Re: Union Work Rules, In Addition To Union Wages, Are What's Killing The Auto Industry

On Mon, 15 Dec 2008 23:45:06 -0500, Thumper <jaylsmith@xxxxxxxxxxx>
wrote:

On Mon, 15 Dec 2008 19:28:23 -0800, Ron <ron@xxxxxxxxxxx> wrote:

On Mon, 15 Dec 2008 15:15:29 -0800 (PST), mg <mgkelson@xxxxxxxxx>
wrote:

On Dec 15, 6:07 am, Thumper <jaylsm...@xxxxxxxxxxx> wrote:
On Sun, 14 Dec 2008 22:36:03 -0800 (PST), mg <mgkel...@xxxxxxxxx>
wrote:



On Dec 14, 9:03 pm, Ron <r...@xxxxxxxxxxx> wrote:
On Sun, 14 Dec 2008 10:46:05 -0800 (PST), mg <mgkel...@xxxxxxxxx>
wrote:

On Dec 13, 10:54 pm, Ron <r...@xxxxxxxxxxx> wrote:
On Sat, 13 Dec 2008 12:06:00 -0500, "Joan F \(MI\)"

<jjf...@xxxxxxxxxxxxxxxxxxxxxxx> wrote:
The auto companies have been working on controlling their costs for a number
of years, they also have several fuel efficient models.  The union has made
concessions in their most recent contracts and have agreed to take over the
health care for retirees with some initial funding from the companies.  This
funding has not been completed yet and the union has agreed to postpone
funding in the middle of this crisis.  Everyone bitches about their big gas
hog cars  but people bought them.  The car execs have no better crystal ball
than the average citizen.  Sure, they were complicit in glamorizing the big
SUVs but the public loves them.  Part of the need for larger cars is the
safety rules, you used to be able to pile a bunch of kids into a medium
sized car, now you have to have proper seats and belts for everyone.  Their
market share has been shrinking but I'm not entirely sure that is all their
fault, either.  Any time people have more choices any individual provider
will see a hit.  They are also suffering under the poor quality reputation,
quality has improved but in the meantime a lot of people wandered off to
Japanese cars and were very happy with them so they stayed.  Detroit still
does well in the truck sector and some people will always need trucks.  If
gas prices hadn't spiked earlier and the credit market hadn't frozen up the
big three would be quietly continuing on restructuring their business
without government help.

A lot of this bull*** you hear about work rules, etc., is truly long gone.
If you lived in Michigan you would know that there have been many plant
closings, many buyouts, many layoffs, over the past few years.  The union
realizes that they can't get more than their share and if there is nothing
to share that is zero.

Saving the big three is about more than just the autoworkers, it's about all
the suppliers who often supply to the foreign companies as well.  If they go
out of business the foreign companies will be scrambling to get parts
suppliers.  If you throw all these people out of work they will have no
income and will be eligible for unemployment for a while, perhaps food
stamps and Medicaid.  They won't be paying taxes or supporting local
businesses.  This 15 billion will look cheap next to what that will cost.

The problem is, GM alone lost $38.7 billion alone in 2007.http://www.washingtonpost.com/wp-dyn/content/article/2008/02/12/AR200...
If they got all of the 15 billion, that wouldn't make up even half
their losses, much less bring them back to profitability.  And we
haven't even touched Chrysler and Ford yet.  It looks like $15 billion
each, every four months for the foreseeable future.  Yes, I know they
are supposed to pay it all back... but how can they when they are
losing money at a faster rate than we are giving it to them?

 They will never learn as long as we keep propping them up with
bailout money.

Ron

According to the website you referenced, the $38.7 billion is an
accounting loss. Excluding the tax item, GM's global automotive
operations lost only $1.9 billion in 2007. The only previous bailout
of the auto industry was for Chrysler in 1980 and they paid it back.
So, it's a little premature to be saying there is a pattern.

Well, it's true GM played with their taxes in using the accounting
loss, but things have apparently got worse in 2008.  Again, citing
another article:http://www.time.com/time/business/article/0,8599,1857627,00.html?iid=...
"Ford reported heavy losses for the third quarter of 2008. Ford lost
$2.75 billion, pretax, from operations; GM fared even worse, losing
$4.2 billion, excluding a one-time gain."  Chrysler losses are harder
to pinpoint since they are owned by a private investment company, but
are rumored to be close to $3 billion for the third quarter of 2008.

 And that's just in the third quarter.  I don't have the figures for
the whole year to date, but making the assumption that it's linear it
would come to $16.8 billion for GM and $11 billion for Ford. I don't
see how they can possibly turn around companies that big in three
months.

According to the article, incidentally, "veteran employees eligible
for or nearing retirement will be offered payments of as much as
$62,500 to retire early. Those who are not eligible to retire can
receive payments of between $70,000 and $140,000, depending on their
length of service, "to voluntarily quit and sever all ties with GM."
My guess is that these early retirement costs will be categorized as
"legacy" costs.

So, here's a question for you, should the money used for the corporate
payoff to employees willing to retire early or voluntarily quit be
counted as part of the employee wage benefits?

Well, once again I have to point out I am not an accountant, but I
think the retirement funds should be considered part of their wages
since they are accumulated while the employee was working and are
based on his/her wage rate.

Ron

I'm sure things have got a lot worse for the auto industry in 2008. My
only point in regard to the $37.8 billion GM loss in 2007 is that
would have been an astounding figure, especially when you consider
that the recession didn't start until Nov. 2007 and the average gas
price in 2007 was only about $2.80/gal.

When I have a complicated ideological/philosophical problem to figure
out sometimes I do an extreme exaggeration or simplification to see
where that takes me. For example, with the legacy cost issue, here's a
hypothetical situation. Say a small company has 4 production workers
and along comes the worst economic collapse since the great
depression. As a result, management decides to eliminate 3 of them and
keep 1 and management decides to give those 3 workers 2 years of pay
in exchange for volunteering to quit. As a result, management winds up
paying a total of 6 years of pay to induce the workers to leave.

Now the question is how does management get that money back from the
remaining worker who will retire in 6 years? Management holds a big
meeting and they decide there is only one logical option and that is
to have the remaining employee work for free. Does that make sense?

That's about what happens.  8 years ago we had 9 people in my group.
8 years ago 3 people Now it's me.  Some of the work has been out
sourced and some has been eliminated by technology but I am still
working twice as hard as I ever did on the busiest day in 40 years.
I'm also on the beeper 24/.

The company makes all that money back that they gave people to leave
within 2 years.

Thumper

Years ago when I worked for US Steel, after the big crunch came and
after all the layoffs, management had two words of encouragement for
us: Work smarter and don't feel obligated to limit yourself to 8 hours
per day :-)

Gee, mg, I always worked that way during my career... in good times
and bad. I found it always paid off for me. That is to say I was
free to set my own hours and days of working and likewise knew when to
take time off (and more important when not to take time off).

Ron


Good for you. Most workers don't have that luxury.
Thumper

It wasn't really unique in all the companies I worked for. Most of
the salaried engineers were treated the same. Actually, looking back
on it, I probably gave the company more hours than I took off.
However, it was nice to have that ability when it was really needed.

Ron
.

Loading