Are UAW Union Bosses Abusing Their Positions for Pay?

[Vanadium 50]

Momentum isn't the key issue, it's energy. And while you have more energy in a heavier vehicle you also have more ways to absorb it.

 

[WarPhalange]

Right, like through the cushioned seats, the dvd player, extra cup holders, etc.

 

[Ivan Seeking]

A very good discussion, as always.
http://abcnews.go.com/Video/playerIndex?id=6315870

George Will makes a point about GM that has had me concerned as well. They intend to market the plug-in hybrid, Chevy Volt, as a part of their recovery plan, but they can't yet make a profit with that car. The government is providing a $7500 tax credit to motivate the buying public, and even then, GM makes no money. I forget the exact number, but the break-even price for for the Volt was something like $35,000. Who wants, in effect, a $40,000 Corolla? I am all for plug-in hybrids, but there appears to be profoundly unrealistic expectations, esp in a collapsed economy.

 

[Greg Bernhardt]

We don't need three car companies in the states. I don't mind helping Ford or GM, but Chrysler is pure garbage and needs to die. No way can we give Chrysler, a private company, tax payer money.

 

[drankin]

It would be safer with smaller cars, period. Crashes involve less total momentum involved (lol 0 if they're going the same speed at each other), and hitting a pedestrian or cyclist is a lot less damaging when it's done by a go-kart than a tank.

The more steel you have around you the safer you will be. Common sense, really. I'd rather run off the road, run into an immobile object, or crash into a semi with my Silverado than my Neon. Of course, if we slowed everyone down and put them in go-carts we'd be safer. But you still need trucks and semi's on the road to transport goods. No way around that.

 

[Office_Shredder]

No way can we give Ford, a private company, taxpayer money.

How is that statement any different Greg?

 

[nuby]

We don't need three car companies in the states. I don't mind helping Ford or GM, but Chrysler is pure garbage and needs to die. No way can we give Chrysler, a private company, tax payer money.

Amen to that. Dodge is pure garbage, but newer Mercedes and Chrysler cars are OK. I think.

 

[Proton Soup]

chrysler is crap, and gm is overpriced. let them both sink.

the thing i don't get though is they're only asking for a few billion each. don't these companies have some collateral to put up? if this is life or death, then you put it all on the line. if GM had a yard sale today, just how much would its assets be worth?

 

[mgb_phys]

No way can we give Ford, a private company, taxpayer money.
How is that statement any different Greg?

Chrylser is owned by a VC firm, Cerberus Capital Management, they bought it when Merc realized what a pile of ... they had bought and dumped it.
Cerberus Capital Management haven't put any investment into it as a car company - they bought it at a bargain price as an investment/gamble. If you bail them out then you should also pay off any day trader whose shares went down.

 

[turbo]

Michael Moore pointed out recently that the government could buy GM's common stock for $3 billion and take ownership instead of giving them huge unsecured loans.

 

[jreelawg]

I think that one major problem is that bankruptcy is the system designed to save companies and allows the government to get involved and work the problems out. In this case, they say it is different because people won't buy a car from a company in that position. So, in my opinion, if that is really the case, then the law is flawed, and there is no system for car companies in this position. If the government decides that car companies cannot go bankrupt, then a new system unique to the car industry needs to be established that allows the same kind of process as bankruptcy under another name, and that going through that system is required in order to get bailout money.

Someone from "Moody's Economy" (the last speaker at the most recent big 3 bailout hearing stated that he estimated that the amount needed to keep them afloat would be more like 75-130 billion, or something like that. That is more than twice the amount proposed. The funny thing is that congress seamed to be unaware of this, until then, and the big 3 seam to be reluctant in stating exactly how much they will need in the long run.

In bankruptcy court, the big 3 would be forced to be entirely honest and audits etc, would make the government fully aware of the situation and the information required to make a sound investment, would be handed over. As is, the big 3 are just trying to get the money, and not kicking down key information.

The big three offered to pay a 1 dollar salary a year to their CEO's. But, that just seams like an extremely over obvious useless gesture, only reinforcing the fact that limiting CEO salary means nothing because bonuses can be given providing them with as much as they want. It is this kind of dishonesty that makes me uneasy. When Chris Dodd claims he is not just going to hand over a blank check, he said the same thing about the 700 billion bail out, yet there seams to be exactly that.

 

[mgb_phys]

Michael Moore pointed out recently that the government could buy GM's common stock for $3 billion and take ownership instead of giving them huge unsecured loans.

Wasn't giving people loans for 10x the value of their assets how we got into this mess in the first place?

 

[turbo]

Wasn't giving people loans for 10x the value of their assets how we got into this mess in the first place?

Sounds familiar, as well as giving loans to entities with no ability to repay them. The Big 3 are bleeding money through their own ignorance and short-sightedness, and they want the taxpayers to give them more. They need to get their house in order first. I would rather see them bought out by the Japanese, who actually seem to be able to make cars Americans want and trust.

 

[turbo]

As an object lesson, apart from a Volkswagon diesel that my 82 year old father bought when he and 3 other guys had to carpool quite a long distance to work everyday after the mill they worked at closed (economy first!) he has only owned US-branded vehicles. He recently bought a used Buick Park Avenue Ultra, and it nickeled and dimed him to death in the first few weeks. I nagged him until he agreed to cash in a CD that he had been saving to give to us kids, and I took him to the Subaru dealership. My wife's Legacy is as steady as a rock, with full time AWD, traction control, ABS, etc, and it is WAY better than my Nissan 4x4 in snow and ice. I suggested a Forester with auto transmission, since he has arthritic knees like me, and he took one for a test drive. They passed him from a salesman to the sales manager, etc, playing games, but I got them back. I couldn't visit the showroom/sales area because of my bad reactions to colognes, etc, so every time they came to him with a new proposal, I had him drag them out to the parking lot so I could hammer on them. I got them to come down over $2000 (about 10% and somewhat under $20K total) before we agreed to a deal. Every time Dad calls me, he raves about that vehicle, and I am considering buying one. My old pickup has great suspension for load-carrying, but it rides like a buckboard unloaded and the rear-end is very loose in icy conditions.

The auto trannie has a flexible shift-point system so that if you flick the shifter toward you when it's in Drive, the trannie stays in lower gears longer, and shifts at higher RPMS, so that rig really scoots. Get on a highway, and flick the shifter away from you to drive it to higher gears and lower RPM shift points for better gas mileage. What a sweet ride.

Can't the US car companies figure out how to build powerful fuel-efficient AWD cars nicely-equipped at the $20K and under price point?

 

[russ_watters]

Michael Moore pointed out recently that the government could buy GM's common stock for $3 billion and take ownership instead of giving them huge unsecured loans.

I'm not sure what he thinks that would do to help - GM needs operating capital and just buying the stock doesn't change that.

 

[Proton Soup]

I think that one major problem is that bankruptcy is the system designed to save companies and allows the government to get involved and work the problems out. In this case, they say it is different because people won't buy a car from a company in that position. So, in my opinion, if that is really the case, then the law is flawed, and there is no system for car companies in this position. If the government decides that car companies cannot go bankrupt, then a new system unique to the car industry needs to be established that allows the same kind of process as bankruptcy under another name, and that going through that system is required in order to get bailout money.

it's BS. there will be no shortage of spare parts or mechanics. dealerships handle multiple brands these days, and will gladly service your chevy. only drawback is the warranty may go bad, so ask for a discount on that basis.

 

[mgb_phys]

I'm not sure what he thinks that would do to help - GM needs operating capital and just buying the stock doesn't change that.

I think his point was - would you loan a loss making business worth $3Bn, $25Bn and hope they turned around? And if you did wouldn't you like some seat on the board and more control on how they spend it than a promise to pay the CEO in bonuses rather than salary and reduce the number of executive jets?

 

[turbo]

I'm not sure what he thinks that would do to help - GM needs operating capital and just buying the stock doesn't change that.

Buying the stock gives control over the company, including voting in a board that will make needed reforms. I certainly wouldn't turn over GM to a loose cannon like "Chainsaw" Al Dunlap, but that company really needs a good enema at the corporate level.

When Ford closed its Marysville OH plant saying that it was unproductive, Honda bought it, retooled and started producing the Accord - the car (at the time) with the highest percentage of US-made parts, using skilled labor from the old Ford work-force. Neither the plant nor the workers were "unproductive" - Ford mismanaged that place into the ground, and Honda bought it for a song and stole their lunch. Until Ford started "selling" huge volumes of Taurus sedans to themselves (Ford Leasing, which supplied rental-car companies and corporate fleets), the Accord was the highest-volume-selling car in the country and all the sales were one-at-a-time sales to retail customers.

 

[Proton Soup]

I'm not sure what he thinks that would do to help - GM needs operating capital and just buying the stock doesn't change that.

it gives you complete control over the situation. and you get something for all that risk you're taking.

 

[WarPhalange]

I'm not sure what he thinks that would do to help - GM needs operating capital and just buying the stock doesn't change that.

$3B won't change that?

 

[turbo]

$3B won't change that?

$3B and a drastic house-cleaning at the top would sure have a better chance than giving GM unsecured loans for many times that amount. If the new management managed to turn the company around, the Treasury might make a nice profit taking the company public after the turn-around.

 

[OmCheeto]

$3B and a drastic house-cleaning at the top would sure have a better chance than giving GM unsecured loans for many times that amount. If the new management managed to turn the company around, the Treasury might make a nice profit taking the company public after the turn-around.

How many employee's do the big 3 employ? 500,000.
3 gigadollars is enough to pay each of those employee's about $6000.

Hmmmm...

I say we have Obama buy the companies, put Johnathan Goodwin and Neil Young in charge of the whole thing, and see what happens by May.

About time them god, um, er, um, gosh darned hippies went to work.

 

[mheslep]

I'm not sure what he thinks that would do to help - GM needs operating capital and just buying the stock doesn't change that.

Well it can. What's done in those cases is the company would just make another stock offering, and in this case the government is the buyer. Tends to irk the existing stock holders.

 

[mheslep]

$3B won't change that?

He meant that if the government just buys existing public shares on the market, the money just goes to into the hands of the existing public shareholders who are selling their shares, and not to the company. The government would indeed gain control and the shareholders get bailed out, but the company is still illiquid and goes under.

 

[mheslep]

A very good discussion, as always.
http://abcnews.go.com/Video/playerIndex?id=6315870

George Will makes a point about GM that has had me concerned as well. They intend to market the plug-in hybrid, Chevy Volt, as a part of their recovery plan, but they can't yet make a profit with that car. The government is providing a $7500 tax credit to motivate the buying public, and even then, GM makes no money. I forget the exact number, but the break-even price for for the Volt was something like $35,000. Who wants, in effect, a $40,000 Corolla? I am all for plug-in hybrids, but there appears to be profoundly unrealistic expectations, esp in a collapsed economy.

It may be worse than that. As understand the bankruptcy laws, a company in Chapter 11 is prohibited from running any operations at loss. At least was my experience working with a large firm that went Chapter 11 years ago. They thought it would be business as usual, but their competitors took the market away from them by bidding on contracts at below cost where it was known follow-on work would be profitable, and the Chap 11 firm could not follow.

 

[mgb_phys]

You can't trade fraudulently - eg.you can't enter into contracts you know you can't pay.
You can run at a loss for years in chapter 11 - that's how the airlines survive.

 

[jreelawg]

I don't think it is any secret that the big three might fail. Plus the fact that the reasons seam to agreed by the public that they sell bad cars and have poor service. If anyone buys from the big three, they will probably just do it to help america out of patriotism. If people understood that bankruptcy doesn't mean out of business and that it is designed to keep them from going out of business, then they should be more assured buying from them under chapter 11 than not.

Thats why they need a new name for auto company bankruptcy, because no one knows what it means. Change the word to restructuring court, and people would be all for it.

 

[drankin]

I don't know why everything thinks they make bad vehicles. My Chevy has more than 100k miles and is still running strong. A good looking truck with lots of creature comforts etc. They make junk too but they all do if you get their lower lines. I don't think the competitors from Japan and Korea have the labor issues we do here.

 

[baywax]

It would be interesting to see what kind of vehicles came out of a Government owned auto manufacturing plant.

How much money has the American government already let slide in the direction of the oil companies, over the last 20 years, in the form of tax relief?
edit: Does the cost of the Iraq war figure into the benefits oil companies have received from Government...? (hefty figure)

Has the same amount been forgiven over the same period of time for the auto industry?

Is this request for 38 billion dollars a symptom of the auto industry playing catch up with the much molly coddled oil industry? Or is this a completely separate condition?

(I was thinking of buying a Chevy Optra or Aero just to help out the industry and I'm not even American. This crisis is a great sales pitch.)

 

[Ivan Seeking]

I don't know why everything thinks they make bad vehicles. My Chevy has more than 100k miles and is still running strong. A good looking truck with lots of creature comforts etc. They make junk too but they all do if you get their lower lines. I don't think the competitors from Japan and Korea have the labor issues we do here.

Toyota cars are just broke-in at 100K. Try 300K. That's how long we drove our first Celica. And over that time, we replaced brakes, clutches, standard maintenance [filters and fluids], and we had one leaky front engine seal at about 200K. I also had to replace an AC line that had cracked, and the heater fan motor went bad and had to be replaced. That was it. We sold the car running. We now have our third and forth Toyotas, and we are getting ready to buy our fifth.

Our Camry gets 35 mpg on the highway. It's a four-door and a sweet-driving car.

 

[Office_Shredder]

Has the same amount been forgiven over the same period of time for the auto industry?

Is this request for 38 billion dollars a symptom of the auto industry playing catch up with the much molly coddled oil industry? Or is this a completely separate condition?

Why are the oil and auto industries competing here? I'm confused

 

[baywax]

Why are the oil and auto industries competing here? I'm confused

I am using the two private industries as comparables not as competitors. In the past, gas and autos have gone hand in hand. Hopefully, for the sake of security, independence and the health of many nations, that will change.

I'm simply pointing out the fact that there is this great outcry against tax dollars supporting the private auto industry yet barely a whimper when it comes to tax dollars (in the form of tax relief and military intervention) supporting what was a burgeoning private gas and oil industry.

 

[BobG]

I don't know why everything thinks they make bad vehicles. My Chevy has more than 100k miles and is still running strong. A good looking truck with lots of creature comforts etc. They make junk too but they all do if you get their lower lines. I don't think the competitors from Japan and Korea have the labor issues we do here.

Here's the difference between wages foreign automakers pay at US plants and US automakers pay at US plants: UAW Losing Pay Edge

You can't make a direct comparison since the pay is usually structured differently. Foreign, non-union plants pay slightly lower base wages and require employees to contribute to their own health insurance plans, but foreign companies have paid bigger bonuses to employees. With auto sales down, period, I doubt the workers at foreign owned plants have made much in bonuses this year (and probably won't next year, either).

On the other hand, here's who the US companies pay: http://www.uaw.org/barg/07fact/fact02.php

US auto workers are paying 180,000 current employees and 540,000 retirees and retiree surviving spouses (at GM the ratio is 75,000 to 340,000). The retiree benefits are where the myth of $73 an hour labor costs for US companies. It's true, but it doesn't mean US assembly line workers are making $140,000 a year.

The solution for US automakers is obvious. Throw the retirees under a bus.

How ethical is that solution? Employees took less pay in return for the promise of retirement benefits - just the same as employees in any job pay money into Social Security with the promise they'll be paid back when they retire.

Of course, the solution to that problem will be the same as the solution to the US autoworkers problem. All these damn young people will vote to cut off our Social Security! :grumpy: They'll throw all of us old people under the bus!

 

[Topher925]

If they do give the big 3 a bailout, then part of the decree better include getting rid of the UAW. The $73 per hour thing may be a myth but many auto-line works are still taking home six figure salaries. I know this for a fact because I know many of these workers personally. The UAW is helping kill the domestic auto-industry and EVERYONE knows it. Its time law makers and the corporations get together to get rid of the unions once and for all or else the big 3 are guaranteed to continue struggling.

This is a truly screwed up web that has been weaved. But I don't think it can be solved by throwing people under a bus. Maybe it will be better for the big3 to go under and just let the foreigners make our cars from now on. They certainly seem to be doing it a lot better than we are.

 

[mgb_phys]

It would be interesting to see what kind of vehicles came out of a Government owned auto manufacturing plant.

http://a905.g.akamai.net/7/905/36356/v0001/www.myride.com/images/vehicle/2008/audi/r8/oem/R8060005_large[1]_(400x300).jpg

(golden share owned by the lower saxony state goverment)