By on January 28, 2009

In a comment under our most recent United Auto Workers post, Taurus GT500 posted the below. I thought it worthy of lifting into pride of place in our blog roll.

“Bob Cratchit asked us to drop you a line. We’re the Ghosts of Main Streets Past, Present, and Future.

The what?

You know us by our nickname. We’re the (former) steel towns of the Mon River – the Steel Valley. You know, Steelers, Steel City. Get it? That’s us.

We’ve been where you’re going. …But, it wasn’t always like this.

Once, we made rails that connected shining sea to shining sea; girders that put the sky in skyscraper; and when Henry and those Dodge boys and that Durant fellow put America on wheels, where you think all that steel came from?

You and Rosie the Riveter was the Arsenal of Democracy. Maybe with better PR we’d a been the Blast Furnace of Freedom.

Our furnaces’d light the sky for miles. Endless parades of coal barges. And freight train whistles at all hours. Man, like the song said, we were something to see.

But that was then …and this is now.

The Golden Triangle’s just a couple of miles and a lifetime away. It’s vibrant. Alive. Museums, universities. It rocks. And on Sundays, whoa boy, the Stillers are lighten’ it up just like the old days. …Bradshaw looking deep…he’s got Swann … oops sorry, got carried away for a moment.

Our Main Streets ain’t too golden. The wind’s howling off the river. Sky’s leaden. The sullen is literal in January …figurative in July. Yep, been kinda rough here for couple years …um, a couple decades actually. These hillsides used to teem with fellas working the mills. They were good boys too. Not booksmart, but hard working salt-of-the-earth types.

But I tell you, get them in a group – a mob actually – and they’d get all filled up with crazy ideas. Couldn’t talk no sense to them to save your life. The union told them what they wanted to hear.

Work less – make more! Heck, who don’t want to hear that. Sign me up for that deal.

After a while they figured you had a union card, you was exempt from the laws of supply and demand. Except that ain’t how real life works. Crazy nonsense but they believed it – just like your UAW boys today.

The 80’s came and it’s been rough ever since. It’s a long story and real complicated but I’m telling you it wasn’t all their fault. Those suits made enough dumb decisions for a couple lifetimes. But, truth be told – and I still can’t say this too loud ‘round here – when it all blew up, well …we sure did our part to help.

It was like they took a blood oath …gonna fight to the last man standing. …like the Alamo. Once the dust settled it was like the Alamo too. No mills left standing.

And us Main Streets? Oh, it’s not so bad. Look …see them blast furnaces.

Where? …just empty fields? Yeah Now! …Gotta close your eyes and imagine!

And over here on Main Street, only a couple empty storefronts …OK …most of them. But we got some real fine businesses left. A couple check cashing stores. Three liquor stores, some bars. The police substation does a brisk business too.

What? What happened to the mill workers? Oh, it all worked out OK …sorta.

They all got jobs. In the 80’s a couple (dozen) mills closed but man, you gotta realize, Walmarts and 7-Elevens popped up everywhere. Talk about transferable skill-sets, you got 25 years of nightshifts you’re set. You got no idea the $10 jobs ‘round here till you start looking.

Yeah, it’s really not that bad, we just need a fresh coat of paint is all. …and a couple new mills couldn’t hurt either.

Well, this is what you got to look forward to. Some of them old mill hunks, the years took the edge off and they got some perspective now. Still not booksmart but they could talk some sense to your UAW hotheads.

They’d tell your fellas they didn’t know how good it was till it all went away. And, if they knew then what they know now, well, they’d a swallowed their pride real hard. Taken the pay cuts. Ripped up those stupid work rules. They knew all along it don’t take four to do the job of one…even named it, called it featherbedding.

And they’d say, “Yins don’t get it. Of course a man don’t want to take a pay cut. Tramples your dignity.

But… making $35 at a plant that’s still open has a whole lot more dignity ‘n “making” $70 at a plant that’s been bulldozed to rubble.”

But some lessons you just gotta learn the hard way.

Hey if you got any extra paint laying around, we could sure use it.”

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45 Comments on “A letter to the auto factory towns peering into the abyss...”


  • avatar
    njdave

    Excellent post. My parents lived in the suburbs of Pittsburgh. I met a LOT of union steel guys who thought exactly like that. All unemployed now. They STILL think like that. If you ask them what they do, they tell you they are steel workers. Their grandfathers were steel workers, their fathers were steel workers and they are too. Never mind that there’s no steel mills left, they are steel workers. They told me flat out that until someone hires them as steel workers and pays them union scale, they will just sit home and collect welfare. And they have been doing just that for 25 years. Its very sad to see.

  • avatar
    lzaffuto

    The guys that used to work in the Checker parts plant nod their heads in agreement… pay heed UAW.

  • avatar
    Pahaska

    As a Senior in High School in 1950, we toured one of the steel mills in Steelton, just down the Susquehanna River from Harrisburg, PA. The Korean War was on and the mills were running full blast, 24 hours a day. The furnaces lit up the sky for miles.

    Today, there are only the rusting hulks of the mills and not much of that.The only stacks jutting up in that area nowadays are at the nuclear farm on Four-Mile Island, downriver a bit. The old houses lining the streets in the mill area are sadly deteriorating.

  • avatar
    psarhjinian

    I was visiting my folks in St. Catharines over Christmas. I don’t get a chance to get out around the town much, and hadn’t been in several years. When I lived there, the town was suffering from waves of layoffs, reductions and closures as the GM Powertrain plants scaled back.

    The recession in the early nineties was bad. The downtown was mostly closed stores, there wasn’t much work outside of doughnut shops, and money was streaming over the Niagara river to New York because good were cheaper. It was particularly annoying to see GM workers buying gas across the ditch while getting steamed about imports taking our jobs. It was even more annoying to hear GM executives, both local and the big-wigs, ranting about all the good their company does when the city was crumbling around them.

    The big-box stores that moved in just as I was moving out made it even worse—anything that was hanging on was getting pounded by Wal-Mart.

    And yet, when I was there this past Christmas, I saw a downtown that was more vibrant than I’d ever seen, and several big-box stores were on their way out, the credit crunch and fuel price hike killing their razor-thin margins. GM was still there, and still haemorrhaging jobs, but yet things were doing well.

    And so I had to find out why.

    Apparently the answer is fairly complex, and the circumstances aren’t necessarily available to, say, Flint, but the simple answer is that St. Catharines “got a life” beyond GM and the big boxes. Government took the hard, long route because industry was obvious not going to do it’s part. The Niagara area has a lot to recommend it, and they played to that strength while giving existing residents a reason not to leave. Business was incubated, strengths promoted, investments made. Wah-lah.

    Of course, a lot of current and former GM people grumble, and understandably so. The jobs available are fewer, far between and more meagre of pay, but I think that people are going to have to come to the realization that the economic climate the existed during the Baby Boomers’ ascension was an aberration, not a given. It’s going to be hard on displaced Boomers try to reclaim their entitlements, and harder on everyone following them as they fight to keep those same entitlements from eroding further.

    But I think things are going to have to change, and that we’re collectively going to have to start making sacrifices to make it all work. But those sacrifices should be ours to make to maintain a vibrant, capable downtown and a middle class that can support it. It shouldn’t be dictated to us by the wealthy as an excuse to grow their wealth at the expense of everyone.

    All that said, I think government should invest in industry. I just don’t think it should be blank cheques to very rich and powerful people who’ve already shown they’re willing to break whole communities to save a buck.

  • avatar
    Steve_S

    They won’t, its part and parcel of working in a union shop. Go work at an “At Will” employer and you soon see you need to make yourself indispensible if you want to succeed.

    Enjoy working at Walmart…

  • avatar
    geeber

    Pahaska: Today, there are only the rusting hulks of the mills and not much of that.

    I live in that area…the old Bethlehem Steel mill in Steelton still produces specialty steel. It is owned and operated by Arcelor Mittal. It employes about 620 people…not much compared to the old days, but the plant is still a viable operation.

  • avatar
    TexN

    My dad spent his whole working life in a steel mill. He had an 8th grade education and made $50k per year back in the ’70’s. The mill shut down when I was in high school. My dad’s take on it: “It was good while it lasted, but the union killed that F@#%*ing plant!”

  • avatar
    M1EK

    hey told me flat out that until someone hires them as steel workers and pays them union scale, they will just sit home and collect welfare.

    In what world can males in the US collect ‘welfare’ anyways?

  • avatar
    mikey

    Great piece Robert.I read it three times its chilling.

    @psarhjinion,mikey don’t hand out too many compliments,but you are one perceptive dude.

  • avatar
    shaker

    A poetic take on the issue!

    My Dad was a “30-year man” at the Homestead Works, and I followed in his footsteps. I had higher hopes other than being a laborer – the mill had postitions where one with good electromechanical skills could move very high up by entering an apprenticeship.

    Right out of high school, 1973, I was hired, but that dream apprenticeship was a long time coming; I had a few diversions – bricklayer helper, power and fuel laborer, material handler, small equipment operator…

    Then came the opening in 1979; “Instrument Repair Apprentice”, a job that any laborer would dream of – maintaining, repairing and even installing control systems for the myriad of reheating furnaces, steam boilers, pollution control systems – wow, life was good.

    Not quite two years go by; I’m settling in nicely, getting in good with the veterans in my shop, pulling straight “A”‘s at my training classes – I was looking forward to retiring at the “top of the heap”.

    Then the layoff notice hit the board, and my name was there. August, 1981.

    Later, while sitting at the bar, it all roared back at me: my support for the radical Union Local 1397, which suited many a laborer’s attitude and demeanor had come back to bite my butt – hard. I mean, everyone had to join the Union, as it was a condition of employment, but this local had some pretty mean-spirited rallys that just about turned into lynch mobs at the mention of certain “white hats” (management) by name. I shied away from them eventually, but they had already left their mark on the mill, and I’m sure that in response to the pressure of cheaper imported steel, the big brass knew which plant they would axe first…

    You can now walk freely around the home of Open Hearth #5, all of the sheet rolling mills, and even touch the beautifully crafted smoke stacks of the 45-Inch Mill soaking pits.

    But you’re standing in the Homestead Waterfront, a modern shopping complex.

    No USWA jobs here, boys.

  • avatar
    Patrickj

    @M1EK

    It’s called “…the wife works at Walmart.”

  • avatar
    gslippy

    My father was a Pittsburgh steelworker (machinist) for 15 years, until U.S. Steel let him go and finally closed the entire plant. He was ashamed of the union and its behavior, and how they would mouth off each night on the news about the raw deal they were getting. He would not have joined the union if he wasn’t forced to do so.

    We lived 15 miles east of the mills, and he would say that if you could smell the air, then the mills were making money. That was true. Today the air is clean and the mills are gone, but the tradeoff isn’t all bad – there are new opportunities in other industries.

    I was very proud of my father, who, after being laid off and bouncing around from one menial job to another, finally retrained himself as a technical writer and taught himself how to use a computer at the age of 50. He never complained; he just welcomed the new opportunities as they came about.

    He even tended to keep mum about his past as a steelworker because he was much more satisfied with receiving things he earned than things he was given via the union. He hated the stigma attached to having been a union worker.

    But you can’t lay everything at the feet of the unions. Historically poor attention to quality, lack of capital reinvestment, bloated pension funds, and the “too big to fail” mentality all have contributed to the downfall of the American steel industry, and now the automotive industry. Unions may be one important piece of the story, but they are not the only one.

  • avatar
    Theodore

    I’m part of management in a heavily unionized industry. Every day I’m grateful that management and the unions in our industry have the sense to work together, not at cross-purposes. I’ve listened to our agreement employees talking about the UAW etc, and their attitude is almost universally one of contempt for an industry that has collectively committed suicide through greed and mismanagement on the part of both management and the unions. The auto industry could take a lesson from us; we have certainly taken a lesson – in how not to do things – from them.

  • avatar
    yournamehere

    I live a few miles from the former Bethlehem Steel Plants. They are currently turning the old factory into a large Casino, Concert hall, restaurants and hotels. (Transformers 2 did some filming during construction as well)

  • avatar
    Andy D

    23 yrs ago the Fore River ship yard closed, I prepared for it by studying electronics. Eventually, this led me into telecom. VOIP killed that, now I repair security systems. Meh. if I had my druthers, I would rather be building ships. At least I’m not working at the local Wal Mart.

  • avatar
    PeteMoran

    Great piece. Thanks.

    As a company involved in constant restructuring for our clients, these are stories of Lore.

    Change. Restructure. Movement of manpower. Railroads, gold rush, war, steel, cars. Economic destruction one and all. Has the cycle ever been any different?

    A strong militant union helps to hide from the workers that restructure is necessary and management is incompetent.

    Were house prices rising in Michigan while the Bigish3 were posting record losses? Amazingly, yes they were. People felt “wealthy” even though the industry that was the life-blood of their state was completely non-viable structurally.

  • avatar
    John Horner

    “Change. Restructure. Movement of manpower. Railroads, gold rush, war, steel, cars. Economic destruction one and all. Has the cycle ever been any different?”

    But isn’t the real story today not that these industries are being “restructured”, but that they are being abandoned in favor of temporarily cheaper imports from China bought with borrowed money? Isn’t it a story of the systematic elimination of the blue collar working class jobs from the US economy?

  • avatar
    PeteMoran

    @ John Horner

    Abandoned and temporary is definitely right. I’m not sure what the answer is however.

    The current rescue attempts seem to be heading in all the wrong directions. It probably seems controllable when it isn’t.

    This a bit extreme, but someone has to work out a way to get back the wealth from the “ownership” class. Workers sharing (two-way) a bit more of the benefits of viable business would be a good start (Microsoft you just removed 5000 “consumers” for another few billion of profit).

    Stopping speculators and debt holders ruin the asset value of a leading manufacturer hoping to cause a short-seller favourable “credit event” would be another. (Caterpillar – a company admired around the world will have debt problems any minute because people are “gaming” the share value).

  • avatar
    lw

    A wise man once told me..

    Never enter into a deal that is either bad for you or bad for the other guy. It won’t end well for anyone..

  • avatar
    Captain Tungsten

    One aspect not mentioned yet is that the mills of the “valleys” (Monongehela, Allegheny, Mahoning, Shenango) had a big competitive disadvantage unrelated to their labor contracts. Getting the big piles of rocks you need to make steel via the rivers added expense that the mills along the lakes don’t have. Which is why Northern Indiana is the heart of the integrated steel business in the US today, why Cleveland’s mills still hang by a thread, even after the cold shutdown when LTV went Chapter 7, and why ThyssenKrupp is building its greenfield site in Alabama on the gulf coast. Yes, there is still some steelmaking in the area (USS still has a Mon Valley works, for example), but for the most part, places like Homestead, J&L Aliquippa, Campbell and Brier Hill works of Youngstown Steel were dead mills melting…

  • avatar
    Robert Schwartz

    “Brother, Can You Spare a Dime,” lyrics by Yip Harburg, music by Jay Gorney (1931)

    They used to tell me I was building a dream, and so I followed the mob,
    When there was earth to plow, or guns to bear, I was always there right on the job.
    They used to tell me I was building a dream, with peace and glory ahead,
    Why should I be standing in line, just waiting for bread?

    Once I built a railroad, I made it run, made it race against time.
    Once I built a railroad; now it’s done. Brother, can you spare a dime?

    Once I built a tower, up to the sun, brick, and rivet, and lime;
    Once I built a tower, now it’s done. Brother, can you spare a dime?

    Once in khaki suits, gee we looked swell,
    Full of that Yankee Doodly Dum,
    Half a million boots went slogging through Hell,
    And I was the kid with the drum!

    Say, don’t you remember, they called me Al; it was Al all the time.
    Why don’t you remember, I’m your pal? Buddy, can you spare a dime?

    A Depression-Era Anthem For Our Times

  • avatar
    joeaverage

    Excellent discussion guys, excellent article Robert…

  • avatar
    magoo

    Farago: “But… making $35 at a plant that’s still open has a whole lot more dignity ‘n “making” $70 at a plant that’s been bulldozed to rubble.”

    Ohhhhhh… you are one of those people who believes auto workers make $70 per hour. Sorry, but that number is a total fiction. It does not represent what an auto worker collects in wages and benefits; it does not represent what the automaker pays an autoworker, and it does not represent a true labor cost in any legitimate accounting system.

    In truth, labor cost represents less than ten percent of the price of a new car.

    The steelworkers didn’t break the steel industry anymore than the auto workers are breaking the auto industry.

  • avatar
    larryken

    I worked summers in HighSchool in the Pittsburgh steelmills (Jones & Laughlin) and was blown away by the union “work ethic.” Management was “bad” and to be obstructed. Experienced guys showed me where to sleep and I was chastised openly for working too hard and too long….I left that place wondering how they made any money or would stay in business. It was contrary to everything I knew.

  • avatar
    NickR

    Sadly, some of the unions at the remaining steel mills have a similar if not worse attitude. A friend of mine worked briefly at a steel mill here in Canada. He left after 6 weeks and found a different job. It was a throwback to a different era…no realization that times have changed dramatically.

  • avatar
    Usta Bee

    If Andrew Carnegie and Charles Schwab were alive today Pittsburgh might actually still have a steel industry.

  • avatar
    gslippy

    magoo: Everyone knows the “$70” isn’t pocketed by auto workers. Perhaps it’s $25, but even so this kind of figure represents a cultural inequity that is lost on the UAW. There are many jobs out there which require intense technical school training and yet do not pay as well, and have no union ‘protection’.

    Also, if a Grand Prix (for instance) is built with 16 man-hours of labor (a number I found elsewhere), and the car is priced at $20,000, and the labor represents 10% of that price, then the calculated labor rate is $125/hr.

    My father told stories of his fellow USW people sleeping on the job. One of them slept while his machining lathe made a long cut, and another fellow threw a 2×4 into the machine to wake him up. These things DO contribute to breaking industries, whether it’s steel or auto.

    Do union workers ever wonder why so many people around the country have voted NOT to unionize?

  • avatar
    magoo

    gslippy :
    “magoo: Everyone knows the “$70″ isn’t pocketed by auto workers. Perhaps it’s $25, but even so this kind of figure represents a cultural inequity that is lost on the UAW. There are many jobs out there which require intense technical school training and yet do not pay as well, and have no union ‘protection’.”

    So while it’s not a real number representing actual wages plus benefits, it’s symbolically meaningful of something? Huh?

    It seems to me if the number is not true, and the falsehood is deliberate, then it is a lie. And the inequity is in the telling of the lie.

    Look, we know the number is whole baloney. It was supposed to represent wages and benefits plus legacy costs, which is a phony way to concoct labor cost. But even that is not accurate, especially post-VEBA.

  • avatar
    PeteMoran

    @ magoo

    Presenting any of those figures is wrong. The UAW know $25/hr isn’t “right” as the main stream media should know $70/hr isn’t “right”. Each needs it’s own fine print to go with.

    It’s like saying $250/mth is the “cost” of a car, when there are also $300/mth running costs as well as the $250/mth for the lease.

    My point is, it’s equally disingenuous to claim $25 as it is to claim $70.

    Simplistically, if I was running GM/Chrysler, and I thank my personal Gods I am not, I would take the benefits/pensions/VEBA inclusive hourly figure when working out my costs per saleable unit. It tells me what I have to MAKE per unit to stay in business.

    All stake-holders, UAW included, appear to have worked that number out way too late in the game.

    post-VEBA

    Really? Is it completely dismantled already…

  • avatar
    magoo

    PeteMoran :
    “Presenting any of those figures is wrong. The UAW know $25/hr isn’t “right” as the main stream media should know $70/hr isn’t “right”. Each needs it’s own fine print to go with.”

    But I have never claimed that UAW workers make $25/hr. Neither has the UAW to my knowledge. Assembly plant wages are in the range of $28 unskilled/$32 skilled. Other UAW shops in the chain make less.

    There is a valid reason assembly plant wages are higher than prevailing rates in both the domestic and transplant facilities — and around the world for that matter. It’s called efficiency wage valuation. These are very sucky jobs, tedious and boring, physically demanding and repetitive. Mfg’ers have learned they must pay a higher wage to keep down absenteeism, turnover, etc. This is where Henry Ford’s $5 day originated. He literally exhausted the Detroit labor market — couldn’t get or hold workers. His turnover was over 70 percent… per month.

    Lots of people say they would screw on lug nuts or tighten seat screws for $28 an hour. They haven’t tried it. The average person will run for his life in the second week. It takes a special kind of mental discipline and compartmentalization to be an auto worker. Unlike nearly everyone here, I have great respect for auto workers.

  • avatar
    PeteMoran

    @ magoo

    But I have never claimed that UAW workers make $25/hr. Neither has the UAW to my knowledge.

    I didn’t claim that you had, it wasn’t my point.

    Gettlefinger has said $28/hr for “senior” workers and also claimed that Toyota workers make $2/hr more. That’s plainly self serving and ridiculous.

    Professor Mark Perry (Uni of Michigan) arrived at the ~$70/hr figure. I believe he was the source for the media reporting of that figure. Meanwhile the Centre for Automotive Research said $26 at Toyota, $24 at Honda and $21 at Hyundai.

    All I’m saying is ultimately, no-one should say $28/$32hr (or whatever low ball figure) because that simply isn’t the complete story. Nor should they say the higher figure without explanation (or comparison).

    BTW, I wouldn’t deny anyone the ability to have a high value, secure and rewarding job. Those jobs come with a commitment from both employee and employer.

    All too frequently unionised workforces push to destruction while nothing is learned from history by the comrade leaders or management alike.

  • avatar
    magoo

    gslippy :
    “Also, if a Grand Prix (for instance) is built with 16 man-hours of labor (a number I found elsewhere), and the car is priced at $20,000, and the labor represents 10% of that price, then the calculated labor rate is $125/hr.”

    As the figures are traditionally compiled in the industry, labor cost/hr is wall-to-wall to run the plant while assembly time is man-hours for one vehicle on the line. You can see how they will never align as they are apples and oranges. Your $125/hr doesn’t mean anything in labor cost or employee wages as there is no way to know how many sets of hands are on the car in that 16 man-hours. Theoretically two workers could do it in one 8-hour shift but in practice that would be hilariously inefficient. Obviously.

    There has been a lot of rubbish in the media lately about how the auto industry operates. Especially with the numbers they throw around, which are essentially hogwash. To me it shows how little the financial media these days know about traditional industries like manufacturing. Lately I have begun to doubt their expertise on banking and financial services as well, but that’s another topic.

  • avatar
    magoo

    PeteMoran :
    Gettlefinger has said $28/hr for “senior” workers and also claimed that Toyota workers make $2/hr more. GThat’s plainly self serving and ridiculous, because Professor Mark Perry (Uni of Michigan) arrived at the ~$70/hr figure.”

    Mark Perry is an ideologue and a polemecist, i.e. a right-wing nitwit. And he got that number from the automakers, who developed it for a recent round of contact talks with the UAW. Obviously it does not reflect true labor cost as it includes pension and insurance benefits for people who don’t even work there anymore.

    Certainly this is a legitimate cost for the automakers, but it is not labor cost under any known accounting system. And it is not a wage or benefit any current employee recieves. So when you say auto workers get $70 an hour, that is an untruth. A lie. No way around it.

    Since then this phony $70 number has come back around to bite the automakers in the ass in the recent Congessional hearings, which I suppose is a form of rough justice.

  • avatar
    PeteMoran

    @ magoo

    So when you say auto workers get $70 an hour, that is an untruth. A lie. No way around it.

    Personally, I don’t say it without explanation. It’s an accurate comparative hourly cost KPI from a respected Management Economist who used the same methodology to provide ~$44/hr for transplants.

    It’s not hard to understand. It isn’t a “lie”. It goes a long long long way to explain the inability of the Bigish3 to turn a profit on products they produce.

  • avatar
    mikey

    @ magoo.36 years in every aspect of car/build has
    taught me respect for all auto workers.Hourly skilled and unskilled and even the lower end of plant management.

    In the 70s GM would hire 10 to get 6 new workers.
    I spent 1977 trough to 1979 training assembly workers.I’ve seen grown men cry cause they couldn’t pick up the job.The best was the training on gas tank install.One guy couldn’t believe that we wanted him to put a gas tank on every car.He lasted an hour and a half.In chassis assembly all new people went to the pit.One guy told the foreman “I AIN’T GOING IN THAT HOLE,and you ain’t making me,his carrer was short.I could write a book on the shit I have witnessed.
    I made a lot of money at GM and a nice retirement package and I earned every cent of it.

  • avatar
    magoo

    PeteMoran :
    “Personally, I don’t say it without explanation. It’s an accurate comparative hourly cost KPI from a respected Management Economist who used the same methodology to provide ~$44/hr for transplants.”

    It’s not hard to understand. It isn’t a “lie”. It goes a long long long way to explain the inability of the Bigish3 to turn a profit on products they produce.”

    If you say so, but it does not represent what any auto worker recieves in wages and benefits. When used in that manner it it a lie.

    And when you ask any auto worker to give back the $70/hr he can’t. He never got it in the first place. It’s only an abstact number, an artifact of tendentious accounting. This is Gettelfinger’s concern when the subject comes ’round to givebacks.

    Careful when you call Mark Perry a “respected management economist.” He’s a guy with a blog and an ax to grind for the most part. And he’s a libertarian. Have you ever met a libertarian who did NOT turn out to be a wingnut? U of M Flint campus. Wow. I can see his office now. Twelve square feet, paperback copy of The Fountainhead on the shelf…

  • avatar
    PeteMoran

    @ magoo

    Careful when you call Mark Perry a “respected management economist.” He’s a guy with a blog and an ax to grind for the most part.

    He’s a Professor which you can’t just claim as an epithet, unless you’re attempting to suggest something about U of Michigan.

    Our clients have successfully used his work and would do so again, I have no doubt.

    And he’s a libertarian. Have you ever met a libertarian who did NOT turn out to be a wingnut?

    I’ve never met a neo-con who didn’t want to start a war either. Perjoratives do nothing for numbers (or your argument).

  • avatar
    magoo

    PeteMoran :
    “He’s a Professor which you can’t just claim as an epithet, unless you’re attempting to suggest something about U of Michigan.”

    No, not the University of Michigan. U of M is one of the finest automotive engineering schools in the world and the home of the Center for Automotive Research, among other things. It’s in Ann Arbor. Perry is at the University of Michigan, Flint campus. Rather like the Louvre, Nogales office.

    A company has contracted him? What does it make? Propeller hats?

  • avatar
    magoo

    mikey :
    “@ magoo.36 years in every aspect of car/build has
    taught me respect for all auto workers.Hourly skilled and unskilled and even the lower end of plant management.

    In the 70s GM would hire 10 to get 6 new workers.
    I spent 1977 trough to 1979 training assembly workers.I’ve seen grown men cry cause they couldn’t pick up the job.The best was the training on gas tank install.One guy couldn’t believe that we wanted him to put a gas tank on every car.He lasted an hour and a half.In chassis assembly all new people went to the pit.One guy told the foreman “I AIN’T GOING IN THAT HOLE,and you ain’t making me,his carrer was short.I could write a book on the shit I have witnessed.
    I made a lot of money at GM and a nice retirement package and I earned every cent of it.”

    Amen, brother.

    Every time I walk into an auto plant today I thank God for OSHA and the UAW. The work is pretty much as difficult and dehumanizing as it ever was, but at least the plants are cleaner and safer — and well lit. That’s what always comes to my mind when I enter a shop; it’s like day vs night. There are mechanisms and policies in place today that 30 years ago were not thought possible — the prevailing wisdom was we can’t do that, it would break the industry. But these measures improved productivity and profits, just as they did for the Japanese.

    We can cut all this to the chase: Contrary to published reports, the current economic mess was not set off by low-income first-time home buyers defaulting on their mortgages. That’s horseshit. The problem with blaming a global banking and liquidity crisis on the poor is they don’t have any money.

    Likewise, the auto industry’s current crisis was not produced by paying the hourly worker too much money. That’s horseshit too. And you are not going to solve any of the industry’s problems by breaking him or her back down again. Not a one.

  • avatar
    PeteMoran

    @ magoo

    A company has contracted him? What does it make? Propeller hats?

    They’re constantly working on auto-stabilizer propeller hats to fly vertically out of the bottomless financial pits that are GM/Chrysler…

    We can cut all this to the chase: Contrary to published reports, the current economic mess was not set off by low-income first-time home buyers defaulting on their mortgages. That’s horseshit.

    I’m beginning to enjoy your writing style. Make a double-negative statement and then call it out as false for yourself.

    …the auto industry’s current crisis was not produced by paying the hourly worker too much money. …. And you are not going to solve any of the industry’s problems by breaking him or her back down again.

    Ok, let them do it your way. Start by accepting that to have any jobs, first the company has to be viable. Please ask your fellow UAW members to vote for VEBA to cease, and other unfunded retired worker entitlements to be converted to equity in the companies.

    That way the debt burden structure of GM (Chrysler is finished) might allow a 10% chance of continued existence. Then the current hourly rate has a chance of being maintained, if the company doesn’t still have to pink-slip another 25% of the work-force, and even then if they can manage to sell some product.

    To help save fellow upstream worker’s jobs, ask the purchasing department to pay supply prices that allow that supplier to be profitable. Probably means laying off the 5% discount pressure you were so keen on in another thread.

  • avatar
    gslippy

    magoo:

    You make a good point about Henry Ford’s $5/day wage, so he could attract and keep decent workers.

    And you also make a good point about the craziness of the numbers tossed about by the media, and their probable ineptitude reporting on the finance industry as well.

    An interesting feature of the auto, mining, and steel industries (besides being unionized) is that they are all very old industries. I believe the companies and unions – together – have miscalculated their viability over time, and are paying the consequences for it today. Frankly, I’m not sure anyone’s crystal ball could foresee the changes these markets have endured over the last 40 years.

    The company I work for is only 20 years old (telecommunications), and one should wonder if the decisions made today will serve us well for decades to come.

  • avatar
    magoo

    PeteMoran,
    You will have to show me. I don’t think you know what constitutes a double negative.

    Again, $70/hr does not reflect what workers earn in wages and benefits. Period. And you are not going to fix VEBA by hacking the shortfall out of the earnings of current workers. Obviously.

    I see a planted assumption at work all throughout this forum, in nearly every discussion — that autoworkers are somehow to blame for the automakers’ troubles, and that retirees do not deserve their pensions and medical benefits. No, friends. They earned those benefits under any coherent capitalism you can imagine. I’m not sure I’m comfortable with the value system on display. At what point did decent pensions and adequate medical benefits for retirees become an evil force in our economic system?

    We all know the UAW is going to take a haircut in the current process no matter what position it takes. Not because the givebacks can help the automakers in any signficant way, but because it will create the necessary theater of shared sacrifice that will appease Congress and the administration and compel the debtholders to step up.

    The biggest hit the autoworkers will take is in VEBA. VEBA was a huge giveback in itself, rolling over the automakers’ liability to the UAW. And now it will have to take funding rollbacks and equity. It’s a fidcuiary nightmare but there is no choice. Before it’s over I expect the retirees will end up in Medicare. And a bunch of people on this website will stand up and cheer, I expect.

  • avatar
    magoo

    gslippy :
    “An interesting feature of the auto, mining, and steel industries (besides being unionized) is that they are all very old industries. I believe the companies and unions – together – have miscalculated their viability over time, and are paying the consequences for it today. Frankly, I’m not sure anyone’s crystal ball could foresee the changes these markets have endured over the last 40 years.

    The company I work for is only 20 years old (telecommunications), and one should wonder if the decisions made today will serve us well for decades to come.”

    I don’t know quite why this is, but people today (most of them younger than me, so I sense it to be generational) vastly overestimate the effect of worker wages and benefits on the viability of industry. When you study the balance sheets, that is the tail wagging the dog.

    I don’t know what the next 20 years will bring for the telecommunications industry but I know this: worker compensation levels will play an insignificant role in its direction and profitability. The success of the sector will determine the compensation levels, not the other way around. Please read the previous sentence again.

    Chris Amon learned how to negotiate driver contracts from Jackie Stewart. When Amon asked him how he had the nerve to ask for such huge sums, he said, “Chris, no one has, or will they ever, pay me more than they think I am worth.”

    Don’t mean to lecture you youngsters. Keeping it light, there is a line of dialogue in The Godfather that comes to mind: A young man comes to Michael Corleone asking for the hand of his niece in marrage. Asked how he will support her, the young man is embarrassed and begins to stammer; he comes from a wealthy family. The Godfather stops him. “Don’t ever apologize for having money,” he says. “Discontent for money is just a trick of the rich to keep the poor without it.”

  • avatar
    PeteMoran

    @ magoo

    I don’t know quite why this is, but people today …. vastly overestimate the effect of worker wages and benefits on the viability of industry.

    This is becoming circular and pointless so I’ll finish by saying that I’ve argued with many a union member/comrade secretary over my many years and I always get the impression they can’t add up.

    Before it’s over I expect the retirees will end up in Medicare. And a bunch of people on this website will stand up and cheer, I expect.

    Clearly I can only speak for myself, but you have me completely wrong. I believe that generalization is unfair to others here also.

    …I expect this comment might be moderated out (my apologies TTAC).

  • avatar
    magoo

    PeteMoran :
    “This is becoming circular and pointless so I’ll finish by saying that I’ve argued with many a union member/comrade secretary over my many years and I always get the impression they can’t add up.”

    Maybe you have your sums wrong and should be listening to the secretary. There are no concessions the UAW can reasonably or conceivably offer that can turn GM into a profitable company. VEBA is unsustainable because GM is not profitable. But if VEBA disappeared tomorrow, GM would not become profitable as a result.

    The working stiff is conditioned (and psychologically predisposed anyway) to live in fear that he is perpetually in danger of killing the golden goose. That’s what the bad prose poem at the top of this thread is all about. Actually it’s hooey.


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