Auto industry bailout plan dies in the Senate

[blueblood]

Remove just one executive and cover all the benefits and wages of all the workers.

That is the reality.

My company -- no I am not telling you who -- got rid of NO ONE from the "bottom". They restructured the executives. We were all offered a buy out but not laid off. The execs, however were not so lucky. They got golden handshakes, but they had to take them. Us minions (those people who actually bring money in) had the option to stay working.

As my father always said -- "when your broke never sell your tools" -- workers are tools in business and the Big 3 are selling their tools. Not smart in the scheme of things IMO.

Those "tools" are also pretty useless when they aren't being used. Toyota realizes that by having good employee/management relations, that is a key to a successful business - Toyota treats employees well, employees don't unionize and gouge the company - Toyota ends up paying less salaries and has happier employees and better profit margins. Why can't left wingers grasp this simple concept?

[M.Dancer]

Hurray UAW....

TORONTO — General Motors said Friday it will cut 250,000 vehicles from its first-quarter production schedule by temporarily closing 21 factories across North America.

The move affects some plants in the U.S., Canada and Mexico. Some will be shut down for the whole month of January. Spokesman Tony Sapienza said normal production would be around 750,000 cars and trucks for the quarter.

Meanwhile, in non Union Honda land...

Honda Motor Co. Ltd. said earlier Friday that it will trim production at all its North American plants.

The Japan-based auto maker will cut output by 119,000 between now and the end of March at plants in Alliston, Ont., Ohio, Alabama and a new factory in Indiana that began producing cars just last month.

Output in Alliston will be cut by about 9 per cent, or 37,000 vehicles from 2007 production of about 390,000, Honda Canada Inc. spokesman Richard Jacobs said.

A mix of non-production days and reduced daily production rates bring output down, Mr. Jacobs said.

Employees will not be laid off, but can report to work for training and maintenance, take vacations or take unpaid time off, he said.

http://business.theglobeandmail.com/servle...y/Business/home

[Shady]

You're kidding right? By your figures above GM's CEO earned $9.3 million. GM has 266,000 workers. That works out to $35 per YEAR per EMPLOYEE. Please tell me how you can cover "all the benefits and wages of all the workers" for $35 per employee? Are you suggesting that that $35 should be their yearly pay (including benefits)?

LOL, apparently that's exactly what she's saying. And apparently firing GM's CEO and saving $9.3 million will cover the loss of $38 billion from the 2007 fiscal year. Who knew?

And to top that, GM and Toyota sold about the same number of cars in '07. Yet Toyota posted a $17 billion dollar profit, while GM was in the red at almost $40 billion. Let's all face it. The UAW destroyed the domestic car industry by bleeding their respective companies dry. And now, there's no more water in the well. Sure some of the CEO's need to go. But so do all the union leaders. How about a union Czar instead of a proposed car Czar? To oversee that union's don't destroy the industries their working for.

[M.Dancer]

- Toyota ends up paying less salaries and has happier employees and better profit margins.

Actually Toyota pays more...

In that instance, Toyota Motor Corp. gave workers at its largest U.S. plant bonuses of $6,000 to $8,000, boosting the average pay at the Georgetown, KY, plant to the equivalent of $30 an hour. That compares with a $27 hourly average for UAW workers, most of whom did not receive profit-sharing checks last year. Toyota would not provide a U.S. average, but said its 7,000-worker Georgetown plant is representative of its U.S. operations

http://www.aftermarketnews.com/Item/28594/...s_struggle.aspx

WHat Toyota doesn't have is the albartross of excessive benfiits of retirees hanging on their necks. Notwithstanding the mandatory benefits that all canadian workers enjoy is putting pressure on Toyota Canada...

My biggest competition is not Ford, General Motors or Chrysler," Tanguay said.

"My biggest competition is the other Toyota plants. We're probably the highest in the industry," he said of his Canadian costs.

Those costs are mainly driven by the currency, which affects all parts purchases and the cost of labour.

"There is more than just labour costs," Tanguay said. Benefits cost more in Canada, and there is more labour cost per car than in the U.S. because of more generous parental leaves and vacations.

There are also higher logistics costs, higher payroll taxes, higher fuel taxes and property taxes and electrical rates in Canada. Most large automotive assembly plants are the largest consumers of electrical power in their host cities.

http://www.canada.com/windsorstar/features...51-0ed48f3af951

Rather than bail out the automakers, they should get creative about the charges they incure by doing business in Canada, ie taxes and energy rates.

[Oleg Bach]

Here is what I see. They are sadly attempting to maintain the status quo..It's like the bank deal - They want OUR money and then they want to continue to profit by lending back our money to us at an interest - talk about entitlement of this silly elite - As for the auto bail out - It's the same thing - the government wants to ensure that they and their friends will continue to turn a profit on auto sales - The math is that they expect a reduction in labour costs - so they can take those savings and give it to themselves. This move continues to destroy the middle class who buy home and all the adult luxury items. Its' greed and they are about to wreck the nations if they do not move back from this brinkmanship based in wanting to live in the luxury they are accustomed to. Sure the executives will continue to get big packages - they simply do not want this to stop. The mini- fake scandal about corporate jets was ruse.

[Topaz]

In Windsor On, on their radio, naturally they were talking about this and they came across where a woman in Kentucky that work at Dairy Queen, went to work for Toyota. Her job was to put the seat belts in and cupholders and she MADE $70,000 yrly and I don't know if that was straight wages or benefits mixed in with it. The reasons that the auto sector is in trouble is the CEO's managing and this globalization of the financial institutions which I can't see any sense in, IF one bank gets into trouble they all go down. The cost of wages of a auto only 9-10% of the total price, the dealers have what 5-10% play room of the price. Another question is why all the bitterness toward the auto sector and not also to Wall Street. The CEO's of both sectors have more to so with what happen then the workers who usually end up losing their jobs while the CEO's go on vacations!

[Oleg Bach]

The founders of all these great corporations had visions and expectations and a purpose. Now that most are aged or dead....The purpose for the very existance of the companies is no more - Now the soul purpose of most corporations is to survive at all cost. Greed, lazyness and stupidy rule. Eventually unless some leadership and vision re-enteres the corporate world it will eat it self. If we are now a corporate society - someone had better notify all the people and let them know that they own the corporation...and it's purpose is to provide health,stablity and general well being for ALL it's members...Politicans are not buisness people - they are lawyers and lawyers should not be allowed to rule a steal from our common corporate purse - DOES NO ONE UNDERSTAND THAT YOU ARE TO INSTRUCT COUNCIL? Not the other way around.

[Renegade]

duplicate

Edited December 12, 2008 by Renegade

[Renegade]

In Windsor On, on their radio, naturally they were talking about this and they came across where a woman in Kentucky that work at Dairy Queen, went to work for Toyota. Her job was to put the seat belts in and cupholders and she MADE $70,000 yrly and I don't know if that was straight wages or benefits mixed in with it.

It is hard to believe but even assuming it is true, so what? Perhaps Toyota pays such high wages for unskilled workers because for the most part it primarily competes with the Big Three who pays even higher wages. Perhaps once there is significant pressure to reduce cost, even those manufacturing jobs will be gone.

The reasons that the auto sector is in trouble is the CEO's managing and this globalization of the financial institutions which I can't see any sense in, IF one bank gets into trouble they all go down. The cost of wages of a auto only 9-10% of the total price, the dealers have what 5-10% play room of the price.

I'm not sure that is true, but even if it is, isn't the fate of the auto workers tied to the fate and decisions of management and vice versa? The workers implicitly agree with the managment decisions when they choose to work and stay working at the company. If they disagree with the direction they are free to move to a company who's direction they agree with. Clearly, the premium paid on wages was sufficient compensation for them to overlook any management decisions they did not agree with.

Another question is why all the bitterness toward the auto sector and not also to Wall Street. The CEO's of both sectors have more to so with what happen then the workers who usually end up losing their jobs while the CEO's go on vacations!

The fact that many wall street firms fail is not an excuse to let the auto industry off the hook. Ultimately as taxpayers we should be angry at both the financial industry and the auto industry for coming to us for bailouts.

[Oleg Bach]

If a poor man comes to you for mercy you grant him grace. If a rich man seeks mercy you also grant him grace. This hate of Bay Street is not useful. As is said - he rains on the good as well as the wicked...Lets have some class and allow all to particpate and cure this ill. That would be the wise thing to do.

[Drea]

FORBES: If GM Collapses, Don't Blame The Union

Detroit's current average labor cost is about $71 per hour, compared to $47 an hour at Toyota, which has no unions. But it's misleading to suggest that Detroit autoworkers are paid $71 an hour. About $17 of that is the cost of health care insurance for retirees. General Motors (nyse: GM - news - people ) has 442,000 retirees in North America, four times as many current employees. Toyota has only 371 retirees in the U.S.; Honda has 2,400.

What do autoworkers really make? Detroit's hourly workers earn $28 an hour, or $57,000 a year. (Toyota workers make $25.) Benefits and payroll taxes bring the total cost per worker up to $54 an hour, versus $47 at Toyota. Under a breakthrough labor contract in 2007, new hires in non-assembly jobs will be paid only $14 an hour and will receive less generous benefits, which will narrow that remaining gap considerably.

I think $10 an hour ought to be enough for anyone. Sheesh! Just because I make 50 grand a year doesn't mean everyone should! After all I went to college! I sell stuff and only make money if I work really hard! Those buggers who do the same repetitive boring job do not deserve nearly what I do -- they are simply slave labourers! They should be happy just to have a job, let alone benefits. Sheesh!

/sarcasm.

[Oleg Bach]

FORBES: If GM Collapses, Don't Blame The Union

I think $10 an hour ought to be enough for anyone. Sheesh! Just because I make 50 grand a year doesn't mean everyone should! After all I went to college! I sell stuff and only make money if I work really hard! Those buggers who do the same repetitive boring job do not deserve nearly what I do -- they are simply slave labourers! They should be happy just to have a job, let alone benefits. Sheesh!

/sarcasm.

Ten bucks is socialism..with the usual elite thriving like hogs. Come on now! Let the middle class survive! Take them down a notch but not to much. The million dollar bonus will still prevail...now how many line workers does a million bucks support?

[Renegade]

FORBES: If GM Collapses, Don't Blame The Union

I think $10 an hour ought to be enough for anyone. Sheesh! Just because I make 50 grand a year doesn't mean everyone should! After all I went to college! I sell stuff and only make money if I work really hard! Those buggers who do the same repetitive boring job do not deserve nearly what I do -- they are simply slave labourers! They should be happy just to have a job, let alone benefits. Sheesh!

/sarcasm.

Hey Drea, you forgot to quote another relevant part of the article:

Their job security guarantees and gold-plated benefits have surely cost General Motors, Ford Motor and Chrysler a bundle over the past few decades. Indeed, the domestics' historically high labor costs are among the reasons they haven't been able to compete with Japanese rivals, and why Detroit CEOs were back on Capitol Hill again Thursday asking for $34 billion in taxpayer loans to survive.

While the union isn't the only cause of the failure, they certainly share the blame. The difference between the $54 quoted and the $71/hour total labour rate is mostly attributed to retiree benefits. Guess who negotiated those? Yes, the UAW. Just as much to blame are the auto executives who agreed to them.

I noticed you didn't address your proposal to pay auto workers $35/year. Hmm, what a surprise..

[Oleg Bach]

What is payed a worker and then when he is taxed, is what he is payed. It's a little off target to go on about what middle class workers should not have...it is what they do have that counts - frankly I would keep an eye on the pension fund...after all it is traditional for management or upper unionist to skip town with pension money...If that is absorbed we will all pay dearly in more health costs as the unemployed worker decends into bad health and slowly dies while sucking on a welfare check with a dirty hospital straw. The long term effects of massive layoffs has not been explored here or even considered. Every one is spending far to much time bickering and struggling for the last few dollars that still exists within this dying industy. As the pace gets more frantic and more desperation sets in..It might turn into an every man for him self brawl. Upper management can not bare to fall - where will these executives go after this? No one will want them - so there will be a furious scramble to skim what they can from bail out money that is really one huge BONUS.

[Topaz]

It is hard to believe but even assuming it is true, so what? Perhaps Toyota pays such high wages for unskilled workers because for the most part it primarily competes with the Big Three who pays even higher wages. Perhaps once there is significant pressure to reduce cost, even those manufacturing jobs will be gone.

I'm not sure that is true, but even if it is, isn't the fate of the auto workers tied to the fate and decisions of management and vice versa? The workers implicitly agree with the managment decisions when they choose to work and stay working at the company. If they disagree with the direction they are free to move to a company who's direction they agree with. Clearly, the premium paid on wages was sufficient compensation for them to overlook any management decisions they did not agree with.

The fact that many wall street firms fail is not an excuse to let the auto industry off the hook. Ultimately as taxpayers we should be angry at both the financial industry and the auto industry for coming to us for bailouts.

You are right about being angry but shouldn't we also be angry when a government that has 12 Bil in surplus and another fund with 3 Bil when they blow it all and have nothing when the tough time comes??

[Oleg Bach]

Not having a job or a CAR is not the end of the world - Having an empty treasury is the end of a nation.

[Topaz]

Everyone on here believes that the Big 3 make big wages that MAYBE true for the UAW but I don't think the CAW workers make that much UNLESS it over time. There's also difference in wages because the US companies have to pay health insurance. If we are going to talk wages there are other who make more like the guy who fixes them. GM Mr. goodwrench charges 80-90 hrly to fix those cars. Plumbers charged $60.00 hrly. It possible some people on here make more than the auto workers. Look the guys working on the pipelines , making $1000- 2000 wkly and now the oil sand are in trouble and we'll bail them out and we should or should we?

[Renegade]

You are right about being angry but shouldn't we also be angry when a government that has 12 Bil in surplus and another fund with 3 Bil when they blow it all and have nothing when the tough time comes??

Of course. Experience over the last 25 years shows that the govenment cannot be trusted to save a "rainy day fund". It is clear that government is swayed by political pressure. That is why government should not be allowed to bail out this industry or any other until they have been proved capable mony managers.

[Topaz]

Of course. Experience over the last 25 years shows that the govenment cannot be trusted to save a "rainy day fund". It is clear that government is swayed by political pressure. That is why government should not be allowed to bail out this industry or any other until they have been proved capable mony managers.

Well it too late for that, I do remember giving the farmers chuck of money, the pig farmer's got 50 million alone, of course this was when Harper thought their may be election.Why is they get because of the down turn in the economy, the bad weather etc. So it doesn't really matter what he tax payer think, when industry go down, the government has to be there for them, after all, they are tax payers too.

[Renegade]

Well it too late for that, I do remember giving the farmers chuck of money, the pig farmer's got 50 million alone, of course this was when Harper thought their may be election.Why is they get because of the down turn in the economy, the bad weather etc. So it doesn't really matter what he tax payer think, when industry go down, the government has to be there for them, after all, they are tax payers too.

So what if they are taxpayers too? Being a taxpayer entitles one to a set of services provided by the government, not a govenment handout. If the governement handed out money before, it shouldn't repeat the same mistake again to yet another unsustainable industry. To follow your logic, you would have the government handing bailouts to makers of horse buggies when their industry was eclipsed by more modern technology. Perhaps they would even be making buggies today at taxpayer expense.

Perhaps it shouldn't be the taxpayers who bail out the auto companies, but instead it should be the employees since clearly they are the ones with the most to lose in a failure. Perhaps they should mortgage their homes and take a pay cut and provide working capital in return for an ownership stake. If the employees aren't interested in mortgaging their future, I don't see why taxpayers would want to.

Edited December 16, 2008 by Renegade