Letting the Auto Makers fall.

Riverwind · April 18, 2009

Toyota has 200 BIG DIFFERENCE in fact it is the biggest difference and those who blame unions with out mentioning the pensioners make their arguement look dumb.

Unions are the reason why there are so many pensioners.

tango · April 18, 2009

Unions are the reason why there are so many pensioners.

Non union shops have pensions too. This is a false argument. Pensions are a cost of doing business.

Edited April 18, 2009 by tango

tango · April 18, 2009

Why are we bailing out car companies that produce shoddy products? Honda and Toyota make terrific cars that are extremely reliable and fuel-efficient. Chrysler makes garbage cars. GM doesn't make the best cars either. Many Chev vehicles are junk compared to their Japanese competition.
In the end, its really the unions and the workers themselves who are to blame for this. They wanted ridiculously high wages and benefits that these car companies just cannot sustain while also trying to make quality cars AND turn a profit.

If these companies (and workers) want the bailout, they must drastically cut the ridiculas wages/benefits. If they don't agree, let the companies fail.

That's bull-oney.

Workers' wages plus health care costs less in Canada than in the US.

Your argument is inaccurate.

Their wages are not "ridiculously high".

Provide a citation for that claim please.

You were right the first time: They make crappy huge cars that people don't want to buy anymore.

Edited April 18, 2009 by tango

Riverwind · April 18, 2009

Non union shops have pensions too. This is a false argument. Pensions are a cost of doing business.

They are only a cost of doing business when the contributions are not sufficient to cover the liabilities. This happens when unions insist on ever increasing wage and benefits packages even when the company is in decline.

tango · April 18, 2009

They are only a cost of doing business when the contributions are not sufficient to cover the liabilities. This happens when unions insist on ever increasing wage and benefits packages even when the company is in decline.

Well then the company should make sure it is doing business properly so it doesn't go into decline.

Fact is ... companies are going under because they did not plan ahead for business in the future. These are dinosaur companies, and the workers do not control the company's business but rather, are victims of it.

One sign of a dinosaur company is that they treat their workers badly. That's not the way to do business profitably.

punked · April 18, 2009

They are only a cost of doing business when the contributions are not sufficient to cover the liabilities. This happens when unions insist on ever increasing wage and benefits packages even when the company is in decline.

Nope Toyota will have the same problem in 50 years if they run like GM, huge profits when their is no pensioner and smaller ones as people retire. When these people started retiring the companies didn't factor in a lot. Such as people living to be older, competition from over seas and globalization. This has nothing to do with Unions and the right does not seem to get that becuase they aren't looking at real numbers. They let their hate for Unions blind them, problem is though if we don't look at the real problem and solve it, the company will never get better.

Riverwind · April 18, 2009

Nope Toyota will have the same problem in 50 years if they run like GM, huge profits when their is no pensioner and smaller ones as people retire.

Highly unlikely. The pensioner problem with the big three is a result of the bloated workforce that they had forced on them by the union which has been dramatically reduced over the years. This means the number of employees today is a fraction of the number of employees in the past ( i.e. GM had 800,000 employees in 1985 and it only has 250,000 today ). The problem was further aggravated by the need to offer 'early retirement' to get employees off the books because the union made it so difficult to lay people off.

Without unions GM would have never had 800,000 employees in 1985 and would not have same pension issues today.

The legacy cost problems with the big three are union made and there is really no way to deny it.

Edited April 18, 2009 by Riverwind

Riverwind · April 18, 2009

Well then the company should make sure it is doing business properly so it doesn't go into decline.

Companies come and go. That is their nature. The problem is unions get so used to cushy deals with failing companies that they pressure governments to bail them out. The Canadian auto industry would be much better off if Chrysler failed and companies like Fiat came in to pick up the leftovers without the legacy costs. The money spent on Chrysler would be better spent on retraining out of work employees. Edited April 18, 2009 by Riverwind

tango · April 18, 2009

Companies come and go. That is their nature. The problem is unions get so used to cushy deals with failing companies that they pressure governments to bail them out. The Canadian auto industry would be much better off if Chrysler failed and companies like Fiat came in to pick up the leftovers without the legacy costs. The money spent on Chrysler would be better spent on retraining out of work employees.

And what about the pensioners?

Look for a job at 75?

The business model is not sustainable.

They planned to go out of business and leave the pensioners high and dry.

That's not a sustainable business model.

They need to get smarter than that if they want to do business.

bush_cheney2004 · April 18, 2009

.....They need to get smarter than that if they want to do business.

They are....bankruptcy will remove many of their liabilities, including pensioners.

tango · April 18, 2009

They are....bankruptcy will remove many of their liabilities, including pensioners.

Ya ... failing to honour their contractual obligations. :rolleyes:

As I said, not a sustainable business model.

bush_cheney2004 · April 18, 2009

Ya ... failing to honour their contractual obligations.
As I said, not a sustainable business model.

You're not making any sense.....bankruptcy is by definition a failed "business model".

Contracts will be voided in court. Why do you think the government has a pension insurance program (small that is is)?

tango · April 18, 2009

You're not making any sense.....bankruptcy is by definition a failed "business model".
Contracts will be voided in court. Why do you think the government has a pension insurance program (small that is is)?

Maybe it's a cultural gap ... you being a bushcheney an' all.

You are saying this is the way it is ... now ... the company weasels out ... legally. ho hum

And I'm saying we can never allow that business model to continue in the future, because it is clearly not a long term sustainable model for Canada, eh. :lol:

Riverwind · April 18, 2009

And what about the pensioners? Look for a job at 75?

I know a lot of people who have nothing but RRSPs. Their retirement income has been cut in half - at least. Retired autoworkers deserve no special treatment nor special sympathy. If the government wants to get into bailing out retirees it should be giving a little bit to everyone who is in trouble instead of coddling the autoworkers.

The business model is not sustainable.
They planned to go out of business and leave the pensioners high and dry.

That's not a sustainable business model.

Exactly. Which is why they should go bankrupt and allow a stronger company to come in a pick up the pieces. The parts makers don't care if they sell to toyota, chrysler or fiat. The only people that care about chrysler going under are the chrysler workers who are now refusing to face reality. Edited April 18, 2009 by Riverwind

xul · April 18, 2009

The parts makers don't care if they sell to toyota, chrysler or fiat.

They do don't care, but I'm afraid Toyota won't use GM's or Chrysler's parts suppliers. Cars are mass-productive products, so most parts of cars between defferent carmakers are uninterexchangeable. And some carmakers are the holding companies of some their parts suppliers. They won't change unless the price you offered are really alluring--that's almost impossible to Canada.

But even if the unions accepted the wage cutting, I can not see there will be any significant different. How many people who didn't buy a GM or Chrysler car just for the price of the car is $100 or $200 more than a Toyota? There are lots of things beyond the costs of car-making(For example, fuel efficiency,reliability, the cost for maintaince,etc. The users care these more than the price of a car.) and we can not see they have any plans to fix them.

I don't know what is the correct or even the better answer of this question. If someone has a plan and can really fix all these mess, I think he really deserve to get several millions dollars bonus or more, wheter or not he is a CEO, politician or even a union leader.

Edited April 18, 2009 by xul

margrace · April 18, 2009

At the bottom of all this is the view that people are entitled to certain styles of life isn't it. It never seemed important to me what kind of a car or truck one drove as long as it got one from point A to point B.

Spending the winter in the south, spending your money there and using our health care system does not seem practical either. I have no problem with going to the south for a trip but once you have seen it why do you need to go again? Is golf that important?

We seem to have people who expect to be treated like royalty. all one has to do is watch the shows on our TV's. Million dollar homes, million dollar holidays, vehicles such as the Hummers to show how great we are? Why?

Perhaps someone on here can explain to me why I should have a fancier car than you or why I should have a fancier home and a cottage? Why do I need a Hummer? The need to be above others, to be seen as better than the common hoy paloy is a rather strange way to see the world.

punked · April 18, 2009

Highly unlikely. The pensioner problem with the big three is a result of the bloated workforce that they had forced on them by the union which has been dramatically reduced over the years. This means the number of employees today is a fraction of the number of employees in the past ( i.e. GM had 800,000 employees in 1985 and it only has 250,000 today ). The problem was further aggravated by the need to offer 'early retirement' to get employees off the books because the union made it so difficult to lay people off.
Without unions GM would have never had 800,000 employees in 1985 and would not have same pension issues today.

The legacy cost problems with the big three are union made and there is really no way to deny it.

Ohhhhh I see they should fly back in time and talk with the Unions then. You are making no sense when presented with a rational arguement on why this isn't the Unions fault you came back with a revamped arguement on how much you hate Unions. I also like the cherry picking of numbers you know why GM had 800,000 employees in 1985 could be in 1984 they bought EDS for 2.6 billion dollars? How many of those 800 000 were unionized employees are the numbers you have to look if you want to continue to hate the Unions. The Unions weren't the reason they had 800 000 employees in 1985 it was becuase they were one of the biggest companies in the world in 1985. In 1985 GM had about 400 000 Union workers and considering their market share it was about the same as now if not less. So please stop with the re writing of history.

Argus · April 18, 2009

Non union shops have pensions too. This is a false argument. Pensions are a cost of doing business.

There are an AWFUL LOT of non union employers with no pensions of any kind - nor benefits of any kind.

Argus · April 18, 2009

Well then the company should make sure it is doing business properly so it doesn't go into decline.

They probably took their cue from the government. Neither the US nor Canadian government put much effort into actually funding its pension plans up until recently. The Canadian government has taken some steps to increase contributions to help offset payouts, but the US government has not done a single thing. In fact, over the previous decades a number of administrations raided the Social Security trust fund until it ran bone dry. Now, so far as I know, all US pensions are simply paid for out of this year's taxes.

One sign of a dinosaur company is that they treat their workers badly. That's not the way to do business profitably.

Wal-mart treats its employees like slaves, and it makes a very nice profit.

Argus · April 18, 2009

They are....bankruptcy will remove many of their liabilities, including pensioners.

It's interesting that the United States financial industry lobbied (bribed) the US government five or six years ago to bring in a bill (actually it was written by a credit card company) to make it much harder for individuals to declare bankruptcy and escape their financial obligations.

They did this even though the credit card industry specifically targets people who have few financial resources because they can charge them higher rates, and because such people have a hard time paying them back - thus allowing the credit card companies to charge all sorts of extra fees and penalties.

So big business deliberately lures people into becoming overburdened with debt, then won't allow them to declare bankruptcy.

Yet a growing number of large businesses see nothing wrong with slipping into bankruptcy and foregoing their business obligations. No one high in the companies ever suffers from this, after all. Even if, by some oddity they get fired, they'll get their multi-million dollar golden parachute.

Argus · April 18, 2009

The legacy cost problems with the big three are union made and there is really no way to deny it.

Unions are set up to do the best for their members. They behave in a predictable fashion. The only time they get out of line is when employers are dumb, lazy and cowardly. The auto companies were all three, along with being short-sighted in terms of financial acumen, and fossilized in terms of adapting to different times.

If this were China, the top two or three layers of management in all the auto makers would be lined up and shot.

Argus · April 18, 2009

You're not making any sense.....bankruptcy is by definition a failed "business model".
Contracts will be voided in court. Why do you think the government has a pension insurance program (small that is is)?

So the companies get out of their obligations, and I am stuck paying for it. Have I got that right?

And the executives who ran these companies into the ground go home to their multi-million dollar mansions where their servants hand them a nice cold drink they can sip on the pool deck, right?

Riverwind · April 18, 2009

But even if the unions accepted the wage cutting, I can not see there will be any significant different.

Neither do I. Chrysler is dead. I am not convinced that Fiat really wants the business but they are still in the game to see if they can get a really sweet deal. The real question is what the government does to help workers when a major employer shuts down. I see that a better use for the bail out money.

Riverwind · April 18, 2009

The Unions weren't the reason they had 800 000 employees in 1985 it was becuase they were one of the biggest companies in the world in 1985.

Unions have a long standing practice of demanding workplace rules that force employers to hire more people than they really need to do the job. Whether they had 800,000 or 400,000 union workers in 1985 that does not change the fact that they had too many people that they could not easily fire and those people now expect to be supported by the pension funds today.

Toyota and the other Japanese companies won't face those kinds of problems because they are not forced to hire workers they don't need because of union rules.

bush_cheney2004 · April 18, 2009

So the companies get out of their obligations, and I am stuck paying for it. Have I got that right?

Maybe....the provincial guarantee funds uses paid premiums from corporations, and there is no legal responsibility to fund the plan once the money is exhausted.

And the executives who ran these companies into the ground go home to their multi-million dollar mansions where their servants hand them a nice cold drink they can sip on the pool deck, right?

Right, but their pensions are in the same boat.

The social safety net mentality actually eroded some support for defined benefit pension plans.