AUTO BAILOUT?

[Gordio]

My father retired from GM when he was 60. Offered an early retirement. I believe retirement, unless offered early package is 62. May be wrong on that though.

 

Who's to say they are overpaid? What do you think they should make per hour if you could set the rate?

 

 

My father-in-law retired when he was 58. Got a $50K buyout also to retire early. Not sure what the pension is but I do know he gets one. I also know that him & my mother-in-law get full medical & dental for the rest of their lives. Tough to run a company & keep it profitable when your fighting that kind of overhead.

[KD in CA]

The luxury car point is simple... they are expensive. Most union people I know can't afford them. However, most people here believe that union workers make so much money, should be able to afford one of those vehicles huh?

 

Looking to protect my own deal? I work within the union because I believe in the labor movement and because of the job description. I don't promote the union to save myself in any way. I promote the union because I have seen first hand how being unionized can help workers and their families. And I get it as well... you dislike unions, think they are a waste. You are only out for your bottom line, who cares about anyone else. Got it.

 

I think it's unconscionable for the government to just toss money into every failing bank and then back off when it comes to the Big 3. How come these banks don't have to provide a business plan for the money they receive to make it's being used correctly? Let's face it, some banks took the money and sat on it instead of using for what it's for. Other financial institutions like AIG just wasting money. No one has issues with that either. The big 3 are being blasted for bad business plans, bad leadership, etc. Shouldn't the financial institutions be held to the same standards. A failing business is a failing business.

 

Yet, people are backing off on the bail out money that could help save millions of jobs. Makes no sense to me.

 

Again, there is no correlation between being overpaid and being wealthy. I have seen people who make $30k per year that were overpaid because they were lazy, useless morons. Likewise, I've seen people who make $100k that were significantly underpaid considering the value they brought to the organization.

 

That's great that you've seen unions "help families", but the point is that it is not a sound economic model to "help families" by overpaying people. Sure that's good for that individual in the short term, but in the long term it contributes to the collapse of the entire system, which eventually does far greater damage to those same individuals. If your model worked, than the Big 3 wouldn't be panhandling for other people's money. I dislike unions because they makes things more expensive and because they are irresponsible and a contributing factor to the disaster that has become the auto (and airline) industry.

 

I also think it's unconscionable for the government to just toss money into every failing bank without requiring significant reform. However, the economy can't survive without a functioning banking system so clearly something has to be done there. Conversely, the economy isn't going to collapse if the Big 3 are forced to reorganize under our established bankruptcy laws. And no, "millions of people" are not going to lose their jobs if that happens. Some of them just might have to work for a fair (rather than inflated) compensation package.

 

Who's to say they are overpaid?

Adam Smith

 

What do you think they should make per hour if you could set the rate?

How about the same as in any other business in the world: an amout that can be paid out of the revenues generated by the product they build. What is special about auto makers that they be exempt from the laws of economics?

[Chef Jim]

Who's to say they are overpaid? What do you think they should make per hour if you could set the rate?

 

Management should say if they are overpaid and how much they should be paid per hour. Who came up with their wages? And I blame the US auto industry for caving to the union.

[pBills]

Management should say if they are overpaid and how much they should be paid per hour. Who came up with their wages? And I blame the US auto industry for caving to the union.

 

 

Give me a break on this caving in crap. Just to bad in many cases the upper level of management are the ones that being overpaid.

[pBills]

Again, there is no correlation between being overpaid and being wealthy. I have seen people who make $30k per year that were overpaid because they were lazy, useless morons. Likewise, I've seen people who make $100k that were significantly underpaid considering the value they brought to the organization.

 

That's great that you've seen unions "help families", but the point is that it is not a sound economic model to "help families" by overpaying people. Sure that's good for that individual in the short term, but in the long term it contributes to the collapse of the entire system, which eventually does far greater damage to those same individuals. If your model worked, than the Big 3 wouldn't be panhandling for other people's money. I dislike unions because they makes things more expensive and because they are irresponsible and a contributing factor to the disaster that has become the auto (and airline) industry.

 

I also think it's unconscionable for the government to just toss money into every failing bank without requiring significant reform. However, the economy can't survive without a functioning banking system so clearly something has to be done there. Conversely, the economy isn't going to collapse if the Big 3 are forced to reorganize under our established bankruptcy laws. And no, "millions of people" are not going to lose their jobs if that happens. Some of them just might have to work for a fair (rather than inflated) compensation package.

 

 

Adam Smith

 

 

How about the same as in any other business in the world: an amout that can be paid out of the revenues generated by the product they build. What is special about auto makers that they be exempt from the laws of economics?

 

 

How much do you think the average auto worker should make per hour? What kind of benefits if any? You keep saying fair not inflated whatever. How much do you make? Let me tell you if I think your base is fair or inflated. And the opposite can be said to your $30k/$100k model.

 

And you are right, the economy can not survive without a banking system... however the banks out there now are just as broke as the big 3 when it comes to leadership. Reward for failure by bailing them out... big 3, let them go under. Both sides have major issues if they go down. If the big 3 go under you're looking at possibly a million more out of work. How strong will the economy be when no one has money to spend because they are out of a job? Also, banks in a sense are nothing more than businesses... why not let many of the lesser ones fail? If they can not stay viable on their own let them go under right? Talk about exemption.

[pBills]

http://www.emailthis.clickability.com/et/e...lToID=529159920

[Chef Jim]

http://www.emailthis.clickability.com/et/e...lToID=529159920

 

Why is the US auto industry going to fail without a bailout?

[IDBillzFan]

http://www.emailthis.clickability.com/et/e...lToID=529159920

I understand your concern, but I think you need to remember one basic, simple concept as you continue debating where the problems lie: a job is not a right. Stop acting as though these people are owed something, because if you pull back the camera on all those generations of people working for GM, you'll probably find pictures on the wall of other family members who found a different career path and are not facing the loss of their job because of excessively grotesque mismanagement of a company.

 

If the CEOs really want to save the companies, the solutions is very simple. First, cut their salaries to $1M/year. Then, shut down the businesses. Fire everyone. On Thursday, start interviewing people to fill positions based on new salaries and benefits. If people really want to work, they'll take what's offered at what will be more responsible salaries and benefits.

 

I understand it's not possible...but if you're facing bankruptcy, what's the difference?

[KD in CA]

Why is the US auto industry going to fail without a bailout?

 

Because he either a) doesn't understand or b) is ignoring for effect, the different between "fail" and "bankruptcy".

[pBills]

Because he either a) doesn't understand or b) is ignoring for effect, the different between "fail" and "bankruptcy".

 

 

Ok genius since you have a crystal ball. What will happen EXACTLY if they let the Big 3 go bankrupt?

[pBills]

I understand your concern, but I think you need to remember one basic, simple concept as you continue debating where the problems lie: a job is not a right. Stop acting as though these people are owed something, because if you pull back the camera on all those generations of people working for GM, you'll probably find pictures on the wall of other family members who found a different career path and are not facing the loss of their job because of excessively grotesque mismanagement of a company.

 

If the CEOs really want to save the companies, the solutions is very simple. First, cut their salaries to $1M/year. Then, shut down the businesses. Fire everyone. On Thursday, start interviewing people to fill positions based on new salaries and benefits. If people really want to work, they'll take what's offered at what will be more responsible salaries and benefits.

 

I understand it's not possible...but if you're facing bankruptcy, what's the difference?

 

 

 

First off - I have NEVER acted as though a job is a right. A job is just that... a job. If hired, one must work hard and earn their money and hopefully benefits. Whether or not they have family members who decided to not work in the auto industry is irrelevant. Those people are simply proud of being auto workers, being part of the UAW. I give them credit for that, they take pride in their job.

 

I agree with you on the CEO's part, they should ALL take large cuts in salary. If the wages are drawn back for the workers on the line so should theirs.

[KD in CA]

Ok genius since you have a crystal ball. What will happen EXACTLY if they let the Big 3 go bankrupt?

I don't know EXACTLY what will happen, but I'm pretty sure that 3 huge companies with global brands and billions in sales are not going to simply cease to exist. I also suspect that they would have the opportunity to reduce the number and expense of dealers, renegotiate supplier contracts, eliminate operational redundancies and reduce labor and health-care costs. Oops...that last one is really at the core of your fear of bankruptcy reorganization, isn't it? You think that those inflated costs should be paid for by taxpayers.

 

But, there's always hope. Here's a step in the right direction:

 

GM saves $9MM

 

 

How much do you think the average auto worker should make per hour? What kind of benefits if any?

I already answered that. They should be paid an amount that the company can afford to pay them. That's not currently the case at the Big 3. But let's make it simple and say that they should be paid whatever the non-union auto makers at the Honda plant are earning. Is there something wrong with their compensation?

 

How much do you make? Let me tell you if I think your base is fair or inflated.

You continue to miss/ignore the point. I am paid an amount that both my boss and I think is fair and that my company can afford to pay me. If he changes his mind, he can fire me. If I change my mind, I can find another job. My salary was not extorted from my company under threat of doing damage to the organization.

[pBills]

I don't know EXACTLY what will happen, but I'm pretty sure that 3 huge companies with global brands and billions in sales are not going to simply cease to exist. I also suspect that they would have the opportunity to reduce the number and expense of dealers, renegotiate supplier contracts, eliminate operational redundancies and reduce labor and health-care costs. Oops...that last one is really at the core of your fear of bankruptcy reorganization, isn't it? You think that those inflated costs should be paid for by taxpayers.

 

 

But, there's always hope. Here's a step in the right direction:

 

GM saves $9MM

 

 

So let's have the companies go through all of that, killing their name even more with potential buys instead of giving them a loan as long as they have an approved business plan.

 

A business plan that would encompass pretty much everything you said above. The loan would help them move in the right direction for retooling plants. Oh and you forgot.. they should also cut down management and CEO compensation (CEO's down to $1 (maybe $2) million per year).

And please let's stop with the extortion or union strong arming crap. It's BS.

 

Oh and in regards to salary... answering a question with a question. What's wrong with workers making $14 - $25 per hour? Is that to much?

[KD in CA]

A business plan that would encompass pretty much everything you said above. The loan would help them move in the right direction for retooling plants. Oh and you forgot.. they should also cut down management and CEO compensation (CEO's down to $1 (maybe $2) million per year).

And please let's stop with the extortion or union strong arming crap. It's BS.

I didn't forget that, I mentioned it several posts ago. However since that's a fraction of the costs of the other expenses, I didn't list it as one of the major areas of savings. I notice however that you almost...but not quite, acknowledged that the unionized labor costs are out of control and need to be reigned in. Come on now, take that last step and admit it. I know there is good in you p. The union hasn't driven it from you completely.

 

Oh and in regards to salary... answering a question with a question. What's wrong with workers making $14 - $25 per hour? Is that to much?

If it's really $14-$25 and hour, probably nothing wrong with it. But if the rules are rigged so that some dude can show up on Sunday and play cards all day while getting "double time", and if it comes with a full retirement at 50 and zero contributions to health insurance for life, than it's probably not reasonable. And again, the acid test is whether the organization can stay afloat at those levels. And obviously the Big 3 can't; hence my points in this thread.

 

 

btw...if not extortion, what would you call threatening to shut down the company if you don't get what you want? If the payroll dept threatened to not write any checks or let anyone else do it until they got a raise, would that be ok?

[John Adams]

Why is the US auto industry going to fail without a bailout?

 

Because people believe Consumer Reports and buy inferior Japanese cars even though American cars kick ass. Don't you understand how markets work yet? Haven't been reading EII's posts?

[Chef Jim]

Because people believe Consumer Reports and buy inferior Japanese cars even though American cars kick ass. Don't you understand how markets work yet? Haven't been reading EII's posts?

 

Actually no, but should I start? I really have a hard time getting past all his stuff.

[pBills]

I didn't forget that, I mentioned it several posts ago. However since that's a fraction of the costs of the other expenses, I didn't list it as one of the major areas of savings. I notice however that you almost...but not quite, acknowledged that the unionized labor costs are out of control and need to be reigned in. Come on now, take that last step and admit it. I know there is good in you p. The union hasn't driven it from you completely.

 

 

If it's really $14-$25 and hour, probably nothing wrong with it. But if the rules are rigged so that some dude can show up on Sunday and play cards all day while getting "double time", and if it comes with a full retirement at 50 and zero contributions to health insurance for life, than it's probably not reasonable. And again, the acid test is whether the organization can stay afloat at those levels. And obviously the Big 3 can't; hence my points in this thread.

 

 

btw...if not extortion, what would you call threatening to shut down the company if you don't get what you want? If the payroll dept threatened to not write any checks or let anyone else do it until they got a raise, would that be ok?

 

 

Multi-million dollar salaries fraction or not should be reduced dramatically. I have said from day one that contracts are high. I do believe it's not due to wages. As stated before it's health care on many levels as well as pension plans... both of which are and continue to be worked on.

 

Double time is for Holidays, Weekend is time and a half. And yes, every worker when they come in for overtime sits on their ass. That is the thing I get tired of hearing. People hear a bad story here or there about someone a-hold who abused the system and their job and every union worker is like that. It's BS. And in regards the health insurance for life, the UAW has already planned on taking that over starting 2010.

 

Strike is ALWAYS THE LAST RESORT. No one wants to strike. Even if management won't even listen, come to the arbitration table or flat out tell the workers to go f themselves. A very small percentage of contract negotiations lead to strike.

[Gordio]

Multi-million dollar salaries fraction or not should be reduced dramatically. I have said from day one that contracts are high. I do believe it's not due to wages. As stated before it's health care on many levels as well as pension plans... both of which are and continue to be worked on.

 

Double time is for Holidays, Weekend is time and a half. And yes, every worker when they come in for overtime sits on their ass. That is the thing I get tired of hearing. People hear a bad story here or there about someone a-hold who abused the system and their job and every union worker is like that. It's BS. And in regards the health insurance for life, the UAW has already planned on taking that over starting 2010.

 

Strike is ALWAYS THE LAST RESORT. No one wants to strike. Even if management won't even listen, come to the arbitration table or flat out tell the workers to go f themselves. A very small percentage of contract negotiations lead to strike.

 

I could only tell you from my father-in-law's & brother-in-laws experience this is what happened at American Axle.

 

First my father-in-law. Like I said earlier, he had high seniority so when things were going good he could basically work any overtime he wanted. He would work 13 straight days before they would make him take a dayoff. I once asked him how he could work so many hours & said it was not really work, we had bbqs, played cards stuff like that. I am not exaggerating. He was classified as a janitor yet he would often brag to me that he was making well over a 6 figure salary. Never paid a dime for medical or dental.

 

Now my brother-in-law. I love him & he is a good guy. He barely got out of high school, no education, no skills, but there GM/American Axle was welcoming him with open arms making 60-70k per year; as an uneducated 18 year old!!! These jobs were not open to the general public though, you had to know someone to get in. That is why I get a kick out of reading these stories where GM has had 4 generations of families working for them. No sh**t because if you did not know somebody you could not get in. They do not care about hiring the best, & hiring people that take pride in their work, just lets keep it in the family. Towards the last 4 or 5 years my brother-in-law would get laid off 4 or 5 months at a time. You would think that would put him in a tough spot right? Not at American Axle. He would get sub pay so after his unemployment AA would kick in the rest & when it was all said & done he would get 95% of his pay. Name one other company in the private sector that would do that. He did get let go for good last December. But even then AA keeps giving, even when facing financial ruin. He got a $100K buyout check & 1 full year of benefits. Plus they would pay for his school for up to a year.

 

I used to pretty bitter about the whole situation. I mean I got my 4yr degree from Syracuse, got my MBA from Canisius College & my first job right out of school I was making 1/2 of what my uneducated brother-in-law was making. Moving up the company ladder & making a decent living myself now, I am no longer bitter at the situation but I must say that the greed of the union & their employees have really put GM behind the 8 ball. You will never convince me otherwise. The problem I have with Union people like the UAW is they think that GM owes them something. GM does not owe them a God Dam thing. Having a well paid job is not a right, it is a privledge. Anyways, that is my 2 cents.

[ExiledInIllinois]

Because people believe Consumer Reports and buy inferior Japanese cars even though American cars kick ass. Don't you understand how markets work yet? Haven't been reading EII's posts?

 

 

I never said that. I said, watch the quality slip... It is already slipping. Oh, and if you do have a problem with some of the Jap brands... Good luck... If they don't bury the service bulletin first, and it steps out of warranty... Double good luck... After all, it is your fault.

 

Gotta hand it to them... The Jap Big 3 have built quite a good business back biting at the American whipping boy. And true, as in good Japanese form, it all started because it was the American's fault for making crappy cars years ago.

 

Now put Consumer Reports into the equation... And you have quite a stronghold on the market.

[John Adams]

I never said that. I said, watch the quality slip... It is already slipping. Oh, and if you do have a problem with some of the Jap brands... Good luck... If they don't bury the service bulletin first, and it steps out of warranty... Double good luck... After all, it is your fault.

 

Gotta hand it to them... The Jap Big 3 have built quite a good business back biting at the American whipping boy. And true, as in good Japanese form, it all started because it was the American's fault for making crappy cars years ago.

 

Now put Consumer Reports into the equation... And you have quite a stronghold on the market.

 

I get your point. I think of it as the "Single Axle Theory." It goes like this: Japanese cars suck and American cars kick ass and it's all some big conspiracy of Japanese car makers not honoring warranties and Consumer Reports is in on it." Somehow all of this totally fools the entire marketplace except you and 3 other people "in the know." Did I miss anything?