Can the UAW just die already?

[the Teuton]

UAW leader says blame economy for Detroit 3 woes
By MARK WILLIAMS, AP Business Writer Mark Williams, Ap Business Writer Sat Nov 15, 4:45 pm ET

COLUMBUS, Ohio ? Even as Detroit's Big Three teeter on collapse, United Auto Workers President Ron Gettelfinger said Saturday that the problem is not the union's contract with the automakers and that getting the automakers back on their feet means figuring out a way to turn around the slumping economy.

http://news.yahoo.com/s/ap/20081115/ap_on_bi_ge/auto_bailout_gettelfinger

Bullshit.  Here's an excerpt of the letter to the editor I wrote the The Pitt News that was published Friday.

So why are these companies struggling? It might have something to do with the approximately $65 per hour per United Auto Worker commanded by employees to cover wages, benefits and pensions, according to a 2005 article written by Henry Payne of The Detroit News. That doesn?t compare too favorably to the $14.81 per hour Honda pays for labor without the associated legacy costs.

The Big Three may look like a sad puppy with their collective tail in between their legs, trying to gain support of the federal government. It isn?t all their fault that a union has a stranglehold on their profits. Don?t paint the American automotive industry to be the bad guys.

I hope The Big 3 all collectively declare bankruptcy and dissolve the UAW.  It would do wonders for the companies and their negative profit margins.

[Secret Chimp]

I'm in favor of unions in general, but I really hate unions like the UAW. Get paid out the ass to do jobs that barely require a middle school education? And people complain about welfare.

[S204STi]

You saw Benz-Boy's thread right?  Do you really want the whole country to live in shacks back in the woods with our trash laying out in the sun?

I didn't think so.

[GoCougs]

So why are these companies struggling? It might have something to do with the approximately $65 per hour per United Auto Worker commanded by employees to cover wages, benefits and pensions, according to a 2005 article written by Henry Payne of The Detroit News. That doesn?t compare too favorably to the $14.81 per hour Honda pays for labor without the associated legacy costs.

The Big Three may look like a sad puppy with their collective tail in between their legs, trying to gain support of the federal government. It isn?t all their fault that a union has a stranglehold on their profits. Don?t paint the American automotive industry to be the bad guys.

Sorry, Tuets, this isn't correct. It is 100% Detroit's fault that it gave such power to the UAW. Detroit's imminent failure is 100% Detroit's fault.

I hope The Big 3 all collectively declare bankruptcy and dissolve the UAW.  It would do wonders for the companies and their negative profit margins.

Detroit by law can't dissolve the UAW. The only entity that can dissolve the UAW is the UAW. The two are forever wed - you won't ever have one without the other. GM's only hope is to reject any and all contract offers, in an effort to buck down UAW power.

[Submariner]

Sorry, Tuets, this isn't correct. It is 100% Detroit's fault that it gave such power to the UAW. Detroit's imminent failure is 100% Detroit's fault.

Detroit by law can't dissolve the UAW. The only entity that can dissolve the UAW is the UAW. The two are forever wed - you won't ever have one without the other. GM's only hope is to reject any and all contract offers, in an effort to buck down UAW power.

Not even some act of the Fed?

[rohan]

Sorry, Tuets, this isn't correct. It is 100% Detroit's fault that it gave such power to the UAW. Detroit's imminent failure is 100% Detroit's fault.

Be honest they didn't just give the UAW the power- the UAW went out and struck as often and for as long as it saw needed and then when GM gave in because they couldn't build cars the UAW demanded more and when things got tight about 5 years ago refused to give anything up and demanded more.  THe UAW is about 75% to blame.

Detroit by law can't dissolve the UAW. The only entity that can dissolve the UAW is the UAW. The two are forever wed - you won't ever have one without the other. GM's only hope is to reject any and all contract offers, in an effort to buck down UAW power.

"Detroit" I assume you mean the big 3?  They can ask for the government to do something- but that's gonna happen now with Obama saying he's going to strengthen the unions and try to make it easier to form and operate by law.

[280Z Turbo]

The parasite will die after the host organism dies.

[Danish]

I'm in favor of unions in general, but I really hate unions like the UAW. Get paid out the ass to do jobs that barely require a middle school education? And people complain about welfare.

This is exactly how I feel about this

You guys ever hear stories of the longshoreman's union out here in SoCal? Those guys get paid a ton of money!

[GoCougs]

Not even some act of the Fed?

Believe me, few things warm my soul like a broken union, but that would be quite some government intervention. I guess it's possible, but the UAW is so pervasive in its infection that I'm not sure Detroit could operate without it.

[280Z Turbo]

Believe me, few things warm my soul like a broken union, but that would be quite some government intervention. I guess it's possible, but the UAW is so pervasive in its infection that I'm not sure Detroit could operate without it.

Any politician who stood up to them would be committing political suicide.

[GoCougs]

Any politician who stood up to them would be committing political suicide.

Could be, but general sentiment seems to blame the UAW and be against the bail-out.

[FordSVT]

Sorry, Tuets, this isn't correct. It is 100% Detroit's fault that it gave such power to the UAW. Detroit's imminent failure is 100% Detroit's fault.

Detroit by law can't dissolve the UAW. The only entity that can dissolve the UAW is the UAW. The two are forever wed - you won't ever have one without the other. GM's only hope is to reject any and all contract offers, in an effort to buck down UAW power.

It's like you haven't been paying attention for the past 40 years.

Do the automakers have to take some of the blame? Of course, they made a ton of poor decisions, especially in marketing and cost-cutting and R&D. But to blame them 100% for the situation they are in with the unions? Like they didn't fight for lower wages and benefits on their own behalf? Like the UAW didn't walk out many times over the past decades and cost GM billions of dollars and a public relations nightmare? Like appointed arbitrators and government pressure didn't decide some of this? Like the general public didn't look at GM and Ford like the Big Bad Wolves any time the UAW stuck their noses in the air? When times were good the Union wanted more and the automakers were obliged to give it to them, when they were bad the unions would never back down an inch. They were the backbone of the US economy for close to a century, and literally thousands of different people in the unions and government and corporate headquarters made a million different decisions that all came to this point. Hell the UAW has been on strike in Michigan and Kansas THIS YEAR over JOB SECURITY! WTF?! This is the kind of shit the domestics have had to put up with over the years, and I'm not certain why you insist that's totally their own fault.

Everything with you is black and white, everything to you is a choice, like every decision you've ever made was made in a vacuum, and every choice was clearly good or bad, positive or negative. Life and business just isn't like that, and I know you know that. The Libertarian Master and Commander attitude is a nice fantasy, but no more pragmatic or realistic than a host of other assorted ideologies that you probably disagree with.

As for the bail-out, I don't think it's a good idea, at least not as good as a bankruptcy reorganization with clear and defined restructuring and the UAW taking it up the ass. A satisfactory plan to compensate their pensioners has to be in place, but no one should be under the delusion that everyone or even the majority is going to keep their jobs. GM is going to have to drop a couple of nameplates, Mercury will probably bite it, plants are going to close.

I'd be perfectly happy if both Ford and GM emerged from this leaner and more focused. Both companies seem to be doing fine in the rest of the world, but the domestic market needs to be killed and resurrected. Their legacy costs simply don't allow for them to properly invest their money or build a competitive car. Toyota can spend more building a car and still fight back from. Their present and upcoming models are promising if they can just stay around long enough to get people to buy them.

I don't think Chrysler is even worth keeping. They don't have a significant presence in or economic success in the rest of the world to lend support, their cars continue to be lacklustre and uncompetitive, and their only current claim to fame is the Hemi, which is a bit ironic in today's economic atmosphere. Let Nissan buy their truck division if they wish, let someone else buy the Jeep brand, and bury Chrysler alongside Plymouth.

[sportyaccordy]

Those #'s don't make sense.

That $65 doesn't translate to assembly line workers making $130K a year. And I am sure Honda provides insurance and other benefits to its workers, which would amount to labor costing them more than $15/hr.

Not only that, but apparently the raw labor cost of a car only amounts to $2400 or so per car. I am sure they omitted benefits & pension costs though in that figure.

The bottom line is though, the UAW is among the many problems facing domestic automakers, and only add to the reasons that they shouldn't be bailed out.

[TBR]

Base wages average about $28 an hour. GM officials say the average reaches $39.68 an hour, including base pay, cost-of-living adjustments, night-shift premiums, overtime, holiday and vacation pay. Health-care, pension and other benefits average another $33.58 an hour, GM says.

So average wage only income would be $58,240, excluding OT.

[sportyaccordy]

Base wages average about $28 an hour. GM officials say the average reaches $39.68 an hour, including base pay, cost-of-living adjustments, night-shift premiums, overtime, holiday and vacation pay. Health-care, pension and other benefits average another $33.58 an hour, GM says.

So average wage only income would be $58,240, excluding OT.

Right, which isn't unreasonable if we are talking about the full range of UAW workers. With raises and promotions that makes sense.

But those numbers don't really matter. What matters is the guarantee of pay; people getting checks when there is no work, etc. There's no reason any GM worker should be making OT now; there is no demand for work and there are too many workers. And the healthcare for retirees? It's all that extra stuff that is a burden. A simple but more relevant comparison would be between GM's operating revenue over a year vs laboring costs compared to that of a non-UAW company, and the breakdown of what is in the labor costs. If UAW can make a case for justifying it's higher costs over those of other companies they should be allowed to stay. I don't see that being the case though.

[TBR]

Considering median household income is $48,000 that still seems pretty high to me.

[FoMoJo]

So why are these companies struggling? It might have something to do with the approximately $65 per hour per United Auto Worker commanded by employees to cover wages, benefits and pensions, according to a 2005 article written by Henry Payne of The Detroit News. That doesn?t compare too favorably to the $14.81 per hour Honda pays for labor without the associated legacy costs.

The Big Three may look like a sad puppy with their collective tail in between their legs, trying to gain support of the federal government. It isn?t all their fault that a union has a stranglehold on their profits. Don?t paint the American automotive industry to be the bad guys.

Can anyone making $14.81 per hour even buy a car?

[TBR]

That's $30,804/year so yes.

[GoCougs]

It's like you haven't been paying attention for the past 40 years.

Do the automakers have to take some of the blame? Of course, they made a ton of poor decisions, especially in marketing and cost-cutting and R&D. But to blame them 100% for the situation they are in with the unions? Like they didn't fight for lower wages and benefits on their own behalf? Like the UAW didn't walk out many times over the past decades and cost GM billions of dollars and a public relations nightmare? Like appointed arbitrators and government pressure didn't decide some of this? Like the general public didn't look at GM and Ford like the Big Bad Wolves any time the UAW stuck their noses in the air? When times were good the Union wanted more and the automakers were obliged to give it to them, when they were bad the unions would never back down an inch. They were the backbone of the US economy for close to a century, and literally thousands of different people in the unions and government and corporate headquarters made a million different decisions that all came to this point. Hell the UAW has been on strike in Michigan and Kansas THIS YEAR over JOB SECURITY! WTF?! This is the kind of shit the domestics have had to put up with over the years, and I'm not certain why you insist that's totally their own fault.

Everything with you is black and white, everything to you is a choice, like every decision you've ever made was made in a vacuum, and every choice was clearly good or bad, positive or negative. Life and business just isn't like that, and I know you know that. The Libertarian Master and Commander attitude is a nice fantasy, but no more pragmatic or realistic than a host of other assorted ideologies that you probably disagree with.

As for the bail-out, I don't think it's a good idea, at least not as good as a bankruptcy reorganization with clear and defined restructuring and the UAW taking it up the ass. A satisfactory plan to compensate their pensioners has to be in place, but no one should be under the delusion that everyone or even the majority is going to keep their jobs. GM is going to have to drop a couple of nameplates, Mercury will probably bite it, plants are going to close.

I'd be perfectly happy if both Ford and GM emerged from this leaner and more focused. Both companies seem to be doing fine in the rest of the world, but the domestic market needs to be killed and resurrected. Their legacy costs simply don't allow for them to properly invest their money or build a competitive car. Toyota can spend more building a car and still fight back from. Their present and upcoming models are promising if they can just stay around long enough to get people to buy them.

I don't think Chrysler is even worth keeping. They don't have a significant presence in or economic success in the rest of the world to lend support, their cars continue to be lacklustre and uncompetitive, and their only current claim to fame is the Hemi, which is a bit ironic in today's economic atmosphere. Let Nissan buy their truck division if they wish, let someone else buy the Jeep brand, and bury Chrysler alongside Plymouth.

"The Libertarian Master and Commander." Nice. I like that. I hope you don't mind if I use that. But all in all there is such a framework as black and white and the evil that is gray.

Detroit CHOSE to give that power to the UAW. Absolutely there were economic, societal and political pressures that greased the transfer, but at the end of the day, the farmer wasn't minding his chicken coop, and slowly over the years let the foxes take over.

Detroit broke itself.

[FoMoJo]

It's like you haven't been paying attention for the past 40 years.

Do the automakers have to take some of the blame? Of course, they made a ton of poor decisions, especially in marketing and cost-cutting and R&D. But to blame them 100% for the situation they are in with the unions? Like they didn't fight for lower wages and benefits on their own behalf? Like the UAW didn't walk out many times over the past decades and cost GM billions of dollars and a public relations nightmare? Like appointed arbitrators and government pressure didn't decide some of this? Like the general public didn't look at GM and Ford like the Big Bad Wolves any time the UAW stuck their noses in the air? When times were good the Union wanted more and the automakers were obliged to give it to them, when they were bad the unions would never back down an inch. They were the backbone of the US economy for close to a century, and literally thousands of different people in the unions and government and corporate headquarters made a million different decisions that all came to this point. Hell the UAW has been on strike in Michigan and Kansas THIS YEAR over JOB SECURITY! WTF?! This is the kind of shit the domestics have had to put up with over the years, and I'm not certain why you insist that's totally their own fault.

Everything with you is black and white, everything to you is a choice, like every decision you've ever made was made in a vacuum, and every choice was clearly good or bad, positive or negative. Life and business just isn't like that, and I know you know that. The Libertarian Master and Commander attitude is a nice fantasy, but no more pragmatic or realistic than a host of other assorted ideologies that you probably disagree with.

As for the bail-out, I don't think it's a good idea, at least not as good as a bankruptcy reorganization with clear and defined restructuring and the UAW taking it up the ass. A satisfactory plan to compensate their pensioners has to be in place, but no one should be under the delusion that everyone or even the majority is going to keep their jobs. GM is going to have to drop a couple of nameplates, Mercury will probably bite it, plants are going to close.

I'd be perfectly happy if both Ford and GM emerged from this leaner and more focused. Both companies seem to be doing fine in the rest of the world, but the domestic market needs to be killed and resurrected. Their legacy costs simply don't allow for them to properly invest their money or build a competitive car. Toyota can spend more building a car and still fight back from. Their present and upcoming models are promising if they can just stay around long enough to get people to buy them.

I don't think Chrysler is even worth keeping. They don't have a significant presence in or economic success in the rest of the world to lend support, their cars continue to be lacklustre and uncompetitive, and their only current claim to fame is the Hemi, which is a bit ironic in today's economic atmosphere. Let Nissan buy their truck division if they wish, let someone else buy the Jeep brand, and bury Chrysler alongside Plymouth.

I agree with most of this.  Somewhere starting in the '60s unions became much too powerful.  They would shut down one manufacturer for months to get their demands.

As for the domestics restructuring, it's underway but must happen much faster with more drastic cuts.  The bailouts may be necessary as the concern is that the cost and intrusion of a chapter 11 may drive them under; as well as keep potential customers away.  A bailout with restrictions aimed at penalizing the management and the unions may be the only thing that will save GM and Ford.  Chrysler, with the exception of Jeep, may as well close up shop right now.

[FoMoJo]

That's $30,804/year so yes.

...and pay taxes and rent and food for a family and clothing and school costs and buy christmas presents and medical expenses and the odd six-pack?

[GoCougs]

Base wages average about $28 an hour. GM officials say the average reaches $39.68 an hour, including base pay, cost-of-living adjustments, night-shift premiums, overtime, holiday and vacation pay. Health-care, pension and other benefits average another $33.58 an hour, GM says.

So average wage only income would be $58,240, excluding OT.

Numerous studies have shown that purely based on merit the average UAW worker commands anywhere from a 50 - 100% premium over non-UAW manufacturing jobs using the same skill sets.

[Lebowski]

Can anyone making $14.81 per hour even buy a car?

$14.81/hr is hardly below the poverty line.  Assume 10 hours/week overtime at 1.5x and a dual income home making that, and we're talking about a ~$80k annual household income.   

[FoMoJo]

$14.81/hr is hardly below the poverty line.  Assume 10 hours/week overtime at 1.5x and a dual income home making that, and we're talking about a ~$80k annual household income.   

I would expect that the example you propose is more true-to-life, however, at $14.81/hr, it pretty much disqualifies an autoworker from supporting a family of 4 without their spouse also working full-time.  I couldn't find a "poverty-line" figure for a familily of 4 living in a large urban community for the US but, up here, it's $37,791.

[the Teuton]

I lived, albeit not comfortably, on $8/hour over the summer with no benefits and having to pay a cable bill that would have been equivalent to car insurance costs.  It can be done.

I was actually saving money all the while, too, which made it even better.

If I can do it, anyone else can do it.  All it takes is some self-discipline.  $14.81 is more than enough to raise 2 or 3 people on, albeit not too comfortably.  With someone else in the family with a job, that's pretty much smack dab middle class right there.

[FoMoJo]

I lived, albeit not comfortably, on $8/hour over the summer with no benefits and having to pay a cable bill that would have been equivalent to car insurance costs.  It can be done.

I was actually saving money all the while, too, which made it even better.

If I can do it, anyone else can do it.  All it takes is some self-discipline.  $14.81 is more than enough to raise 2 or 3 people on, albeit not too comfortably.  With someone else in the family with a job, that's pretty much smack dab middle class right there.

Where'd you live?

[TBR]

...and pay taxes and rent and food for a family and clothing and school costs and buy christmas presents and medical expenses and the odd six-pack?

Someone making that little with 3 dependents doesn't pay taxes and UAW workers don't have to worry too much about medical expenses. Nonetheless, you certainly couldn't support a family comfortably off that, but it is doable and for those who want luxuries (that odd six-pack and new cars) they can either get an education or they can have the other spouse working.

[TBR]

Where'd you live?

He lives/lived in Pittsburgh. Not an expensive place to live I am sure, but then how many auto manufacturing facilities are on the west coast or the northeast?

[TBR]

I would expect that the example you propose is more true-to-life, however, at $14.81/hr, it pretty much disqualifies an autoworker from supporting a family of 4 without their spouse also working full-time.  I couldn't find a "poverty-line" figure for a familily of 4 living in a large urban community for the US but, up here, it's $37,791.

National poverty line for a family of 4 is $21,200.

[FoMoJo]

Someone making that little with 3 dependents doesn't pay taxes and UAW workers don't have to worry too much about medical expenses. Nonetheless, you certainly couldn't support a family comfortably off that, but it is doable and for those who want luxuries (that odd six-pack and new cars) they can either get an education or they can have the other spouse working.

I thought we were talking about Honda workers.

I know that it's doable but it would be a major step backwards in lifestyle for industrial workers.  Perhaps that's the new reality for workers in the US.