Why only $2500? If we use slave labor to build cars, we could probably shave $7000 off every sticker price. How much has emancipation cost the industry?

If you're going to complain about employees making livable wages why not complain about them making wages at all?

I had edited my post before you commented, but you're just looking at hourly wages because I wanted to get some hard facts on the cost before posting exact numbers. However, the UAW stilll increases the overall cost per unit.

http://mjperry.blogspot.com/2007/07/...of-market.html

Since we want to quote websites. So the average UAW worker is making more than a college professor? You don't see a problem with that?

unions have nothing to do with "livable wages" - they are about getting the most possible benefit for the least possible amount of work. if they didn't pay a decent wage, they would not be able to attract decent employees. since when did you clowns decide we are a Marxist country?

i understand some of you kids are you just young and naive and "against the man" and many of you are just far left nutjobs... and i forgive that... but suggesting Unions don't dramatically increase operating costs while adding nothing to the bottom line, is totally retarded.

my whole family are in unions and they are jackasses and i spent my whole childhood watching adults spend the bulk of their time trying to figure out how to accomplish the least while trying to get paid the most... and guess who ultimately pays for that in the end? we all do.

the Japanese buried the US auto manufacturers by being more efficient in every single thing they do.... which is the exact opposite of what unions bring

Let's say you ran a porn company and had two potential designers you wanted to hire. They did the exact same quality work, one was asking for a reasonable wage and one was asking for 3 times the going rate for that work, who would you hire? It's about earning what's reasonable for the skills you bring to a particular job.

I don't know all of the inner workings of unions so maybe somebody can clarify something for me about national unions... the big guys.

Say there are three construction companies, each with 500 employees, for a total of 1500 employees. Now, would a union be formed for each individual group of workers for the individual construction companies... or do the 1500 workers get together and force the three construction companies to obey their demands?

Sounds like a cartel to me...

This will never be solved on an adult webmaster board...lol
This auto industry meltdown has many, many reasons for this to be happening.
There is plenty on blame to go around.

Gov:
Really shitty trade deals put in play by our government. Automotive, Steel, etc. All US manufacturing has been undercut by lame trade agreements our gov has made.
This is really where this problem starts.

Problems -
Auto Execs:
Ridiculously huge compensation for execs. It should be performance based.
Lack of foresight in reading market trends.
Stock options as part of the compensation, leading to risk taking to better the "golden parachute"
Old fashioned Greed
Agreeing to stupid union contracts

Union:
Non flexibility of union contracts. Get real....
Lack of self governing the members. Dead weight needs to be cut.
Needs to work with the management, not against them.

If the bailout doesn't happen, it will be a snowball effect. It is already pretty grim here in Michigan. With a bailout, we will see even more automotive supplier shops close (even non-union for the union haters), more foreclosures, more loan defaults, banking problems because of the defaults, the trickle down will be horrific.

So....nobody wins.

The only way out of this is to stop the stupid one-sided trade agreements and have a limited bailout with concessions from both union and management as well as some extreme oversight to make sure taxpayer money isn't wasted. I'm talking taxpayer ownership, if we are bailing them out I want my moneys worth. There also has to be a more "nationalism" attitude with Americans. In other words, "Be American, Buy American"

:2 cents:

yeah a newspaper is the same as some guy with a blogspot account. I quote some of the comments:
Professor Perry,

You realize that your graph is mislabeled because it should be labeled ?Hourly Labor Cost?. GM's labor cost and UAW employee compensation are not one and the same. Labor cost is aggregated to include benefits that employees do not receive whereas employee compensation is individualized to actual wages and benefits. GM uses quantifiable labor costs to make business case decisions, but no employee actually receives that amount of pay and benefits.

And this one

These are some scary words for an economics professor. And it reveals a real lack of knowledge of what is going on with bargaining.

First, the nonorganized assembly plants (the Nissans, Toyotas, Hondas, etc.) pay COMPETITIVE WAGES AND BENEFITS. They do this for a reason -- to keep their workers union-free. That means, their hourly wages and bene packages are COMPARABLE to those negotiated by the UAW. So if you think a production worker earning $23 an hour is offensive because he only has a high school degree, then take your grievance up with Toyota. (note to the world: do you think they are going to continue to pay those "competitive wages" if the UAW contracts are going to be majorly concessionary?)

But union labor costs are much higher. Why? The backloaded costs of retiree healthcare and pensions. Their "legacy costs" are much lower because they are newer operations (not many workers have made it to retirement). Moreover, these companies make it very difficult for workers to make it to retirment (just listen to the difference between a worker who has been at honda for 1 year versus 15 -- ask them about workplace injuries and how accommodating their companies are when their production system caused them to wreck their bodies).

The bottom line is that union negotiated contracts have a long view -- that workers are not fungible robots. that if workers are injured and give their health to their companies, they deserve to be treated well. And what is so wrong about our parents/grandparents (heck, even ourselves) having healthcare from their employer when they retire? or pensions? Isn't that removing the burden from the rest of us? What screws these workers now is that their employers don't have the marketshare. and that has NOTHING to do with their "union contracts" (anyone check out the recent harbour report which reported that almost all of the most productive auto assembly plants in the US are union?). They are even screwed by their own employers because the assembly plants they leave in the US are the heavy gas-guzzling truck and SUV types.

It's very sad to me that there is this vein of sick schadenfreude going through the keystrokes of everyone who has an opinion about Big 3 bargaining. You can have opinions I disagree with, but know the whole story first. At the end of the day, you might say that workers making a product that enriches shareholders beyond their wildest dreams should only make minimum wage. That's your world view. I think that those workers deserve better. And if they come together collectively to bargain, isn't that the freest expression of the free market?

Tony if we were talking about a newspaper article and a blog post regarding the war or George Bush you would be favoring the blog post as long as it said something bad over the good that the article may be reporting.

First off the blog post was based off of a Forbes Magazine Article. You can dismiss the article wholesale, and I never said it was only the unions fault, but they are part of the problem.

However, this never ending cycle of bailing out failed business has to stop. I'm not happy with the Government bailing anyone out, but if they are going to proceed to bailout out there has to be some fundamental changes with the way the Big Three run, from management down to the UAW workers. There has to be conditions placed on this bailout otherwise its just throwing money at a failed system which never works.

Now, I don't have a dislike for unions, but in the same breath I don't have an obsessive lust for them either. I've seen firsthand how the Teacher's Union protects tenured teachers that have no place being in the classroom. I've seen how stagehands if they work a minute after midnight costs a company an extra 2 million dollars. I'm not anti-union, but I believe in a sane approach of workers and management getting along.

Anybody who believes the average union wage is $27hr knows nothing about unions. That article must have been written by a union thug.
Its more like $72 once all benefits, retirement etc.

Are you doing stand-up? Learn history.



Hilarious that you are being condescending while defending the failed right wing economics that have (predictably) brought us to the brink of depression. You calling others naive, i-r-o-n-y. The policies have failed right in front of your eyes but you are so indoctrinated that you keep telling yourself up is down. It must be communism that made the capitalist system collapse. People like you remind everyone how Nazism and Sovietism were able to occur. People can make themselves believe anything.

Unions in the year 2008... not the year 1910

i made some assumptions regarding your intelligence and apparently overshot by quite a bit. i guess on one hand, you could look at that as a compliment given some of the stuff you've said.



Capitalist system collapsed? Economies grow and contract in equal proportion to growth. Are you that naive? Really? We had over 20 years of unreal growth globally... how is it that some of your fucking retards don't even understand the very basics of macroeconomics?

... Or .... are you just saying as so many before you that Capitalism can't work (i assume you give any sales you make to the people) and is destined to fail in spite of the obvious facts to the contrary?

Sorry... i thought the US was the worlds largest and most successful economy ever in the history of the planet. I wasn't aware that we are doing it wrong.

Where this country fucks up is when government gets involved in a free market, trying to legislate success and rewarding failure (i.e. airlines, farmers and auto industry). Japan during its major collapse tried over 20 times to bail out everyone, inject more capital into the market and it did absolutely nothing. It takes time to correct itself and you can't speed that up by playing God.

Today we are pumping money into banks that are sitting on tons of their own capital as it is and now everyone has their hand out. That reason they have their hand out is the Marxism part... they know that the people and the government will happily reward shitty business practices and prop up a dying business with MY tax dollars... so they ask for it. Why wouldn't they? And here we are, rewarding failed businesses for poor business practices with tax payer money. lesson learned? nothing.

Finally... stop being an idiot. Bush has as much to do with the economic slowdown and housing market collapse as Clinton did with the .com boom.

ironic that you start talking about indoctrination and being brainwashed when here you are.... towing the party line all the way. that sounds perfectly fair, balanced and objective to me. you're a genius.

Interesting read, File for chapter 11

http://www.portfolio.com/news-market...e-US-Carmakers

Alongside of greedy unions and overpaid workers - another factor I think is badly hurting the auto industry at the moment is the 'employee pricing' sales campaign the Big Three went through a few years back. All three automakers offered massive discount incentives to the public and enjoyed a huge upsurge in sales volume (at the expense of their bottom line profit margins).

Consumers who had the financial option at the time went out enmasse and took advantage of the bargains.

And now...sales have drastically slowed (coupled with the recent skyhigh prices at the pumps). Yet oddly enough, the automakers are wondering why.

You can only go to the consumer's financial well with your bucket a finite number of times before it runs low.

I still put the lion's share of the blame at the feet of the autoworker's unions...however I'm saying its only one causation of the current crisis.

If the bailout goes ahead and the big three are mandated to create enviro/green cars, but nobody buys them, then what?

Have you seen the pricing on GM's hybrids? the caddy and yukon hybrids add an insane level of cost. The ford escape/mariner hybrid is a solid vehicle. GM has that Vue greenline I think now...

GM needs to dump shitty brands. Buick and Cadillac don't need to BOTH exist do they? toss the 1 nice buick into the cadillac line LOL

Most of what is in the Buick line belongs under the GMC line if it isn't already. the GMC and buick lines offer the same shit. Pontiac's G8 is the only vehicle worth keeping around there.

Serious consolidation is needed. Why have the same car marketed under Buick, Saturn, Chevy, AND Pontiac? Wasting tons of marketing dollars and I'm sure time in assembly lines and workers.

The Aveo and Cobalt are total garbage! I want a nice american made compact! Take a lesson from Mini cooper... build a quality small car that actually has a nice interior!

The wife and I lease two Pursuits (Pontiac version of the Cobalt) - and agree the entire line is total garbage. Poor workmanship all around. The laundry list of repairs we've had to both vehicles in the past few years would choke a horse.

GM had grown very proficient at making 'factory rattles' in the frontend a standard feature. I had the steering column and nearly the entire frontend replaced before the car was even 6 months old. And I don't drive it hard.

if we would start acting like a free market economy... it wouldn't matter what went wrong.. how, where, why etc. a vacuum would be created when they collapse... new companies/products would rise up to fill that demand and would have adapted to the new realities whatever they may be.... the net effect would be better, stronger companies.

the biggest problem in companies like auto manufacturers and airlines in the US is that they are allowed to fuck up and run shit into the ground.. then can always turn to the government to keep them alive. that reinforces bad business practices, bad habits and general dysfunction.

the horrible truth about the US auto manufacturing industry is that they spent 3 decades pumping out horrible shit and the japanese buried them with more efficient business practices from top to bottom and a better product.

when you are the very people that invented cars... invented the assembly line.. made cars affordable to the common man and you can't hang on... then you don't deserve help. anyone saying Unions don't play a major role in corporate dysfunction are simply naive about unions or in strong denial.

We must be brothers from different muthas - I find myself agreeing with you often. :winkwink:

me too...

the 70's vehicles went to hell and until around 2000 the big 3 were pretty clueless. Now GM at least is building pretty decent quality stuff these past few years. They finally have a good diesel truck that compares nicely to the dodge diesels that have dominated thanks to cummins badassness.

They just haven't been able to compete in the compact market. Honda seems to be pricing themselves out of it but a good low cost car would sure be nice. Shit those tata indian built cars are looking better than those stupid gas powered "smart" cars.

Ok, well, come back when you figure out the massive flaws in our system. Privatized profit, socialized losses... yeah, that's sustainable.

"massive flaws" like the ones that created the worlds largest economy and the worlds single largest economic success story?

sustainable... as in "worked quite well for a few centuries" and works quite well all over the world?

what do you propose to replace that with that's worked so well? a monarchy? a dictatorship? communism? a theocracy?

maybe we should get a few rogue generals together, build an army and murder everyone who opposes us, our utopian vision, everyone with an education so we can impose this new system and do so for the betterment of the nation?

jesus man

:1orglaugh:1orglaugh:1orglaugh:1orglaugh

Benevolent dictatorship. :thumbsup

I'm putting in my candidacy as we speak. :1orglaugh

These bailouts are getting out of hand. But if you want to protest a bailout protest the banks being bailed out. The only thing they are doing is buying up other banks with the money. It's not just about the current workers with these companies. Those who are on retirement benefits also get the ax. If Ford goes down my Grandmother will lose both her health and income and will be solely depending on SSI and Medicare. There has to be some sort of protection put in place for retirees. Companies these days are just looking at the easy way out in filing for BK removing all of the retirees from the payroll and health costs and getting back in.

“We can't solve problems by using the same kind of thinking we used when we created them.”

Albert Einstein

First thing thats made sense in this thread right here :thumbsup

In our current system its nothing but a few major corporations puppeteering the system. Democracy is all smoke and mirrors anyway

Democracy is overrated... those African warlords and Arabic sheiks have it made!

the hourly wages aren't the issue, its all the perks they get. Insane health coverage and retirement related extra costs are absolutely insane.

Yeah it's really crazy for workers to have health care and pensions.

What a bunch of fools, the unions have put the auto makers out of business. They can't efford to keep up the cost of these workers. The big 3 should go into chapter 11 so they can break the unions and rebuild. There will never be able to keep things going paying out all that money to people that turned a couple of bolts all day long. The union should be offering to cut everyone in order to try and same the industry but, sad, they are greedy cock suckers.