Major auto execs return to Hill to ask for aid

[Chris]

I'm curious what the itemized cost of building a car at GM actually is.  I poked around for a little bit yesterday hoping to stumble across a document or two and found nothing. 

What if I could buy a new Chevy Malibu (which is a nice car) for $15,000 instead of the $20,000 it invoices for.  I wonder how much the "creature comforts" add to the price of a car and why they are unable to compete on price, if not quality.  Pretty wheels?  Power windows?  Fancy stereo?  All that junk can be added after-market if you really want it.  They call them "base" models for a reason.  Not to mention union-negotiated labor costs GM $75 an hour compared to the $40-50 that non-UAW plants pay. 

I have serious doubts about management, and giving the same idiots more money is not the answer.  How hard is it to take an existing platform and mix-and-match it into a new product?  The 1953 Corvette was a damn Oldsmobile!  Lee Iacocca did it at Chrysler in the 80's with their K-car.  Twenty years ago, you couldn't walk fifty feet in a parking lot without seeing half a dozen iterations of some K-car.  GM poured money into the Kappa II platform for the Solstice/Sky just to axe it because it costs more to produce than they earn on one.  The Solstice is a hot little car.  I would love to have one if they could knock about $7000 off the price so I can afford one.

It's time to put the Excitement back in Pontiac.

[Toastedturningtidelegs]

The last Union Employee, I guess.

It's not just the unions Free. The management at all three companies share the blame in this as well!{They didn't have to agree to those contracts!} In all fairness The UAW has made concessions concerning cost sharing with the health care{something that until a few years ago was unheard of in that industry} It just wasn't enough. It's the huge pool of retirees sucking those companies dry along with their product reliability issues still hanging over them from the 80's and 90's...whether earned  or not at this time. It does hurt their sales. One thing however...I was under the impression that this was a loan...not a bailout? Still I understand your point about the union. They forgot that the better the company does the better the membership does. Alot of greed on both sides of the table got them to where they are today. IMO  

[Chris]

I was under the impression that this was a loan...not a bailout? Still I understand your point about the union.

Waggoner is referring to it as a loan.  If they can pay it back remains to be seen.

[Ptarmigan]

May as well bailout every company while we're at it. Let'em all crash. They became another welfare agency for workers because of the UAW.

[Crazy Horse]

The times for unions in this country is over. They are sucking the life blood from many industries including the car makers. Let them file chapter 11 and get new contracts are become Union free. That is really the best option for all of us.

Signed.........former International Association of Machinist and Aerospace Workers member

[Chris]

Chris, you might be surprised to hear that Toyota and Honda have cited the very same concept you've mentioned.... the mix and matching of a platform and components into different vehicles, as a pivotal means of cost reduction, flexibility, and profitability!  

Roger Smith abused the hell out of badge-engineering during his tenure.  Does the Cadillac Cimmaron ring any bells?  They should have at least put some effort into making it look different.

[rich_t]

How much does the average UAW worker earn per hour?

[Chris]

How much does the average UAW worker earn per hour?

The figure I heard (from Rush Limbaugh and a few other sources) is the cost to employ a UAW worker at a GM/Ford plant is $75 an hour if you include health and retirement benefits.  I haven't actually seen any supporting evidence, but I have a feeling the UAW wouldn't be too generous with that kind of information.

I have a friend that works at Peterbilt that is a UAW member and earns $50k a year and is in his mid-40's.

[rich_t]

The figure I heard (from Rush Limbaugh and a few other sources) is the cost to employ a UAW worker at a GM/Ford plant is $75 an hour if you include health and retirement benefits.  I haven't actually seen any supporting evidence, but I have a feeling the UAW wouldn't be too generous with that kind of information.

Thanks, but I was asking more along the lines of hourly wage.  A retired UAW member called into Rush's show yesterday and claimed he was making $25 an hour when he retired 2 years ago at age 55.

[Chris]

Chris, would you find it odd, if while your supervisor was saying your wages are 'X' when they factor in your retirement benefits over a given 'Y' amount of time; yet you know very well they haven't paid into the retirement fund during the entire 'Y' time.  Would you not begin to question the rest of those figures?  Especially when they refuse to break them down, and become agitated when you point out contradictory info that they weren't aware you had gained access too?

All I have to go on is the information that is available publicly.  I don't know.

I think the auto companies should use bankruptcy to dump the UAW and half of their management.  But it won't happen.

[rich_t]

How much are current UAW auto industry wages?

In 2006 a typical UAW-represented assembler at GM earned $27.81 per hour of straight-time labor. A typical UAW-represented skilled-trades worker at GM earned $32.32 per hour of straight-time labor. Between 2003 and 2006, the wages of a typical UAW assembler have grown at about the same rate as wages in the private sector as a whole – roughly 9 percent. Part of that growth is due to cost-of-living adjustments that have helped prevent inflation from eroding the purchasing power of workers’ wages.

UAW LINK

I wonder what sort of positions they consider to be skilled-trades worker.  Also $27.81 per hour is pretty damn high for unskilled labor.

[Chris]

I wonder what sort of positions they consider to be skilled-trades worker.  Also $27.81 per hour is pretty damn high for unskilled labor.

I'm sure they have it all neatly defined and categorized.  Installing trip pieces and headlight covers?  Probably not, but where do you draw the line?  There are lots of opportunities to pad the books here.

[Chris]

How much are current UAW auto industry wages?

In 2006 a typical UAW-represented assembler at GM earned $27.81 per hour of straight-time labor. A typical UAW-represented skilled-trades worker at GM earned $32.32 per hour of straight-time labor. [/url]

Even unskilled labor at $27 an hour costs the company $50,000 a year and that doesn't include health, pension, taxes, and unemployment benefits.  On top of the UAW agreements to pay workers their full salary during down-time and days they would normally work but aren't, due to demand or re-tooling (I think they called it Time Bank or something like that).

[rich_t]

I'm sure they have it all neatly defined and categorized.  Installing trip pieces and headlight covers?  Probably not, but where do you draw the line?  There are lots of opportunities to pad the books here.

No doubt.

If I could buy a GM car that was of the same quality and features/options of say my wife's Accord for roughly the same price...  I'd buy the GM product.

But when the GM product costs thousands more...  I'm going with the Honda.

[rich_t]

Even unskilled labor at $27 an hour costs the company $50,000 a year and that doesn't include health, pension, taxes, and unemployment benefits.  On top of the UAW agreements to pay workers their full salary during down-time and days they would normally work but aren't, due to demand or re-tooling (I think they called it Time Bank or something like that).

I have a cousin that works for a UAW shop.  He gets something like 95% of his pay plus benefits when they shut down his shop for 3 months each year.  At least he was a couple of years ago.  I haven't seen him recently.

[Chris]

No doubt.

If I could buy a GM car that was of the same quality and features/options of say my wife's Accord for roughly the same price...  I'd buy the GM product.

But when the GM product costs thousands more...  I'm going with the Honda.

GM/Ford has gotten better with their quality.  Mercury and Chevrolet are up near the top in initial quality (first three years of ownership).  They just need an entire overhaul of management, business practices, and outlook.  They need people like Ray Wert and Robert Farago on their board, people who actually care about cars that aren't bean counters and union thugs.  A 1974 Ford Maverick or 1976 BMW 2002 turns me on more than anything Detriot shits out on a daily basis.

[Chris]

As was recently explained to me, a person is unskilled if they don't have an MBA from the proper school, along with Six Sigma Black Belt certification!

The Six Sigma thing is a joke, but I don't buy the MBA thing.  "Skilled" are your electricians, engineers (motor and engine workers)... shit like that.

[Chris_]

The average UAW worker in Detroit's big 3 earns about $73.00 per hour, straight time. [40 hours]  That includes retirement, medical, dental, Rx, Glasses, vacations, and paid holidays.  As of news reports today, the CEO's opf those same big 3 companies flew in there private jets to beg for taxpayer money, it wasn't mentioned how the head of the UAW got to Washington, DC.  Each flight is estimated to have cost $20,000.00 [X 3 = $60,000.00].  GM is reported to have 8 private jets for their execs, with a cost of over $100 million per, and the CEO of Ford reportedly earned $36,000,000.00 in total compensation last year.  And yet these prima donas have the gall to ask the American workers that averages about $27.00 per hours to bail them and their unions out to the tune of $25 billion.  Until the mid 80's I lived in a northern suburb of Detroit, owned a business not related to the auto industry, but had to compete with the salaries and benefits back then with my employees.  I still have many relatives up there that work for the auto industry in some form, but I can and will say  - screw the big 3 - let them file chapter 11, clean up their mess or go under - I hope Congress finally wakes up and says NO.

[rich_t]

The average UAW worker in Detroit's big 3 earns about $73.00 per hour, straight time. [40 hours]  That includes retirement, medical, dental, Rx, Glasses, vacations, and paid holidays.  As of news reports today, the CEO's opf those same big 3 companies flew in there private jets to beg for taxpayer money, it wasn't mentioned how the head of the UAW got to Washington, DC.  Each flight is estimated to have cost $20,000.00 [X 3 = $60,000.00].  GM is reported to have 8 private jets for their execs, with a cost of over $100 million per, and the CEO of Ford reportedly earned $36,000,000.00 in total compensation last year.  And yet these prima donas have the gall to ask the American workers that averages about $27.00 per hours to bail them and their unions out to the tune of $25 billion.  Until the mid 80's I lived in a northern suburb of Detroit, owned a business not related to the auto industry, but had to compete with the salaries and benefits back then with my employees.  I still have many relatives up there that work for the auto industry in some form, but I can and will say  - screw the big 3 - let them file chapter 11, clean up their mess or go under - I hope Congress finally wakes up and says NO.

Just curious...  Where are you getting your $27.00 per hour figure?

[Toastedturningtidelegs]

I wonder what sort of positions they consider to be skilled-trades worker.

Machinists,tool makers,electricians etc.

[Chris_]

The $27.00 average is just that, a nation wide average according to an article read in the Birmingham News, business section.  Since non-UAW related employees nation wide get varying amounts for benefits, ranging from none to full,  it was taken strickly from salaries without benefits.  The point that was made though, how can companies whose workers earn nearly three times, in wages and benefits, expect those making much less, to bail them out.

One correction to my earlier post though - The Ford CEO's compensation of $36 million was not for last year.  According to A Washington Post article published in the Birmingham News today -- Mulally CEO of Ford only earned $21.7 million last year and Wagoner CEO of GM $15.7 million last year, no figures for Cryslers CEO Nardelli were given.  Also, I think it would be interesting to see the figures that the UAW president, who testified earned and how he got to DC.  When ask by Peter Roskam, R.Ill, if any of the big 3 CEO's, as a symbolic gesture would be willing to work for $1 dollar a year to clean up the mess their companies are in [the same thing Ex-Crysler CEO Lee Iococco did in the 70's, to get the federal governmet to help with a loan for assistance]- Mulally replied "I think I'm OK where I am".

Another intesting article today in the same paper, only this one is from the AP: - The Democratic Congress is unwilling or unable to approve a $25 billion bail out, so they want to "punt the automakers" fate to a lame-duck Republican President.  The only exceptions of coarse are Reps. and Senators from the auto industry states i.e. Sen. Carl Levin D. MI, Sen. George Voinovich, R. Ohio, and Sen. Kit Bond, R. MO, who where trying to placate skeptical Demorats by including a guarantee that the fuel-efficiency loan fund ultimately would be replenished.

In many, including the last election, Michigan [largely because of union support] has been known as a Democratic state.  If the Democratic Congress rejects the bail out it will be interesting to see which way the unions lean next election.

[Chris_]

I don't know DS.

If you can't positively say that "this is the line", then it SHOULDN'T BE DONE. 

No matter how heart-breaking it is for all those autoworkers to lose their jobs, no matter how many other satellite businesses will be affected.  The public coffers are not there to prop up every failed business model in America, and should not be used to prop up select failed business models just because the incompetent business modellers have connections to politicians that you and I don't.

Consider this an intervention.  The Big-3 have so crippled themselves with dependency to the socialism of Unions that they're willing to inflict socialism on the rest of America in order to continue to feed their addiction.  If we feed that addiction it may postpone the inevitable, but inevitably the Big-3 will die; even more painfully than they claim they will die today if they don't get their "fix".  If we give them that "fix" inevitably they will die, and likely take more of America with them.  The proper course is to get them off the drug and into "treatment" - bankruptsy.  Under bankruptsy protection, they will be freed to re-structure their business model without the nagging dependency of the Unions and their deadweight.  The assets that are no longer productive for the Big-3 can and should be sold, but others will buy those assets, and probably use them much more efficiently than the Big-3's Union Dependency allowed them to.

America wil grow from this and move on - IF we have the courage to face and defeat the addiction NOW.

[rich_t]

If you can't positively say that "this is the line", then it SHOULDN'T BE DONE. 

No matter how heart-breaking it is for all those autoworkers to lose their jobs, no matter how many other satellite businesses will be affected.  The public coffers are not there to prop up every failed business model in America, and should not be used to prop up select failed business models just because the incompetent business modellers have connections to politicians that you and I don't.

Consider this an intervention.  The Big-3 have so crippled themselves with dependency to the socialism of Unions that they're willing to inflict socialism on the rest of America in order to continue to feed their addiction.  If we feed that addiction it may postpone the inevitable, but inevitably the Big-3 will die; even more painfully than they claim they will die today if they don't get their "fix".  If we give them that "fix" inevitably they will die, and likely take more of America with them.  The proper course is to get them off the drug and into "treatment" - bankruptsy.  Under bankruptsy protection, they will be freed to re-structure their business model without the nagging dependency of the Unions and their deadweight.  The assets that are no longer productive for the Big-3 can and should be sold, but others will buy those assets, and probably use them much more efficiently than the Big-3's Union Dependency allowed them to.

America wil grow from this and move on - IF we have the courage to face and defeat the addiction NOW.

I agree 100%.

A firm, distinct line needs to be drawn.  All these bailouts are going to do is delay the inevititable.