carepov Posted June 15, 2012 Report Posted June 15, 2012 Because unlike lower skilled labor wages, the supply of qualified executives is much smaller and the best talent commands a premium wage. {Edited to add that union membership actually rewards mediocrity and punishes higher piece rate performers.] It also depends on the industry and level of competition. I agree but up to a certain point. Multi-million dollar salaries + perks, why do shareholders swallow this? Also, you should not paint all unions with the same brush. There are good and bad unions/companies. Millions of dollars for a competent CEO or CFO is well worth it if the corporation is being led successfully, is growing, and pays a dividend! Here is the main point that makes me think something is rotten in the world of Western Corporations. Many companies are terribly managed yet executives take in millions anyways! I agree that is the perception and it does impact employee morale (mostly during lean years), but as you state it is not the major cost driver. Workers in North America are paid wages many times that of so called third world countries, but we don't think that is unfair. Again I agree with the principle, but the level we are at today is absurd. I can see executives making 10-40 times the average salary (this is my understanding of where the levels were historically and also in Japan) but > 100 X! Quote
carepov Posted June 15, 2012 Report Posted June 15, 2012 This is fundamental...I don't know how anyone can make a sound economic argument otherwise. Compete on labor costs or lose the jobs...pretty simple. Simple yes and simplistic. Again, don't ignore labour costs, but don't forget that labour is only a small portion (I am guessing 5%) of the total costs: -Compete on better design -Compete on better sourcing and supplier relations -Compete on reduced inventory and other waste reduction -Compete on energy efficiency -Compete on marketing -Compete on plant safety -Compete on establishing a better Union-Management relationship .... Quote
bush_cheney2004 Posted June 15, 2012 Report Posted June 15, 2012 (edited) I agree but up to a certain point. Multi-million dollar salaries + perks, why do shareholders swallow this? Also, you should not paint all unions with the same brush. There are good and bad unions/companies. And you should not paint all shareholders "with the same brush". Major and minor stakes shareholders influence the process in different ways, but ultimately vote with their portfolio decisions. It is misdirected enmity to focus on executive salaries in the face of larger issues and priorities. Compensation can also affect corporate tax advantages, depending on the nation, state, province, etc. Here is the main point that makes me think something is rotten in the world of Western Corporations. Many companies are terribly managed yet executives take in millions anyways! The same could be said of the poor who reap billions in government benefits, paid for in part by corporate and payroll taxes. Moral value judgements are largely not applicable in this scenario. Should sports figures or media darlings be denied exorbitant compensation based on failure as well? Again I agree with the principle, but the level we are at today is absurd. I can see executives making 10-40 times the average salary (this is my understanding of where the levels were historically and also in Japan) but > 100 X! It is what it is...supported by markets that will pay that and more. I fail to see how correcting this perceived injustice will fix the bottom line or save workers' jobs at failing corporations. Edited June 15, 2012 by bush_cheney2004 Quote Economics trumps Virtue.
carepov Posted June 15, 2012 Report Posted June 15, 2012 And you should not paint all shareholders "with the same brush". Major and minor stakes shareholders influence the process in different ways, but ultimately vote with their portfolio decisions. It is misdirected enmity to focus on executive salaries in the face of larger issues and priorities. Compensation can also affect corporate tax advantages, depending on the nation, state, province, etc. The same could be said of the poor who reap billions in government benefits, paid for in part by corporate and payroll taxes. Moral value judgements are largely not applicable in this scenario. Should sports figures or media darlings be denied exorbitant compensation based on failure as well? It is what it is...supported by markets that will pay that and more. I fail to see how correcting this perceived injustice will fix the bottom line or save workers' jobs at failing corporations. To bring this back to "fix the bottom line or save workers' jobs at failing corporations." I say it is not 100% the Union's fault like I hear you and others saying, they negotiated, and just like you said above "it is what it is" based on the market conditions. I am 100 % against regulating any private sector salary. I take your point about me painting shareholders with the same brush. I just can't understand why the executives of failed/failing companies keep getting huge salaries + bonuses + perks; I am thinking Citibank, BofA, GM, Air Canada, Nortel, HP. If I was working on the floor for GM today facing a 20% cut while executives are padding their bonuses - I would be less likely to work with Management. My thesis is a major cause of non-competive companies is poor union-management relationship/teamwork. The absurd gap between executive and worker pay is a major cause of poor relationships. Quote
bush_cheney2004 Posted June 15, 2012 Report Posted June 15, 2012 Simple yes and simplistic. Again, don't ignore labour costs, but don't forget that labour is only a small portion (I am guessing 5%) of the total costs: -Compete on better design Automobiles have never been better....improvements in design, engineering, emissions, safety, efficiency, plant tooling, materials, supply chain qualification...even recycling considerations have steadily gotten better for all makes, even in Russia! -Compete on better sourcing and supplier relations Done...Tier 2 and Tier 3 supply chains are far better integrated, vertically and horizontally. -Compete on reduced inventory and other waste reduction North America has trimmed annual production and consumption by about 25%...4 million vehicles. -Compete on energy efficiency Take your pick....gas, diesel, hybrid, plug-in electrics, 6 - 8 speed transmissions....much more fuel efficient -Compete on marketing New media is already being exploited for targeted demographics. -Compete on plant safety This is actually a cost center and liability so the incentive has existed for years. Unsafe operations are mitigated and/or automated to reduce repetitive motion injuries, exposure to hazardous materials, boredom, etc. -Compete on establishing a better Union-Management relationship .... Old news from post WW2 Japan and American quality management principles (e.g. Deming)...see kaizen and Toyota Production System. Quote Economics trumps Virtue.
carepov Posted June 15, 2012 Report Posted June 15, 2012 (edited) Automobiles have never been better....improvements in design, engineering, emissions, safety, efficiency, plant tooling, materials, supply chain qualification...even recycling considerations have steadily gotten better for all makes, even in Russia! Done...Tier 2 and Tier 3 supply chains are far better integrated, vertically and horizontally. North America has trimmed annual production and consumption by about 25%...4 million vehicles. Take your pick....gas, diesel, hybrid, plug-in electrics, 6 - 8 speed transmissions....much more fuel efficient New media is already being exploited for targeted demographics. This is actually a cost center and liability so the incentive has existed for years. Unsafe operations are mitigated and/or automated to reduce repetitive motion injuries, exposure to hazardous materials, boredom, etc. Old news from post WW2 Japan and American quality management principles (e.g. Deming)...see kaizen and Toyota Production System. Are you saying that people are buying German and Japanese cars because they are cheaper than American cars? Also, these initiatives are never "done". That is why it is called continuous improvement. Edited June 15, 2012 by carepov Quote
bush_cheney2004 Posted June 15, 2012 Report Posted June 15, 2012 Are you saying that people are buying German and Japanese cars because they are cheaper than American cars? You statement ceases to have meaning in an industry with global suppliers, manufacturing, distribution, and sales. My German automobile was assembled in Mexico with parts from dozens of nations. There is nothing special about Canada (or the USA) in this regard. People buy cars for many reasons besides price. Quote Economics trumps Virtue.
carepov Posted June 15, 2012 Report Posted June 15, 2012 You statement ceases to have meaning in an industry with global suppliers, manufacturing, distribution, and sales. My German automobile was assembled in Mexico with parts from dozens of nations. There is nothing special about Canada (or the USA) in this regard. People buy cars for many reasons besides price. To paraphrase what I heard you say earlier was "cut labour costs and all our problems are solved, simple". Do you stand by this statement? Quote
bush_cheney2004 Posted June 15, 2012 Report Posted June 15, 2012 ... My thesis is a major cause of non-competive companies is poor union-management relationship/teamwork. The absurd gap between executive and worker pay is a major cause of poor relationships. ..and my thesis is that the very existence of an organized labor union is more likely to negatively impact the success of a corporate concern, even when owned by the employees! There is a reason why Canadian Forces cannot legally be unionized. Quote Economics trumps Virtue.
bush_cheney2004 Posted June 15, 2012 Report Posted June 15, 2012 To paraphrase what I heard you say earlier was "cut labour costs and all our problems are solved, simple". Do you stand by this statement? More correctly, I agreed with another member's position that Canada cannot successfully compete for automotive production without cutting labor costs from present levels. I made no mention of "all our problems". Quote Economics trumps Virtue.
Fletch 27 Posted June 16, 2012 Author Report Posted June 16, 2012 Buffoon alert... Now just HOW MUCH do you think that Ferarri would cost if it was made in Canada?????? LOL. You don't even seem to know what you claimed! They make less money per hour at a Ferrari plant, that is true. But you claim that labour costs to make a Ferrari are cheaper than the labour costs to make a Chrysler. Not true at all. And not backed up by your cut/paste job. A Ferrari would take a lot more labour than a Chrysler and would cost a lot more to make despite labour being cheaper in Italy. Quote
carepov Posted June 16, 2012 Report Posted June 16, 2012 More correctly, I agreed with another member's position that Canada cannot successfully compete for automotive production without cutting labor costs from present levels. I made no mention of "all our problems". On this point I misunderstood and the way you put it makes more sense. You may be right now that we lost our "low-dollar-crutch". Quote
carepov Posted June 16, 2012 Report Posted June 16, 2012 ..and my thesis is that the very existence of an organized labor union is more likely to negatively impact the success of a corporate concern, even when owned by the employees! There is a reason why Canadian Forces cannot legally be unionized. Again, I agree. However I am sure that corporate success is achievable with a union. How about this question: in the case of GM circa 2008-2009, who do you think bears the most responsibility for their near-collapse: Union, Management, Board, Government, Others? Quote
dre Posted June 16, 2012 Report Posted June 16, 2012 Again, I agree. However I am sure that corporate success is achievable with a union. How about this question: in the case of GM circa 2008-2009, who do you think bears the most responsibility for their near-collapse: Union, Management, Board, Government, Others? This was most definately management and the emergence of strong competitors from Japan. GM lost market share in north america every years between 1980 and 2006. They built garbage that was simply inferior, and less reliable, and were designed large gas guzzlers while the price of fuel doubled. They also started to put more money into gambling on the stock and foreign exchange market than they put into making cars. Quote I question things because I am human. And call no one my father who's no closer than a stranger
The_Squid Posted June 16, 2012 Report Posted June 16, 2012 Buffoon alert... Now just HOW MUCH do you think that Ferarri would cost if it was made in Canada?????? Then why didn't you say that? Instead, you asserted that a Ferrari is cheaper to make, in terms of labour costs, than a Chrysler. Which is absurd. Yes, they make less in Italy than Canada. I'm guessing labour costs in general are less in Italy. Buffoon? Why the personal attacks. Makes you look petty. Quote
Jack Weber Posted June 16, 2012 Report Posted June 16, 2012 Then why didn't you say that? Instead, you asserted that a Ferrari is cheaper to make, in terms of labour costs, than a Chrysler. Which is absurd. Yes, they make less in Italy than Canada. I'm guessing labour costs in general are less in Italy. Buffoon? Why the personal attacks. Makes you look petty. He's an O'Learyite....Prepare for the free market sycophancy along with the unsubstantiated cheap shots.... Quote The beatings will continue until morale improves!!!
cybercoma Posted June 16, 2012 Report Posted June 16, 2012 Then why didn't you say that? Instead, you asserted that a Ferrari is cheaper to make, in terms of labour costs, than a Chrysler. Which is absurd. Yes, they make less in Italy than Canada. I'm guessing labour costs in general are less in Italy. Buffoon? Why the personal attacks. Makes you look petty. Ferraris, other than paint and the engines, are put together by hand, which is part of the reason they're so expensive. Quote
Fletch 27 Posted June 16, 2012 Author Report Posted June 16, 2012 (edited) Oh no sir... Please let me educate you... On the hourly wage to hand craft a Ferrari Enzo (no longer made but I'm using 2003 numbers). It cost 357,000 dollars to make an enzo LABOR only... If that car was made, now follow me here, In Canada,,,, LABOUR OnLY would be 5,720,000.00....its Very simple math.... Remeadial math.... I must say that the cost of labor in italy is "reasonable" given the cost of the car at 1,1500,000... But how could they lose almost 4 meg in canada? I'm a realist... Numbers work... I have NO idea where your head is at.... Simple... Do the math.... Or I can suggest a tutor.. He's an O'Learyite....Prepare for the free market sycophancy along with the unsubstantiated cheap shots.... Edited June 16, 2012 by Fletch 27 Quote
dre Posted June 16, 2012 Report Posted June 16, 2012 Oh no sir... Please let me educate you... On the hourly wage to hand craft a Ferrari Enzo (no longer made but I'm using 2003 numbers). It cost 357,000 dollars to make an enzo LABOR only... If that car was made, now follow me here, In Canada,,,, LABOUR OnLY would be 5,720,000.00....its Very simple math.... Remeadial math.... I must say that the cost of labor in italy is "reasonable" given the cost of the car at 1,1500,000... But how could they lose almost 4 meg in canada? I'm a realist... Numbers work... I have NO idea where your head is at.... Simple... Do the math.... Or I can suggest a tutor.. All youre really compared when you compare real labor is exchange rates, and the Canadian dollar follows the price of oil as shown here... http://cwf.ca/images/blog-images/Dutch%20Disease-1.jpg So in 2002 your numbers would have been completely different. We could make that ferrari for less than Italy. Its not that unions have bargained for a large increase in wages since 2002 that has changed. Its simply that our dollar is rising in value because mostly because of oil prices. Quote I question things because I am human. And call no one my father who's no closer than a stranger
Jack Weber Posted June 16, 2012 Report Posted June 16, 2012 (edited) Oh no sir... Please let me educate you... On the hourly wage to hand craft a Ferrari Enzo (no longer made but I'm using 2003 numbers). It cost 357,000 dollars to make an enzo LABOR only... If that car was made, now follow me here, In Canada,,,, LABOUR OnLY would be 5,720,000.00....its Very simple math.... Remeadial math.... I must say that the cost of labor in italy is "reasonable" given the cost of the car at 1,1500,000... But how could they lose almost 4 meg in canada? I'm a realist... Numbers work... I have NO idea where your head is at.... Simple... Do the math.... Or I can suggest a tutor.. Wait a minute... Are you suggesting that everythin g that comes off a Big 3 assembly line is handmade??? And you haven't aswered the question that I asked about why is the labour at JAMA Ontario assembly plants similar (slightly less) than Big 3 asembly plants in the same province?? Enquiring minds want to know?? Thrill us with your labour market acumen,kiddo... By the way...It's "remedial"... Edited June 16, 2012 by Jack Weber Quote The beatings will continue until morale improves!!!
Jack Weber Posted June 16, 2012 Report Posted June 16, 2012 All youre really compared when you compare real labor is exchange rates, and the Canadian dollar follows the price of oil as shown here... So in 2002 your numbers would have been completely different. We could make that ferrari for less than Italy. Its not that unions have bargained for a large increase in wages since 2002 that has changed. Its simply that our dollar is rising in value because mostly because of oil prices. Oh no!!! You aren't pitting one region against another are you?? MARXIST!!! Quote The beatings will continue until morale improves!!!
Fletch 27 Posted June 16, 2012 Author Report Posted June 16, 2012 Not at all! The tards assembling autos in Canada could not opperate a CNC machine nore figure out a thou vs a micron! I KNOW we don't assemble by hand in Canada, we souldnt figure "team work" out! But the costs, hour vs hour would make a "canadian ferarri" about 5 meg dollars!!! Read with me slowly here.... AND!!!! I can tell your the director of QA at Toyota in Cambridge makes MORE than the director of QA in the Ford Oakville plant! By about 11,000 dollars... I ride motorcycles with both of them.. I agree hard to substantiate but.. Meet us at the ride for sight this weekend.. I will even buy you a beer.. Jama employees actually do make more (over the pasy 7 years) given profit sharing.. I'm envious of profit sharing actually.. Wait a minute... Are you suggesting that everythin g that comes off a Big 3 assembly line is handmade??? And you haven't aswered the question that I asked about why is the labour at JAMA Ontario assembly plants similar (slightly less) than Big 3 asembly plants in the same province?? Enquiring minds want to know?? Thrill us with your labour market acumen,kiddo... By the way...It's "remedial"... Quote
Jack Weber Posted June 16, 2012 Report Posted June 16, 2012 (edited) Not at all! The tards assembling autos in Canada could not opperate a CNC machine nore figure out a thou vs a micron! I KNOW we don't assemble by hand in Canada, we souldnt figure "team work" out! But the costs, hour vs hour would make a "canadian ferarri" about 5 meg dollars!!! Read with me slowly here.... AND!!!! I can tell your the director of QA at Toyota in Cambridge makes MORE than the director of QA in the Ford Oakville plant! By about 11,000 dollars... I ride motorcycles with both of them.. I agree hard to substantiate but.. Meet us at the ride for sight this weekend.. I will even buy you a beer.. Jama employees actually do make more (over the pasy 7 years) given profit sharing.. I'm envious of profit sharing actually.. Riiiight..All unionized workers are "'tards"... I'm sure you've heared of "kaizan" work cells...We do this in the rail car industry... You do know that Warren Buffett invested over a billion dollars into BNSF about a year and a half ago,right? Are we all simply "'tards" in your free market nirvana??? And how 'bout those forced 60 hour work weeks at non union Toyota and Hinda in Ontario?? Wonder why there's been a few recalls of Toyoats products recently? Edited June 16, 2012 by Jack Weber Quote The beatings will continue until morale improves!!!
dre Posted June 16, 2012 Report Posted June 16, 2012 Not at all! The tards assembling autos in Canada could not opperate a CNC machine nore figure out a thou vs a micron! I KNOW we don't assemble by hand in Canada, we souldnt figure "team work" out! But the costs, hour vs hour would make a "canadian ferarri" about 5 meg dollars!!! Read with me slowly here.... AND!!!! I can tell your the director of QA at Toyota in Cambridge makes MORE than the director of QA in the Ford Oakville plant! By about 11,000 dollars... I ride motorcycles with both of them.. I agree hard to substantiate but.. Meet us at the ride for sight this weekend.. I will even buy you a beer.. Jama employees actually do make more (over the pasy 7 years) given profit sharing.. I'm envious of profit sharing actually.. Again your focus is in the wrong place. You are ranting and raving about wages, and unions but wages have been more or less stagnant for decades. Whats changed is the denomination those wages are paid in. This is entirely a macro-economic / monetary phenomenon. And responding to this by trying to bust unions or drive down wages in certain sectors is a gigantic mistake, because all you do is create an imbalance in our domestic economy. Workers whos wages have been targetted for reduction will no longer be able to afford to buy services from workers who havent. This is why the cost of things like healthcare and college tuition are outpacing inflation by such a big margin. If we want to have a thriving export economy and manufacturing economy you need to address the underlying reason we arent competitive, and you need to address it across the board. The value of our dollar is simply too high for us to compete. Quote I question things because I am human. And call no one my father who's no closer than a stranger
Jack Weber Posted June 16, 2012 Report Posted June 16, 2012 (edited) Again your focus is in the wrong place. You are ranting and raving about wages, and unions but wages have been more or less stagnant for decades. Whats changed is the denomination those wages are paid in. This is entirely a macro-economic / monetary phenomenon. And responding to this by trying to bust unions or drive down wages in certain sectors is a gigantic mistake, because all you do is create an imbalance in our domestic economy. Workers whos wages have been targetted for reduction will no longer be able to afford to buy services from workers who havent. This is why the cost of things like healthcare and college tuition are outpacing inflation by such a big margin. If we want to have a thriving export economy and manufacturing economy you need to address the underlying reason we arent competitive, and you need to address it across the board. The value of our dollar is simply too high for us to compete. What I'm hearing here is that issues of globalization seem to be the problem ,as it relates to floating currency...And conservatives should focus on those things instead of using this as an opportunity to go off on an ideological bent about busting unions?? Edited June 16, 2012 by Jack Weber Quote The beatings will continue until morale improves!!!
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.