23 Votes

Union Bashing Abounds, But Did UK's Car Magazine Hit The Nail On Head With Their Take On It?

Agent009 submitted on 12/12/2008 Official Bell & Ross Timestamp: 11:32:20 AM

37 user comments | Category: Misc News | Source: | SOURCE: www.carmagazine.co.uk

This morning America will wake to the news that its own government will not save its domestic car industry.

The decision by the Senate last night to veto the proposed short-term rescue package raises the very real possibility of both General Motors and Chrysler going out of business before the end of the year.

The Union of Auto Workers (UAW) effectively scuppered the rescue by refusing to accept a pay cut in 2009, which would put its 250,000 members on a par with equivalent workers in Japanese-owned car factories where unions play no part. This is not insultingly low pay, merely less than they currently earn.

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Union Bashing Abounds, But Did UK's Car Magazine Hit The Nail On Head With Their Take On It?

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"If everything seems under control, you're just not going fast enough."
— Agent009 (View Profile)

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The UAW has effectively priced themselves out of the market by demanding such high pay and benefits. There is a reason why the foreign automakers have built their plants in the South and not in Michigan.

Blame for the Big Three's current financial fiasco should not be completely placed on the unions. Decades of inept management, lackluster products, and government regulations (ie CAFE standards) have all contributed. However, companies can't restructure and become competitive when they have an inflexible work force.
— HSCenterconsole (View Profile)

Posted on 12/12/2008 11:49:24 AM | reply to this comment | Votes: 13

Thats me in the front.
— 1UAW (View Profile)

Posted on 12/12/2008 12:07:31 PM | reply to this comment | Votes: -17

That dude looked like a slacker.
— Badgewhore (View Profile)

Posted on 12/12/2008 12:53:15 PM | | Votes: 11

How do you union people sleep at night?

Would you go into poverty, by taking wage cuts and saving Big 3? No. You still would be paid more than other manufacturers auto workers are paid.

So, what is it: ego, greed? Don't you think people would rather keep their jobs with less pay, rather than becoming unemployed. Don't you get it?

UAW should be ashamed.
— vladyxa (View Profile)

Posted on 12/12/2008 12:41:15 PM | reply to this comment | Votes: 14

they probably sleep quite well on their expensive sleep by number bed in a house bigger than yours. Who would have thought snapping interior trim in a car would be so lucrative?
— Agent009 (View Profile)

Posted on 12/12/2008 1:44:50 PM | | Votes: 7

009...You forgot to say "cheap, plastic" interior trip that falls off when you hit a pothole.
— BSBB (View Profile)

Posted on 12/12/2008 1:51:02 PM | | Votes: 5

"trim", not "trip"...sorry for the typo.
— BSBB (View Profile)

Posted on 12/12/2008 1:51:45 PM | | Votes: 3

Are you glad you guys did not accept "Fair" pay, like the good people at Toyota and Honda do ?
— Lamborghini_vs_Ferrari_Racer (View Profile)

Posted on 12/12/2008 12:47:13 PM | reply to this comment | Votes: 15

http://www.cnn.com/2008/WORLD/americas/12/12/zakaria.autobailout/index.html
— 1995e34 (View Profile)

Posted on 12/12/2008 12:54:28 PM | reply to this comment | Votes: -4

So what if I was wrong to blame the republican, the problem remains to be solved. If I have to blame democrats, so be it. This is not the time to take side, it's about all americans coming together to solve this crisis. If it happens to be Nancy Pelosi and Harry Reid that stoned wall this bailout plan, F them. I don't care what party they are, if they don't do no good for the citizens, they don't deserve my respect. Right now all fingers point to Bush and the republicans for this current crisis. Proof to me otherwise.
— Badgewhore (View Profile)

Posted on 12/13/2008 4:41:43 AM | | Votes: -1

This time it's not the Unions fault, the republican controlled senate was going to shut this plan down from the get-go. The Union will accept a pay cut once their contract expires in 2011. It's only another year. That's not justifiable enough reason to send detroit down the toilet and put millions of jobs at stake and destroy the economy. Down with republicans!!
— Badgewhore (View Profile)

Posted on 12/12/2008 12:57:42 PM | reply to this comment | Votes: -13

Those companies don't need 2011 (and it's not "another year", but more than two years), they need it now.

If UAW reject to make cuts now, when Big 3 need it the most, arguing that it will cut it in 2011, there is little trust in their promises to cut it in 2011.

So, republicans did damn great thing by not letting this bill through.
— vladyxa (View Profile)

Posted on 12/12/2008 1:05:56 PM | | Votes: 12

"It's only another year."

Badgewhore, at the rate GM and Ford are burning through cash, they will not make it until 2011. Either the union gives now or they will be out of work entirely.

GM, in Q3, burned through $6.9 billion in cash. At this current level of cash burn, GM will be insolvent by the middle of 2009. Ford's cash burn for Q3 amounted to $7.7 billion. When using a 90-day quarter, this amounts to an outstanding $85.5 million per day.

I give the Republicans credit for standing up to this bail out and acting like fiscal conservatives again. Throwing $14 billion at failing companies that aren't drastically altering their business plans is a waste of taxpayer money. After two or three months, the Big Three would be begging again in Congress for more money. They need to change their business model, not prop up a failed business model at the taxpayer's expense.
— HSCenterconsole (View Profile)

Posted on 12/12/2008 1:07:06 PM | | Votes: 8

Now is not the right time to play tough. The outcome is worse. Why are the republicans willing to sink the nation just to play tough ball with the UAW boards? It's REALLY DUMB!! If they were really concern that the UAW was killing detroit, they should've done something or voice their opinions decades ago. This is politics at it's worse, people still trying to score political points in these drastic times, really counter productive to me.
— Badgewhore (View Profile)

Posted on 12/12/2008 1:37:22 PM | | Votes: -8

theyre still mad they can't have slaves...after all these years.
— 1995e34 (View Profile)

Posted on 12/12/2008 1:39:20 PM | | Votes: -6

Just to clarify, the Republicans actually don't control the Senate nor the House for the 110th Congress. Before spewing your liberal hatred, please check the facts.
— IVANURI97 (View Profile)

Posted on 12/12/2008 2:34:45 PM | | Votes: 2

Badgeh..... im sure you can agree with me on this.

Its funny how many post on union topics in autospies typically only repeats what the misconstrued and biased news wants to air., and not the truth at all.
— 1UAW (View Profile)

Posted on 12/12/2008 10:51:02 PM | | Votes: -4

So what if I was wrong to blame the republican, the problem remains to be solved. If I have to blame democrats, so be it. This is not the time to take side, it's about all americans coming together to solve this crisis. If it happens to be Nancy Pelosi and Harry Reid that stoned wall this bailout plan, F them. I don't care what party they are, if they don't do no good for the citizens, they don't deserve my respect. Right now all fingers point to Bush and the republicans for this current crisis. Proof to me otherwise.

Sorry for the repost, just got back from clubbin and still a bit messed up.
— Badgewhore (View Profile)

Posted on 12/13/2008 4:46:20 AM | | Votes: -1

I want the big three to file bankruptcy because they can get detach themselves from the UAW. that is the governments ultimate plan. F the unions. Plus, no bailout wont increase taxes more. Then, they can hire new management. labor laws will not allow people who work in manufacturing to have horrible working conditions, there is no need for unions anymore, only 100 years ago.
— 2ndbimmer (View Profile)

Posted on 12/12/2008 1:12:24 PM | reply to this comment | Votes: 11

"Throwing $14 billion at failing companies that aren't drastically altering their business plans is a waste of taxpayer money"

So please tell me how CitiGroup, AIG, Fannie May/Freddie Mac have drastically altered their business plan? The damage is already done, the companies have lended more money than the people can pay back. Hence the $700 billion load to financial institutions.

Don't get me wrong, I'm not on the UAW's side, not at all. For someone working for supllier to GM, I see Union workers in the plants every week. Its not as bad as you all think, but it does need to be improved.

Things will change and contracts will be re-negotiated, but in the meantime they need the money now to survive. At least these companies manufacture and provide jobs and stabilize the economy. I don't see anyone calling for the heads of the Wall St comanies who received multibillion dollar bailout with a simple phone call. Lets see them get razed for their private jet flight or Maybach chauffered ride to Washington...
— volnedan (View Profile)

Posted on 12/12/2008 1:43:41 PM | reply to this comment | Votes: 3

Volnedan, a large part of the crisis faced by the financial services industry (including Citi, AIG, etc.) was that they held huge quantities of bad mortgage debt issued by government sponsored Freddie and Fannie. In hindsight, these companies should have been more aware of what type of debt they were holding (ie people who have no credit history and no steady income being allowed large mortages). However, for the most part, the banking and investment management services offered by these financial services firms remain reasonably sound.

The Big Three's problems, on the other hands, are far more drastic and pervasive. They have crippling union healthcare, salary, and pension obligations. They have far too many dealerships compared with their foreign competitors (GM having 10,000 and Toyota having 2,000). Public perception of their products is extremely low. Government is forcing them away from their cash cows (SUV's and trucks) with higher CAFE standards along with recent, skyrocketing oil prices.

I'm no fan of TARP either, especially when it dillutes my stock holdings. However, comparing the two is apples to oranges.
— HSCenterconsole (View Profile)

Posted on 12/12/2008 2:05:52 PM | | Votes: 0

To blame Freddie Mac, Fannie Mae for the financial crisis that is caused by the securitization of mortgage risk and the math models thats were based on flawed data, reeks of the typical pro republican whinging. Freddie Mac and FM do not issue mortgages to the end user they are intemedaries. Niether are they the center point of the securitization regime that was run by the IB's . Without getting into the details of the financial industry , its enough to say that the "hands off" "pro market forces" "low ooversight" idiocy by the republicans lead to a debt instrument market in mortgage securites, debt swaps and other debt securities that are currently all untradeable.
— izfuney (View Profile)

Posted on 12/12/2008 2:22:46 PM | | Votes: 0

izfuney, you might want to read up about the Community Reinvestment Act (originally signed by President Carter). By forcing banks to lend more to "affordable" housing, it raised the risk of defaults. This obviously, isn't the sole cause of the financial crisis, but one of the main factors. Forcing banks to lend, especially to risky borrowers, is not the right idea. See my comments in response to sogac.
— HSCenterconsole (View Profile)

Posted on 12/12/2008 2:29:32 PM | | Votes: -1

HSCenterconsole wrote:

izfuney, you might want to read up about the Community Reinvestment Act (originally signed by President Carter).By forcing banks to lend more to "affordable" housing, it raised the risk of defaults.

CRA had very little to do with the current housing crapola.

Look at a map around the country of states where theres a high floreclosure rate. they are mostly middle and upper middle class suburbs and exburbs in CA/FL/MI/NE

Most of the banks that have been caught up in this mess did not opt into CRA program.
— thatdude718 (View Profile)

Posted on 12/12/2008 3:22:07 PM | | Votes: 1

i made that point a couple weeks ago. nobody wanted to hear it.
— 1995e34 (View Profile)

Posted on 12/12/2008 3:37:47 PM | | Votes: -2

Ford is saying they will survive without any government assistance. It's GM and Chrysler who are sucking wind. If you cannot sell your product for a stated price without dickering or giving 0% loans, then you need to rethink what you are doing. You don't go into Mickey D's and offer to pay them $.25 for a hamburger - you pay what is displayed on the sign. The GM and Chrysler need money, yet banks and other institutions are not lending any. They got their money but they are taking hunting trips with it. I blame the banks as much as I blame GM and Chrysler.
— sogac6 (View Profile)

Posted on 12/12/2008 1:54:12 PM | reply to this comment | Votes: 3

"The GM and Chrysler need money, yet banks and other institutions are not lending any."

Sogac, the reason why the banks and other financial insitutions aren't lending to the Big Three is that they have a high risk of default. Their bonds are rated B- (aka junk) by S&P.

Don't you remember the whole subprime mortgage crisis a few months ago? The reason why the financial services industry nearly exploded was that they had lent money to unqualified buyers who were unable to repay. Sound similiar? We need to learn from past mistakes.
— HSCenterconsole (View Profile)

Posted on 12/12/2008 2:11:14 PM | | Votes: 3

The banks have their bailout and they were supposed to loan money back out. They have not done that. They are busy buying other banks and taking hunting trips to the UK. I understand that the auto industry is in the toilet, but it is money they need to keep putting their products out. But if no one is buying, why bother. I remember the subprime issue. The mistakes are their greed of a quick buck. I don't care if they go Chap 11 and jettison the UAW. Maybe we'll end up with a better product. I drive two American brand vehicles. I have no issues with either of them. They also don't spend as much time in the shop as the German marks I used to drive.
— sogac6 (View Profile)

Posted on 12/12/2008 2:26:26 PM | | Votes: -1

sogac, why should we force the banks to lend to GM or F or Chrysler when there is a high risk of them defaulting?
— HSCenterconsole (View Profile)

Posted on 12/12/2008 2:30:55 PM | | Votes: 0

On S&P's rating scale, BB and below (not B-) are considered junk. However, in the real world (of credit markets), financial institutions (I work in one) would be hard-pressed to touch anything below A.
— BSBB (View Profile)

Posted on 12/12/2008 2:35:44 PM | | Votes: -1

Correction to myself HSCenterconsole...I overlooked that you were talking specifically about the Big 3, not credit ratings in general. Apologies.
— BSBB (View Profile)

Posted on 12/12/2008 2:38:06 PM | | Votes: 3

Why loan money when it will only prolong the eventual outcome?

Right now with the systems and mangement the big 3 have in place, no amount of money can help them out.
— answer (View Profile)

Posted on 12/12/2008 3:45:25 PM | reply to this comment | Votes: 2

GM has plenty of excess stock piled up in storage yards--enough to last them over 3 months without making anything. Demand is low enough that they aren't selling much a month anyway. I say ramp up production to full capacity for 2 months until they have enough stock to last them 6 months without producing anything. Then fire EVERY Union worker. Get rid of UAW altogether...who cares if they strike...totally cut them off from the company.

Then rehire the previous Union workers that are willing to get the same salaries as a foreign automaker's plant's factory worker. Those that don't come back...GM probably wouldn't need anyway with such an ample supply. My bet is that most union members would come crawling back for lower wages and no unions.

This transition would probably take 3-4months, but would be well worth it--ridding UAW from GM.
— aznstuart (View Profile)

Posted on 12/12/2008 6:35:04 PM | reply to this comment | Votes: -1

Let's get one thing straight here, this 2011 date is a talked about date, it's not even a real date set in stone. This is why the bailout failed. The UAW would not agree to meeting the market average or set a date to start pay cuts. The UAW wanted it to be called "a future date" in the actual bailout contract.
I don't think it's so bad for American workers to make good money because then they will spend more, creating more jobs, more consumer spending, etc. But to be honest this guy whose the head of the union couldn't have made the UAW look any more stupid, greedy, and arrogant than he did. And he acted that way until 2 weeks ago. He said give us the money or the governemnt will be stuck with $3B in pension funds--great message to send--last time I checked $3B is less than $14B, $25B, or $34B. A UAW comittee should be sitting in a room right now, firing this idiot, accepting a gradual pay cut to MARKET STANDARDS over the next 2 years with the final hourly salary set in 2011. This will start to free up money immediately, workers aren't necesserily losing $5/hr right away like a shock to the system and the government would give the auto makers the money.
At the same time Chrysler should cut half the cars they make off the production line and focus on these things: Chrysler mini-vans, Chrysler 300 series, Dodge mini-vans, Dodge Chargers/Challengers, Dodge pick-ups, and Jeep Grand Cherokee/Liberty. Let them focus for once on the products that people want instead of Sebrings that end up as rental cars and no consumer really wants.
These guys graduate from the likes of Harvard but they just can't get the most basic forms of ecnomics right. I just don't get it, I just don't. One of THE MOST frustrating things to watch/listen/read about.
— Schwitz916 (View Profile)

Posted on 12/12/2008 8:08:49 PM | reply to this comment | Votes: -1

Germany and Japan are laughing right now because for years their governments have supported their industries and America is to stupid to realize for years and years the big 3 have been supporting themselves with hardly any help from the US and now that they do need help it is such a big deal. Not to mention The Big 3 and everyone that has an indirect or direct form of employment has paid over 1000 tines the amount of 15 billion dollar loan to the US tax base.
— 1UAW (View Profile)

Posted on 12/12/2008 11:02:31 PM | reply to this comment | Votes: -5

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Union Bashing Abounds, But Did UK's Car Magazine Hit The Nail On Head With Their Take On It?

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