Over the past few days, it has become pretty clear what the Republican response to the auto-industry bailout will be- no. If the Big Three are bailed out, Democrats are going to have to do it on their own, because the Republicans have some history to re-write and some other motives.
In order for the Republicans to get back to their roots so that they may one day get back in power, they are going to have to become “fiscal conservatives” again. Now granted, looking at the history of Republican rule, they have NEVER been fiscal conservatives, as the vast majority of our national debt, to include the largest annual budget deficits, were all brought to you via Republicans. However, there are a lot of idiots like me out there who don’t pay attention, and think Republicans are fiscally responsible. As such, expect the Republicans to spend the next few years simply saying no to any and all spending. What they are hoping is a couple years of them saying no and the Obama administration spending will allow them to rebuild their favorite fantasy- the GOP as prudent defenders of the taxpayer’s money.
The second reason you can expect them to say no is even easier to figure out- this is union busting on a grand scale. There have been dozens of signs over the past week what they really want, starting with the Mitt Romney editiorial in the NY Times:
The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”
You don’t have to look far for industries with unions that went down that road. Companies in the 21st century cannot perpetuate the destructive labor relations of the 20th. This will mean a new direction for the U.A.W., profit sharing or stock grants to all employees and a change in Big Three management culture.
When Mitt Romney says a “new direction” for unions, the new direction means planned obsolescence. It is important to remember what Mitt Romney does to make his money, and when he gives advice to what should happen to the auto industry, you need to understand that his vision for America is more of the same- in his worldview, everyone is working for $8 dollars an hour at Wal-Mart, getting their health care from medicare/medicaid, and barely making it.
On Monday last week, Todd Harris picked up the ball and ran with it:
Harris: Republicans are going to be looking-as we talk about concessions on the management side, we’re going to be looking, when you talk about bailing out Detroit, looking at reopening some of those ridiculous union contracts that have been huge, massive giveaways.
***No, I don’t-I don’t think that this is class warfare. I mean, you talk about a company like AIG or a company like Citigroup, and there was bipartisan consensus that they were simply too big to allow to fail.
Now, you haven’t heard-at least I’m not aware of any Republicans saying, no, you have got to protect the AIG management, or you have got to protect the Citigroup management. If they need to be hung out to dry, then let them hang them out to dry.
But, when you talk about some of these union contracts that are really crippling the Big Three, it’s not just that they made bad cars or that they made cars that used a lot of gas. They certainly did, although their cars are a lot better now. But, if you’re going to address fundamental reform in Detroit, you have got to have the union issue on the table.
And just so you are completely clear on what the real agenda is for the Republicans, the WSJ brings it home this morning:
onsider labor costs. Take-home wages at the U.S. car makers average $28.42 an hour, according to the Center for Automotive Research. That’s on par with $26 at Toyota, $24 at Honda and $21 at Hyundai. But include benefits, and the picture changes. Hourly labor costs are $44.20 on average for the non-Detroit producers, in line with most manufacturing jobs, but are $73.21 for Detroit.
This $29 cost gap reflects the way Big Three management and unions have conspired to make themselves uncompetitive — increasingly so as their market share has collapsed (see the nearby chart). Over the decades the United Auto Workers won pension and health-care benefits far more generous than in almost any other American industry. As a result, for every UAW member working at a U.S. car maker today, three retirees collect benefits; at GM, the ratio is 4.6 to one.
It could not be clearer. I do not know what the best thing to do with the auto industry is, and I am sick and tired of all these bailouts. However, I do think it is important that people realize that when Republicans reject a bailout of the auto-industry, that they are not doing so out of principle. If anything should be clear, when it comes to spending, the GOP has no principles. Instead, their no vote will be about something else- protecting the big money backers, the captains of industry and the folks who, unlike everyone else, have done well in the past few years.
liberal
Svensker
I read somewhere recently (Kos, Hilzoy?) that the $72 figure the right is always shouting about include fixed cost pensions for already retired workers. So it doesn’t belong in the benefits package number for current workers.
Joe D.
Is that $73 figure wrong though? If thats the case, it definitely means at the very least, the big 3 are overpaying for the work they receive…unless those figures Toyota and others are paying equate to slave labor, I see no problem with restructuring both the union wages to be more in-line with competitors AND re-organization from the ground up on what cars they make and how they plan to make them in the future.
searp
Somehow it is evil to want men and women to take home a wage that lets them join the middle class, buy a house, send their kids to college, etc., but it is patriotic to give Lockheed Martin hundreds of billions of dollars.
We don’t just have our priorities backwards, we have our heads up our asses.
Interrobang
This conflicts me terribly. On the one hand, I can’t condone union-busting. On the other hand, I can’t condone saving General Motors, either, considering that GM is largely responsible for a vast majority of the dysfunction of modern North American culture. Losing the UAW would be a small price to pay to see GM destroyed, as far as I’m concerned. They’ve been a criminal enterprise and serial antitrust violator for 80 years now. Doesn’t that disturb anyone but me? If they were a human criminal instead of a corporate criminal, they’d have long since been serving a life sentence under a "three-strikes" law.
I’d agree to bail them out if and only if they agreed to the following conditions themselves:
1. They need to be, not one company, but several companies. Spin GMAC off and make it into a bank (it’s currently one of North America’s largest banks right now, and GM controls it lock, stock, and barrel). If they genuinely are "too big to fail," they’re also too big to exist in their current form.
2. Vertically disintegrate — no more monopolistic and monopsonistic tendencies, no more strong-arming suppliers, and strongarming the culture.
3. They need to gradually move away from an exclusive focus on private vehicles and start building more mass-transit vehicles. How ’bout some low-cost streetcars? GM practically has a responsibility to the world to replace the well-functioning system it spent the better part of forty years (1920-1960) destroying.
Am I pro-union? Hell yes. But when it comes to the Big Three, I’m definitely a hanging judge.
Incertus
@Svensker: Exactly. But when it comes to union busting, there’s no lie too big. Romney said what he meant in that editorial, though:
The only way, from an executive’s perspective, to make that enmity stop is to bust the union and give all the power to management. As a union member, I respond with "Fuck you very much."
flavortext
If we ignore the reality that the Big Three make crappy cars and have terrible business strategies and accept the idea that auto-workers’ benefits are killing them, wouldn’t this be a strong argument for universal healthcare and better social security?
But of course, shifting public services from private industry to the government is SOCIALISM so never mind me.
cleek
right. it’s total labor expenditures (which includes pensions, health ins, etc) divided by current workers.
El Cruzado
It should be noted that the UAW has ALREADY made all the necessary concessions, but a few matters conspire for them to (hopefully not) be too little, too late, in no particular order:
– The management sucks (both money and quality-wise).
– The existing costs of healthcare and pensions for retirees ain’t going nowhere (even if the latest agreements between UAW and the companies help somewhat).
– The competition ain’t gonna stop working on new and better things just so the Big Three can catch up.
But you’re right about the general gist of it. You could say they have an overriding principle: More Money for the Rich. Union Busting is just a particularly pleasurable way of achieving it.
Michael
Why does the GOP forget the golden parachutes from the financial industry and include those in their wages and then compare them to the UAW wages. The parachutes far exceed any benefit that the UAW worker receives.
They are against the card vote since it would allow workers in right to work States to form unions easily. The foreign car assembly plants would now have to bargain with their workers.
There are calls for management changes in the auto industry but no calls on management changes in the financial sector which has created this crisis for all businesses in America and around the World. It is time for Americans to stand up and give voice to theses issues and drown out the bs the GOP tries to sell.
Paul in KY
A way to fight against this union-busting masquarading as faux concern for the poor car company & their employees is to hilight all the obscene executive pay at those companies & ask why the Ford family hasn’t sold the sports teams they own & the yachts they own to put the money back into the company.
Let’s see them do that, before you talk about cutting salaries for the actual workers.
Atanarjuat
Of course the GOP, and all conservatives in general, have no principles or any redeeming values whatsoever. Liberals nod their collective heads in unison in the face of such an axiomatic truth that it’s not even worth debating.
After all, how else could liberals gather a power base (and an an army of easily manipulated minions) to spread a wealth-redistributing agenda if there were no conservative boogeymen to demonize and blame for every financial and social ill?
In a leftist fantasy world, it all makes perfect sense.
Mike
As cleek said, this includes benefits paid to retired workers, a fixed cost, as if it were a per-hour cost. Note that as GM gets smaller, the misleading per-hour version of this number rises (the same cost divided by fewer man-hours.) In fact, the best way to get that number down would be for GM to hire a lot of new employees.
cleek
IIRC, the current chairman of Ford takes no salary. and he recently told NPR that the executive board is "discussing" taking pay cuts.
of course Ford is the only of the US 3 that is in reasonable shape. it’s GM and Chrysler that need real help/tough-love.
Tsulagi
But Cheney said Reagan proved deficits don’t matter. He said that to Treasury Secretary O’Neill who in Bush’s first term warned of a fiscal crisis down the road due to budget deficits topping $500B. Of course O’Neill was canned a month later. When has The Dick ever been wrong?
liberal
@Atanarjuat:
Some conservatives have redeeming value: e.g., the ones (non-neoconservatives) who thought the Iraq war was a terrible idea, and that current US foreign policy is abhorrent.
But the GOP? They’ve gotten almost nothing right in the past couple decades, save Bush 41’s compromise with congressional Dems that got the 1990 Budget Enforcement Act passed (the one recent provision which really did set Uncle Sam on a sound fiscal course), and his willingness (relative to other presidents) to be reasonable on the Israel/Palestinian issue.
Other than that…dreck.
Zifnab
@flavortext:
Why stop there? We should ignore the fact that asbestos causes lung problems, that Gitmo and Abu Garab increased terrorist recruitment, that cutting taxes doesn’t raise revenue, and that Social Security isn’t going to go bankrupt. Then all the GOP policies make perfect sense.
Ignore the fact that there are no unicorns and everyone can have a free magic pony!
I think the union-management sparring contest that occurs every decade or so isn’t good for the industry. You get policies that help the employee base less than it could and hurt the management more than it has to, because both sides want to score "victories" over each other rather than hashing out a sensible business strategy. Business-provided health care is the classic lose-lose for unions and companies. Employees got increasingly shitty coverage while the Big 3 got noosed with a billion dollar albatross.
That said, it sure as hell beats the alternative. Unions set the gold standard for wages in this country. Get rid of American car company unions and it’s a race to the bottom with non-union plants in neighboring "Right to Work" states. For the same reason that California emissions standards threaten auto companies in Detriot (whatchagonna do? stop selling to the most populated state in the country?), union jobs in Detriot threaten auto profits in the deep south. Capitalism is a bitch like that.
It would be great to see unions and the businesses they work with facilitate win-win reforms. They did a great job holding down CAFE standards and fighting emissions requirements. No reason to believe they can’t work together to pass universal health care and fight for a domestic-friendly auto market. It would be even better to see unions and management come together to work out reasonable and functional employee practices that keep workers in the middle class while still meeting management’s bottom line. :-p I look forward to an Obama White House that works towards reconciliation of labor and management rather than another 4 more years of self-deprecating class warfare.
RSA
I can’t see how the message "fuck retired people" can fail to be successful in America. Has global warming eliminated all the ice floes in the world?
srv
I assume if GM/Ford/Chrysler went bankrupt that their pension plans would fall to the governments Pension Benefit Guarantee Corp. (PBGC) fund.
So even if the Republicans get their wish, we will still all be paying for it. So perhaps the way to make the world worker-competitive would be to push the retirees to the new health care plan, and then have the gov’t bailout/takeover the pension costs. No idea what that cost is.
Of course, this wouldn’t solve the management problems or product problems with these companies. So let them go bankrupt and sell a 10 year exclusive rights to US production to ‘foreign’ carmakers for the cost of the pensions. They would pick up a fair number of the existing plants and employees to accomodate growth.
Atanarjuat
liberal said:
Not so fast, liberal! Why do you so blithely dismiss the creation of the Environmental Protection Agency and the Equal Employment Opportunity Commission? Is it perhaps because this was done at the behest of (gasp!) President Richard Nixon? Yeah, I know, I know… he’s a Republican, so it’s better to pretend that no member of the GOP is capable of transforming such progressive ideas into functional reality.
Thanks for proving my point.
mikkel
@srv: Yes exactly. Their argument is that if companies want to be successful then they should just not offer retirement benefits and let it fall onto the government.
Now I’m not necessarily opposed to this, as the current climate does show that even companies that have been around over 100 years may fail at any point, and it sort of makes sense to not have millions of retirees depending on the health of a company. On the other hand, it does also logically flow that we should have universal health care…which for some reason I don’t think is the message that the GOP was exactly shooting for.
Jose Padilla
With regard to the $73.00 an hour figure, not only is it misleading, but the automakers chose this route. For decades they offered autoworkers better retirement benefits in lieu of better pay.
El Cid
So, I suppose that if there had been no autoworkers’ unions and the pay and benefits were lower, this would have prevented the U.S. auto industry executives from running it into the ditch with awful decisions, such as pushing to keep fuel economy standards down, pushing to keep passenger SUV’s getting the same manufacturers’ tax subsidies as work trucks, pushing to expand & keep the small business deduction of up to $100K for vehicles OVER 6500 lbs, and investing their finance-based profits horribly, particularly in real estate?
Really?
That all would have been done away with? Lacking unions would have been a magic wand making auto company leaders less stupid, less gluttonous, less corrupt, less short-sighted?
Really?
Zifnab
Key words, "Last couple of decades". When you’ve got to go back more than forty years to make a point about a modern political force, you’ve lost your argument.
Side Note: Worth mentioning that people who bring up LBJ and the Civil Rights Act in defense of the Dem Party being "pro-black" make about as much sense as bringing up Robert "KKK" Byrd’s Klan history or Dixiecrat Segregationist positions in the US House, Senate, and state governorships.
If the last great thing you can name your party doing happened before you were born, you have just stepped in a giant pot of fail.
Caidence (fmr. Chris)
I have to admit, I really DID think that Republicans were more anti-spending than your average Dem, because they seemed to like tearing things apart. But that what I get for taking my intermediate course in politics during the years of Junior the Chimp.
Now I realize that people work in government to go get money for their pet projects, full-stop.
Caidence (fmr. Chris)
@Atanarjuat:
Unfortunately, I’m starting to wonder if these super-socialist "leftists" ever existed outside of the psychosis of the Limbaugh Right. I haven’t seen it ever take solid form, and now I’m noticing that even that which takes solid form isn’t even real.
up is down; left right; so on, so forth.
Brachiator
Unfortunately, you can’t bailout the auto industry simply because you want to protect the auto unions, if the prices of US cars are too high and if buyers don’t want them. And it is sad, but typical, that the auto industry can’t get beyond the standard antagonism between management and labor in order to rescue themselves.
People have rightfully noted the clown show of the three plutocrat auto executives sitting before Congress. But it is also notable that the the head of the auto union did not appear. And everyone has noted that the central failing was that these goons showed up to beg for money, but did not see a need to even have an outline of a plan to present to the Congress.
And although I presume that the GOP wants to dig a grave for the auto union, there’s not too much that the Congress or the taxpayers can do if the unions insist on providing the shovel. In a related matter, it amazes me that the Screen Actors Guild only knows one word, "strike," which does little more than match the greed and stupidity of the producers, particularly since TV viewers and movie goers reacted to the delays and quality compromises resulting from the Writers’ strike by rejecting most of the crap that was thrown in their faces. The viewer reaction to the lame, re-tooled "Knightrider," for example, is a message to both the auto and the entertainment industry.
Mike
More than thirty, anyway.
Dave L
That $72/hr total compensation figure used by the lying Wall Street Journal is beyond a lie – it’s a damned lie.
Following the right’s reasoning on this point to its logical conclusion, and UAW workers should be PAYING the Big Three about $30/hr to bring total compensation costs back into line with the foreign producers’ average.
And even if you want to argue that legacy costs are a legitimate point of comparison, which basically penalizes GM for shrinking – that is, doing exactly what Mitt and every other consultant and WSJ editorialist has been telling them to do for decades – then you somehow have to calculate the benefit to European and Asian manufacturers of state-funded health care.
But why bother? It’s not as if you’re going to win an argument with weasels by appealing to right reason.
Josh Hueco
Let’s see…professional athletes have strong labor unions, but the leagues are doing well. Service workers like janitors have unions but I don’t see the hospitality industry dying. And there were no unions in finance industries that were run into the ground. But it’s the unions’ fault. Always is.
Zifnab
@Josh Hueco:
To be fair, the baseball strikes in the 90s did terrible things to the books of major league franchises, and many suspect that the rapid decline in popularity of the sport following the strikes was a factor in increased drug use at the turn of the century. Managers, looking to drag their sales numbers out of the gutter, turned a blind eye to ‘roid induced home run rallies.
Likewise, the TV and movie industries were hit hard by the writers’ strikes.
But these pitfalls weren’t caused by "unions" in a vacuum. They were caused by disputes between unions and management. One could easily note that if management just rolled over to every labor request the strikes wouldn’t happen and business would hum along just fine.
To take this to its logical conclusion, the problem with the auto industry isn’t the existence of unions at all. It’s the existence of management. Get rid of management and all your problems are solved. QED, bitches!
I mean, it makes perfect sense, right?
liberal
@Atanarjuat:
When I said "past couple decades," I meant two decades.
As for Nixon—there were a few good things he did. But he went down in history as a moral monster for spreading the war into Cambodia. (Not to mention other offenses like the so-called "southern strategy".)
…added as edit: looks like Zifnab already made the point about the time scale.
ew
It seems like the leftist illuminati sees these large companies failing as a bad thing.. but won’t we come to a point where throwing money at something else is impossible? We have to run into a point of no more money to borrow, where the unions have no point but to fail.
liberal
@Zifnab:
Well, honestly, in the case of sports, what the hell does management actually do?
AFAICT, the public puts up a good chunk of the money for things like stadiums.
All I see the owners doing is ensuring they collect monopoly rents by creating barriers to entry for new teams.
JasonF
THE TRAGEDY OF THE AMERICAN AUTOMOBILE INDUSTRY
A Play in Three Acts
Dramatis Personae
BIG THREE, a manufacturer of automobiles
UAW, Big Three’s employee
MITT ROMNEY, an idiot
ACT ONE
BIG THREE: I have plans to build automobiles, but I need labor to do so!
UAW: I will labor for you if you will pay me $40 per hour.
BIG THREE: I will not pay you $40 per hour.
UAW: But I need to save for my inevitible retirement, and any health concerns that may arise.
BIG THREE: I will pay you $30 per hour, plus a generous pension of guaranteed payments and health care upon your retirement.
UAW: Then I agree to work for you!
ACT TWO
UAW: I am building cars for you, as I have promised to do!
BIG THREE: I am designing terrible cars that few people want to buy! Also, rather than save for UAW’s inevitible retirement when I will have to pay him the generous pension of guaranteed payments and health care that I promised, I am spending that money under the dubious assumption that my future revenues will be sufficient to meet those obligations.
ACT THREE
UAW: I have fulfilled my end of the deal by building the automobiles that you have asked me to build.
BIG THREE: Oh no! I am undone! My automobiles are no longer competitive due to my years of poor planning and poor judgment!
MITT ROMNEY: This is all UAW’s fault!
Scott H
Common sense ought to alert one that a company is not paying an active employee nearly 158% in benefits. The $70 bit the curb a couple of weeks ago as above commenters have pointed out.
Secondly, one doesn’t read the WSJ for objective analysis. Well, some do. Some read, apparently completely uncritically, a great many things.
I don’t argue that the unions need to be engaged in the process of reorganization, but I am not going to entertain the propaganda originating from the board rooms intended to arouse resentments against labor.
Workers’ productivity rises year over year while their actual wages erode. The exact opposite can be said for management.
James F. Elliott
Goddammit, the WSJ is using that $73/hour figure too. Lies, damned lies! It’s obtained by amortizing all of the pension and healthcare obligations for retirees out of current costs. Indeed, after last years’ UAW negotiations where the UAW agreed to allow the Big Three to release most of those obligations, it’s a moot fucking point in the first place. Real current per-employee costs for benefits only add an additional $10/hour or so, bringing the Big Three squarely in line with the Japanese-owned U.S. plants.
In fact, since those plants are so new, it’s fucking unconscionable to include Big Three retiree-benefits in a comparison in order to try to make the argument that the UAW is the cause of all of Detroit’s woes. Back during the "Treaty of Detroit," the original contract negotiations between the UAW and the Big Three, the UAW saw the Big Three’s pension plans as a huge crisis waiting to happened and offered to throw their support in with the corporations to push for a robust public retirement and health system. The corporations turned them down.
So fuck the conservatives. They don’t even know what they’re talking about, or they’re lying to have their way.
OCD
Do you really think that toyota and other industries with factories in right to work states like Alabama would be paying that $26/hour if they weren’t competing with the UAW? If you do I have some beachfront property in Montgomery that’s for sale. Gimme a call at 1-800- dumbass.
John PM
@JasonF: #35.
I nominate this for best short play of 2008 and for the Pulitzer Prize. Seriously, talk about boiling the issue down to its essence. Awesome!!!!
tammanycall
I hate to be obvious, but we’re in this hole because we (the left) are made up of a coalition of "special interests" who aren’t always great at thinking or acting strategically. In the past, the UAW helped management fight environmentalists on tougher emissions standards, even though politically unions have more in common with enviromentalists than management. I believe the UAW came around on this issue eventually, but their initial reaction exemplifies my point: too often, we only think in short term solutions, or of one issue at a time, when everything is interconnected.
Now we are comparing labor costs for different auto companies. The points we usually make are that unions keep non-union costs in check, and that workers in Japan have state-provided health care, thus lowering the cost of business. The point we should be making is that when we have universal health care, the costs of labor – not just in the auto industry, but in every industry – will be drastically reduced. That is why universal health care is so necessary, and why the $75 figure is moot. We should strive to find the thrulines of our key issues, and form allegeances amongst our voting blocks dedicated to protecting them, because the only way the GOP can stop our agenda is by convincing some of us to "go rogue".
That does not mean that we should let either management or unions totally off the hook. Management should be dragged through the streets of public opinion. Union leaders should be working to help the rank and file, not just the upper echeleon of union leadership. And the AFL-CIO should re-address the methods of its minority outreach, especially considering the continued rise in the Latino population.
JR
ew says: "leftist illuminati" (?)
Hahahahahahahahahahahaha.
Imjustanut, is that you being a spoof of a spoof? Or did another peanut from the crazy Con tree fall into this blog?
"leftist illuminati" Hahahahahaha.
Fuck off.
————————————–
Hey John Cole, this was a great post, thanks. You have an insider’s knowledge of the Republican game show, and a real knack for ‘splainin’
Brachiator
@tammanycall:
What does this have to do with the health care costs of auto workers in the US, Canada or Mexico who are employed by Japanese auto companies?
Also, I am not sure how the Japanese health care system affects other company costs based on this description of how the system works:
I would like to see an accurate breakdown of the proportion of auto costs related to salaries, pensions and health care costs (and something more reliable than the crap floating up to the top of the WSJ and other publications). Still, the idea that the US auto industry would magically become more efficient and productive if only they were relieved of their health care costs is an idle fantasy.
The Other Andrew
Having just lost an election–largely due to their mishandling/corruption of the economy–conservatives plan to regain a majority by attacking blue-collar, middle-class voters in states they desperately need to win. Yes, that makes sense…
liberal
@tammanycall:
I should hope not. The policies of the corrections union(s) in California are despicable, AFAICT.
Roger Moore
@Zifnab:
The baseball strike wasn’t really caused by the union at all. They only launched the strike when it became clear that there was no real hope of reaching an agreement without some kind of labor action. They chose to strike rather than be locked out the following spring, but it was clearly the owners who were spoiling for a fight.
The MLBPA offered the owners a no strike/no lockout agreement, and the owners rejected it. The owners then refused to negotiate for over a year. When they did negotiate, they refused to budge at all, declared an impasse, and tried to implement their final offer. It wasn’t until a Federal Judge (Sonia Sotomayor, who is supposedly on Obama’s Supreme Court short list) ruled that they had negotiated in bad faith and issued an injunction that the owners engaged in any substantive negotiation.
Even then, the owners wound up decisively rejecting the agreement their representative negotiated. They were only shamed into ratifying it when Jerry Reinsdorf- one of the instigators of the rejection- made exactly the kind of crazy signing that he had been railing against. It’s hard to imagine anything that the union could have done to prevent some kind of work stoppage short of capitulating to all of the owners demands.
Atanarjuat
liberal quoted, then condescended:
les
Part of the $72/hr bs is the fact that current employees are saddled with retiree benefits because the companies, with the complicity of Congress and the IRS, has knowingly underfunded pensions and retiree benefits to gussy up their shot term books and stock prices, allowing them to claim successes to base ridiculous mgmt. compensation on. If the big 3 (and most other large US companies) honestly funded for their known future obligations, there would be a lot less financial system bubble and a lot less excuse for multi-million dollar CEO comp.
srv
@The Other Andrew:
Regardless of any bailout, the big 3 are still probably going to collapse or significantly shrink. So it isn’t a win-win for the Dems.
Whether a strategy to focus on all the purple states that end up on the short end of the bailout stick works, somebody should start working on that.
Conservatively Liberal
The exact problem, succinctly stated. The workers are doing more with fewer employees and getting less for their efforts. Management is saving that money, right? No, they have been splitting it up amongst themselves and their shareholders. The more management cuts labor expenses, the more they get paid. The people who do the actual production get less and their bosses get more for making the employees do more with less.
The car companies utilize blue collar labor to produce goods that can be sold, so no bailout from the Repubs. The banks and financial markets produce money by having white collar people shuffling more money around. They get bailed out with Republican approval.
So a business that moves money around to make more money without actually producing a thing is worthy of a bailout, yet bailing out a business that actually produces something of value is wrong?
Talk about fucked up priorities.
I recently read a story about Toyota and how it has become the Wal-Mart of auto manufacturing. Currently Toyota is looking at rescaling the wages (downward, of course) with the misfortune of the big three. Unions have been the standard for prevailing wage, and the only reason those who work build cars in right-to-work states get paid what they do is because of the UAW. If the UAW bites it, you can bet wages in non-union car plants will go down.
It’s the Republican race to the bottom, if they win we all lose.
binzinerator
Just more gooper Disaster Capitalism at work.
liberal
@Atanarjuat:
Certainly the GOP has changed quite a bit between the Nixon era and now. Much for the worse.
At best, it’s relatively minor in the big scheme of things (like e.g. creating roughly 4 million refugees from Iraq).
As for hate, emotions aren’t really relevant, though given how badly Bush has hurt this country, hatred for him is well-deserved.
Zifnab
@Roger Moore:
I won’t argue with any of this. I’m merely pointing out that the strike hurt baseball in general. Likewise, I would certainly characterize the union making an offer and the management telling the union to screw off a "dispute between unions and management".
What’s more, had their been no union, I question whether management’s new position would have triggered a "strike" or merely provoked an on-again off-again wave of individual players coming and going from the sport. The baseball franchise might have survived better if individual players or teams of players made disjointed personal protests, but the players as a whole would almost certainly have received a worse deal.
Joshua
It did, short term, but I am pretty sure baseball now is more popular and profitable than it was in 1994 by a fair margin. Of course, the roiding had something to do with that, but fans do want to see a clean sport (or at least, they overwhelmingly *say* they do, and I realize they may not be telling the full truth).
In any case, baseball is doing fine, Bud Selig has stuck on for so long because he has funnelled tons and tons to his owners, and the union has done very well since the strike for its players. Contracts for players of every tier are fatter than ever, and teams are doing well. And yes, I take every article about "only small% of owners making money" with a very very very large piece of salt.
Of course, it is hard to apply lessons learned from baseball, which has an antitrust exemption and all, to the actual world of business. It exists in its own realm.
Chuck Butcher
Some one asked what difference it made to car costs that Japan has universal health care. It is more than that, it is also a matter of the Japanese market subsidizing US assembled cars. What? You thought those parts were made in the US? They’re assembled in the US, all the component parts are Japanese subsidized. Goddam if you’re gonna act like you know something about an issue this fucking important, how about actually knowing something about it? The component sudsidization is a dirty little secret, they got busted for doing it with entire cars and put plants here and did the same damn thing with the parts. Check the price of the same car in Japan. Why the hell does it cost more than it does here? There is a little matter of an entire damn ocean to get those parts across and they don’t make them here?
Fuck. You play the goddam Republican game for them. RMN??? Jayzus, that’s the guy that instituted wage and price controls you asswipejanut. That’s your idea of the GOP? You let these asshole control the goddam discussion on their terms and wonder why the hell they win elections? Sure fuck the big three and UAW, so you can buy subsidized Japcans and think being some service (servant) economy is gonna work out real well. You saved $15K on your quarter million dollar house by insourcing labor and never complained that Americans were getting screwed to the wall just so you could save that pittance, about the price of your walk in closet by the square foot. I drove myself into a corner by hiring legally and paying for qualified workers and training up workers and paying them as they qualified instead of some illegals. You’ve kicked the worker into the ditch from St Ronnie on and now it’s his fault? Fuck ya’ll.
Greed and big cars? Big three give up an average of around $1500 per unit, now with that average do you build little cheap vehicles or big expensive ones? If you’re giving up big chunks on your components how do you cover that? Same way. Management was fucked either way they went and the Japanese know that and that’s their business model. US trade rules allow it. The only US business that approaches their predatory policies is WalMart.
You yap about doing something new and then use the same old manufactured discussion to go there? Why the hell do you think we’re in the boat we’re in right now? Let’s lose some more elections now that we won one. Aw fuck it.
Yes, I’m pissed off to see this stupidity promulgated by so-called lefties on a left site. Can you tell?
Church Lady
Except for union workers, and perhaps some government retirees, I can’t think of any jobs that continue to provide full health insurance benefits after retirement. You retire, you turn 65, and you enroll in Medicare. As for those that retire prior to age 65, they are making a lifestyle choice, and should be prepared to pay their own health insurance premiums, just as anyone else retiring prior to age 65 would.
As to pensions, I also cannot think of too many careers in this day and age that have defined pension benefits, much less any that provide retirement benefits equal to full salary at the time of retirement.
Until Detroit can jettison these costs, they will continue either lose money or will remain uncompetitive with non-union automakers that don’t have these staggering legacy costs, resulting in selling fewer and fewer cars.
If they cannot get their costs and wages in line with the others, only two things can happen. Either they will go under or we, the taxpayers, will have to look forward to a future of supporting the Big 3 retirees for a long, long time.
Jennifer
Others have already pointed this out upthread, but let’s hear it from the horse’s mouth, as reported by the AP:
GM, which negotiated the four-year deal that serves as a template for UAW deals with Chrysler and Ford, says its total hourly labor costs dropped 6 percent this year from pre-contract levels, from $73.26 in 2006 to around $69 per hour. The new cost includes laborers’ wages of $29.78 per hour, plus benefits, pensions and the cost of providing health care to more than 432,000 GM retirees, GM spokesman Tony Sapienza said.
See, the problem is that a bunch of old people are getting health care, the leeches.
Conservatively Liberal
Fix’t.
Church Lady
At $29.78 an hour, given a 40 hour week and pay for 52 weeks a year (I assume that they get paid vacation), we’re talking almost 62K per year in base pay. This doesn’t include the value of the paid health insurance and defined benefit pension plans the workers receive. Given that most of the auto workers probably are not college graduates, I’d say that’s pretty darned sweet pay for a high school graduate. There are boatloads of college graduates earning no where near that kind of base pay, never mind the benefits.
My sister-in-law, with a Masters in Education and 10 years experience teaching in New Jersey, Tennessee and now Texas, teaches high school AP History. I’m sure that she wishes she was making that much money and had those benefits. Sadly, she doesn’t.
It’s great that the auto workers have good jobs paying an above average wage (median US income is about $48K). However, either they have to make less in the future, and receive fewer benefits, or they will be unemployed when GM, Chrysler and Ford go under. In addition, retiree plans will have to be reconfigured to have health coverage comparable to Medicare in benefits. How to cope with their pensions is beyond my ability to figure out, unless the government would be able and willing to fold them into the Social Security system (probably unworkable).
Comrade grumpy realist
Actually, GM et al. have funded the pension plans "quite well". Article in WSJ today about how the gov’t fall-back agency for pensions (the one that is supposed to clean up when private pension plans fail) has been yowling to high heaven about GM et. al. potentially looting said pension plans for their cash needs right now.
Have noticed that if you throw out the front portion of the WSJ, the rest of the paper is pretty sensible. Front portion can be read, but requires large amounts of NaCl to assimilate properly. Editorial section is distilled eau-de-wingnut, 180 proof.
Sasha
Wow, John. You’re really beginning to sound like a DFH.
Welcome, brother.
Nancy Irving
The Big Three’s benefits costs are so high because they have so many elderly retirees. The Japanese carmakers’ U.S. operations began relatively recently, so they have comparatively few retirees, and fewer very elderly ones, which means that their retiree health costs are much lower.
This is the only reason for the disparity. It has nothing to do with the unions.
If we had universal health coverage the problem would be eased.
But the people who want to blame the unions for Detroit’s troubles are the same people who are against universal health coverage.
pseudonymous in nc
What it has to do is this: for the many decades before Japanese Auto started building factories in Southron Land in response to the bribespersuasive powers of Southron state government, they did not rack up the kind of long-term obligations to their employees that GM did in the US. (This doesn’t get GM off the hook for idiotic decisions in its domestic market, but it’s a bit rich for Mitt fucking Romney to say to retired UAW workers: ‘you fucked up, you trusted us!’)
Chuck Butcher
hey Churchie,
Do you pay any attention at all? You can bust the big three down to crap wages and no benefits and they’ll still be giving up money to the japs. Have two of your live brain cells talk to each other. The components, the biggest price of the car are made in goddam JAPAN with socialized medicine and subsidized by the local market.
How about Fair Trade instead of Free-for-all Trade?
Your teacher pals work 9 months and it ain’t on concrete floors bustin ass on a line that doesn’t stop and doesn’t care if you’re having a bad day or you’re 60 years old instead of 20. Your ignorance of what it means to do physical work is beyond apparent in your little screed. Mindless monotonous work 8x8x8x8x8 if it’s not running flat out as you trade your health and well-being for denigration by the "elites." Most of them probably didn’t go to college, and that means exactly what? They’re stupid? Their work has no value? Exactly what future do you think there is? Doing the same thing next year and then…
On the best day of your life you wouldn’t last 3 hours on one of my jobsites and my people have had their throats slit by illegal labor/amnestied labor. They make 50% of what they would have when St Ronnie was elected, like that? Get some labor tables and take a look at various occupations and see what has happened to wages with inflation over that period. The rich got a hell of a lot richer, the middle class whipped that horse to a froth and the blue collar got left in the ditch – now the pain has bled up and that middle is starting to squeal, how’s it feel to be a paycheck from damn disaster? Oh my, I bet you thought you did everything right – so did those guys in the ditch you’ve ignored. And they didn’t buy a McMansion.
Conservatively Liberal
Nice way to lay out the facts Chuck, on target too. People have forgotten that what made us great as a nation was the fact that we could build anything we put our minds to, that there are many people in our country who are ready to roll up their sleeves and get the job done. We have people who like to work, and yet our government has been selling their jobs off to other nations. The McCain moment when he said American workers would not pick lettuce for $50.00 an hour says it all. People with a lot of money seem to have this idea that American people don’t care for real physical labor, that they can’t do ‘real work’.
Bullshit. American people love work, but they want to be paid a fair value for the work performed. Big business is only interested in the bottom line, getting the work done for the least cost. The so-called "Free Trade" charade the wingnuts love is not free. Look what has happened to our manufacturing sector since the free trade rules were passed. It has moved out of our country, destroying a lot of jobs that paid real well. With "free trade" I have watched the rich get richer and the blue collar middle class being slowly destroyed. People who produce something of value are losing out to people who do nothing but pretend to make money from money while actually lining their own pockets. From an excellent diary at Kos:
What I am finding particularly disturbing coming out of the wingnut peanut gallery is that we are hearing how everything that is going wrong in our economy is the fault of poor people and blue collar people. The poor people were given lots of money to buy houses that they could not afford by bankers who were forced to give them them the money (by Democratic law makers), and that corporations are getting screwed over by the unions who represent the workers. Republicans are revving up the class warfare for the next round of finger pointing.
We are supposed to believe that everything is the fault of the rabble, the blue collar workers. Never mind the assholes who got rich off of the Ponzi scheme that our economy has become. They are standing over the corpses of our economy, housing and manufacturing sectors, blood dripping from the knife in their hand, yet pointing an accusing finger at everyone watching them. They didn’t kill the golden goose, we did.
The Republicans think this line will sell now? Maybe they will fool some people for a bit longer but soon the truth of the matter will be plain for everyone to see. We were sold out by our politicians to the highest bidder, or in the case of our jobs, to the lowest bidder. What has happened to our country is criminal, and the Republicans have led the way with the Democrats following like meek little sheep.
The house of cards is falling, the grand illusion is over. Tough times are ahead, no doubt about it, and it is all our fault.
Bullshit.
ET
“Getting more and more pay for less and less work is a dead-end street.”
Sort of like the executives at the Big 3???
Shygetz
It means nothing about their intelligence or the value of their work. It has to do with available labor supply–it’s easier to find workers for jobs that don’t REQUIRE college degrees than it is to find workers for jobs that do.
My "teacher pals" don’t average $62K even if you pro-rate for a 9-month work year, and that’s not counting the 4+ years of productive work they gave up to go to college, usually sinking tens of thousands of dollars into their education. My "teacher pals" are also salaried, so they work overtime free (and often, at that). My "teacher pals" do bust ass on concrete floors covered with cheap tile, and I hate to tell you this but the students, parents, and administrators don’t give a shit if you’re having a bad day or if you’re 60 years old instead of 20. And my "teacher pals" get to put up not only with your "elites" who look down on them with such witty aphorisms as "Those who can, do; those who can’t, teach", but also with parents who either don’t care if little Jimmy is setting all the books on fire, or who are sure that someone else is making little Jimmy set all the books on fire, and either way it’s the teacher’s fault.
And all of the sanctimonious "You wouldn’t last three hours on one of my jobsites" is bullshit. I was raised in a small town that had multiple manufacturing plants. I know plenty of line workers (and teachers, and farmers). They spanned the same unexceptional range as most people do–no better, no worse. America is filled with plenty of people getting shafted by the last two decades of American labor and economic policy, and trying to pit line workers against teachers is stupid, counter-productive, and results in you looking like an ass. So knock it off.
dr. luba
@Shygetz:
Your teacher pals knew going in what teacher pay is. It’s never been that great, but it’s a government job, and you can usually find work, and the job comes with benefits. Blue states tend to pay more than red, but it’s never been the way to riches. And you get the summer and holidays off.
Not everyone is smart enough to go to college, and, of those who can are, not everyone can afford it. Should being not so bright condemn you to a life of poverty? Should only "smart" people be allowed to live a good middle class life?
My dad did factory work all his life, and it wore him out. He retired at 60 living off savings until Medicare and SS kicked in. He wanted an easier life for his kids, and made sure we could afford to go to college.
Yes, your friend gave up four "productive" years. Well, I gave up twelve. It’s the price you pay for avoiding back-breaking labor, not a guaranty of riches.
littleplatte2
You have got to love some of these comments–labor unions makes too much money, teachers have the summers off, labor unions are no good. The Big 3 make crappy cars. Maybe 15 years ago, but not today. The average citizen beats on each other when the upper class makes off with all the money. Why complaint about the UAW’s wages and worry more about your wages!