Are UAW Union Bosses Abusing Their Positions for Pay?

[montoyas7940]

Toyota, Nissan, and Honda America use 401k's along with a spartan health care plan.

At Nissan we still have a pension plan in addition to a 401k plan. That will probably change very soon. Our management is using the big three predicament as an excuse to squeeze us.
I think to say the health care plan is spartan is being generous.
Honda also has a pension and 401k. I don't know about Toyota.

 

[mheslep]

At Nissan we still have a pension plan in addition to a 401k plan. That will probably change very soon. Our management is using the big three predicament as an excuse to squeeze us.
I think to say the health care plan is spartan is being generous.
Honda also has a pension and 401k. I don't know about Toyota.

Montoyas - care to comment the correctness of published salary averages? GM supposedly paid ~$69/hour including benefits versus $48/hr at Toyota including benefits. Benefits here include pension and health care costs.
http://www.manufacturing.net/News-GM-Vs-Toyota-Wages-And-Benefits.aspx

 

[montoyas7940]

I have heard recently $52.00 an hour for production labor. That number would include all costs. That number is expected to drop to $48 in 2009 and then again to $44 in 2010.

I think the cost per hour for an employee can be misleading however. Something that matters just as much is man hours per unit.

 

[edward]

The Japanese big three also have another advantage. At their assembly and parts factories in Japan the workers have a national health care plan.

 

[Proton Soup]

The Japanese big three also have another advantage. At their assembly and parts factories in Japan the workers have a national health care plan.

how is that an advantage if they have to pay taxes to support it? maybe it costs more.

 

[mheslep]

I have heard recently $52.00 an hour for production labor. That number would include all costs. That number is expected to drop to $48 in 2009 and then again to $44 in 2010.

I think the cost per hour for an employee can be misleading however. Something that matters just as much is man hours per unit.

$52/hr what? Average of all salaries? Or is that the top end? Does that include the benefits (pension/health)?

 

[mheslep]

The Japanese big three also have another advantage. At their assembly and parts factories in Japan the workers have a national health care plan.

Yes GM pays more for health costs than foreign based competitors, but the difference is more complicated than 'they have nation health care.' Japan does have a National Health Insurance system, but that is only for the unemployed or self-employed. The employers still fund the other medical system called SIS, along with premiums paid by the employees - somewhat similar to the way its done here. Japan keeps its costs down in part because the government sets the price for most everything in the medical system - that has other consequences. Most importantly they don't fund their health care through the tax system as the US unfortunately does.
http://www.medhunters.com/articles/healthcareInJapan.html.
http://www.coph.ouhsc.edu/coph/HealthPolicyCenter/Pubs/1992/chpr9202j.pdf
A better comparison for auto makers to my mind is the foreign owned auto makers located here, which operate under the same US health care system but are doing relatively well.

how is that an advantage if they have to pay taxes to support it? maybe it costs more.

The US health care system is very expensive, highest in the world ($/head). Also US corporate tax rates are higher, 35% in the US to 30% in Japan, though with loop holes it can go lower in the US. Detroit can't lean on that excuse either, as again the foreign owned companies in the US have the same problem.

 

[russ_watters]

how is that an advantage if they have to pay taxes to support it? maybe it costs more.

Didn't you know? Nationalized means free!

 

[montoyas7940]

$52/hr what? Average of all salaries? Or is that the top end? Does that include the benefits (pension/health)?

That would be hands on "direct labor" for a "topped out" production tech.

There are many different roles as you might imagine. In the broad classification of production tech the "topped out" pay including all direct employee costs is about $52. That would include pay and all payroll taxes paid by the company. It also includes pension, health care, vehicle purchase discount, lease vehicles, 401k match, uniforms, educational reimbursement...

All of the production techs have topped out as there have been no new hires in many years. And it is not a skills based progression. Pay is based on years of service and tops in about three years I think. Vacation continues to increase until ten years of service.

The company ended the pension for new employees about five years ago; so as time goes on that cost will decrease. It also decreased health coverage for current and future retirees.
We expect that the pension will be frozen for all hourly employees soon. It depends on what the UAW and big three do.

 

[edward]

how is that an advantage if they have to pay taxes to support it? maybe it costs more.

Big corporations have ways of avoiding taxes. If it costs more why would Japan be doing it ?

 

[russ_watters]

If it costs more why would Japan be doing it ?

That's even funnier than your last one!

 

[mheslep]

Didn't you know? Nationalized means free!

Yep, Michael Moore said so.

 

[mgb_phys]

Bailouts for banks but not car makers ?
No problem just declare your self a bank http://www.nytimes.com/2008/12/25/business/25gmac.html?_r=1&em

 

[edward]

That's even funnier than your last one!

Nice one liner I hope you had a good laugh, now let's look at the numbers.

USA Health care; $6,102 per ca-pita. 15.3% of GDP. Japan $2249 per ca-pita. 8.7 of GDP.

http://assets.opencrs.com/rpts/RL34175_20070917.pdf

After Japanese workers including auto workers retire there is no legacy system. At age 65 they go on the national health care system. The Japanese companies don't have retiree health care benefits hung around their neck.

Traditionally The big three have been saddled with enormous retirement health care costs. Albeit they are struggling to change that. If they do change the health care costs will be picked up by medicare and we know who pays for that.

General Motors Corp. will seek relief from its $68-billion post-retirement employee health care obligation in contract talks with the United Auto Workers union, according to an annual report filed with federal regulators.

http://articles.latimes.com/2007/mar/16/business/fi-gm16

I simply stated that the Japanese auto companies in the USA had a cost advantage by manufacturing parts in Japan for cars made in the USA.

Some how we have diverged into the good or bad of health care system scenario and that was never my intention.

I made no inference as to which health care system was better. That seemed to be your presumption, as in your post, #323,

Didn't you know? Nationalized means free!

However the Japanese have done it cheaper since the 1990's.

Having a home country health care cost savings advantage also gave the Japanese auto makers a big edge in funding global expansion.

 

[montoyas7940]

I simply stated that the Japanese auto companies in the USA had a cost advantage by manufacturing parts in Japan for cars made in the USA.

I think you would find it interesting to take a walk through a Nissan dealership and look at the U.S part content stickers on most models. Many, such as the Quest, Altima, Maxima, Frontier, Titan, Armada and Pathfinder are/were over 90%. I say were because we are losing some models back to Japan.

I can't speak about Toyota, Honda, Suzuki and all the other foreign makers. Certainly they meet similar part source challenges in similar ways.

 

[edward]

I think you would find it interesting to take a walk through a Nissan dealership and look at the U.S part content stickers on most models. Many, such as the Quest, Altima, Maxima, Frontier, Titan, Armada and Pathfinder are/were over 90%. I say were because we are losing some models back to Japan.

I can't speak about Toyota, Honda, Suzuki and all the other foreign makers. Certainly they meet similar part source challenges in similar ways.

You are right. The percentage of American parts has been increasing in the Japanese vehicles. This followed a lot of complaints by the big three back in the 90's when the Japanese got their jump start here.

There are a few options for determining a car's domestic-parts content. We went with the figure that appears alongside the window sticker of new cars as a result of the American Automobile Labeling Act, enacted in 1994. The AALA mandates that virtually every new car display the percentage, by cost, of its parts that originated in the U.S. and Canada. We deemed cars with a domestic-parts content rating of 75 percent or higher eligible for the index.

http://www.cars.com/go/advice/Story.jsp?section=top&subject=ami&story=amMade1207&aff=chitrib

On the other hand in recent years the Big three are now using a lot of parts made in other countries.

Fewer than half of the parts on some Big Three vehicles are made in the U.S.

Looking at a Ford Fusion? It is assembled in Mexico. The Chrysler 300C is assembled in Canada, but its transmission is from Indiana; the brand's V-8 engine is made in Mexico. Engines in the Chevrolet Equinox sport utility vehicle are from China.

http://www.cnn.com/2008/US/12/12/american.cars/

 

[WhoWee]

Bailouts for banks but not car makers ?
No problem just declare your self a bank http://www.nytimes.com/2008/12/25/business/25gmac.html?_r=1&em

I like the idea of allowing the UAW pension funds to become a specialized (vehicle loan) bank...chartered to ONLY make loans for Big 3 products...at a MUCH HIGHER rate of interest. Car loans of 15% plus will be normal in a few years when inflation kicks in anyway.

If they loan $15B at an average of $30K per vehicle = 500,000 new vehicles sold AND they'll achieve approximately $242M in cash flow per month moving forward...which could purchase an additional 8,000 vehicles per month or left to accumulate.

If all taxes are waived...$15B will fix the problem...as long as people make their payments and the cars last through the loan period.

Maybe (just maybe) everyone involved will realize that smaller, slightly less profitable - but more affordable vehicles will increase demand and reduce payback risk.

If the UAW pensions aren't willing to take this risk...why should banks?

 

[russ_watters]

After Japanese workers including auto workers retire there is no legacy system.

Well in the US, there is a legacy system, and it has already been paid for (and the money then wasted). Why should I pay for it twice?

What you are saying is all non sequitur - even foreign companies who build their cars in the US have lower costs than their American counterparts, so what happens in Japan is completely irrelevant. American car companies have wasted money that was supposed to be saved for their workers' retirement and as a result, they have had to raise the price of their cars while cutting R&D. It is a death spiral that a baliout won't fix. And bailing them out now would only encourage others to make the same mistakes and throw bad money after good.

...now let's look at the numbers.

That's also a non sequitur, but you may want to look more into what those numbers mean and how they are arrived at. A company founded on freedom would never accept such draconian price controls that risk destroying such an important industry. Whether a nationalized health care system could/would actually be cheaper (without hurting service and driving hospitals out of business) than what we have now can't be proven with numbers from other countries.

 

[OmCheeto]

On the other hand in recent years the Big three are now using a lot of parts made in other countries.

Recent years?
My '95 Chrysler LeBaron came with a Mitsubishi V6.
And I didn't find out my '93 Ford Probe was a Mazda MX6 under the skin until I bought the repair manual.

If only one of the big 3 would start putting their badge on a Subaru.

http://www.drive.subaru.com/Win06/SubaruHEV/B5PTH.jpg
http://www.drive.subaru.com/Win06_HEV.htm"​

To my knowledge, I've never owned a Subaru. Though I probably would have recognized a boxer engine.

 

[edward]

Well in the US, there is a legacy system, and it has already been paid for (and the money then wasted). Why should I pay for it twice

You shouldn't and neither should I and this was never a point of my posts.

What you are saying is all non sequitur - even foreign companies who build their cars in the US have lower costs than their American counterparts, so what happens in Japan is completely irrelevant

It was relevant when the Japanese companies moved here in the 90's and got a foothold by using Japanese parts and big tax incentives from states and local communities.

American car companies have wasted money that was supposed to be saved for their workers' retirement and as a result, they have had to raise the price of their cars while cutting R&D. It is a death spiral that a bailout won't fix.

You may be right on this part. Only time will tell

And bailing them out now would only encourage others to make the same mistakes and throw bad money after good.

What others? There are only three. And yet far fewer people are complaining about the $7 00 billion for the investment bankers than the $15 billion for the auto industry.

My concern has never been about the 250,000 auto assembly workers. It is about the parts and support jobs that go with the industry.

Even the Japanese are worried about the parts factories since they now use many of the same suppliers as the big three. They are also worried about the effect on their own vehicle sales if Detroit tanks making the economy even worse. Both Toyota and Honda are now in the red.

http://www.japantoday.com/category/...utomakers-not-celebrating-over-big-3-problems

That's also a non sequitur, but you may want to look more into what those numbers mean and how they are arrived at. A company founded on freedom would never accept such draconian price controls that risk destroying such an important industry. Whether a nationalized health care system could/would actually be cheaper (without hurting service and driving hospitals out of business) than what we have now can't be proven with numbers from other countries.

Again I was not comparing the good or bad aspects of either health care system. I was only mentioning that the Japanese system is more financially beneficial to the Japanese automakers than Our system is to the US automakers.

A large percentage of the Japanese vehicles sold here are still made in Japan. The health care plans offered to workers in Japanese factories in this country are Spartan at best.

 

[edward]

Recent years?
My '95 Chrysler LeBaron came with a Mitsubishi V6.
And I didn't find out my '93 Ford Probe was a Mazda MX6 under the skin until I bought the repair manual.

If only one of the big 3 would start putting their badge on a Subaru.

http://www.drive.subaru.com/Win06/SubaruHEV/B5PTH.jpg
http://www.drive.subaru.com/Win06_HEV.htm"​

To my knowledge, I've never owned a Subaru. Though I probably would have recognized a boxer engine.

The first years of the Chrysler minivans built on the K car platform also had the Mitsubishi V6.

I love that little Subaru boxer engine. The Subs are engineered to be mechanic friendly. I once changed the oil pan gasket on one and thought it would be a nightmare. It was easily done with the engine in place. They left holes in the front cross member for every bolt.

 

[montoyas7940]

I don't think these guys could be paid little enough.

http://www.redstate.com/warner_todd_huston/2008/12/28/uaw-union-bosses-abusing-positions-for-pay/