By on January 15, 2009

The Detroit Free Press reports that Ron Gettelfinger is confused. Yes, the United Auto Workers (UAW) boss is waiting for “clarification on loan impact.” You know the loans, right? The $17.4b hoovered from your tax money to prop-up the bankrupt automakers known as GM and Chrysler (not to mention the $25b retooling loans, which seem to have dropped off the MSM’s radar). The same “bridge to nowhere” loans that require the UAW to agree to wage and benefit parity with Toyota, Honda and Nissan’s American workers before the rest of the money– however many billions that will be– can be shoveled in Motown’s direction. “During an interview on WDET-FM (101.9), Gettelfinger reiterated his complaint that the loan terms dealing with the union are unclear.” What is it with Ron and radio? Why can’t he give the print boys his best stuff? And what doesn’t Big Ron understand about “parity?” “There’s a lot of provisions in the loan guarantees that the companies had to sign,” Gettelfinger said. “We don’t really have any documents to work from other than their loan agreements, so we’re waiting to see until President-elect Obama gets in power, then we’ll see how this thing comes out.” Badly. I assure you. Maybe not in January or February or March. But soon. And forever.

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28 Comments on “Bailout Watch 342: UAW Stonewalls on Concessions...”

  • avatar

    Whats “parity”? The lower wage of a Toyota worker in Texas, or the higher wages of a Toyota worker in Kentucky? Are we talking wages or everything in? Do you just wipe out pensioned workers income and health care? Its pretty simple to see that this is anything but simple for everyone involved. There is no standard transplant wage and benefits package to adopt.

  • avatar

    “we’re waiting to see until President-elect Obama gets in power, then we’ll see how this thing comes out” – quote Ron Gettelfinger

    That is the solution to the riddle.

  • avatar

    LXbuilder :

    One thing it doesn’t mean is “wait until your Obama gets home!”

  • avatar

    This is already taken care of.
    Obama is sworn in next Tuesday and then the UAW will recieve their payback for all the millions they gave to the Democrat party. Quite a simple concept and the beauty is the UAW only needs to stall a couple more days and they won’t lose their private golf course.

  • avatar

    Which is how come you wait for true concessions to take effect before giving away free taxpayer money to car companies.

  • avatar

    He he.

    You give’m the money first (the $37 billion December Bush auto bailout) …

    … and then expect them to give concessions?

    Negotiation 101: FAIL.

  • avatar

    Of Course Gettelfinger is “stonewalling”. I would do the same thing in his shoes. He’s been asked to put his best offer on the table before anybody else has been asked to give up anything (GM’s bondholders). The best, and perhaps only, way to resolve this is to get all the concerned parties in one place and mediate this thing until everyone gives up in exhaustion. Perfect job for an “auto czar”.

    Gettelfinger is anything but a czar. He’s an elected union president. He has a multiple constituancies and factions he has to woo. There are active workers, retirees and near-retirees who all have different perspectives. They also have their own biases and delusions that are no worse than those maintained by Rick Wagoner and the bondholders.

  • avatar

    The uaw will not have to give up anything. The government has already stated they will not let any of the debt3 go under. The uaw will just say no and the government will capitulate and more money will flow towards the uaw and the detroit car makers.

    Congress screwed up by not letting Chrysler go under so they could set an example. It’s like a kid getting threatened they’ll get a punishment and then doing nothing. Once they learn there are no teeth in the threat, they’ll do whatever they want. Just like the uaw and the debt3.

  • avatar

    The UAW is probably the worst union in the world, wage parity will mean nothing if the Detroit automakers can’t permanently and inexpensively (i.e the couple weeks of severance that someone that went to college gets) let go thousands of unnecessary workers and get out of the productivity destroying, featherbedding work rules.

    As the UAW gets self righteous about not getting enough taxpayer money we might get a return to pissing in the seat foam and throwing bolts in the rear fenders.


    Don’t underestimate his desire for a second term. Bailing out failed companies is left of the Democratic Platform, and loosing the south and west for one special interest group probably (hopefully) doesn’t add up.

  • avatar

    What is it with Ron and radio? Why can’t he give the print boys his best stuff?

    WDET-FM is known for throwing Ron softballs.

    BTW, the Muppet pics are great. But has Jim Henson’s estate made any legal noises about damage to the Muppet brand due to GM (and UAW) references?

  • avatar
    John Horner

    The latest UAW/2.8 deal puts actual cash money very nearly at parity with the transplants. The biggest difference is in the cost of the 2.8’s legions of retirees. The transplants are new enough to not have retirees.

    So, how do you square that? Do you demand that the current 2.8 workers be paid less cash than those at the transplants? Do you force the 2.8 to renege on their promises to their retirees?

    To paraphrase Bill Clinton, it all depends on what parity is.

  • avatar

    Robert: Maybe the current administration should be blamed for that.

  • avatar

    bluecon and vww12-afraid you are probably right.

    Note to “Big Ron”:
    In case you haven’t noticed you are running a buisness. Calling it a “union” and pretending it is to serve others does not change that.

    If the Debt 3 fail so does your biz.

    Get it?

    You cost too much to employ. Yes, there are other problems that are not your fault. Tough.
    If you don’t do your part the UAW is still dead.


  • avatar

    >Do you just wipe out pensioned workers income and health care?
    >Do you force the 2.8 to renege on their promises to their retirees?

    Yup. It may well come to that. No different than any other private business that has done that in the last 20 years to stay afloat.


  • avatar

    The death of GM and the UAW are greatly exagerated. It’ still 6-8 years off, by my guess. They won’t be allowed to fail during the Obama administration (They’re building an Electric Car! Gotta save GM to save the Planet!), and they won’t be allow to die in the first or second year of whoever follows Obama.
    However after that the failure of the Volt, and the general stupor of the company will finally allow a mercy killing.

    Until that day – that final day, the UAW worker will continue his or her favored child status.

  • avatar

    John Horner:

    UAW workers at the Detroit automakers cost more than $70 per hour excluding legacy costs. $70 per hour is simply the cost of the pay and present and future benefits that a current UAW worker gets per hour.

    The $70 per hour figure does not include benefits to current retirees.

    The transplants pay total costs of just under $50 an hour because even though they pay close the same hourly amount they have less generous benefits, they don’t have job banks, and they give their blue collar workers 401(k) accounts (like white collar workers) instead of much more expensive defined benefits pensions that current UAW workers still get.

    UAW Workers Actually Cost the Big Three Automakers $70 an Hour:

  • avatar

    LXbuilder said:
    Do you just wipe out pensioned workers income and health care?

    Of course, why not?

    Ever heard of companies “Anderson”, or “Enron”, or as recently as “Nortel”?

    Why should GM employees or retirees deserve more than those worked for Enron? Just because their gang union is more threatening?

  • avatar

    At the risk of getting lynched, a question:
    The UAW concessions and give backs will presumably come from the current compensation of current and retired UAW workers.
    The question: Will there be a matching concession and giveback from the present and past Big 2.8 management?

    Fair’s fair. I realize that it is holy MBA School writ that after every defeat you pin medals on the generals and shoot the soldiers, but…..

    John Horner: your source for the $70+/hour excluding legacy costs is the Heritage Foundation, which isn’t exactly impartial on this.
    The NYTimes, which isn’t altogether a raving pinko rag, represents $71/hour at Ford as including legacy costs…that:
    the true hourly compensation of Detroit’s unionized work force: roughly $55 an hour. It’s a little more than twice as much as the typical American worker makes, benefits included. The more relevant comparison, though, is probably to Honda’s or Toyota’s (nonunionized) workers. They make in the neighborhood of $45 an hour, and most of the gap stems from their less generous benefits.
    But worker paychecks aren’t Detroit’s primary problem anyway:
    Imagine that a Congressional bailout effectively pays for $10 an hour of the retiree benefits. That’s roughly the gap between the Big Three’s retiree costs and those of the Japanese-owned plants in this country. Imagine, also, that the U.A.W. agrees to reduce pay and benefits for current workers to $45 an hour — the same as at Honda and Toyota. Do you know how much that would reduce the cost of producing a Big Three vehicle? Only about $800. That’s because labor costs, for all the attention they have been receiving, make up only about 10 percent of the cost of making a vehicle. An extra $800 per vehicle would certainly help Detroit, but the Big Three already often sell their cars for about $2,500 less than equivalent cars from Japanese companies, analysts at the International Motor Vehicle Program say. Even so, many Americans no longer want to own the cars being made by General Motors, Ford and Chrysler.

    There’s an excellent chart.
    The whole thing is here and here.

    Play nice now….

  • avatar

    The NYTimes, which isn’t altogether a raving pinko rag

    Yes it is.

  • avatar

    Stewart Dean:

    I don’t agree with the Heritage Foundation on a lot of issues, but I trust them to interpret financial statements, in a well cited article, more than I trust the Time’s piece that basically just cites the UAW.

    The management, dealers and UAW workers all conspired to destroy the Detroit automakers. The government shouldn’t be deciding who gets what, a bankruptcy court should be.

    The Japanese and German automakers are not driven by myopic, smash and grab US MBA style mismanagement, but they still do everything possible to avoid the UAW; it destroys companies.

  • avatar

    Presumably the cost saving from labor concessions would go towards improved materials, technology and quality, thus making the Big 3 cars more desirable and worth closer to MSRP.

  • avatar

    Big Ron: “……..we’ll see how this thing comes out.”

    I’ve got your answer, Ronnie. It’s going to come out brown and smelly.

  • avatar

    Also keep in mind re: the $70 an hour number. According to the UAW website until recently the starting wage for a UAW member was $28.12 an hour or 56k a year. How hard is it to belive that the cost to the big three for the average worker – including the gold plated benifits – is $75 an hour?

  • avatar

    The primary thing the MSM and the politicians are missing in respect to the labor costs is the actual power the UAW has in the domestic car companies. That power is maintained via its contracts with the domestics and the byzantine work-rules enshrined in those contracts. There’s no objective way to quantify the cost of that power-structure in dollars lost for the companies, but it is a huge number. Sorta like the US tax code and the social costs we incur to even attempt to comply with it.

    Even if you had the best management in the world at the D3 and even if you had labor-cost parity (not wage parity, that’s a different animal), you would still be hamstrung by that power structure. It reminds me of the old Soviet Union’s military – even the most elite units such as SSBN crews and Spetsnaz -where every unit had a “political officer” from the CCCP. The political officer was not a professional at the job at hand, he was a professional Communist. His primary purpose was to make sure everyone toed the party line, and he had veto powers over any of the other executives in the unit. Normal military guy could theoretically over-rule the political officer, but only with the likely outcome of a KGB visit to his family, and career destruction.

    The domestics work the same way. Even if you had the best managers at GM, they really are not running the company in the same sense their peers are over at Honda, for instance. The UAW has a significant say not just in how much employees are paid, but in how those employees work and what work they do. Needless to say, its quite an inefficient disaster that puts all the speed and responsiveness GM can muster to answer changing markets and consumer tastes in molasses. Its like being in a foot-race with lead shoes. Even I can outrun Usain Bolt if Usain has to wear a Big Bird suit for the race and I don’t. Combine such an organizational mess with really bad management (kinda like me racing Usain Bolt, but now I’m the one in the Big Bird suit) and its tits-up assuming you can’t get some Uncle Sugar for any outfit, not just a car company.

  • avatar

    CarnotCycle has a very good point. Suppose GM is allowed to hire any number of non-union workers. Then, even if they are paid the same, the productivity will actually be higher, due to less “over-protection” for workers.

    The cost that UAW incurs is indeed more than $70/hour, more like $100/hour.

  • avatar

    If the UAW has to exist (I have no view on that), then a continuing adversarial relationship is broken for both parties.

    If management can’t make UAW members understand the enterprises’ structural problem, and UAW members fail to take the time to understand management’s plan to address the structure, then they will go out of business pronto.

    In that sense, GM/Chrysler and the UAW deserve each other.

  • avatar

    What is wrong with Americans. Are they just unable to see the air leaving the balloon. This is not about GM, FORDS,Chrysler, this is about American JOBS. There is no way to compete with foreign goods. They have no workers rights whatsoever. Basically slave labor. Woulkd that make Americans happy. People dying without healthcare. Homeless people wandering the streets. Is there no compassion . The USA ids Hemorraging blood and its own people are begging to cut it further. LOOK at the businesses leaving the USA do to the undermining by foreign goods. WAKE UP> We are at WAR. Weare at war for the AMERiCAN WAY OF LIFE. IT is being undermined by those that already have more than they can spend in a thousand lifetimes. Your so busy beating down your BROTHERS that you dont see the guy behind you slitting your throat. This guy(Foreign Governments) does not care whether your an autoworker or a lawyer or any job. It can all be done somewheres else. Who is operating your phones,they are either automated or they are in INDIA,China or Pakistan. This is an ATTACK on the American ECONOMY. WAKE UP AMERiCANS

  • avatar

    If GM wanted to save monies they would clean out theyre own bed first. Company cars,jets,overpayed and underqualified slary jobs. Nepotism. The list goes on and on. The fact is that the worker produces. Currently there are more than a three to one ratio of salary to hourly workers. Why is this? For one years back GM had swelling hourly ranks. This has been reduced by hundreds of thousands,and yet the slary side was not reduced. Also technology has created a savings that has not been touched. Computers alone could save millions, but has not. Supervisors used to go around and check his or her employees in b hand and this is now automated. Did we see a reduction in the salary workforce do this no. Why??????????? I dont want to see any JOBS LOST no matter whether they are salary or HOURLY but if your going to count beans, COUNT them ALL.

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