Supply and demand!

 

It appears the unions are really starting to kill some of the bigger companies here in the US. It's kind of a trickle effect that started with good intentions by creating safety standards but has now led to workers demanding way too much. Look at the NYC transit union. They make $47-52K a year and they went on strike! There's a heck of a lot of people out of work that would be thrilled to make half that. But when wages went up quickly, people moved into bigger, more expensive housing which meant they need to continue to make overpaid salaries just to make ends meet. People should be happy to have a job and willing to take pay cuts if it means they will still have a job. my brother has been out of work for almost 2 years and actually works part time between 3 jobs to try and cover the 1 he had. For some reason, we feel we deserve to make large salaries when people in other countries just want something to survive. That's why the jobs are leaving the US. My brother would jump on that assembly line at GM for half what those workers are making. That's the reality of it and if the unions don't give in then they will all be out of work anyway.

 

DaimlerChrysler AG will cut 6,000 administrative jobs, or one-fifth of its worldwide total, to save more than a billion dollars a year

1,000,000,000 / 6,000 = $166,666.67 – Wow.

 

Jeff,Seems like $47,000.00 is a aweful lot of money today,but cost of housing,taxes,medical ins,cars,raising kids,etc have skyrocketed!! What really amazes me is what upper management and the CEO's make,they put a drain on profits these companies make!!

 

My "real" job is with one of the companies. We are going through a re-org as a result. It really comes down to payback time. Payback for products that, at least in the past, were not as good or as value packed as those from competitors. Layer into this the costs for retirees and fat union contracts that feature FREE healthcare, and you get massive layoffs and plant closings. Healthcare costs are out of control here. Not sure what the answer is, but more than $1500 per car is added to support benefits for line workers. Let me be clear- I don't blame them- the unions negotiated, and the companies gave them the deal at the time, but now comes the day of reckoning. For years, we have levied huge import tarrifs to "level the playing field". In actuality, we probably built in an unnecessary safety net, which resulted in the wrong products and subpar quality. I think that this is just a start, too, unless the right products are built for the global market. U.S. automakers need to build a better mousetrap for less. When we do, then we will see the upside the industry so sorely needs. I think we will do it. My family and I are depending on it!

 

Not an ounce of blame can be pushed off on the unions for how a company is run. After all it's mgnts job to run the company isn't it? Mgnt and the union bargain every 2-5 years over contracts and it's just another part of doing and running the business for mgnt.

The problem is modern mgnt is near-sited, I haven't seen a 5yr plan in 10+ years. Mgrs take over a department and effect a change that shows immediate gains or savings but long term isn't a good idea. That's ok because that got the guy a promotion and someone else gets sent in to take the fall for the long term. With the next guy comes layoffs and when he can't cut it he gets demoted to his old position but keeps his higher pay level. That bought time to bring money in along with someone to effect another short term fix... The cycle repeats itself over and over.

I work in a very large company much like Ford or GM and having had involvment with division mgrs, directors and other higher levels of mgnt I have heard all too many time, "I'm retiring next year, if we can keep things going until then it will be someone elses problem" That's where the problem is in American business today...

 

Yeah those nasty unions are ruining everything. Maybe we should bring back the days of the Pinkertons, the coal and iron police, and the company store. That should fix everything. We could live in company housing, grow a garden and can food to last the winter, and at the end of the week can owe the company money. That should get them back on their feet again.
Sorry for going off about this but I'm SICK AND TIRED of hearing about the unions being the cause of this.

 

Funny, right or wrong, all unions get lumped together. What the majors need now is a nationalized healthcare system that would let them off the h/c cost hook. And the UAW is on that bus too. But other unions have created complete health insurance companies and they don’t want to let go, so they fight any kind of nationalized h/c. It’s all politics & money.

 

Yeah - the titanic is sinking and everyones pointing fingers.
NOT MY FAULT MAN... (blubbb blubbbb).

chit or get off the pot.

Thanks NAFTA. Some of those displaced auto workers can go work at wallymart or dominos. A jobs a job right?

 

Jeff H - You hit the nail on the head! Wages in the US are extremely out of wack. It is pathetic that we can ship materials overseas, pay for labor in another country and ship the assembled product back for half of what we can do it for in America. It's no wonder that American companies can't compete.

It appears the unions are really starting to kill some of the bigger companies here in the US. It's kind of a trickle effect that started with good intentions by creating safety standards but has now led to workers demanding way too much. Look at the NYC transit union. They make $47-52K a year and they went on strike! There's a heck of a lot of people out of work that would be thrilled to make half that. But when wages went up quickly, people moved into bigger, more expensive housing which meant they need to continue to make overpaid salaries just to make ends meet. People should be happy to have a job and willing to take pay cuts if it means they will still have a job. my brother has been out of work for almost 2 years and actually works part time between 3 jobs to try and cover the 1 he had. For some reason, we feel we deserve to make large salaries when people in other countries just want something to survive. That's why the jobs are leaving the US. My brother would jump on that assembly line at GM for half what those workers are making. That's the reality of it and if the unions don't give in then they will all be out of work anyway.

 

I agree it's very sad for us lovers of American rides,..the last thing I want to see is the importation Chevy's and Fords, which is where we're headed. Notice, with the announcement of layoffs, offshore plants aren't impacted.

Three things:

1) More goes into a new car for the health ins. coverage for current and former employees (about $1500 per car) than the cost of steel per car...think about that. Since most the Asian and European countries have national health care or employee paid HC, Toyota, Mercedes, etc, don't have this $1500 expense. Also, American pensions are better than those in other countries and again, it hurts the bottom line when comparing.

2) To combat the above, we need a tarriff on imports to offset the soft/administrative costs of our cars so GM and Ford can start on equal footing.

3) It's still widely believed that imports are better,..this in not always the case yet this perception overpowers patriotism (IMO).

We need to fix all this, or the next Chevy you buy might be made in Hong Kong or Nuevo Laredo.

 

Not an ounce of blame can be pushed off on the unions for how a company is run. After all it's mgnts job to run the company isn't it? Mgnt and the union bargain every 2-5 years over contracts and it's just another part of doing and running the business for mgnt.

The problem is modern mgnt is near-sited, I haven't seen a 5yr plan in 10+ years. Mgrs take over a department and effect a change that shows immediate gains or savings but long term isn't a good idea. That's ok because that got the guy a promotion and someone else gets sent in to take the fall for the long term. With the next guy comes layoffs and when he can't cut it he gets demoted to his old position but keeps his higher pay level. That bought time to bring money in along with someone to effect another short term fix... The cycle repeats itself over and over.

I work in a very large company much like Ford or GM and having had involvment with division mgrs, directors and other higher levels of mgnt I have heard all too many time, "I'm retiring next year, if we can keep things going until then it will be someone elses problem" That's where the problem is in American business today...

I totally agree!!! I work for a large company also and see this everyday!! They are always crying about not meeting profit objective that's set out of reach in the first place. The cuts are nearly always in the working class while the "fat cats" are still pulling in 6 figures PLUS bonuses PLUS stock options and no one knows what else!

When they do cut management positions, what it turns out to be is a retirement incentive for a select group and then those position are renamed and filled with up and comers which leave openings to hire brand new management types. So the end result is hardly any positions are ever really cut.

Big industry is really FAT with lots of management making LOTS of money. I believe these type announcements and layoffs are designed to drive stock prices up, and if succesful will reward the decision makers with bigger bonuses and of course a bigger return on their earlier stock options!

So lets cut a bunch of workers, shut down some plants, move overseas, where labor is cheap but most importantly there are NO ENVIROMENTAL REGULATIONS! Sounds like another bonus on the way for some brilliant decision maker!

If this goes on long enough, I wonder who will be buying the expensive product since we'll all be working at Wal-Mart, Mcdonalds or not working at all??? Of course the "big dogs"
don't care....if they shut the whole thing down today...they are still multi-millionairs.

Then the ENORMOUS $1500 per car for worker benifits?? Well, on a $20,000 car, that right around .075%. How dare we spend that kind of money on the low life blue collar union trash thats building the cars that's making us millionairs!!!

Ok, that's enough, I'm through....you guessed it, I am part of the blue collar working class.....and proud of it!!!

 

Sid, check your math on the percentage. The $1500 per car on a $20,000 car is 7.5% not .075%

 

Like I said, the unions were great for us early on when they helped establish safety standards and whatnot. But now with the pensions they demand and over inflated wages, the companies are no longer profitable and therefore go out of business or cut costs/jobs. The company I work for is private and there are no pensions. We fought long and hard to survive and last year was our best year ever. In my 17 years with the company we have been through some really lean years with rumors of buyouts. We went many years with no increases, no bonuses, no company picninc, party or anything like that. So yes, unions are contributing to the problem. It's not the sole problem, but when workers say they won't work below a certain level because that's what the union says, then you've got a real bad situation. The big 3 need to reduce the cost to produce a car and part of that is reduced helath benefits, reduced pensions, reduced wages. And if you can't live with that scenario, you'll be looking for a job when the company goes out of business. Not tyring to be a jerk or anything, but that's the way I see part of the problem. And yes, the CEO's, CIO's, COO's are making way too much money. They all need to take a big hit just like the little guy.

 

Sid, check your math on the percentage. The $1500 per car on a $20,000 car is 7.5% not .075%

My mistake...I guess I was a little torqued up!

It's still pretty minimal compared to the big money going up top!

Don't get me wrong, I know the guy's up top have to make a lot of important decisions. I just think there's a major imbalance in the pay/benifits between the worker and manager.

Then to blame all their problems on the overpaid worker while their six figures/perks continue to roll in, just don't set to well with me! :angry:

Thanks for the correction :thumbsup:

 

Sid, I think there is plenty of blame to go around. I think there has been a lot of poor management getting a lot of premium salaries, but I also think that the unions have been pricing American labor out of the market for a long time. 15 years ago I was a Teamster myself, not because I wanted to be, but because I had no choice if I wanted to work for that employer. What I saw of my fellow teamsters on that job was a lot of whining, and not a lot of work compared to other jobs I had done in the same field. Everyone knew how to play the system, slack on the job, and rake in the overtime.

but with that said, think that the management of Ford, GM, etc... has been atrocious. I think that the days of giant executive compensation with poor executive performance have to end. I think that we as a country need to find a way to stay competitive on the manufacturing front. I think that higher tariffs on foreign made products might help short term, but it is just a band aid. In the long run things like that hurt us overall by pricing our exports out of the ballpark. It helps to boost sales domestically, but kills our foreign trade. Unfortunately I don't think there are easy solutions. And certainly none that will make everyone happy.

 

It appears the unions are really starting to kill some of the bigger companies here in the US. It's kind of a trickle effect that started with good intentions by creating safety standards but has now led to workers demanding way too much. Look at the NYC transit union. They make $47-52K a year and they went on strike! There's a heck of a lot of people out of work that would be thrilled to make half that. But when wages went up quickly, people moved into bigger, more expensive housing which meant they need to continue to make overpaid salaries just to make ends meet. People should be happy to have a job and willing to take pay cuts if it means they will still have a job. my brother has been out of work for almost 2 years and actually works part time between 3 jobs to try and cover the 1 he had. For some reason, we feel we deserve to make large salaries when people in other countries just want something to survive. That's why the jobs are leaving the US. My brother would jump on that assembly line at GM for half what those workers are making. That's the reality of it and if the unions don't give in then they will all be out of work anyway.

JEFF part of this is true the people in the unions making $47K to $52K and without the union they will be making HALF THAT!!
BROTHER THAT IS A FACT WAY LESS THAN HALF AS A MATTER OF FACT
around here a union job verse's a non union job is living in a rented apartment without food verses living in your own home with some mcdonalds every now and then ,

 

There is nothing more cyclical than the auto industry. How many new cars do you really buy? A new one every 4 years? Not me.

 

As the old adage goes; "nothing is forever". The Big 3 had an incredible run, enjoying close to 70 years of automotive dominance. We've had our day in the sun. But now it's a different game. Ford and Chrysler are the least of our worries. It's a basketball game out there now. You got a full court press and a dozen car companies all gunnin' for the same prize. And they've all brought their "A" games with them too. Legacy costs from our "Generous Motors" days are starting to take their toll. Our only recourse is to minimize costs and downsize. Frankly, I don't think the hemorhaging will stop until all the companies are within the same size of each other. Thats when you'll see it level off and the real slugfest begin. But unfortunately, we carry an additional burden on our shoulders in this fight; a biased media. They hate us. They view us as the evil empire that is finally getting what they deserve and they'll pour it on every chance they get. They wave our mistakes in our face and to the masses while brushing our accomplishments to the curb. All for the sake of supporting their misguided and twisted agenda.

I don't know what else to say. I believe we build great cars that are right there with the Japanese and in some cases...better. But you can't MAKE people like you....they have to WANT to like you. The only way to acccomplsh that is to just stay the course and keep pressing on. Eventually they'll get it. Until then, all I can do is keep showing up for work and hope I don't find a chain around the door when I go to swipe my badge.

 

I'm not sure why 7.5% is "minor"... it's probably double the company's net profit on each car...and that's only health care. Anyone got any figures on "retirement benefit" costs?

About 6 years ago, things got real lean in the industry I work in. I had to elimite our 100% company paid helth care comepletely, discontinued "company matching" in our retirement program, AND did a 10% across the board salery cut. (Note: the corporate biggie, me, saw his salery drop 40%!!)
A number of employees left because of these changes. Interestingly, the ones who stayed were the best, had always been the best. They worked their *sses off to get "our" company back on it's feet. Since then, those employees have seen a so far total salery increase of 35% on merit alone, the company is healthy and growing again, and everyone is happy.... except for those who weren't in it for the long haul anyway, but they work somewhere else now.

 

I hope all the people getting laid off can find work before they have to cash in their 401k’s just to pay their bills. Unfortunately, saving money for emergencies has not been a priority for most working families for the last several years. Many are deeply in debt, living paycheck to paycheck.

 

What role do you think the unions play in the current problems with the big 3?

 

Sid, I think there is plenty of blame to go around. I think there has been a lot of poor management getting a lot of premium salaries, but I also think that the unions have been pricing American labor out of the market for a long time. 15 years ago I was a Teamster myself, not because I wanted to be, but because I had no choice if I wanted to work for that employer. What I saw of my fellow teamsters on that job was a lot of whining, and not a lot of work compared to other jobs I had done in the same field. Everyone knew how to play the system, slack on the job, and rake in the overtime.

but with that said, think that the management of Ford, GM, etc... has been atrocious. I think that the days of giant executive compensation with poor executive performance have to end. I think that we as a country need to find a way to stay competitive on the manufacturing front. I think that higher tariffs on foreign made products might help short term, but it is just a band aid. In the long run things like that hurt us overall by pricing our exports out of the ballpark. It helps to boost sales domestically, but kills our foreign trade. Unfortunately I don't think there are easy solutions. And certainly none that will make everyone happy.

Scott, I can certianly agree with that! I too have witnessed the unions go too far. I'm not union and never have been. There's times I wished I were but all in all, it's been good for me so far.....I've been blessed with a great paying job & great benefits. I guess I'm one of the bad guys now

On the other hand though, I've seen the upper management of these companies, mine included, go far beyond for themselves what the unions ever dreamed of! They want to cut the workers while dragging off billions (collectivly) for themselves.

I guess what I'm saying is that I could take a pay/benefit cut a lot better if it was across the board. From the janitor to the CEO....if there needs to be cuts made, then cut everyone equally! Whether it's 5%, 10% whatever, just do it to everybody!

The problem is that the decision makers are just not going to make a decision that affects them adversly!

I'm outta here with this quick find from almost a year ago, I'm sure there's some newer info out there but I've got a car to work on........ http://www.usatoday.com/money/companies/management/2005-03-30-ceo-pay-2004-cover_x.htm

 

People are pointing fingers, blaming it on the Unions, blaming it on the CEO's, etc. What about Americans taking things into their own hands? There was a time and a place where people wouldn't support companies when they heard of mistreatment of employees, or morally and ethically wrong behavior by companies, and would stand up to this crap. How did they do it? By collectively banding together and boycotting their products, their services, etc. When enough people come together, and shut off the "food supply" of these companies, or at least put a big enough dent in their revenues to show up in their stock performance, then they will wake up and stop the abuse. The problem is that, today, we as Americans are the largest consumer nation in the world, and we flock to the malls, and the stores, and anywhere else we can to spend money on gadgets that are being put out by these companies because WE WANT, WE GOTTA HAVE, WE ARE DEPENDENT on the products of these companies! We have been conditioned to consume over several generations now and in this idealogy of consuming, we aren't willing to forgo the modern conveniences we have to be strong enough to come together. Instead we say "Oh, I'll quit buying that when somebody else stops doing it" or "I don't know what I'd do without my cell phone, I guess I'll keep paying even though they are screwing me on the rates because they have to pay their CEO more money" or "X company's customer service sucks and their rep was an @$$hole to me, but I gotta have their product so I guess I'll just live with it." We live in a society where the corporate greed has gotten out of hand, and they know they have us by the balls! What we need is another depression, so that people learn to live without a few things for awhile, and realize that what is really important in our country is depending on each other, and that food, housing, families, and a good job are the necesseties, and everything else is a luxury! That's my $0.02.

 

JEFF part of this is true the people in the unions making $47K to $52K and without the union they will be making HALF THAT!!
BROTHER THAT IS A FACT WAY LESS THAN HALF AS A MATTER OF FACT
around here a union job verse's a non union job is living in a rented apartment without food verses living in your own home with some mcdonalds every now and then ,

And that's my point exactly. If the job deserves to be paid half that, then why are the workers being paid that? I know several people who have been out of work for a while who would jump at the opportunity to have a job even if it was half what others were making.