11 December 2008
damn all Republicans
Posted by Dirk under: politics .
Senate talks to provide roughly $14 billion in federal loans to the Big Three automakers collapsed late Thursday night, as Democrats and Republicans reached an impasse over requiring the United Auto Workers to reach pay parity with their major foreign counterparts operating in the United States.
The end came when Corker and other Republicans were not able to reach agreement with the UAW, who asked to have until 2011 to bring their labor costs down to that of foreign companies, Sen. George Voinovich, R-Ohio, said after the Republican-only meeting. Corker had initially proposed a March 31, 2009, deadline.
So basically, after handing over $700 Billion dollars to pretty much any random finance company that says they need it, the Republicans in the Senate won’t agree to give the big 3 American autocompanies $14 Billion because they want to bust up the UAW.
Give all those white collar jackasses the moon but refuse to give the blue collar guys a piece of fucking cheese (comparitively).
Yah, tell me again about ‘country first’ and how the Republicans are all for Joe Sixpack. Blow me, you lying pieces of shit.
9 Comments so far...
Arcanum Says:
12 December 2008 at 10:07 am.
Do you honestly think the blue collar guys will benefit much from any sort of government bailout of, or loan to, the auto industry? Highly unlikely. FoMoCo, Chrysler, and GM have constantly declining workforces because their labor costs are horrendous. The labor costs are horrendous because of the UAW. A few billion dollars won’t change anything in the long run. The UAW has held one of our nation’s largest industries hostage for decades. A temporary bail out is not likely to do as much for our country as new labor agreements between the automobile manufacturers and their employees. U.S. auto makers would need to become more efficient to properly compete with foreign competitors. That isn’t going to happen as long as the UAW continues to get their way. As long as business continues as usual U.S. automobile manufacturing will continue its inevitable crawl towards extinction. Where will we be as a country then?
One economist took on the auto industry in this fight, and won:
http://www.swamppolitics.com/news/politics/blog/2008/11/auto_industry_needs_tough_love.html
The average cost of a new car in this country is close to $30,000. Can you afford that? I sure as hell can’t.
http://www.carbuyersnotebook.com/archives/2008/02/average_new_vehicle_cost_1.htm
Who do they make their products for? Certainly not me, and likely not for the same blue collar workers you want to look out for. That must be a real joy: toiling on the assembly line knowing full well you won’t be able to buy the car in front of you until you find it on a used car lot ten years later.
Dirk Says:
12 December 2008 at 2:27 pm.
Well, the blue collar guys would continue to have their jobs, which they would probably consider a benefit.
You state that ‘labor costs are horrendous’ but you don’t actually show any evidence of that. What would you consider ‘horrendous’?
http://www.uaw.org/auto/12_02_08auto1.cfm
According to that site, labor costs make up only 10% of the cost of a new car.
I agree that the big 3 need to make some changes, I just don’t think that blaming their failure all on labor is at all fair or true. I think the issues they are having is with poor management.
I also think that cars are too expensive. I think lots of things are too expensive. Real estate prices are retarded, even now, after they’ve dropped, the average family can’t afford a house.
Again though, I don’t think these high costs are labor’s fault. They just build what they are told to build.
Arcanum Says:
12 December 2008 at 4:27 pm.
I though the first link I provided went over labor costs in more detail. Looking at it again, I see Morici makes statements about those costs but that articles doesn’t seem to give numbers.
http://news.yahoo.com/s/ap/20081212/ap_on_go_co/congress_autos
“GM says its total hourly labor costs are now $69, including wages, pensions and health care for active workers, plus the pension and health care costs of more than 432,000 retirees and spouses. Toyota says its total costs are around $48. The Japanese automaker has far fewer retirees and its pension and health care benefits are not as rich as those paid to UAW workers.”
http://www.heritage.org/research/economy/wm2135.cfm
“The average private sector worker earned $25.36 an hour in 2006–$17.91 an hour in cash wages and $7.45 an hour in benefits such as pensions, paid time off, and health insurance. Autoworkers at Japanese plants located in the United States earn substantially more than this: between $42 and $48 an hour in wages and benefits, which amounts to over $80,000 a year in total compensation–hardly cheap labor.
The typical UAW worker at the Big Three earned between $71 and $76 an hour in 2006. This amount is triple the earnings of the typical worker in the private sector and $25 to $30 an hour more than American workers at Japanese auto plants. The average unionized worker at the Big Three earns over $130,000 a year in wages and benefits.”
You may not feel that blaming the UAW is fair or true. That’s your opinion. My opinion, and that of others, is that it is both fair and true. This decline is nothing new; it has been ongoing for a long time. Poor management is most certainly another large factor. But in my opinion blaming only management is not fair, either. Normally I’m all for pointing the finger at corporate greed as the reason for the economic woes in our country. However, in the case of the automobile industry it is not the only factor.
Dirk Says:
12 December 2008 at 4:36 pm.
Check out this article in the NY Times
http://www.nytimes.com/2008/12/10/business/economy/10leonhardt.html?_r=1
Arcanum Says:
12 December 2008 at 5:23 pm.
I understand where the $69-$73/hr figures come from. Even ignoring that number, and only taking the numbers from the NY Times article for *current* employees, you’re looking at $40/hr for wages and $15/hr for benefits. That’s $55/hr for slapping on hubcaps, on average.
If labor is truly such an insignificant portion of an auto maker’s operating costs, then we should all be employed by GM, Ford, or Chrysler. Everyone in this country could make $80,000-$100,000/yr and we all could afford to buy brand new cars every year. At the very least there wouldn’t be layoffs by the thousands, like we’re seeing now.
Dirk Says:
12 December 2008 at 5:56 pm.
But $55/hr isn’t that much more than the non-union Toyota guys are making and Toyota isn’t about to declare bankruptcy, which indicates that the labor costs are not the cause of the American car company’s problems.
Is $55/hr too much to be paid for those jobs? Maybe, but the evidence seems to indicate that it isn’t the root of this problem.
Really though, we’ve went off on a tangent here. I don’t think we should be bailing any of them out. My anger is that the politicians did set aside $700B for bailing out companies and seem fine with handing it over to all these banks without a second thought but now are choking on giving these blue collar companies a small chunk of it and the entire point of their reticence seems to be to bust up the unions.
Arcanum Says:
12 December 2008 at 7:04 pm.
“But $55/hr isn’t that much more than the non-union Toyota guys are making and Toyota isn’t about to declare bankruptcy, which indicates that the labor costs are not the cause of the American car company’s problems.”
No, they aren’t *the* cause. But they are *a* cause. If GM, Ford, and Chrysler do file for bankruptcy tomorrow, will it be solely because of inflated compensation? No. But they’ve been heading towards this outcome for a long time now. We discussed this very situation in my college Econ classes all those years ago. I don’t have a link to the website, and a quick search doesn’t reveal it (it’s late, and I want to leave work soon so I’m not being terribly diligent) but I read earlier that GM employs over 84,000 union workers. If you take the average of $40/hr and multiply that by a 2000 hour work year (which is a low estimate given that the $40/hr figure includes overtime), you are looking at over $6.7 billion in annual salary just for the blue collar laborers. That does not include the costs for benefits. $6.7 billion is a significant amount of money, and that is only for one of the auto makers.
“Is $55/hr too much to be paid for those jobs? Maybe, but the evidence seems to indicate that it isn’t the root of this problem.”
No offense, but I haven’t seen much evidence to back up that point. Simply saying that labor costs account for 10% of the cost of a car does not equate to the same thing as labor costs not being part of the problem.
“Really though, we’ve went off on a tangent here. I don’t think we should be bailing any of them out. My anger is that the politicians did set aside $700B for bailing out companies and seem fine with handing it over to all these banks without a second thought but now are choking on giving these blue collar companies a small chunk of it and the entire point of their reticence seems to be to bust up the unions.”
I agree that perhaps we shouldn’t be bailing any of these companies out. If you are concerned with handing out money without a second thought, then perhaps you should consider that not giving the auto makers any money is a good thing. Busting up the UAW may very well be a positive thing for this country in the long run. It could be that the people making the decision not to give GM, Ford, and Chrysler any money did give it a second thought, and their reasons were sound. I may be helping to prove your point here, though. It would have been nice if the same reticence had been shown with the $700 billion.
Dirk Says:
12 December 2008 at 7:31 pm.
I think unions are good and necessary to balance out the supreme executive power of the bosses.
Robzilla Says:
20 December 2008 at 3:34 pm.
I don’t think that the real issue here is what the average American auto worker makes per hour but rather the unbelievable benefits that the UAW has the power to demand. Over the years the UAW has become a monster. The power brokers that run that and other American unions are greedy to a fault.
“But $55/hr isn’t that much more than the non-union Toyota guys are making and Toyota isn’t about to declare bankruptcy, which indicates that the labor costs are not the cause of the American car company’s problems.”
Toyota currently pays right about 12 dollars an hour to it’s workers in Japan. These workers get little or none of the unreal benefits that American auto workers have. That is how Toyota and other Japanese auto makers can absorb the loss of operating plants here in the us. Which they ONLY do because they want to say that they make cars in the US.
“I think unions are good and necessary to balance out the supreme executive power of the bosses.”
There was a time in our history when the Unions were needed and necessary but that time has long passed. All the real reasons that the unions were needed when the were created(things like minimum wage, overtime when you work long days, workers compensation for getting hurt on the job, breaks during your shift, ect) are watched over by the state and federal government. We do not need unions anymore in America. I am not going to spend anymore time here but if you need proof that the American union/worker are slowly killing the ability of US manufacturing to compete in the world economy just look at one simple fact. It is less expensive to make parts in the us, ship the parts to China, assemble those parts into products and ship them back that it is to assemble them here. Shit, all that and I have not even touched on NAFTA.