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.

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).

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.”

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.

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.

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.

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.

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?

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).

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…

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.

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.

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.

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.

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.

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.

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…

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.

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?

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.

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