns a big chunk of Cerberus. Rumor has it that if Chrysler doesn't get a bail-out, it could actually make Sun Capital go into bankruptcy. And if that happens, they're worried that the restaurants might get shuttered, and the assets and equipment sold off, in order to raise some cash in a restructuring.
And the sad thing is, the restaurant my friend is working at is actually doing a good business, even in these times! Yet, he and everyone there is in danger of losing their jobs because of something going on in a completely different industry!. He's already looked into picking up a part time job at another restaurant, and if his place goes under, he'll be able to pick up more hours. Some of his co-workers have done the same, and I think the managers are looking into other alternatives.
Agree with most of what you say. What's worse - trying to ignore China with it's major ethical problems? If we do that then less ethical western nations will trade and we will be out of the game. If we trade with them we are playing with the devil.
Since we know we will be competing with China, why not get agile and excellent now? Detroit has decades of slow responses, shouldn't we move world-class fast? That's why this incremental stuff like GMs unwillingness to shut down divisions (which should have been done 5-10 years ago when they had more money) is so exasperating. One thing that is certain - propping them up won't solve their problems; it's like giving an addict more cocaine. Let's hope they make real tough decisions in spite of any bailout money that goes their way. Having the taxpayers pour money into them will hurt the country a lot if they don't change their ways, and FAST.
The best way to see Detroit is in your rear view mirror...I defy ANYONE to find anything good to say about the City of Detroit, and rocky doesn't count...
That is a beautiful theater. Hopefully the UAW riots of 2009 do not destroy it. That theater would make a nice center piece for a Detroit National Monument. Use eminent domain to condemn the rest of the city and let it go back to nature. They could show movies of the good old days when GM was the leader in automobile design and technology. Michael Moore could make a movie of how the GM executives along with the UAW leadership destroyed the largest corporation in the World.
Comments
"States and cities around the nation are already slashing budgets and services as the deepening economic downturn shrinks their coffers. To close their budget gaps, governments are cutting public health programs, reducing aid to public school and universities, and laying off workers.
Problems in the auto industry are only exacerbating this turmoil. Not only have nearly 800,000 people lost car-related jobs this year, accounting for 40% of the increase in unemployment, but auto sales are at a 26-year low and at least 660 dealerships have closed their doors.
This means state and local governments are collecting less in personal income taxes, corporate business taxes and sales taxes -- all critical to funding their operations. State tax revenue fell 2.6%, when adjusted for inflation, in the third quarter, according to preliminary figures from the Rockefeller Institute of Government.
"If we see a significant falloff in employment and a continued decline in auto sales, the states are really going to see it and feel it," said Scott Pattison, executive director of the National Association of State Budget Officers. "It just hits so many sources of revenue."
Collapse would hit states hard
Any additional weakening of the auto industry would further reduce government revenues, while increasing the amount the public sector has to lay out for unemployment benefits, welfare and Medicaid, experts said.
A 50% reduction in the Big Three's domestic operations, for instance, would result in 2.5 million people losing their jobs, according to the Center for Automotive Research. That would drain $20.5 billion in personal income taxes at the federal, state and local levels in 2009, while forcing the public sector to spend an additional $11.9 billion in benefits.
Every state would feel the impact. Even if only GM, the most troubled of the automakers, shut down, 914,000 jobs would be lost nationwide, according to the Economic Policy Institute. This includes people who work in the plants, in auto suppliers and in businesses that support the industry, such as nearby restaurants and shops.
Of course, Michigan, Indiana and Ohio would be among the hardest hit, losing 2.5%, 1.4% and 1.1% of each state's total employment, respectively, the institute found. But all would see some decline in jobs, with Alabama losing 1.1% of its state workforce and New Hampshire shedding 0.6%."
Keep killing American auto industry
When we are all devastated, at least we can be glad we didn't buy the '74 Vega
good post dave.
Go tell the UAW and Mr. Scuttlefinger that. Apparently, they would rather see the losses you mentioned rather than be prudent. No wonder he is a labor class guy.
If he had settled for an instant paycut, they would have had the loan as we discuss this.
As retired UAW worker I kinda doubt half you jerks know how long a grind it is for a blue collar in a factory hs to pick crap with the chickens before he/she gets to a UAW factory job that pays that "$23-28" an hr. And how many times they have had to stand the picket lines in blizzards/blistering heat to get a contract that will provide a good living for their families, pay taxs so less fortunate can have a roof and a jar pf peanut butter. When these figures are thrown around consider the fact that most is derived from incentive workers busting butt, whistle to whistle, 8-10-12 hrs a shift. Think you could do it for 30 years on concrete???? Some come out of there like busted up football players and you think they should not have a decent retirement pension and insurance ? Believe it, by far, it's not a FREE LUNCH JOB. I gave up many hourly pay raises for retaining the insurance, pension benifits that I have today. I live in a mobile home and our nuwest car is a 2003 BUICK, 98 Linc.TC, 92 Jeep, 90 Olds...GET IT! See any foriegn names there.
I don't think so. I think "three little words" Senator Corker (TN) has it in for the unions and would have come up with a couple of more words if Gettelfinger had agreed to a date certain. Like "drop dead."
And Sen. Shelby (AL) would be right there singing in the chorus.
I am sure they are. There base is closer to $65k. It would only take about 15 hours per week OT to break $100k. I worked 70+ hours per week the last 25 years on the job. 15 hours per week is nothing.
I used the combined Honda, Toyo, and Nissan
I added all the Japanese and miscalculated. It was only 290k. The bottom line. 746k vehicle sold and only 332k were domestic. That is about 44% for the home team.
A 50% reduction in the Big Three's domestic operations, for instance, would result in 2.5 million people losing their jobs, according to the Center for Automotive Research.
Last article from that group said if all three went down we would lose 2.5 - 3.0 million jobs. Now if operations are cut in half we lose 2.5 million jobs. Well sales are off close to 40% so we are already screwed according to their calculations. There is nothing on the horizon to make US believe we will gain back that percentage in the next few years if ever.
Even if only GM, the most troubled of the automakers, shut down, 914,000 jobs would be lost nationwide
We have already lost 800k auto related jobs. So if only GM liquidates that is only 114,000 more job losses. Ever get the idea none of these experts have a clue as to what will happen if GM shuts down?
There was NO sense of conceding to a call for lower wage package in return for the bailout. Gettlefinger wants to string the tax payers along with regular bailouts. He is trying to hold the Federal Government hostage just as he and the UAW have done with the Big 3 for the last 70 years. The time has come to call their bluff. We need a Ronald Reagan with some guts to tell them enough is enough. A line worker at the Big 3 should NOT make as much as an engineer at the Big 3. EVER....
Well, alive anyway. They have to compete with NATCA.
I doubt that members of either union will be going on strike anytime soon, assuming it's still illegal for them to do so, but the unions are still organizing controllers.
Welcome to the Forum it is good to have first hand accounts.
How long was the wage progression when you went to work in the UAW? I am sure we all have stories of how difficult our job was or is. I can recall splicing cable in the Arctic at -40 degrees with wind chill at minus 115 degrees. And the oil company bosses hanging around in their heated PU trucks wanting to know how long it was going to take to get them back in service. We were outside NO heated tent. I also gave up raises to have a better pension. Then after 20 some years of paying in we were told that not only the age requirement for retirement went from 45 to 57 years old, we were not going to get paid health care after we retired. The truth is the retirement fund would be broke if we had pushed for that benefit. Just the same as GM is broke trying to keep up an unsustainable health care program for the retirees. So when I retired I paid my own health care until I was eligible for Medicare. Just part of life.
I worked the last 25 years in the Arctic on Ice 8 months of the year. My schedule was 21 days straight 10+ hours per day. Our outside work was mostly in the winter when some trainee front end loader operator would cut one of our telephone cables. I would not like your job and you would probably not like mine.
Here in Tokyo, I watched today a couple of very popular televised debates on a Japanese version of the same theme ("should government provide some kind of safety net for workers that are being made redundant"). It is fast becoming a debate between protectionist/socialists vs. free market capitalists - and belonging to the latter group, I am alarmed to see that the former is now citing US as the example why their case is stronger ("If it is not working out in the US, then why should Japan continue to push for that?").
I worry that large scale bail outs continuing in the US are going to trigger similar moves in other large economies, and we know where that is going to lead us - an unraveling of the global free markets, leading to a lower standard of living all around....
It would be very unfortunate if that is how it turned out to be. While there might be a lot of different opinions about what ails the B3, there cannot be any doubt that competition provided the consumer the best choice - everyone today drives a much better car because of that.
Not sure if we will be able to say this five years from now.....
Customer walks onto Toyota dealer's lot.
Salesman, "Yo, whatchoo lookin' at? You gonna buy a car or not, deadbeat?"
Customer, "Uh...I was just looking."
Salesman, "Yo, loser! Why don'tcha just take a picture it'll longer! Why you wastin' my time?"
Customer, "Well, I was thinking of trading in my 6 year-old H...."
Salesman, "Gimme dem keys to dat hooptie!" (Tosses keys onto roof of dealership)
Now you ain't goin' nowhere sucker!"
Customer, "That does it! I'm calling the police!"
Salesman, "What cops, fool? There ain't no tax base left to pay the po-po! You is stuck, man!"
Customer, "Oh, man! Uh, what's the MSRP on the base Corolla?"
Saleman, "The stripper Corolla in 'Flat Puke Green' primer is $45,000! You get no radio, no heater, no turn signals, but since you're such a great guy, I'll throw in a reverse gear for only $2,500!"
Customer, "Uh, I think I'll catch the bus and look elsewhere!"
Salesman, "Whatchoo talkin' 'bout? There ain't no buses left 'round here no more! No money to pay the drivers, fool! And don't be thinkin' 'bout going to Honda, Nissan, or Hyundai! We all part of the same dealership group. That Fit is $47,000, the Versa is $50K, and the Elantra is $46 grand! This strippo Corolla is your best deal! Take or or leave it!"
Customer, "What about financing?"
Salesman, "We got an easy payment plan! You pay me $850 a month for eight years at 25% or I break your face! You can't argue, dere's no easier payment plan den dat!"
As the housing market prices adjust, watch the auto market. Perfect opportunity for Chinese auto concerns to make their mark.
Regards,
OW
Please, get real. Bell Helicopter, Boeing, and many other salaried are represented by the UAW or other unions. To stereotype UAW membership as an uneducated is myth. I hold two under graduate degrees (math and physics) in science and an MBA. I also have a friend in Janesville's, Wisconsin, who later on in life attained an electrical engineering degree and is just as happy working in the factory. While most of the rank and file may make $100,000 (or close to) a year if they opt to work overtime. This is another misconception, its got to be from the mouth of a idiot. Please tell me where you heard that?
If a firm making widgets decided to offer overtime and not hire additional workers. They do so to save money. They don't give out addition vacation/personal time for overtime hours worker. Neither do they pay the retirement, holidays, or medical insurance that hiring that additional employee would entail.
The intelligent class of people create the business/work. The labor class only provides the means to get the work done. To even think that they deserve more than the people who are responsible for creating work for them is utterly delusional.
Education is an asset and most certainly will get you more out of life. The great minds, those who can do the math and science, aren't just a matter of going to school. Lets face it, most under graduates change majors after one semester/year in college. This is where the business and other schools within the universities get their students. Rare is a student like my oldest, who enters college wanting to be a chemical engineer and leaves a chemical engineer. I would estimate 5% to 10% have this God given gift. My wife explained this to me when I just couldn't understand why my youngest was struggling with algebra.
In having said that. Its these engineers/science folks and not the 70% of business majors who create IPOD, cell phones, flat screens, and all those products that have made life a bit more tolerable. I would go further in stating that those who pay tuition, play sports, and do other things a universities are there to support the small select group gifted few with brilliant minds.
There is a place for the everyone in a society. Each can make a contribution. If you want to envy someone, I might suggest a brilliant mind as opposed to someone whom has profited from the ideas of the intellectual class. Because my friend, test don't lie, and on that test the mind is exposed.
By the way, I paid no tuition, books, room, or board for my oldest. They even kicked in a lap top on the first year. Why do they complain about the high cost of higher education? Remember ignorance is curable, stupidity is terminal.
After burning through the 1st installment with nothing to show for it, the domestic car makers demand tens of billions in additional "loans", saying that if they're not allowed to "borrow" more, they can't possibly repay what they "borrowed" previously. They get everything they ask for but go down the tubes anyway because they can't control labor costs while building affordable, attractive cars.
The government, broke & with no hope of recovering this money from the now-defunct Big 3, raises income & excise taxes through the roof.
Taxpayers, their disposable income a fraction of what it once was, stop buying new cars. Soon, the import dealerships go out of business. Only used-car lots survive, but not for long.
State & local governments, starved for revenue because they're no longer collecting taxes on new car sales, hike income & property taxes. Now taxpayers can't even afford to buy used cars, & soon the used-car lots fold up.
But in every cloud there's a silver lining, & a vibrant new industry emerges: used shoe stores, which cater to taxpayers who can't afford cars & must now walk everywhere. The largest of the used shoe retailers is...Lemko's Quality Footware Emporium, which offers a full range of certified pre-owned shoes as well as easy financing. ("No Credit? No Problem! We Won't Let You Leave Barefoot!")
Lemko, now the wealthiest man in the greater Philly metro area, can finally afford to indulge his childhood fantasy. He imports a glossy black Mercedes Benz S600 V-12 & moves into a mansion once occupied by a hedge fund manager.
True, but but the business/sales people are needed to create the market/value of the product produced. I know lots of engineers and no doubt most are very smart and gifted, but several I know have the personality of a pencil. The IPOD's success has more to do with Apples marketing machine than engineering of the product. I've worked with many small manufacturing companies where the top sales people are compensated much higher than the top engineers.
Congrats on the accomplishments of your eldest son. While I was a management major and my wife Pharmacy (very similar studies to Chem E with an extra 2 years), we attended a school that has a huge engineering program and we hung around many engineering students. Chem E is definitely a demanding program and anyone who earns a Chem E degree is not lacking in intelligence.
Yeah, math is not a universal ability. I always struggled with math. My wife breezed through it. In college, she would keep taking calculus classes as electives because she was good enough at it to not go to class and still able to ace the exam. She did that with 3 or 4 classes in calculus. It made me sick that she would attend the first week of class, get the lesson plan for the semester, and only show up on the days of tests and the final exam and get A's. I OTOH, would attend every class, go to study sessions and squeak by with a C. So far it looks like our daughters got her brains. Thank god.
DETROIT -- Oscar Gray achieved the good life during 28 years of hard work at Delphi Corp. -- a six-figure income, a nice home in Holly and two vehicles.
But as Michigan's auto industry tanked in recent years, the forklift operator lost huge amounts of overtime pay and gradually sank into financial ruin. Saddled with $469,000 in debt, he declared bankruptcy last month.
Gray didn't lose his job. His health isn't failing, and he is not going through a divorce -- the typical reasons many declare bankruptcy.
Gray has been losing overtime. His gross pay was cut $16,000 one year, sliding to $87,000, and may dip again because Delphi is considering a Chapter 11 filing.
"You count on something your whole life and then it gets jerked around," Gray said.
While layoffs have soared, it's often autoworkers still on the job who are drowning in debt.
http://www.detnews.com/2005/autosinsider/0509/18/A01-318432.htm
Maybe you have a better term to describe that kind of IGNORANCE. It is giving too much money to someone ill equipped to manage it.
Some interesting stuff how the decline of the UK automotive industry from 1945-2005 is paralleling lots of stuff going on here.
1945-2005
During the war all production was concentrated on war materials. After 1945 Britain became the world's largest automobile exporter, providing 52% of the world's exported vehicles in 1950. In 1953 Morris merged with Austin to form the British Motor Corporation (BMC), becoming the UK's largest producer. BMC specialized in small, economy sedans and sports cars, with 4 cylinder engines.
By the late 1950s, West German automobile manufacturers were benefiting from the Economic miracle and rapidly gained market share, followed soon by the French and Italian producers, and the UK lost most of its continental market through neglect and stagnation. At the end of the 1950s, the Rootes group acquired Singer. In 1966 BMC merged with Jaguar Cars and Pressed Steel to form British Motor Holdings, which then merged, in 1968, with the Leyland Motor Corporation, which had by then acquired the Rover Company and the Triumph Motor Company, to form the British Leyland Motor Corporation (BLMC) as Europe's fourth largest automaker.[9] Chrysler UK finished acquiring the Rootes group in 1967, a process it had started in 1964.
By 1970 Japanese firms identified the British market as the first major European market to attack because of the relative weakness of the domestic car industry.[10]
Stiff competition from Japanese and German cars, a reputation for shoddy workmanship and a breakdown in labor relations brought the British companies to near bankruptcy by 1975. The UK government effectively nationalized the bankrupt BLMC in 1975, rationalising the company into British Leyland, which produced 40% of the cars sold in Britain. The government provided £11 billion (in terms of 2008 £, or $16.5 billion in 2008 $) in bailouts. Wildcat strikes consumed more than 32 million worker-hours in 1977. Management cut employment in half, from 200,000 to 105,000 to cut expenses. In 1977 Chrysler sold its European interests to Peugeot, with Chrysler UK being renamed Peugeot Talbot.
After a decline in the UK market's significance for multinational automakers, Japanese manufacturers hoping to get around EEC trade restrictions established manufacturing plants in the UK. Nissan, Toyota and Honda all manufacture passenger cars in UK factories, primarily for car markets in Europe, Africa and the Middle East.
After a series of divestitures, British Leyland was renamed the Rover Group, which was eventually acquired by BMW, then split up into various divisions that were sold separately. MG Rover finally went bankrupt in 2005, ending the era of mass production by UK-owned automobile manufacturers. The remnants were bought by the Chinese government-owned manufacturers, SAIC and NAC, which later merged. Former British Leyland car brands include Jaguar and Land Rover, now owned by Tata Motors, MINI, owned by BMW and MG owned by SAIC/NAC. Only 22,000 workers remain employed at successor firms.
I wasn't trying to champion the intellectual class, but rather trying to point out that each has God given gifts. Son number two has his gifts too. Fact is they are more visible and he is living the life of the super star/idol which this society worships. The GQ/Madison Ave looks, sports/basketball abilities, and others which I'm not able or have yet to see. The subtle nuances I do see, such as the manner females do a double take are obvious. I'm not a pushy sports parent, but I sired that prime time display/entertainment, and my ego gets massaged, but I keep that in check. Many have come by to say that he could be a starter in many colleges and or offer scholarships. The trick is getting into a Division 1 school.
All that being said we then too must acknowledge that being human entails flaws as well. Many folks are quick to point out these flaws and or lack of character, rather than looking for the positive. A smart man/woman would do some behavior modification, positive reenforcement, and or something subtle to encourage the positive or discourage the negative traits/behavior. We all can change things if we set our minds to it. Employers can create an atmosphere that respects others for their differences and brings people together to innovate. My employer stresses that I should never forget whom I work for. I work for that soldier out in harms way. Hence, we have common ground and I'll go above and beyond their expectations. Refuse to envy others and or pass judgment on coworkers. Its been a blessing to work with others who nurture one another's ideas, all the while respecting differences. Belittling anyone is just another way to massage ones own ego and counter productive.
All that being said we then too must acknowledge that being human entails flaws as well. Many folks are quick to point out these flaws and or lack of character, rather than looking for the positive. A smart man/woman would do some behavior modification, positive reenforcement, and or something subtle to encourage the positive or discourage the negative traits/behavior. We all can change things if we set our minds to it. Employers can create an atmosphere that respects others for their differences and brings people together to innovate. My employer stresses that I should never forget whom I work for. I work for that soldier out in harms way. Hence, we have common ground and I'll go above and beyond their expectations. Refuse to envy others and or pass judgment on coworkers. Its been a blessing to work with others who nurture one another's ideas, all the while respecting differences. Belittling anyone is just another way to massage ones own ego and counter productive.
Great post.
I'm not opposed to change and or the evolution of things to come. However, not in such a rapid manner that doesn't allow the transition to go more smoothly. One can look at manufacturing moving south to avoid unions/high wages, only to become unionized again. The rust belt did not shut down. Do you think that China has aspirations of becoming the manufacturing country of the world? How long will it take China to dominate the auto industry?
Unfortunately financial intelligence is not universal either. That is a problem across all levels of income and educations. To many scenarios like that plaguing our economy.
About 6 years ago I was selling boats as job between jobs and I remember trying to finance people with 6 figure incomes that didn't have the credit left to charge a pack of gum. Many of these were business owners, doctors and lawyers. I remember a surgeon knocking down $35k/mo that was trying to finance a $200k boat. He was in debt up to his eyeballs and I couldn't get him financed. This type of scenario was common, I spent more time trying to get banks to finance loans than I did trying to sell features of boat, which I enjoyed, not calling low life bankers. Many times I just wanted to say, you have no business buying anything, much less a boat, but that wouldn't help me pay my bills.
Come on Gary. They pick one case. A black man at that. If he make top scale $28 and hour. Thats less than $60,000 a year. So therefore he must still be working overtime, just not as much. I'm starting to believe they like to sensationalize news in order to sell newspapers.
There are lots of folks out there who live beyond reason. To say that the UAW workers are the only ones or that all UAW workers mismanage their money is just not true. I know many who have up-wards of a million in their 401K plans. I personally wrote a hardship letter for a UAW member with five children. So that his family could get a five bedroom home and move from their 1300 square foot (paid off) home. He had over a half a million and wanted to use $200,000 of his 401K money to give his family more room. So some UAW workers live an frugal lifestyle. This is the very reason privatization of social security is a bad idea. While many could and would do well, some would self destroy.
Today, he is unemployed, living in my girlfriend's mother's house, his fancy house in CT has been foreclosed, he's in massive credit card debt, his wife is leaving him, his kids won't talk to him, his E-Class Mercedes was repossessed, he has to take the bus or get a ride in my hooptie, is dirt poor and living on our charity, and our patience with him is wearing thinner than an apple peel.
On the flip side, I remember an article about several years ago, maybe like 10, about a black fork lift driver for Ford that was in his 70's making $100k with the o/t he worked. I think it may have either been in WSJ or Detroit Free Press, I can't remember. He drove a 10 year old Escort, put all of his kids through college and donated nearly $1million to some black college, even though he himself didn't graduate from high school. It was a great article.
Here, this is not the original article I remember, but it describes this very generous and I think incredible person.
forklift driver
I'm starting to believe they like to sensationalize news in order to sell newspapers.
No doubt about that
On its face, this may be true, but at the rate folks are deserting the Big 3 (for quality, UAW or management, I don't care why) for what they believe to be the "better" imports, those same jobs will be lost any way...
On the flip side, all that does is try and justify giving the money to the Big 3 simply to maintain the FACADE of a manufacturing company, who will continue to make a product that no one wants to buy...so, as millions of cars line up on dealers lots that no one wants, how soon before we simply tow the new cars to a landfill (the City of Detroit might as well be used, it has been a toxic waste dump since 1980 when I was there) and let them continue to keep the lines running so people look like they are working??????????????
It has to end sometime...they need to file Ch 11 and dump the UAW...the cost of their cars will probably drop by 25% overnight, and with all the illegals making the cars, they at least have a work ethic, and could be trained to make a better product in about a week...
The "entitlement" attitude of the average auto worker would put the average sports hero to shame...they think they can do no wrong, when they are about to be jettisoned to find out they will do nothing anymore...
If ever a lump labor force needed elimination, it is the UAW...
The auto industry will survive just fine, but the union must go...it is kinda like a cruise ship...just get rid of the people drilling the holes in the hull, and the remainder of the ship will do just fine...the UAW is the "hole driller"...
I sort of picture the UAW workers as the grunts down in the engine room who keep pumping oil on all the camshafts. All of a sudden they wonder what the big grinding noise coming from topside is, while the ship slows down.
Guess who's in the life rafts with the parachutes? :P
LOL, well not really.
I would add the UAW in the radio room frantically sending SOS messages on the Marconi telegraph until overtaken by incoming seawater.
And just as he was trying to leave the office, the harbormaster has to go bail out his dingy and try to find his oars.
However, the ship IS sinking. We all agree on that. The question now is are the boys in the engine room willing to do anything to help the ship from sinking or are they just reminding the Engine Room Chief to make sure that they get paid on time, while waiting for someone to rescue them?
I have yet to see anything from the UAW supporters that suggests that they are willing to lift a finger to save themselves.
The rest of us owe it to them "because the UAW created the middle class 100 years ago."
Today in the global economy we are behind in producing college graduates as compared to other nations. The high cost of education and other concerns have eroded the worlds best system. One would ask why other nations don't have this situations? The safety net or lack of provided by our nation is cited as the number one reason. National health in many countries has produced a higher college graduate rate. It stands to reason if someone doesn't have to enter the work force to obtain health insurance, they might stay in the schools longer and may even graduate.
This would concern me more than if America loses its auto making industry. With long term implications and bleak prospects for those who fail to secure college educations. Will America stand for being a second rate nation? This is happening and for those who detest unions, this will cause hardship, which in turn social unrest, and the rebirth of the union. More or less the same logic used in the political arena as the pendulum has swung the other way just as far as it had to the right.
In any case thats my thinking and welcome any thoughts. I've often enjoyed economics of any given situation. While I was burned during the dot com bust, I did see opportunity there after and exploited it. Rewarded beyond my wildest expectation. I'm looking at a rather bleak situation and many folks out there with few investment options.
I suspect we almost all agree that we would want the US to be able to compete on a world scale and not allow anybody else to be the world class auto manufacturer. We just see different ways to achieve that.
One way is protectionism and propping up industries in this country that frankly, aren't even near world-class today. Will incremental changes be enough to make the huge paradigm shift that needs to occur?
Another way is to allow big pain now with the hope that we can emerge from the ashes with a new sense of strong competitiveness - we will be the BEST, we will be COMPETITIVE. To do that we need to be flexible and open-minded.
Do you think incremental changes with the way the GM management has been operating and the way the UAW behaves with their work rules and 2200 page contracts are really going to provide the massive change that we need to get to that vision? It's taken 30 years since the Vega, 20 years since the Citation and Chevette, and we are not nearly there. No evidence that the current formula is working.
I must say that with an outsider in charge of Ford (Mulally), there are signs that they are doing some impressive things. He has been pruning other models and brands from Ford, and the 2010 Fusion is looking very impressive based upon the Edmunds first look. I wish GM would get with it without it being forced down their throats by their own insolvency.
Fancy professional name. Who funds them and their research? Are they subject to peer review?
On the flip side, all that does is try and justify giving the money to the Big 3 simply to maintain the FACADE of a manufacturing company, who will continue to make a product that no one wants to buy...
Plenty of folks out their products and will continue to do so. I'll give you that they have some losers, model which are not as great as they could be. However, they have many more which are world class.
The "entitlement" attitude of the average auto worker would put the average sports hero to shame...they think they can do no wrong, when they are about to be jettisoned to find out they will do nothing anymore...
A person working all this overtime is just someone trying to do right by their family. Time off is the most expensive thing they can give themselves. While Madison Ave and this society bombard them with all the creature comforts which they would be better off with, they are taken in. Yeah they could cut off the cable TV, do away with cell Phones, internet service, and the many other non essentials. Then there would be less economic activity and thats by no means good in a capitalist system.
You have the Big Three offering the overtime. They do it in order not to hire the additional employee. The UAW has recognized that people need time off, family time. So to discourage overtime they have a fund. $1 for each hour they work a UAW employee is put into this fund and the UAW/GM NASCAR is funded. I would consider it corporate greed/business sense in their not wanting to hire that additional employee to give the workforce relief.
I know it's been almost 15 years since I've been out of college, but I remember having access through the university for fairly cheap health insurance if I would have needed it. I know our current employer provided insurance will cover our kids until 24 years old. I can't see that as being a reason why people decide not to go to college.
The 1944 GI Bill gave America a 40% college graduate rate. The other competing nations were 25% at most.
I don't believe 40% of high school graduates went on to get a degree during the late 40's. I've read where nearly 1/2 of the WWII surviving veterans took advantage of the GI Bill, but the GI bill wasn't just for education, as it provided low cost mortgage loans etc.
This is from the census bureau in 2004. Last year, 85 percent of adults age 25 and over had completed at least high school, an all-time high, the U.S. Census Bureau reported today. Also in 2003, 27 percent of adults age 25 and over had a college degree, another record.
census
Pick your poison. I would consider a BMW before any Toyota/Honda product. I'm a realist. China is subsidizing an inefficient steel industry and thereby making the more efficient producer go out of business. Thats a communist country. High level communist and their families are getting rich. They have one metric"JOBS". this assures the status quo and no uprising/social unrest. That might redistribute the wealth/income. If these multi national want access to one-fifth of the future consumers they must tolerate whatever China demands. Level that trading field. It has a slope which drops like a cliff. Competition is all and good in the text books, but this is a real world. All I see is a one way street and all manufacturing going to China.
All the while corporate America/multi nationals have to suffer the unrighteous indignations and put up with them. That is if they someday want to have access to one-fifths of the future consumers of the planet. Patents, intellectual property, copy rights, and other silly western notions are violates daily. Violate as much if not more than human rights, child/prison labor, environmental crimes, and you name it. Many companies in China make product by day and knock offs by night. Why would we trade with China, by far a greater abuser of human rights than Cuba? Cuba doesn't have the one-fifth of the worlds future consumers. The population of China and India (Chindia) have one third of the futures consumers. If they tell a multi national to move a plant to the main land, they can't move it fast enough.
The only thing I agree with you on is that those model were dogs. However, you have to consider the Toyota offering in the early days too. You don't even want to see their Matrix thread here on Edmund's.
http://yaleglobal.yale.edu/display.article?id=10877
The winds of change might call for sympathy strikes. Maybe by all union and non union. Folks are reasonable as long as you treat them fair.This is the 2000's and not the 30's, 40's, or 50's.
There are legitimate strikes. No UAW strike in the last 10 years comes under that cover. GM has been bleeding red ink for 20 years. Every time GM comes up with a winner the UAW has tried to take advantage with a strike. Bailing out that kind of greed is criminal. Striking for parity against a company making a legitimate profit is what good Union leaders do. The UAW have leaders that need to be taken out and beat. They have destroyed the good jobs that were built over decades.
And just as he was trying to leave the office, the harbormaster has to go bail out his dingy and try to find his oars."
It seems to me that our host has trouble staying on topic...30 lashes, matey, and ye shall walk the plank (or, if you like physics, walk the Planck, as in Planck's Constant)...
Be careful what you wish for or I'll bury you in links...
He said, he said:
Battle heats up between UAW and Republicans (Detroit News)
"I am telling you there are over 100,000 people in Tennessee – people exactly like you and me -- who are getting ready to be horribly and brutally affected by the automotive industry collapse."
Roy Exum: Pigs and Money (Chattanoogan.com)
"An abrupt bankruptcy for autos could be devastating for the economy," Bush told reporters.
The UAW's Gettelfinger said the failure of the legislation showed that Congress should stay "away from the bargaining table."
White House: No immediate deal on auto loans (AP)
Gettelfinger, often a harsh Bush critic, said he hopes to avoid a rerun of the Senate showdown in which "organized labor was singled out."
It's not only automakers in trouble, but their suppliers. Fitch Ratings put seven on ratings watch last week because of vulnerability to GM, including American Axle, ArvinMeritor, Hayes-Lemmerz, Johnson Controls, Tenneco, TRW and Visteon."
Carmakers feel urgency to see Bush act on rescue plan (USA Today)
And a headline especially for you Bob:
North and South split as US battles to save GM, Chrysler and Ford (Times Online)
The blurb - "The UAW says that a double standard has operated by which the South has attracted investment from foreign car companies, with more than $3 billion of state subsidies since 1992 — while denying help for the North."
And the sad thing is, the restaurant my friend is working at is actually doing a good business, even in these times! Yet, he and everyone there is in danger of losing their jobs because of something going on in a completely different industry!. He's already looked into picking up a part time job at another restaurant, and if his place goes under, he'll be able to pick up more hours. Some of his co-workers have done the same, and I think the managers are looking into other alternatives.
Since we know we will be competing with China, why not get agile and excellent now? Detroit has decades of slow responses, shouldn't we move world-class fast? That's why this incremental stuff like GMs unwillingness to shut down divisions (which should have been done 5-10 years ago when they had more money) is so exasperating. One thing that is certain - propping them up won't solve their problems; it's like giving an addict more cocaine. Let's hope they make real tough decisions in spite of any bailout money that goes their way. Having the taxpayers pour money into them will hurt the country a lot if they don't change their ways, and FAST.
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