Mike InMich's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/302937/comments http://seekingalpha.com/article/140957-gm-eulogies-let-s-move-on?source=feed#comment-529612 529612 Wed, 03 Jun 2009 09:04:07 -0400 http://seekingalpha.com/article/133841-chrysler-gets-its-miracle-not-so-fast?source=feed#comment-482353 482353
Besides this outrage, there is another interesting item to play out. I'm sure Fiat would prefer to build the 500 in non-UAW Mexico. If forced to build in the US by their majority UAW owners the value equation is even more out of whack. Look for more federal money over the next few years.

Obama should realize that there it is a zero sum game. UAW jobs lost in a liquidated Chrysler would be offset by fewer losses at GM and Ford. Shoot this dead horse.]]> Wed, 29 Apr 2009 09:10:17 -0400
Besides this outrage, there is another interesting item to play out. I'm sure Fiat would prefer to build the 500 in non-UAW Mexico. If forced to build in the US by their majority UAW owners the value equation is even more out of whack. Look for more federal money over the next few years.

Obama should realize that there it is a zero sum game. UAW jobs lost in a liquidated Chrysler would be offset by fewer losses at GM and Ford. Shoot this dead horse.]]> http://seekingalpha.com/article/128721-three-main-reasons-for-gm-s-slow-decline?source=feed#comment-446656 446656
A fourth item, or perhaps a subset of item 1, is that the transplants have exploited ridiculous US law that has uneven union rules. Specifically they have gone to mostly right-to-work states. I find it amazing that the left that loves to hate american cars is choosing non-union over union. Go figure.

I'm a little worried that Ford may not benefit as you have suggested. Now that Ford is competing with Obama Motors I fear that the competition will not be fair, as the success of O-motors will be in part a function of their sales. Also, Ford will not be free to benefit from customer demand for their cars because CAFE will be ratcheted up.

Someone above said Toyota and Honda also had to meet CAFE. True, but they were coming from a small car nitch that easily made CAFE and they used their profits (base don non-union labor) to upsize into bigger vehicles. Ford and GM started from a large car nitch and had to make massive investments to downsize into vehicles no one wanted, and not sell vehicles people wanted. CAFE was massively discriminatory to the US auto makers - see item 3 culture comments for some of rationale.

Note also that Ford's largest selling vehicle, the F-series, has commercial applications. To me it makes no more sense to make Ford meet CAFE with these trucks than to force Mack truck meet CAFE. ]]> Tue, 31 Mar 2009 12:40:08 -0400
A fourth item, or perhaps a subset of item 1, is that the transplants have exploited ridiculous US law that has uneven union rules. Specifically they have gone to mostly right-to-work states. I find it amazing that the left that loves to hate american cars is choosing non-union over union. Go figure.

I'm a little worried that Ford may not benefit as you have suggested. Now that Ford is competing with Obama Motors I fear that the competition will not be fair, as the success of O-motors will be in part a function of their sales. Also, Ford will not be free to benefit from customer demand for their cars because CAFE will be ratcheted up.

Someone above said Toyota and Honda also had to meet CAFE. True, but they were coming from a small car nitch that easily made CAFE and they used their profits (base don non-union labor) to upsize into bigger vehicles. Ford and GM started from a large car nitch and had to make massive investments to downsize into vehicles no one wanted, and not sell vehicles people wanted. CAFE was massively discriminatory to the US auto makers - see item 3 culture comments for some of rationale.

Note also that Ford's largest selling vehicle, the F-series, has commercial applications. To me it makes no more sense to make Ford meet CAFE with these trucks than to force Mack truck meet CAFE. ]]> http://seekingalpha.com/article/115796-chrysler-fiat-deal-is-horrible-for-gm-and-ford?source=feed#comment-434396 434396
"31october" said Ford and GM don't compete with the FIAT 500:

But, Ford, for one, is planning to bring over small cars from Europe that would compete with the FIAT 500. Specifically their B-car Fiesta in 2010.


Several of you argue that FIAT will not be competitive in the US. I agree this is true after people see what crap they are after a couple of years. Were it not for the federal bailout money they would not even be able to come over here. But if you build a plant with what amounts to taxpayer - bailout money - a certain number of those cars WILL be sold, taking share from Ford and GM.

So the US taxpayers subsidize the further erosion of no-bailout-money Ford's market share. And this with third rate FIAT vehicles. This is beyond anything envisioned by the initial bailout.

I reluctantly supported the bailouts to date because we were told of dire consequences. I don't support the subsidy of a new, third rate, entry into the US market. I now think it is a zero sum (market share) game. If Chrysler losses auto jobs via bankruptcy, then Ford, GM and the transplants loose fewer jobs.

]]> Sat, 21 Mar 2009 10:16:33 -0400
"31october" said Ford and GM don't compete with the FIAT 500:

But, Ford, for one, is planning to bring over small cars from Europe that would compete with the FIAT 500. Specifically their B-car Fiesta in 2010.


Several of you argue that FIAT will not be competitive in the US. I agree this is true after people see what crap they are after a couple of years. Were it not for the federal bailout money they would not even be able to come over here. But if you build a plant with what amounts to taxpayer - bailout money - a certain number of those cars WILL be sold, taking share from Ford and GM.

So the US taxpayers subsidize the further erosion of no-bailout-money Ford's market share. And this with third rate FIAT vehicles. This is beyond anything envisioned by the initial bailout.

I reluctantly supported the bailouts to date because we were told of dire consequences. I don't support the subsidy of a new, third rate, entry into the US market. I now think it is a zero sum (market share) game. If Chrysler losses auto jobs via bankruptcy, then Ford, GM and the transplants loose fewer jobs.

]]> http://seekingalpha.com/article/125379-ford-and-uaw-working-together?source=feed#comment-422156 422156
Giving back is relative. If you have COLA then giving back is not getting a COLA raise, which few in this country get. If you have total health care coverage then giving back is not getting a 10-15% raise in health care expenses every year. And so on. The UAW baked in so many automatic raises that just staying even was considered a big give back to this crowd.

The fact is the big 3 could fill their plants with happy, productive, and grateful workers for a quarter of what they pay the UAW extortionists. And still the UAW radicals complain.

]]> Wed, 11 Mar 2009 15:26:33 -0400
Giving back is relative. If you have COLA then giving back is not getting a COLA raise, which few in this country get. If you have total health care coverage then giving back is not getting a 10-15% raise in health care expenses every year. And so on. The UAW baked in so many automatic raises that just staying even was considered a big give back to this crowd.

The fact is the big 3 could fill their plants with happy, productive, and grateful workers for a quarter of what they pay the UAW extortionists. And still the UAW radicals complain.

]]> http://seekingalpha.com/article/124701-the-current-stagnation-of-natural-gas-vehicles-in-america?source=feed#comment-418350 418350
]]> Sun, 08 Mar 2009 16:31:35 -0400
]]> http://seekingalpha.com/article/124139-doubling-fuel-economy-despite-economic-turmoil?source=feed#comment-413300 413300
Try again prof. Not that I blame you since you can't get any government funding for telling the truth any more.

Let's look at this another way. If it was so easy would not the auto companies be doing it as they got whacked this summer by customer demand for fuel economy? And if it is so easy why are Toyota and Ford and others introducing hybrids that cost $8000 more than non-hybrids, and I beleive they still loose money. If they knew the magic recipes that the Global Fuel Economy initiative and Prof.Haywood have they could get more fuel economy without even trying, and clean up in car sales.

Maybe there is a difference between acadamia, the third world dominated UN, belteway bandits, and REALITY!]]> Wed, 04 Mar 2009 16:40:38 -0500
Try again prof. Not that I blame you since you can't get any government funding for telling the truth any more.

Let's look at this another way. If it was so easy would not the auto companies be doing it as they got whacked this summer by customer demand for fuel economy? And if it is so easy why are Toyota and Ford and others introducing hybrids that cost $8000 more than non-hybrids, and I beleive they still loose money. If they knew the magic recipes that the Global Fuel Economy initiative and Prof.Haywood have they could get more fuel economy without even trying, and clean up in car sales.

Maybe there is a difference between acadamia, the third world dominated UN, belteway bandits, and REALITY!]]> http://seekingalpha.com/article/124056-automotive-depression-government-needs-to-let-the-weak-fail?source=feed#comment-412316 412316 Wed, 04 Mar 2009 07:47:49 -0500 http://seekingalpha.com/article/122470-is-a-car-produced-in-alabama-really-an-import?source=feed#comment-404272 404272 Here is my data.From corporate.honda.com/am...

Today, Honda employs more than 25,000 people in all 50 states.

From:
cargroup.org/docum...

Detroit Three employed 239,341 hourly
and salary workers in the United States at the end of 2007

A company with only 25,000 US employees did not design, develop and manufacture the cars you have listed. Design could mean styling, which can be done by a couple of artsy types. Develop could mean run a few emission tests. The vast majority of Honda engineering is done in Japan.

From world.honda.com/profil.../

Total number of employees
Consolidated: 178,960 (as of March 31, 2008)

So 25k of 178k Honda employees are in the US. I suspect over half of their sales are in the US. As I have said before, the Japs have calculated what presense is required in the US to make the gulible press and others think they are designing and building in america. The employment data tells the real story.
]]> Thu, 26 Feb 2009 09:02:37 -0500 Here is my data.From corporate.honda.com/am...

Today, Honda employs more than 25,000 people in all 50 states.

From:
cargroup.org/docum...

Detroit Three employed 239,341 hourly
and salary workers in the United States at the end of 2007

A company with only 25,000 US employees did not design, develop and manufacture the cars you have listed. Design could mean styling, which can be done by a couple of artsy types. Develop could mean run a few emission tests. The vast majority of Honda engineering is done in Japan.

From world.honda.com/profil.../

Total number of employees
Consolidated: 178,960 (as of March 31, 2008)

So 25k of 178k Honda employees are in the US. I suspect over half of their sales are in the US. As I have said before, the Japs have calculated what presense is required in the US to make the gulible press and others think they are designing and building in america. The employment data tells the real story.
]]> http://seekingalpha.com/article/122470-is-a-car-produced-in-alabama-really-an-import?source=feed#comment-402825 402825
Those who read my posts know I am a fan of the US car companies because I am a fan of the US, and know the two are linked.

While I respect the historical importance of the UAW I think they are currently way overpaid and way over-bearing with their workrules. If these workrules are preventing modern plants like the one in the video from being built in the US by the big 3 then cars will be built elsewhere by others.

You can't stop progress and the march toward efficiency. Lookup the word "Luddite". en.wikipedia.org/wiki/...]]> Wed, 25 Feb 2009 09:49:00 -0500
Those who read my posts know I am a fan of the US car companies because I am a fan of the US, and know the two are linked.

While I respect the historical importance of the UAW I think they are currently way overpaid and way over-bearing with their workrules. If these workrules are preventing modern plants like the one in the video from being built in the US by the big 3 then cars will be built elsewhere by others.

You can't stop progress and the march toward efficiency. Lookup the word "Luddite". en.wikipedia.org/wiki/...]]> http://seekingalpha.com/article/122470-is-a-car-produced-in-alabama-really-an-import?source=feed#comment-402759 402759 .
During the auto witch trials in Congress in the Fall a man from the U.S. tooling industry testified that the Japanese transplants, in particular, used almost no U.S. tooling in their final assembly plants. That is part of the reason why the U.S. tool and die industry has been wiped off the map, affecting shops across the nation but especially in the Midwest.

These final assembly plants are a facade calculated to be the least content possible to dupe the gullible (press) to think that the cars are US products. The first loyalty of Toyota and Honda is to the fatherland, which is not the US!

The worse part of this tooling trend are not obvious. I read recently that a man wanted to bring some textile production back to the US. He found that it was more difficult that anticipated because there were no longer tool makers in the US who could support his plans.

There is a lot more to building products, like cars, then the final assembly plant. I hope we can figure this out before it is too late.]]> Wed, 25 Feb 2009 09:29:44 -0500 .
During the auto witch trials in Congress in the Fall a man from the U.S. tooling industry testified that the Japanese transplants, in particular, used almost no U.S. tooling in their final assembly plants. That is part of the reason why the U.S. tool and die industry has been wiped off the map, affecting shops across the nation but especially in the Midwest.

These final assembly plants are a facade calculated to be the least content possible to dupe the gullible (press) to think that the cars are US products. The first loyalty of Toyota and Honda is to the fatherland, which is not the US!

The worse part of this tooling trend are not obvious. I read recently that a man wanted to bring some textile production back to the US. He found that it was more difficult that anticipated because there were no longer tool makers in the US who could support his plans.

There is a lot more to building products, like cars, then the final assembly plant. I hope we can figure this out before it is too late.]]> http://seekingalpha.com/article/122470-is-a-car-produced-in-alabama-really-an-import?source=feed#comment-402674 402674
From corporate.honda.com/am.../
Today, Honda employs more than 25,000 people in all 50 states.

From:
www.toyota.com/about/o...

U.S. Direct Employment 36,632

From:
www.cargroup.org/docum...

Detroit Three employed 239,341 hourly
and salary workers in the United States at the end of 2007

Thus, Toyota and Honda employ only 25% as many employees as the big 3, but now make almost as many cars.

Note, I don’t have the data handy, but the multiplier effect in the supply base is much higher for the big three as well, as they tend to make and buy parts in the US.

See uaw.org for a list of union version non-union models in the US and Canada. ]]> Wed, 25 Feb 2009 08:52:26 -0500
From corporate.honda.com/am.../
Today, Honda employs more than 25,000 people in all 50 states.

From:
www.toyota.com/about/o...

U.S. Direct Employment 36,632

From:
www.cargroup.org/docum...

Detroit Three employed 239,341 hourly
and salary workers in the United States at the end of 2007

Thus, Toyota and Honda employ only 25% as many employees as the big 3, but now make almost as many cars.

Note, I don’t have the data handy, but the multiplier effect in the supply base is much higher for the big three as well, as they tend to make and buy parts in the US.

See uaw.org for a list of union version non-union models in the US and Canada. ]]> http://seekingalpha.com/article/121238-chrysler-held-hostage-by-cerberus?source=feed#comment-393639 393639
In the current dire straights I think letting Chrysler go into Chapter 7 would not drag down others. Many suppliers work with multiple manufacturers so a decrease in Chrysler will be offset to sales to others.

Jobs will be lost, but it is a zero-sum game and fewer jobs will be lost at Ford and GM.

The Jeep brand can be sold to any of a number of others and the proceeds used to tap off the pension plan and provide severance pay.

No subsidy for private Cerburus, No subsidy for foreign Fiat. Sadly, good-bye Chrysler as we know it. A step back in the direction of capitalism instead of crony-socialism where the Feds get greased to pick winners and losers.]]> Wed, 18 Feb 2009 12:22:15 -0500
In the current dire straights I think letting Chrysler go into Chapter 7 would not drag down others. Many suppliers work with multiple manufacturers so a decrease in Chrysler will be offset to sales to others.

Jobs will be lost, but it is a zero-sum game and fewer jobs will be lost at Ford and GM.

The Jeep brand can be sold to any of a number of others and the proceeds used to tap off the pension plan and provide severance pay.

No subsidy for private Cerburus, No subsidy for foreign Fiat. Sadly, good-bye Chrysler as we know it. A step back in the direction of capitalism instead of crony-socialism where the Feds get greased to pick winners and losers.]]> http://seekingalpha.com/article/119006-ford-partners-to-commercialize-electric-cars?source=feed#comment-378044 378044
" When driven on surface streets for the first 30 miles following a full charge, the Ford Escape PHEV can achieve up to 120 mpg. "

I see a lot of this 100+ MPG stuff when talking about electrics. The problem is that it is hard to define the MPG for a vehicle using energy from the grid. This is not free energy, and is most likely from fossil fuel (coal) in the U.S. We must be careful to not overstate the "green" aspect of PHEVs. I think there is a net gain for the environment for such vehicles, albeit at a great cost, but I suspect the 120 MPG figure overstates this benefit.

Perhaps the author can explain the 120 MPG figure for the readers.

Also, there is a tendancy for the advocates to suggest that only solar or wind power will be used for these cars. But if such power were availaable in the quantities required, such power could just as well have been diverted to other electricity uses and displaced more coal. I think we should use a factor, something on the order of 80%, that represents the percent of electricity in the US from coal when assessing the effect of electric cars on global warming.

There is a great risk of spending a lot of US resources on a over-hyped technology if we don't get this math correct.]]> Fri, 06 Feb 2009 08:25:02 -0500
" When driven on surface streets for the first 30 miles following a full charge, the Ford Escape PHEV can achieve up to 120 mpg. "

I see a lot of this 100+ MPG stuff when talking about electrics. The problem is that it is hard to define the MPG for a vehicle using energy from the grid. This is not free energy, and is most likely from fossil fuel (coal) in the U.S. We must be careful to not overstate the "green" aspect of PHEVs. I think there is a net gain for the environment for such vehicles, albeit at a great cost, but I suspect the 120 MPG figure overstates this benefit.

Perhaps the author can explain the 120 MPG figure for the readers.

Also, there is a tendancy for the advocates to suggest that only solar or wind power will be used for these cars. But if such power were availaable in the quantities required, such power could just as well have been diverted to other electricity uses and displaced more coal. I think we should use a factor, something on the order of 80%, that represents the percent of electricity in the US from coal when assessing the effect of electric cars on global warming.

There is a great risk of spending a lot of US resources on a over-hyped technology if we don't get this math correct.]]> http://seekingalpha.com/article/116728-obama-insists-cars-improve-fuel-efficiency-by-40?source=feed#comment-367683 367683
But we have lost the arguments about why reduce fossile fuel use. So now that politicians have decided that we are going to reduce use to a much lower level then the market would dictate, the question is how.

If the goal is to reduce said fossile fuel it is infinitely more effective to accomplish this by a small, tactical modification of the marketplace. Simply change the current fed gasoline tax to a much higher level. (or better still a fossile fuel tax). This does not require a single new bureacrat and is the most fair across the automakers. Where these high taxes have been used for decades in Europe Ford and GM are very competitive.

And again, the tax has a much bigger impact on the goal of reduced fossile fuel use because it affects existing vehicles as well as new ones, which take at least 10 years to effectively replace. It also affects many lifestyle options as was shown this summer where high gas prices caused people to drive less, plan trips, carpool, use mass transit, and infinite other market driven options to reduce fuel use and save money.

Even we who argue the premise like here_in_Akron should be saying, OK, if you must reduce, then use a tax so you don't wreck the US economy in the process. ]]> Tue, 27 Jan 2009 11:50:59 -0500
But we have lost the arguments about why reduce fossile fuel use. So now that politicians have decided that we are going to reduce use to a much lower level then the market would dictate, the question is how.

If the goal is to reduce said fossile fuel it is infinitely more effective to accomplish this by a small, tactical modification of the marketplace. Simply change the current fed gasoline tax to a much higher level. (or better still a fossile fuel tax). This does not require a single new bureacrat and is the most fair across the automakers. Where these high taxes have been used for decades in Europe Ford and GM are very competitive.

And again, the tax has a much bigger impact on the goal of reduced fossile fuel use because it affects existing vehicles as well as new ones, which take at least 10 years to effectively replace. It also affects many lifestyle options as was shown this summer where high gas prices caused people to drive less, plan trips, carpool, use mass transit, and infinite other market driven options to reduce fuel use and save money.

Even we who argue the premise like here_in_Akron should be saying, OK, if you must reduce, then use a tax so you don't wreck the US economy in the process. ]]> http://seekingalpha.com/article/116728-obama-insists-cars-improve-fuel-efficiency-by-40?source=feed#comment-367569 367569
I fear the answer is that this direct tax will make the voters unhappy. Using the big bad auto companies, who hide 100 mpg carburetors under their desks, to collect taxes if much mor epolitically expedient.

Note that if the goal is reduction of fossile fuel a gas tax will also:
reduce length of trips, affect existing cars as well as new ones, increase car-poolng, affect other uses of fossile fuel like home heat, and millions of other market driven solutions. With the modifed price of fossile fuel all of this will be achieved with market / pricing efficiency.

CAFE has the affect of disproportionate impact on US based auto companies who make commercial pickup trucks. (why doesn't Mack truck have to meet CAFE?). The California law has an exception for small companies, all of which are foreign, which is no surprise since this crowd hates all things American, except Obama, for now.

Gas tax yes. CAFE no!]]> Tue, 27 Jan 2009 10:56:28 -0500
I fear the answer is that this direct tax will make the voters unhappy. Using the big bad auto companies, who hide 100 mpg carburetors under their desks, to collect taxes if much mor epolitically expedient.

Note that if the goal is reduction of fossile fuel a gas tax will also:
reduce length of trips, affect existing cars as well as new ones, increase car-poolng, affect other uses of fossile fuel like home heat, and millions of other market driven solutions. With the modifed price of fossile fuel all of this will be achieved with market / pricing efficiency.

CAFE has the affect of disproportionate impact on US based auto companies who make commercial pickup trucks. (why doesn't Mack truck have to meet CAFE?). The California law has an exception for small companies, all of which are foreign, which is no surprise since this crowd hates all things American, except Obama, for now.

Gas tax yes. CAFE no!]]> http://seekingalpha.com/article/111876-detroit-s-biggest-failure-losing-the-youth-market?source=feed#comment-336255 336255
It is an illusion if you think we can all work in finance, for the government, sue each other, and otherwise support ourselves by "consumption". Making things is essential to the economy, and in case you haven't noticed we don't make much anymore. Cars, in fact, are just about the last thing left, and then we are down to less than 50% designed and built in the US. There are figures out there saying 3 million jobs are tied to the US big 3; I think it is 10 times that when you look at the multiplier effect.

We may find out too late to bring this back. Already I saw a story where a textile compnay wanted to bring back some production to the US. but they failed because all the tooling and supplier infrastructure was gone.

So thanks for the bailout, whether you agreed or not. Now with the UAW facing up to reality we can rebuild the US auto industry. Then the sons and daughters of the current UAW can have above average wages and benefits, and job security as well. ]]> Mon, 22 Dec 2008 22:36:04 -0500
It is an illusion if you think we can all work in finance, for the government, sue each other, and otherwise support ourselves by "consumption". Making things is essential to the economy, and in case you haven't noticed we don't make much anymore. Cars, in fact, are just about the last thing left, and then we are down to less than 50% designed and built in the US. There are figures out there saying 3 million jobs are tied to the US big 3; I think it is 10 times that when you look at the multiplier effect.

We may find out too late to bring this back. Already I saw a story where a textile compnay wanted to bring back some production to the US. but they failed because all the tooling and supplier infrastructure was gone.

So thanks for the bailout, whether you agreed or not. Now with the UAW facing up to reality we can rebuild the US auto industry. Then the sons and daughters of the current UAW can have above average wages and benefits, and job security as well. ]]> http://seekingalpha.com/article/111876-detroit-s-biggest-failure-losing-the-youth-market?source=feed#comment-336207 336207 fleetowner.com/news/08.../

"The last strike UAW called against Caterpillar resulted in a defeat that left the union in a weakened state, Devinatz noted. “In 1994, UAW held a strike that lasted 18 months. During that time 13,000 workers struck— 4,000 crossed the picket line— that’s 30% of the work force,” he said.

UAW’s failure to hold the picket line during the last strike may have emboldened Caterpillar’s management this time around, Devinatz said. “They were able to maintain high productivity levels based on the workers that crossed the picket line. Certainly it was a defeat for the union. The union ended the strike because they felt it wasn’t having an effect— the plant was still able to operate.” "

I don't think the big 3 would ever be able to break the union like this due to the density of union people in big 3 neighborhoods.

Someone else above blamed GM for granting 95% pay to laid off workers. Look up the word "extortion" in the dictionary and tell me how it differs from a strike?
]]> Mon, 22 Dec 2008 20:19:38 -0500 fleetowner.com/news/08.../

"The last strike UAW called against Caterpillar resulted in a defeat that left the union in a weakened state, Devinatz noted. “In 1994, UAW held a strike that lasted 18 months. During that time 13,000 workers struck— 4,000 crossed the picket line— that’s 30% of the work force,” he said.

UAW’s failure to hold the picket line during the last strike may have emboldened Caterpillar’s management this time around, Devinatz said. “They were able to maintain high productivity levels based on the workers that crossed the picket line. Certainly it was a defeat for the union. The union ended the strike because they felt it wasn’t having an effect— the plant was still able to operate.” "

I don't think the big 3 would ever be able to break the union like this due to the density of union people in big 3 neighborhoods.

Someone else above blamed GM for granting 95% pay to laid off workers. Look up the word "extortion" in the dictionary and tell me how it differs from a strike?
]]> http://seekingalpha.com/article/111876-detroit-s-biggest-failure-losing-the-youth-market?source=feed#comment-336204 336204
Regading the VW bug, I once rode with a guy in Winter who was telling me what a great car it was as he was reaching out the side window with a scraper to clear the front window while driving.

It is true that the biggest problem faced by the big 3 is that they are just plain out of style. People feel a need to justify purchasing foreign cars by complaining about the American cars they owned 20 years ago, and give the Jap cars a pass on their numerous problems at every opportunity. Witness the whole damn fleet of Toyota Tundra trucks recalled because the engines were not properly ventilated and the oil sludged. Toyota tried to blame the owners for poor service habits, but the big 3 know Americans abuse their trucks and licked this problem years ago.

The reason people keep going after the UAW is it is their costs that are out of line. The management and salary engineers get paid what they would in any major US city at a major US company. The UAW is way out of line in wages, and especially benefits for their education, skill level and work ethic. Waaaaay out of line.

Note also that the remaining US car buyers are mostly middle and lower class, who are not amused that your wages and benefits far exceed theirs. The UAW thinks they are the leaders of these people, but no one else is buying that now.

So in order to convince Americans to buy your cars you must cut you wages and benefits to transplant level (at least 20%), thank America for a second chance, and plead with working class Americans to buy your cars. BTW cutting the wage and beenfits of people not hired yet doesn't count as a cut in my world. Nice try.

Otherwise the big 3 will die and you will take down the Midwest with you. Hope you will be happy with yourselves.

So far Gettlefinger's response was to cry about being picked on and said he'll go to his ?lapdog? Obama for a redo. Nice way to show gratitude Ron!
]]> Mon, 22 Dec 2008 20:10:27 -0500
Regading the VW bug, I once rode with a guy in Winter who was telling me what a great car it was as he was reaching out the side window with a scraper to clear the front window while driving.

It is true that the biggest problem faced by the big 3 is that they are just plain out of style. People feel a need to justify purchasing foreign cars by complaining about the American cars they owned 20 years ago, and give the Jap cars a pass on their numerous problems at every opportunity. Witness the whole damn fleet of Toyota Tundra trucks recalled because the engines were not properly ventilated and the oil sludged. Toyota tried to blame the owners for poor service habits, but the big 3 know Americans abuse their trucks and licked this problem years ago.

The reason people keep going after the UAW is it is their costs that are out of line. The management and salary engineers get paid what they would in any major US city at a major US company. The UAW is way out of line in wages, and especially benefits for their education, skill level and work ethic. Waaaaay out of line.

Note also that the remaining US car buyers are mostly middle and lower class, who are not amused that your wages and benefits far exceed theirs. The UAW thinks they are the leaders of these people, but no one else is buying that now.

So in order to convince Americans to buy your cars you must cut you wages and benefits to transplant level (at least 20%), thank America for a second chance, and plead with working class Americans to buy your cars. BTW cutting the wage and beenfits of people not hired yet doesn't count as a cut in my world. Nice try.

Otherwise the big 3 will die and you will take down the Midwest with you. Hope you will be happy with yourselves.

So far Gettlefinger's response was to cry about being picked on and said he'll go to his ?lapdog? Obama for a redo. Nice way to show gratitude Ron!
]]> http://seekingalpha.com/article/110247-auto-bailouts-mortgage-debt-and-the-economy?source=feed#comment-331611 331611 I vote Republican, except when I was in his district I voted for mean John Dingle. You are right though, Michigan mostly votes Democratic. I think you will find that the Dems at the national level, like Dingle, tried to keep CAFE laws in check. ]]> Tue, 16 Dec 2008 23:48:31 -0500 I vote Republican, except when I was in his district I voted for mean John Dingle. You are right though, Michigan mostly votes Democratic. I think you will find that the Dems at the national level, like Dingle, tried to keep CAFE laws in check. ]]> http://seekingalpha.com/article/110247-auto-bailouts-mortgage-debt-and-the-economy?source=feed#comment-326238 326238 The following U.S. government policies, many of them having popular support, hurt the big three significantly relative to the foreign transplants:
1. Uneven union laws across states:
a. The 1935 U.S. government Wagner Act granted the right of workers in the private sector to organize labor unions and take place in strikes. What this effectively meant was the labor unions were allowed to seize the plant and prevent its use until they got what they wanted. This created the ridiculous result in the US that workers are paid in proportion to the pain they can inflict by shutting things down. Trains, docks, garbage collectors, police, … get high pay. People in low capital or less critical to safety related industries like restaurants and retail get paid low paid. The relationship of pay to skill, work ethic, hazards goes away. Soon after the Wagner act the UAW took over the auto industry; GM and Chrysler in 1937; Ford in 1941. With no foreign competition the UAW monopoly flourished for about 30 years.
b. The 1947 U.S. government Taft–Hartley Act tried to reign in the unions after a series of post-war strikes. While some provisions were national, the states were allowed to pass "right-to-work laws" that outlawed union shops. Such shops require workers to join the union and pay dues. Said state laws are serious impediments to union organization and viability because few people want to pay dues if not required.
c. The vast majority of foreign owned plants are in right-to-work states providing huge advantages in labor costs and productivity relative to the big three.
d. The big three would find it impossible to change the state laws where they are located due to union dominance of state governments. If they built in the South they have to accept the UAW because they would strike back in Michigan.
e. No other country has this crazy system to my knowledge.

2. Promoted defined benefit packages and kept them in the company name. Did you ever consider how totally stupid it is to pin an employee retirement package, meant to last about 50-60 years from first hire until death, to the viability of their company? The top 10 companies in 1950 were very different than in 2000, with the railroads taking a big dive since then. And in 2020 it will be totally different again. Defined benefit packages were a bad idea, promoted by the US government till this day, and the big three are paying the price. If a company is in decline, due to the other items mentioned here, their retiree pool grows relative to gross income and number of active workers. Costs rise and competitiveness goes down, sales decline in a vicious spiral. Note also that while someday the transplants will pay pensions here in the US, the bulk of their corporate salary people (engineers for instance) back home get pensions from the government. Again, a totally crazy concept promoted by the Feds with widespread public support. And again, affecting the big three orders of magnitude harder than the foreign auto companies.

In most western nations, if there is a defined benefit program, it is paid into a government fund and is divorced from the company. If the company fails, people don’t lose their pension. In the U.S., the Pension Benefit Guarantee Company, a quasi-government / private company (like Fanny-Mae) supposedly fills in when the company goes belly up. But it is really a welfare program, with maximum limits far lower than promised pensions for many salaried workers. The airline pilots at United Air Lines, the current poster child of how wonderful chapter 11 will be for the big three, got screwed out of a large percentage of their “guaranteed” pension. Apparently the courts have ruled bond holders have first dibs on people’s defined benefits supposedly “held in trust”. What a travesty; only in the worse run country in the western world. These plans were in lieu of 401k plans. They are not deferred compensation as some say. There is a pot of gold with the employees names on it.

See the PBS Frontline episode here for what happened at United.

www.pbs.org/wgbh/pages.../

All of you with defined benefit plans are in jeopardy. The Feds can fix these laws by simply making pension funding shortfalls first in line for bankruptcy allocations. Put the vulture chapter 11 lawyers and banks second in line after peoples pensions (which are essentially saving accounts).

3. No national healthcare. This is killing all US industry because we are competing with foreign companies with virtually no health care costs at home. Again, for transplants, the tens of thousands of such people at corporate headquarters are not in the U.S., but back home with free insurance. I’m basically a free market person but U.S. healthcare is so screwed up, and the employer based care creating such a competitive disadvantage, I give up – company paid healthcare must go and something needs to replace it. Watch for a future blog entry on that topic. Even though the transplants provide health care for their workers this is again an order of magnitude bigger problem for the big three because: 1) Corporate staff is back home with free health care, transplant workers are younger and therefore healthier, big three also pays health insurance for a million retirees.

4. Blunt instrument CAFÉ laws. The original purpose of CAFE was to reduce depletion of finite fossil fuel supplies and/or to reduce foreign imports. The Global Warming theory did not exist when CAFE was instituted but CAFÉ supports this as well. These same goals are achieved in almost all other Western counties via very high (on order of $3-$6 per gallon) federal gasoline taxes. That is the primary reason the cars are smaller in Europe and Japan. Our cowardly government did not want to be associated with taxes so instead wrote CAFE laws so the big three could do the taxing. I would argue that such laws fell, and continue to fall, disproportionately on the big three. The laws regulate an average fuel economy for a fleet produced by a given company. This forced the big three to abandon the cars they made money on, and build cars they don’t make money on, usually at a loss. The economics are simple: it takes as many overpaid UAW workers to put a door on a $14000 focus as a $30000 F150. So the bigger and more expensive the car the better the big three can compete. The above mentioned economic disadvantages of the big three are exaggerated on small, lower cost cars. And yes, people expect small cars to cost less. Screwed again by the feds! Ford, for instance, has trucks providing over 50% of sales. A rapidly increasing percentage of these trucks are used in the trades; try carrying a load of bricks or even a saddle in a Focus. Why does the Ford commercial truck have to go into a CAFÉ formula when a Mack Truck or Caterpillar dump truck does not? In the rest of the world, where gas taxes are used to reduce fossil fuel consumption, each company is allowed to compete in the part of the vehicle market where they do best. The customer takes the cost of gasoline with tax into consideration when he decides what size and features he needs, and then shops the brands that play in that market. With CAFÉ, the big three were forced at gunpoint to build and sell small cars at a loss just so they could meet the consumer demand for larger cars and trucks with their greater utility (carried more people for instance). The Japanese entered the market in the small car nitch where their low cost and experience from the sane countries with gas taxes gave them the greatest advantage. The Japanese became associated with small cars and better gas mileage, although for the same size car and performance there was no difference on average.
It it were one or two of these items the big three might have competed better, but between the four the cost disadvantage in thousands per car and the hill too hard to climb. People seem to think Americans are superman, blessed with privilege, and the big three should have been able to overcome these odds against our oriental upstarts. In my opinion the big three did an amazing job lasting this long, as they are only mere mortals; doing the best they can given the stacked deck against them.
In the end it is not the above items that are killing the big three right now. These items and the recent gas spike put the big three in a weak position, but they were recovering with the help of the UAW. Cars sell on credit, and there is no money available. Houses are also credit sensitive, but the housing industry doesn’t have the large capital equipment (factories, labs, buildings) and huge staffs (engineers…) to keep feeding when there is a drop in sales. And the housing industry is dominated by illegal alien workers which they just let go.
This credit crisis in not of the big three’s making by any stretch of the imagination. The most likely biggest wrongdoers in the congress and the federal bureaucracy, will keep their jobs and pensions. The second biggest wrongdoers in the financial sector, are getting a trillion or so dollars of bailouts.
The big three are asking for a 5% loan and all this hate comes out in the press and the web. The gap between perception and reality is staggering.
]]> Thu, 11 Dec 2008 09:09:34 -0500 The following U.S. government policies, many of them having popular support, hurt the big three significantly relative to the foreign transplants:
1. Uneven union laws across states:
a. The 1935 U.S. government Wagner Act granted the right of workers in the private sector to organize labor unions and take place in strikes. What this effectively meant was the labor unions were allowed to seize the plant and prevent its use until they got what they wanted. This created the ridiculous result in the US that workers are paid in proportion to the pain they can inflict by shutting things down. Trains, docks, garbage collectors, police, … get high pay. People in low capital or less critical to safety related industries like restaurants and retail get paid low paid. The relationship of pay to skill, work ethic, hazards goes away. Soon after the Wagner act the UAW took over the auto industry; GM and Chrysler in 1937; Ford in 1941. With no foreign competition the UAW monopoly flourished for about 30 years.
b. The 1947 U.S. government Taft–Hartley Act tried to reign in the unions after a series of post-war strikes. While some provisions were national, the states were allowed to pass "right-to-work laws" that outlawed union shops. Such shops require workers to join the union and pay dues. Said state laws are serious impediments to union organization and viability because few people want to pay dues if not required.
c. The vast majority of foreign owned plants are in right-to-work states providing huge advantages in labor costs and productivity relative to the big three.
d. The big three would find it impossible to change the state laws where they are located due to union dominance of state governments. If they built in the South they have to accept the UAW because they would strike back in Michigan.
e. No other country has this crazy system to my knowledge.

2. Promoted defined benefit packages and kept them in the company name. Did you ever consider how totally stupid it is to pin an employee retirement package, meant to last about 50-60 years from first hire until death, to the viability of their company? The top 10 companies in 1950 were very different than in 2000, with the railroads taking a big dive since then. And in 2020 it will be totally different again. Defined benefit packages were a bad idea, promoted by the US government till this day, and the big three are paying the price. If a company is in decline, due to the other items mentioned here, their retiree pool grows relative to gross income and number of active workers. Costs rise and competitiveness goes down, sales decline in a vicious spiral. Note also that while someday the transplants will pay pensions here in the US, the bulk of their corporate salary people (engineers for instance) back home get pensions from the government. Again, a totally crazy concept promoted by the Feds with widespread public support. And again, affecting the big three orders of magnitude harder than the foreign auto companies.

In most western nations, if there is a defined benefit program, it is paid into a government fund and is divorced from the company. If the company fails, people don’t lose their pension. In the U.S., the Pension Benefit Guarantee Company, a quasi-government / private company (like Fanny-Mae) supposedly fills in when the company goes belly up. But it is really a welfare program, with maximum limits far lower than promised pensions for many salaried workers. The airline pilots at United Air Lines, the current poster child of how wonderful chapter 11 will be for the big three, got screwed out of a large percentage of their “guaranteed” pension. Apparently the courts have ruled bond holders have first dibs on people’s defined benefits supposedly “held in trust”. What a travesty; only in the worse run country in the western world. These plans were in lieu of 401k plans. They are not deferred compensation as some say. There is a pot of gold with the employees names on it.

See the PBS Frontline episode here for what happened at United.

www.pbs.org/wgbh/pages.../

All of you with defined benefit plans are in jeopardy. The Feds can fix these laws by simply making pension funding shortfalls first in line for bankruptcy allocations. Put the vulture chapter 11 lawyers and banks second in line after peoples pensions (which are essentially saving accounts).

3. No national healthcare. This is killing all US industry because we are competing with foreign companies with virtually no health care costs at home. Again, for transplants, the tens of thousands of such people at corporate headquarters are not in the U.S., but back home with free insurance. I’m basically a free market person but U.S. healthcare is so screwed up, and the employer based care creating such a competitive disadvantage, I give up – company paid healthcare must go and something needs to replace it. Watch for a future blog entry on that topic. Even though the transplants provide health care for their workers this is again an order of magnitude bigger problem for the big three because: 1) Corporate staff is back home with free health care, transplant workers are younger and therefore healthier, big three also pays health insurance for a million retirees.

4. Blunt instrument CAFÉ laws. The original purpose of CAFE was to reduce depletion of finite fossil fuel supplies and/or to reduce foreign imports. The Global Warming theory did not exist when CAFE was instituted but CAFÉ supports this as well. These same goals are achieved in almost all other Western counties via very high (on order of $3-$6 per gallon) federal gasoline taxes. That is the primary reason the cars are smaller in Europe and Japan. Our cowardly government did not want to be associated with taxes so instead wrote CAFE laws so the big three could do the taxing. I would argue that such laws fell, and continue to fall, disproportionately on the big three. The laws regulate an average fuel economy for a fleet produced by a given company. This forced the big three to abandon the cars they made money on, and build cars they don’t make money on, usually at a loss. The economics are simple: it takes as many overpaid UAW workers to put a door on a $14000 focus as a $30000 F150. So the bigger and more expensive the car the better the big three can compete. The above mentioned economic disadvantages of the big three are exaggerated on small, lower cost cars. And yes, people expect small cars to cost less. Screwed again by the feds! Ford, for instance, has trucks providing over 50% of sales. A rapidly increasing percentage of these trucks are used in the trades; try carrying a load of bricks or even a saddle in a Focus. Why does the Ford commercial truck have to go into a CAFÉ formula when a Mack Truck or Caterpillar dump truck does not? In the rest of the world, where gas taxes are used to reduce fossil fuel consumption, each company is allowed to compete in the part of the vehicle market where they do best. The customer takes the cost of gasoline with tax into consideration when he decides what size and features he needs, and then shops the brands that play in that market. With CAFÉ, the big three were forced at gunpoint to build and sell small cars at a loss just so they could meet the consumer demand for larger cars and trucks with their greater utility (carried more people for instance). The Japanese entered the market in the small car nitch where their low cost and experience from the sane countries with gas taxes gave them the greatest advantage. The Japanese became associated with small cars and better gas mileage, although for the same size car and performance there was no difference on average.
It it were one or two of these items the big three might have competed better, but between the four the cost disadvantage in thousands per car and the hill too hard to climb. People seem to think Americans are superman, blessed with privilege, and the big three should have been able to overcome these odds against our oriental upstarts. In my opinion the big three did an amazing job lasting this long, as they are only mere mortals; doing the best they can given the stacked deck against them.
In the end it is not the above items that are killing the big three right now. These items and the recent gas spike put the big three in a weak position, but they were recovering with the help of the UAW. Cars sell on credit, and there is no money available. Houses are also credit sensitive, but the housing industry doesn’t have the large capital equipment (factories, labs, buildings) and huge staffs (engineers…) to keep feeding when there is a drop in sales. And the housing industry is dominated by illegal alien workers which they just let go.
This credit crisis in not of the big three’s making by any stretch of the imagination. The most likely biggest wrongdoers in the congress and the federal bureaucracy, will keep their jobs and pensions. The second biggest wrongdoers in the financial sector, are getting a trillion or so dollars of bailouts.
The big three are asking for a 5% loan and all this hate comes out in the press and the web. The gap between perception and reality is staggering.
]]> http://seekingalpha.com/article/110254-tarp-the-sequel-auto-bailout?source=feed#comment-326231 326231 The following U.S. government policies, many of them having popular support, hurt the big three significantly relative to the foreign transplants:
1. Uneven union laws across states:
a. The 1935 U.S. government Wagner Act granted the right of workers in the private sector to organize labor unions and take place in strikes. What this effectively meant was the labor unions were allowed to seize the plant and prevent its use until they got what they wanted. This created the ridiculous result in the US that workers are paid in proportion to the pain they can inflict by shutting things down. Trains, docks, garbage collectors, police, … get high pay. People in low capital or less critical to safety related industries like restaurants and retail get paid low paid. The relationship of pay to skill, work ethic, hazards goes away. Soon after the Wagner act the UAW took over the auto industry; GM and Chrysler in 1937; Ford in 1941. With no foreign competition the UAW monopoly flourished for about 30 years.
b. The 1947 U.S. government Taft–Hartley Act tried to reign in the unions after a series of post-war strikes. While some provisions were national, the states were allowed to pass "right-to-work laws" that outlawed union shops. Such shops require workers to join the union and pay dues. Said state laws are serious impediments to union organization and viability because few people want to pay dues if not required.
c. The vast majority of foreign owned plants are in right-to-work states providing huge advantages in labor costs and productivity relative to the big three.
d. The big three would find it impossible to change the state laws where they are located due to union dominance of state governments. If they built in the South they have to accept the UAW because they would strike back in Michigan.
e. No other country has this crazy system to my knowledge.

2. Promoted defined benefit packages and kept them in the company name. Did you ever consider how totally stupid it is to pin an employee retirement package, meant to last about 50-60 years from first hire until death, to the viability of their company? The top 10 companies in 1950 were very different than in 2000, with the railroads taking a big dive since then. And in 2020 it will be totally different again. Defined benefit packages were a bad idea, promoted by the US government till this day, and the big three are paying the price. If a company is in decline, due to the other items mentioned here, their retiree pool grows relative to gross income and number of active workers. Costs rise and competitiveness goes down, sales decline in a vicious spiral. Note also that while someday the transplants will pay pensions here in the US, the bulk of their corporate salary people (engineers for instance) back home get pensions from the government. Again, a totally crazy concept promoted by the Feds with widespread public support. And again, affecting the big three orders of magnitude harder than the foreign auto companies.

In most western nations, if there is a defined benefit program, it is paid into a government fund and is divorced from the company. If the company fails, people don’t lose their pension. In the U.S., the Pension Benefit Guarantee Company, a quasi-government / private company (like Fanny-Mae) supposedly fills in when the company goes belly up. But it is really a welfare program, with maximum limits far lower than promised pensions for many salaried workers. The airline pilots at United Air Lines, the current poster child of how wonderful chapter 11 will be for the big three, got screwed out of a large percentage of their “guaranteed” pension. Apparently the courts have ruled bond holders have first dibs on people’s defined benefits supposedly “held in trust”. What a travesty; only in the worse run country in the western world. These plans were in lieu of 401k plans. They are not deferred compensation as some say. There is a pot of gold with the employees names on it.

See the PBS Frontline episode here for what happened at United.

www.pbs.org/wgbh/pages.../

All of you with defined benefit plans are in jeopardy. The Feds can fix these laws by simply making pension funding shortfalls first in line for bankruptcy allocations. Put the vulture chapter 11 lawyers and banks second in line after peoples pensions (which are essentially saving accounts).

3. No national healthcare. This is killing all US industry because we are competing with foreign companies with virtually no health care costs at home. Again, for transplants, the tens of thousands of such people at corporate headquarters are not in the U.S., but back home with free insurance. I’m basically a free market person but U.S. healthcare is so screwed up, and the employer based care creating such a competitive disadvantage, I give up – company paid healthcare must go and something needs to replace it. Watch for a future blog entry on that topic. Even though the transplants provide health care for their workers this is again an order of magnitude bigger problem for the big three because: 1) Corporate staff is back home with free health care, transplant workers are younger and therefore healthier, big three also pays health insurance for a million retirees.

4. Blunt instrument CAFÉ laws. The original purpose of CAFE was to reduce depletion of finite fossil fuel supplies and/or to reduce foreign imports. The Global Warming theory did not exist when CAFE was instituted but CAFÉ supports this as well. These same goals are achieved in almost all other Western counties via very high (on order of $3-$6 per gallon) federal gasoline taxes. That is the primary reason the cars are smaller in Europe and Japan. Our cowardly government did not want to be associated with taxes so instead wrote CAFE laws so the big three could do the taxing. I would argue that such laws fell, and continue to fall, disproportionately on the big three. The laws regulate an average fuel economy for a fleet produced by a given company. This forced the big three to abandon the cars they made money on, and build cars they don’t make money on, usually at a loss. The economics are simple: it takes as many overpaid UAW workers to put a door on a $14000 focus as a $30000 F150. So the bigger and more expensive the car the better the big three can compete. The above mentioned economic disadvantages of the big three are exaggerated on small, lower cost cars. And yes, people expect small cars to cost less. Screwed again by the feds! Ford, for instance, has trucks providing over 50% of sales. A rapidly increasing percentage of these trucks are used in the trades; try carrying a load of bricks or even a saddle in a Focus. Why does the Ford commercial truck have to go into a CAFÉ formula when a Mack Truck or Caterpillar dump truck does not? In the rest of the world, where gas taxes are used to reduce fossil fuel consumption, each company is allowed to compete in the part of the vehicle market where they do best. The customer takes the cost of gasoline with tax into consideration when he decides what size and features he needs, and then shops the brands that play in that market. With CAFÉ, the big three were forced at gunpoint to build and sell small cars at a loss just so they could meet the consumer demand for larger cars and trucks with their greater utility (carried more people for instance). The Japanese entered the market in the small car nitch where their low cost and experience from the sane countries with gas taxes gave them the greatest advantage. The Japanese became associated with small cars and better gas mileage, although for the same size car and performance there was no difference on average.
It it were one or two of these items the big three might have competed better, but between the four the cost disadvantage in thousands per car and the hill too hard to climb. People seem to think Americans are superman, blessed with privilege, and the big three should have been able to overcome these odds against our oriental upstarts. In my opinion the big three did an amazing job lasting this long, as they are only mere mortals; doing the best they can given the stacked deck against them.
In the end it is not the above items that are killing the big three right now. These items and the recent gas spike put the big three in a weak position, but they were recovering with the help of the UAW. Cars sell on credit, and there is no money available. Houses are also credit sensitive, but the housing industry doesn’t have the large capital equipment (factories, labs, buildings) and huge staffs (engineers…) to keep feeding when there is a drop in sales. And the housing industry is dominated by illegal alien workers which they just let go.
This credit crisis in not of the big three’s making by any stretch of the imagination. The most likely biggest wrongdoers in the congress and the federal bureaucracy, will keep their jobs and pensions. The second biggest wrongdoers in the financial sector, are getting a trillion or so dollars of bailouts.
The big three are asking for a 5% loan and all this hate comes out in the press and the web. The gap between perception and reality is staggering.
]]> Thu, 11 Dec 2008 09:06:07 -0500 The following U.S. government policies, many of them having popular support, hurt the big three significantly relative to the foreign transplants:
1. Uneven union laws across states:
a. The 1935 U.S. government Wagner Act granted the right of workers in the private sector to organize labor unions and take place in strikes. What this effectively meant was the labor unions were allowed to seize the plant and prevent its use until they got what they wanted. This created the ridiculous result in the US that workers are paid in proportion to the pain they can inflict by shutting things down. Trains, docks, garbage collectors, police, … get high pay. People in low capital or less critical to safety related industries like restaurants and retail get paid low paid. The relationship of pay to skill, work ethic, hazards goes away. Soon after the Wagner act the UAW took over the auto industry; GM and Chrysler in 1937; Ford in 1941. With no foreign competition the UAW monopoly flourished for about 30 years.
b. The 1947 U.S. government Taft–Hartley Act tried to reign in the unions after a series of post-war strikes. While some provisions were national, the states were allowed to pass "right-to-work laws" that outlawed union shops. Such shops require workers to join the union and pay dues. Said state laws are serious impediments to union organization and viability because few people want to pay dues if not required.
c. The vast majority of foreign owned plants are in right-to-work states providing huge advantages in labor costs and productivity relative to the big three.
d. The big three would find it impossible to change the state laws where they are located due to union dominance of state governments. If they built in the South they have to accept the UAW because they would strike back in Michigan.
e. No other country has this crazy system to my knowledge.

2. Promoted defined benefit packages and kept them in the company name. Did you ever consider how totally stupid it is to pin an employee retirement package, meant to last about 50-60 years from first hire until death, to the viability of their company? The top 10 companies in 1950 were very different than in 2000, with the railroads taking a big dive since then. And in 2020 it will be totally different again. Defined benefit packages were a bad idea, promoted by the US government till this day, and the big three are paying the price. If a company is in decline, due to the other items mentioned here, their retiree pool grows relative to gross income and number of active workers. Costs rise and competitiveness goes down, sales decline in a vicious spiral. Note also that while someday the transplants will pay pensions here in the US, the bulk of their corporate salary people (engineers for instance) back home get pensions from the government. Again, a totally crazy concept promoted by the Feds with widespread public support. And again, affecting the big three orders of magnitude harder than the foreign auto companies.

In most western nations, if there is a defined benefit program, it is paid into a government fund and is divorced from the company. If the company fails, people don’t lose their pension. In the U.S., the Pension Benefit Guarantee Company, a quasi-government / private company (like Fanny-Mae) supposedly fills in when the company goes belly up. But it is really a welfare program, with maximum limits far lower than promised pensions for many salaried workers. The airline pilots at United Air Lines, the current poster child of how wonderful chapter 11 will be for the big three, got screwed out of a large percentage of their “guaranteed” pension. Apparently the courts have ruled bond holders have first dibs on people’s defined benefits supposedly “held in trust”. What a travesty; only in the worse run country in the western world. These plans were in lieu of 401k plans. They are not deferred compensation as some say. There is a pot of gold with the employees names on it.

See the PBS Frontline episode here for what happened at United.

www.pbs.org/wgbh/pages.../

All of you with defined benefit plans are in jeopardy. The Feds can fix these laws by simply making pension funding shortfalls first in line for bankruptcy allocations. Put the vulture chapter 11 lawyers and banks second in line after peoples pensions (which are essentially saving accounts).

3. No national healthcare. This is killing all US industry because we are competing with foreign companies with virtually no health care costs at home. Again, for transplants, the tens of thousands of such people at corporate headquarters are not in the U.S., but back home with free insurance. I’m basically a free market person but U.S. healthcare is so screwed up, and the employer based care creating such a competitive disadvantage, I give up – company paid healthcare must go and something needs to replace it. Watch for a future blog entry on that topic. Even though the transplants provide health care for their workers this is again an order of magnitude bigger problem for the big three because: 1) Corporate staff is back home with free health care, transplant workers are younger and therefore healthier, big three also pays health insurance for a million retirees.

4. Blunt instrument CAFÉ laws. The original purpose of CAFE was to reduce depletion of finite fossil fuel supplies and/or to reduce foreign imports. The Global Warming theory did not exist when CAFE was instituted but CAFÉ supports this as well. These same goals are achieved in almost all other Western counties via very high (on order of $3-$6 per gallon) federal gasoline taxes. That is the primary reason the cars are smaller in Europe and Japan. Our cowardly government did not want to be associated with taxes so instead wrote CAFE laws so the big three could do the taxing. I would argue that such laws fell, and continue to fall, disproportionately on the big three. The laws regulate an average fuel economy for a fleet produced by a given company. This forced the big three to abandon the cars they made money on, and build cars they don’t make money on, usually at a loss. The economics are simple: it takes as many overpaid UAW workers to put a door on a $14000 focus as a $30000 F150. So the bigger and more expensive the car the better the big three can compete. The above mentioned economic disadvantages of the big three are exaggerated on small, lower cost cars. And yes, people expect small cars to cost less. Screwed again by the feds! Ford, for instance, has trucks providing over 50% of sales. A rapidly increasing percentage of these trucks are used in the trades; try carrying a load of bricks or even a saddle in a Focus. Why does the Ford commercial truck have to go into a CAFÉ formula when a Mack Truck or Caterpillar dump truck does not? In the rest of the world, where gas taxes are used to reduce fossil fuel consumption, each company is allowed to compete in the part of the vehicle market where they do best. The customer takes the cost of gasoline with tax into consideration when he decides what size and features he needs, and then shops the brands that play in that market. With CAFÉ, the big three were forced at gunpoint to build and sell small cars at a loss just so they could meet the consumer demand for larger cars and trucks with their greater utility (carried more people for instance). The Japanese entered the market in the small car nitch where their low cost and experience from the sane countries with gas taxes gave them the greatest advantage. The Japanese became associated with small cars and better gas mileage, although for the same size car and performance there was no difference on average.
It it were one or two of these items the big three might have competed better, but between the four the cost disadvantage in thousands per car and the hill too hard to climb. People seem to think Americans are superman, blessed with privilege, and the big three should have been able to overcome these odds against our oriental upstarts. In my opinion the big three did an amazing job lasting this long, as they are only mere mortals; doing the best they can given the stacked deck against them.
In the end it is not the above items that are killing the big three right now. These items and the recent gas spike put the big three in a weak position, but they were recovering with the help of the UAW. Cars sell on credit, and there is no money available. Houses are also credit sensitive, but the housing industry doesn’t have the large capital equipment (factories, labs, buildings) and huge staffs (engineers…) to keep feeding when there is a drop in sales. And the housing industry is dominated by illegal alien workers which they just let go.
This credit crisis in not of the big three’s making by any stretch of the imagination. The most likely biggest wrongdoers in the congress and the federal bureaucracy, will keep their jobs and pensions. The second biggest wrongdoers in the financial sector, are getting a trillion or so dollars of bailouts.
The big three are asking for a 5% loan and all this hate comes out in the press and the web. The gap between perception and reality is staggering.
]]> http://seekingalpha.com/article/110276-three-month-bailout-the-wrong-fix?source=feed#comment-326225 326225 The following U.S. government policies, many of them having popular support, hurt the big three significantly relative to the foreign transplants:
1. Uneven union laws across states:
a. The 1935 U.S. government Wagner Act granted the right of workers in the private sector to organize labor unions and take place in strikes. What this effectively meant was the labor unions were allowed to seize the plant and prevent its use until they got what they wanted. This created the ridiculous result in the US that workers are paid in proportion to the pain they can inflict by shutting things down. Trains, docks, garbage collectors, police, … get high pay. People in low capital or less critical to safety related industries like restaurants and retail get paid low paid. The relationship of pay to skill, work ethic, hazards goes away. Soon after the Wagner act the UAW took over the auto industry; GM and Chrysler in 1937; Ford in 1941. With no foreign competition the UAW monopoly flourished for about 30 years.
b. The 1947 U.S. government Taft–Hartley Act tried to reign in the unions after a series of post-war strikes. While some provisions were national, the states were allowed to pass "right-to-work laws" that outlawed union shops. Such shops require workers to join the union and pay dues. Said state laws are serious impediments to union organization and viability because few people want to pay dues if not required.
c. The vast majority of foreign owned plants are in right-to-work states providing huge advantages in labor costs and productivity relative to the big three.
d. The big three would find it impossible to change the state laws where they are located due to union dominance of state governments. If they built in the South they have to accept the UAW because they would strike back in Michigan.
e. No other country has this crazy system to my knowledge.

2. Promoted defined benefit packages and kept them in the company name. Did you ever consider how totally stupid it is to pin an employee retirement package, meant to last about 50-60 years from first hire until death, to the viability of their company? The top 10 companies in 1950 were very different than in 2000, with the railroads taking a big dive since then. And in 2020 it will be totally different again. Defined benefit packages were a bad idea, promoted by the US government till this day, and the big three are paying the price. If a company is in decline, due to the other items mentioned here, their retiree pool grows relative to gross income and number of active workers. Costs rise and competitiveness goes down, sales decline in a vicious spiral. Note also that while someday the transplants will pay pensions here in the US, the bulk of their corporate salary people (engineers for instance) back home get pensions from the government. Again, a totally crazy concept promoted by the Feds with widespread public support. And again, affecting the big three orders of magnitude harder than the foreign auto companies.

In most western nations, if there is a defined benefit program, it is paid into a government fund and is divorced from the company. If the company fails, people don’t lose their pension. In the U.S., the Pension Benefit Guarantee Company, a quasi-government / private company (like Fanny-Mae) supposedly fills in when the company goes belly up. But it is really a welfare program, with maximum limits far lower than promised pensions for many salaried workers. The airline pilots at United Air Lines, the current poster child of how wonderful chapter 11 will be for the big three, got screwed out of a large percentage of their “guaranteed” pension. Apparently the courts have ruled bond holders have first dibs on people’s defined benefits supposedly “held in trust”. What a travesty; only in the worse run country in the western world. These plans were in lieu of 401k plans. They are not deferred compensation as some say. There is a pot of gold with the employees names on it.

See the PBS Frontline episode here for what happened at United.

www.pbs.org/wgbh/pages.../

All of you with defined benefit plans are in jeopardy. The Feds can fix these laws by simply making pension funding shortfalls first in line for bankruptcy allocations. Put the vulture chapter 11 lawyers and banks second in line after peoples pensions (which are essentially saving accounts).

3. No national healthcare. This is killing all US industry because we are competing with foreign companies with virtually no health care costs at home. Again, for transplants, the tens of thousands of such people at corporate headquarters are not in the U.S., but back home with free insurance. I’m basically a free market person but U.S. healthcare is so screwed up, and the employer based care creating such a competitive disadvantage, I give up – company paid healthcare must go and something needs to replace it. Watch for a future blog entry on that topic. Even though the transplants provide health care for their workers this is again an order of magnitude bigger problem for the big three because: 1) Corporate staff is back home with free health care, transplant workers are younger and therefore healthier, big three also pays health insurance for a million retirees.

4. Blunt instrument CAFÉ laws. The original purpose of CAFE was to reduce depletion of finite fossil fuel supplies and/or to reduce foreign imports. The Global Warming theory did not exist when CAFE was instituted but CAFÉ supports this as well. These same goals are achieved in almost all other Western counties via very high (on order of $3-$6 per gallon) federal gasoline taxes. That is the primary reason the cars are smaller in Europe and Japan. Our cowardly government did not want to be associated with taxes so instead wrote CAFE laws so the big three could do the taxing. I would argue that such laws fell, and continue to fall, disproportionately on the big three. The laws regulate an average fuel economy for a fleet produced by a given company. This forced the big three to abandon the cars they made money on, and build cars they don’t make money on, usually at a loss. The economics are simple: it takes as many overpaid UAW workers to put a door on a $14000 focus as a $30000 F150. So the bigger and more expensive the car the better the big three can compete. The above mentioned economic disadvantages of the big three are exaggerated on small, lower cost cars. And yes, people expect small cars to cost less. Screwed again by the feds! Ford, for instance, has trucks providing over 50% of sales. A rapidly increasing percentage of these trucks are used in the trades; try carrying a load of bricks or even a saddle in a Focus. Why does the Ford commercial truck have to go into a CAFÉ formula when a Mack Truck or Caterpillar dump truck does not? In the rest of the world, where gas taxes are used to reduce fossil fuel consumption, each company is allowed to compete in the part of the vehicle market where they do best. The customer takes the cost of gasoline with tax into consideration when he decides what size and features he needs, and then shops the brands that play in that market. With CAFÉ, the big three were forced at gunpoint to build and sell small cars at a loss just so they could meet the consumer demand for larger cars and trucks with their greater utility (carried more people for instance). The Japanese entered the market in the small car nitch where their low cost and experience from the sane countries with gas taxes gave them the greatest advantage. The Japanese became associated with small cars and better gas mileage, although for the same size car and performance there was no difference on average.
It it were one or two of these items the big three might have competed better, but between the four the cost disadvantage in thousands per car and the hill too hard to climb. People seem to think Americans are superman, blessed with privilege, and the big three should have been able to overcome these odds against our oriental upstarts. In my opinion the big three did an amazing job lasting this long, as they are only mere mortals; doing the best they can given the stacked deck against them.
In the end it is not the above items that are killing the big three right now. These items and the recent gas spike put the big three in a weak position, but they were recovering with the help of the UAW. Cars sell on credit, and there is no money available. Houses are also credit sensitive, but the housing industry doesn’t have the large capital equipment (factories, labs, buildings) and huge staffs (engineers…) to keep feeding when there is a drop in sales. And the housing industry is dominated by illegal alien workers which they just let go.
This credit crisis in not of the big three’s making by any stretch of the imagination. The most likely biggest wrongdoers in the congress and the federal bureaucracy, will keep their jobs and pensions. The second biggest wrongdoers in the financial sector, are getting a trillion or so dollars of bailouts.
The big three are asking for a 5% loan and all this hate comes out in the press and the web. The gap between perception and reality is staggering.
]]> Thu, 11 Dec 2008 09:03:34 -0500 The following U.S. government policies, many of them having popular support, hurt the big three significantly relative to the foreign transplants:
1. Uneven union laws across states:
a. The 1935 U.S. government Wagner Act granted the right of workers in the private sector to organize labor unions and take place in strikes. What this effectively meant was the labor unions were allowed to seize the plant and prevent its use until they got what they wanted. This created the ridiculous result in the US that workers are paid in proportion to the pain they can inflict by shutting things down. Trains, docks, garbage collectors, police, … get high pay. People in low capital or less critical to safety related industries like restaurants and retail get paid low paid. The relationship of pay to skill, work ethic, hazards goes away. Soon after the Wagner act the UAW took over the auto industry; GM and Chrysler in 1937; Ford in 1941. With no foreign competition the UAW monopoly flourished for about 30 years.
b. The 1947 U.S. government Taft–Hartley Act tried to reign in the unions after a series of post-war strikes. While some provisions were national, the states were allowed to pass "right-to-work laws" that outlawed union shops. Such shops require workers to join the union and pay dues. Said state laws are serious impediments to union organization and viability because few people want to pay dues if not required.
c. The vast majority of foreign owned plants are in right-to-work states providing huge advantages in labor costs and productivity relative to the big three.
d. The big three would find it impossible to change the state laws where they are located due to union dominance of state governments. If they built in the South they have to accept the UAW because they would strike back in Michigan.
e. No other country has this crazy system to my knowledge.

2. Promoted defined benefit packages and kept them in the company name. Did you ever consider how totally stupid it is to pin an employee retirement package, meant to last about 50-60 years from first hire until death, to the viability of their company? The top 10 companies in 1950 were very different than in 2000, with the railroads taking a big dive since then. And in 2020 it will be totally different again. Defined benefit packages were a bad idea, promoted by the US government till this day, and the big three are paying the price. If a company is in decline, due to the other items mentioned here, their retiree pool grows relative to gross income and number of active workers. Costs rise and competitiveness goes down, sales decline in a vicious spiral. Note also that while someday the transplants will pay pensions here in the US, the bulk of their corporate salary people (engineers for instance) back home get pensions from the government. Again, a totally crazy concept promoted by the Feds with widespread public support. And again, affecting the big three orders of magnitude harder than the foreign auto companies.

In most western nations, if there is a defined benefit program, it is paid into a government fund and is divorced from the company. If the company fails, people don’t lose their pension. In the U.S., the Pension Benefit Guarantee Company, a quasi-government / private company (like Fanny-Mae) supposedly fills in when the company goes belly up. But it is really a welfare program, with maximum limits far lower than promised pensions for many salaried workers. The airline pilots at United Air Lines, the current poster child of how wonderful chapter 11 will be for the big three, got screwed out of a large percentage of their “guaranteed” pension. Apparently the courts have ruled bond holders have first dibs on people’s defined benefits supposedly “held in trust”. What a travesty; only in the worse run country in the western world. These plans were in lieu of 401k plans. They are not deferred compensation as some say. There is a pot of gold with the employees names on it.

See the PBS Frontline episode here for what happened at United.

www.pbs.org/wgbh/pages.../

All of you with defined benefit plans are in jeopardy. The Feds can fix these laws by simply making pension funding shortfalls first in line for bankruptcy allocations. Put the vulture chapter 11 lawyers and banks second in line after peoples pensions (which are essentially saving accounts).

3. No national healthcare. This is killing all US industry because we are competing with foreign companies with virtually no health care costs at home. Again, for transplants, the tens of thousands of such people at corporate headquarters are not in the U.S., but back home with free insurance. I’m basically a free market person but U.S. healthcare is so screwed up, and the employer based care creating such a competitive disadvantage, I give up – company paid healthcare must go and something needs to replace it. Watch for a future blog entry on that topic. Even though the transplants provide health care for their workers this is again an order of magnitude bigger problem for the big three because: 1) Corporate staff is back home with free health care, transplant workers are younger and therefore healthier, big three also pays health insurance for a million retirees.

4. Blunt instrument CAFÉ laws. The original purpose of CAFE was to reduce depletion of finite fossil fuel supplies and/or to reduce foreign imports. The Global Warming theory did not exist when CAFE was instituted but CAFÉ supports this as well. These same goals are achieved in almost all other Western counties via very high (on order of $3-$6 per gallon) federal gasoline taxes. That is the primary reason the cars are smaller in Europe and Japan. Our cowardly government did not want to be associated with taxes so instead wrote CAFE laws so the big three could do the taxing. I would argue that such laws fell, and continue to fall, disproportionately on the big three. The laws regulate an average fuel economy for a fleet produced by a given company. This forced the big three to abandon the cars they made money on, and build cars they don’t make money on, usually at a loss. The economics are simple: it takes as many overpaid UAW workers to put a door on a $14000 focus as a $30000 F150. So the bigger and more expensive the car the better the big three can compete. The above mentioned economic disadvantages of the big three are exaggerated on small, lower cost cars. And yes, people expect small cars to cost less. Screwed again by the feds! Ford, for instance, has trucks providing over 50% of sales. A rapidly increasing percentage of these trucks are used in the trades; try carrying a load of bricks or even a saddle in a Focus. Why does the Ford commercial truck have to go into a CAFÉ formula when a Mack Truck or Caterpillar dump truck does not? In the rest of the world, where gas taxes are used to reduce fossil fuel consumption, each company is allowed to compete in the part of the vehicle market where they do best. The customer takes the cost of gasoline with tax into consideration when he decides what size and features he needs, and then shops the brands that play in that market. With CAFÉ, the big three were forced at gunpoint to build and sell small cars at a loss just so they could meet the consumer demand for larger cars and trucks with their greater utility (carried more people for instance). The Japanese entered the market in the small car nitch where their low cost and experience from the sane countries with gas taxes gave them the greatest advantage. The Japanese became associated with small cars and better gas mileage, although for the same size car and performance there was no difference on average.
It it were one or two of these items the big three might have competed better, but between the four the cost disadvantage in thousands per car and the hill too hard to climb. People seem to think Americans are superman, blessed with privilege, and the big three should have been able to overcome these odds against our oriental upstarts. In my opinion the big three did an amazing job lasting this long, as they are only mere mortals; doing the best they can given the stacked deck against them.
In the end it is not the above items that are killing the big three right now. These items and the recent gas spike put the big three in a weak position, but they were recovering with the help of the UAW. Cars sell on credit, and there is no money available. Houses are also credit sensitive, but the housing industry doesn’t have the large capital equipment (factories, labs, buildings) and huge staffs (engineers…) to keep feeding when there is a drop in sales. And the housing industry is dominated by illegal alien workers which they just let go.
This credit crisis in not of the big three’s making by any stretch of the imagination. The most likely biggest wrongdoers in the congress and the federal bureaucracy, will keep their jobs and pensions. The second biggest wrongdoers in the financial sector, are getting a trillion or so dollars of bailouts.
The big three are asking for a 5% loan and all this hate comes out in the press and the web. The gap between perception and reality is staggering.
]]> http://seekingalpha.com/article/110241-saving-the-us-auto-industry?source=feed#comment-326222 326222 The following U.S. government policies, many of them having popular support, hurt the big three significantly relative to the foreign transplants:
1. Uneven union laws across states:
a. The 1935 U.S. government Wagner Act granted the right of workers in the private sector to organize labor unions and take place in strikes. What this effectively meant was the labor unions were allowed to seize the plant and prevent its use until they got what they wanted. This created the ridiculous result in the US that workers are paid in proportion to the pain they can inflict by shutting things down. Trains, docks, garbage collectors, police, … get high pay. People in low capital or less critical to safety related industries like restaurants and retail get paid low paid. The relationship of pay to skill, work ethic, hazards goes away. Soon after the Wagner act the UAW took over the auto industry; GM and Chrysler in 1937; Ford in 1941. With no foreign competition the UAW monopoly flourished for about 30 years.
b. The 1947 U.S. government Taft–Hartley Act tried to reign in the unions after a series of post-war strikes. While some provisions were national, the states were allowed to pass "right-to-work laws" that outlawed union shops. Such shops require workers to join the union and pay dues. Said state laws are serious impediments to union organization and viability because few people want to pay dues if not required.
c. The vast majority of foreign owned plants are in right-to-work states providing huge advantages in labor costs and productivity relative to the big three.
d. The big three would find it impossible to change the state laws where they are located due to union dominance of state governments. If they built in the South they have to accept the UAW because they would strike back in Michigan.
e. No other country has this crazy system to my knowledge.

2. Promoted defined benefit packages and kept them in the company name. Did you ever consider how totally stupid it is to pin an employee retirement package, meant to last about 50-60 years from first hire until death, to the viability of their company? The top 10 companies in 1950 were very different than in 2000, with the railroads taking a big dive since then. And in 2020 it will be totally different again. Defined benefit packages were a bad idea, promoted by the US government till this day, and the big three are paying the price. If a company is in decline, due to the other items mentioned here, their retiree pool grows relative to gross income and number of active workers. Costs rise and competitiveness goes down, sales decline in a vicious spiral. Note also that while someday the transplants will pay pensions here in the US, the bulk of their corporate salary people (engineers for instance) back home get pensions from the government. Again, a totally crazy concept promoted by the Feds with widespread public support. And again, affecting the big three orders of magnitude harder than the foreign auto companies.

In most western nations, if there is a defined benefit program, it is paid into a government fund and is divorced from the company. If the company fails, people don’t lose their pension. In the U.S., the Pension Benefit Guarantee Company, a quasi-government / private company (like Fanny-Mae) supposedly fills in when the company goes belly up. But it is really a welfare program, with maximum limits far lower than promised pensions for many salaried workers. The airline pilots at United Air Lines, the current poster child of how wonderful chapter 11 will be for the big three, got screwed out of a large percentage of their “guaranteed” pension. Apparently the courts have ruled bond holders have first dibs on people’s defined benefits supposedly “held in trust”. What a travesty; only in the worse run country in the western world. These plans were in lieu of 401k plans. They are not deferred compensation as some say. There is a pot of gold with the employees names on it.

See the PBS Frontline episode here for what happened at United.

www.pbs.org/wgbh/pages.../

All of you with defined benefit plans are in jeopardy. The Feds can fix these laws by simply making pension funding shortfalls first in line for bankruptcy allocations. Put the vulture chapter 11 lawyers and banks second in line after peoples pensions (which are essentially saving accounts).

3. No national healthcare. This is killing all US industry because we are competing with foreign companies with virtually no health care costs at home. Again, for transplants, the tens of thousands of such people at corporate headquarters are not in the U.S., but back home with free insurance. I’m basically a free market person but U.S. healthcare is so screwed up, and the employer based care creating such a competitive disadvantage, I give up – company paid healthcare must go and something needs to replace it. Watch for a future blog entry on that topic. Even though the transplants provide health care for their workers this is again an order of magnitude bigger problem for the big three because: 1) Corporate staff is back home with free health care, transplant workers are younger and therefore healthier, big three also pays health insurance for a million retirees.

4. Blunt instrument CAFÉ laws. The original purpose of CAFE was to reduce depletion of finite fossil fuel supplies and/or to reduce foreign imports. The Global Warming theory did not exist when CAFE was instituted but CAFÉ supports this as well. These same goals are achieved in almost all other Western counties via very high (on order of $3-$6 per gallon) federal gasoline taxes. That is the primary reason the cars are smaller in Europe and Japan. Our cowardly government did not want to be associated with taxes so instead wrote CAFE laws so the big three could do the taxing. I would argue that such laws fell, and continue to fall, disproportionately on the big three. The laws regulate an average fuel economy for a fleet produced by a given company. This forced the big three to abandon the cars they made money on, and build cars they don’t make money on, usually at a loss. The economics are simple: it takes as many overpaid UAW workers to put a door on a $14000 focus as a $30000 F150. So the bigger and more expensive the car the better the big three can compete. The above mentioned economic disadvantages of the big three are exaggerated on small, lower cost cars. And yes, people expect small cars to cost less. Screwed again by the feds! Ford, for instance, has trucks providing over 50% of sales. A rapidly increasing percentage of these trucks are used in the trades; try carrying a load of bricks or even a saddle in a Focus. Why does the Ford commercial truck have to go into a CAFÉ formula when a Mack Truck or Caterpillar dump truck does not? In the rest of the world, where gas taxes are used to reduce fossil fuel consumption, each company is allowed to compete in the part of the vehicle market where they do best. The customer takes the cost of gasoline with tax into consideration when he decides what size and features he needs, and then shops the brands that play in that market. With CAFÉ, the big three were forced at gunpoint to build and sell small cars at a loss just so they could meet the consumer demand for larger cars and trucks with their greater utility (carried more people for instance). The Japanese entered the market in the small car nitch where their low cost and experience from the sane countries with gas taxes gave them the greatest advantage. The Japanese became associated with small cars and better gas mileage, although for the same size car and performance there was no difference on average.
It it were one or two of these items the big three might have competed better, but between the four the cost disadvantage in thousands per car and the hill too hard to climb. People seem to think Americans are superman, blessed with privilege, and the big three should have been able to overcome these odds against our oriental upstarts. In my opinion the big three did an amazing job lasting this long, as they are only mere mortals; doing the best they can given the stacked deck against them.
In the end it is not the above items that are killing the big three right now. These items and the recent gas spike put the big three in a weak position, but they were recovering with the help of the UAW. Cars sell on credit, and there is no money available. Houses are also credit sensitive, but the housing industry doesn’t have the large capital equipment (factories, labs, buildings) and huge staffs (engineers…) to keep feeding when there is a drop in sales. And the housing industry is dominated by illegal alien workers which they just let go.
This credit crisis in not of the big three’s making by any stretch of the imagination. The most likely biggest wrongdoers in the congress and the federal bureaucracy, will keep their jobs and pensions. The second biggest wrongdoers in the financial sector, are getting a trillion or so dollars of bailouts.
The big three are asking for a 5% loan and all this hate comes out in the press and the web. The gap between perception and reality is staggering.
]]> Thu, 11 Dec 2008 09:02:29 -0500 The following U.S. government policies, many of them having popular support, hurt the big three significantly relative to the foreign transplants:
1. Uneven union laws across states:
a. The 1935 U.S. government Wagner Act granted the right of workers in the private sector to organize labor unions and take place in strikes. What this effectively meant was the labor unions were allowed to seize the plant and prevent its use until they got what they wanted. This created the ridiculous result in the US that workers are paid in proportion to the pain they can inflict by shutting things down. Trains, docks, garbage collectors, police, … get high pay. People in low capital or less critical to safety related industries like restaurants and retail get paid low paid. The relationship of pay to skill, work ethic, hazards goes away. Soon after the Wagner act the UAW took over the auto industry; GM and Chrysler in 1937; Ford in 1941. With no foreign competition the UAW monopoly flourished for about 30 years.
b. The 1947 U.S. government Taft–Hartley Act tried to reign in the unions after a series of post-war strikes. While some provisions were national, the states were allowed to pass "right-to-work laws" that outlawed union shops. Such shops require workers to join the union and pay dues. Said state laws are serious impediments to union organization and viability because few people want to pay dues if not required.
c. The vast majority of foreign owned plants are in right-to-work states providing huge advantages in labor costs and productivity relative to the big three.
d. The big three would find it impossible to change the state laws where they are located due to union dominance of state governments. If they built in the South they have to accept the UAW because they would strike back in Michigan.
e. No other country has this crazy system to my knowledge.

2. Promoted defined benefit packages and kept them in the company name. Did you ever consider how totally stupid it is to pin an employee retirement package, meant to last about 50-60 years from first hire until death, to the viability of their company? The top 10 companies in 1950 were very different than in 2000, with the railroads taking a big dive since then. And in 2020 it will be totally different again. Defined benefit packages were a bad idea, promoted by the US government till this day, and the big three are paying the price. If a company is in decline, due to the other items mentioned here, their retiree pool grows relative to gross income and number of active workers. Costs rise and competitiveness goes down, sales decline in a vicious spiral. Note also that while someday the transplants will pay pensions here in the US, the bulk of their corporate salary people (engineers for instance) back home get pensions from the government. Again, a totally crazy concept promoted by the Feds with widespread public support. And again, affecting the big three orders of magnitude harder than the foreign auto companies.

In most western nations, if there is a defined benefit program, it is paid into a government fund and is divorced from the company. If the company fails, people don’t lose their pension. In the U.S., the Pension Benefit Guarantee Company, a quasi-government / private company (like Fanny-Mae) supposedly fills in when the company goes belly up. But it is really a welfare program, with maximum limits far lower than promised pensions for many salaried workers. The airline pilots at United Air Lines, the current poster child of how wonderful chapter 11 will be for the big three, got screwed out of a large percentage of their “guaranteed” pension. Apparently the courts have ruled bond holders have first dibs on people’s defined benefits supposedly “held in trust”. What a travesty; only in the worse run country in the western world. These plans were in lieu of 401k plans. They are not deferred compensation as some say. There is a pot of gold with the employees names on it.

See the PBS Frontline episode here for what happened at United.

www.pbs.org/wgbh/pages.../

All of you with defined benefit plans are in jeopardy. The Feds can fix these laws by simply making pension funding shortfalls first in line for bankruptcy allocations. Put the vulture chapter 11 lawyers and banks second in line after peoples pensions (which are essentially saving accounts).

3. No national healthcare. This is killing all US industry because we are competing with foreign companies with virtually no health care costs at home. Again, for transplants, the tens of thousands of such people at corporate headquarters are not in the U.S., but back home with free insurance. I’m basically a free market person but U.S. healthcare is so screwed up, and the employer based care creating such a competitive disadvantage, I give up – company paid healthcare must go and something needs to replace it. Watch for a future blog entry on that topic. Even though the transplants provide health care for their workers this is again an order of magnitude bigger problem for the big three because: 1) Corporate staff is back home with free health care, transplant workers are younger and therefore healthier, big three also pays health insurance for a million retirees.

4. Blunt instrument CAFÉ laws. The original purpose of CAFE was to reduce depletion of finite fossil fuel supplies and/or to reduce foreign imports. The Global Warming theory did not exist when CAFE was instituted but CAFÉ supports this as well. These same goals are achieved in almost all other Western counties via very high (on order of $3-$6 per gallon) federal gasoline taxes. That is the primary reason the cars are smaller in Europe and Japan. Our cowardly government did not want to be associated with taxes so instead wrote CAFE laws so the big three could do the taxing. I would argue that such laws fell, and continue to fall, disproportionately on the big three. The laws regulate an average fuel economy for a fleet produced by a given company. This forced the big three to abandon the cars they made money on, and build cars they don’t make money on, usually at a loss. The economics are simple: it takes as many overpaid UAW workers to put a door on a $14000 focus as a $30000 F150. So the bigger and more expensive the car the better the big three can compete. The above mentioned economic disadvantages of the big three are exaggerated on small, lower cost cars. And yes, people expect small cars to cost less. Screwed again by the feds! Ford, for instance, has trucks providing over 50% of sales. A rapidly increasing percentage of these trucks are used in the trades; try carrying a load of bricks or even a saddle in a Focus. Why does the Ford commercial truck have to go into a CAFÉ formula when a Mack Truck or Caterpillar dump truck does not? In the rest of the world, where gas taxes are used to reduce fossil fuel consumption, each company is allowed to compete in the part of the vehicle market where they do best. The customer takes the cost of gasoline with tax into consideration when he decides what size and features he needs, and then shops the brands that play in that market. With CAFÉ, the big three were forced at gunpoint to build and sell small cars at a loss just so they could meet the consumer demand for larger cars and trucks with their greater utility (carried more people for instance). The Japanese entered the market in the small car nitch where their low cost and experience from the sane countries with gas taxes gave them the greatest advantage. The Japanese became associated with small cars and better gas mileage, although for the same size car and performance there was no difference on average.
It it were one or two of these items the big three might have competed better, but between the four the cost disadvantage in thousands per car and the hill too hard to climb. People seem to think Americans are superman, blessed with privilege, and the big three should have been able to overcome these odds against our oriental upstarts. In my opinion the big three did an amazing job lasting this long, as they are only mere mortals; doing the best they can given the stacked deck against them.
In the end it is not the above items that are killing the big three right now. These items and the recent gas spike put the big three in a weak position, but they were recovering with the help of the UAW. Cars sell on credit, and there is no money available. Houses are also credit sensitive, but the housing industry doesn’t have the large capital equipment (factories, labs, buildings) and huge staffs (engineers…) to keep feeding when there is a drop in sales. And the housing industry is dominated by illegal alien workers which they just let go.
This credit crisis in not of the big three’s making by any stretch of the imagination. The most likely biggest wrongdoers in the congress and the federal bureaucracy, will keep their jobs and pensions. The second biggest wrongdoers in the financial sector, are getting a trillion or so dollars of bailouts.
The big three are asking for a 5% loan and all this hate comes out in the press and the web. The gap between perception and reality is staggering.
]]> http://seekingalpha.com/article/110273-gm-ford-leading-the-u-s-into-a-socialized-utopia?source=feed#comment-326213 326213 The following U.S. government policies, many of them having popular support, hurt the big three significantly relative to the foreign transplants:
1. Uneven union laws across states:
a. The 1935 U.S. government Wagner Act granted the right of workers in the private sector to organize labor unions and take place in strikes. What this effectively meant was the labor unions were allowed to seize the plant and prevent its use until they got what they wanted. This created the ridiculous result in the US that workers are paid in proportion to the pain they can inflict by shutting things down. Trains, docks, garbage collectors, police, … get high pay. People in low capital or less critical to safety related industries like restaurants and retail get paid low paid. The relationship of pay to skill, work ethic, hazards goes away. Soon after the Wagner act the UAW took over the auto industry; GM and Chrysler in 1937; Ford in 1941. With no foreign competition the UAW monopoly flourished for about 30 years.
b. The 1947 U.S. government Taft–Hartley Act tried to reign in the unions after a series of post-war strikes. While some provisions were national, the states were allowed to pass "right-to-work laws" that outlawed union shops. Such shops require workers to join the union and pay dues. Said state laws are serious impediments to union organization and viability because few people want to pay dues if not required.
c. The vast majority of foreign owned plants are in right-to-work states providing huge advantages in labor costs and productivity relative to the big three.
d. The big three would find it impossible to change the state laws where they are located due to union dominance of state governments. If they built in the South they have to accept the UAW because they would strike back in Michigan.
e. No other country has this crazy system to my knowledge.

2. Promoted defined benefit packages and kept them in the company name. Did you ever consider how totally stupid it is to pin an employee retirement package, meant to last about 50-60 years from first hire until death, to the viability of their company? The top 10 companies in 1950 were very different than in 2000, with the railroads taking a big dive since then. And in 2020 it will be totally different again. Defined benefit packages were a bad idea, promoted by the US government till this day, and the big three are paying the price. If a company is in decline, due to the other items mentioned here, their retiree pool grows relative to gross income and number of active workers. Costs rise and competitiveness goes down, sales decline in a vicious spiral. Note also that while someday the transplants will pay pensions here in the US, the bulk of their corporate salary people (engineers for instance) back home get pensions from the government. Again, a totally crazy concept promoted by the Feds with widespread public support. And again, affecting the big three orders of magnitude harder than the foreign auto companies.

In most western nations, if there is a defined benefit program, it is paid into a government fund and is divorced from the company. If the company fails, people don’t lose their pension. In the U.S., the Pension Benefit Guarantee Company, a quasi-government / private company (like Fanny-Mae) supposedly fills in when the company goes belly up. But it is really a welfare program, with maximum limits far lower than promised pensions for many salaried workers. The airline pilots at United Air Lines, the current poster child of how wonderful chapter 11 will be for the big three, got screwed out of a large percentage of their “guaranteed” pension. Apparently the courts have ruled bond holders have first dibs on people’s defined benefits supposedly “held in trust”. What a travesty; only in the worse run country in the western world. These plans were in lieu of 401k plans. They are not deferred compensation as some say. There is a pot of gold with the employees names on it.

See the PBS Frontline episode here for what happened at United.

www.pbs.org/wgbh/pages.../

All of you with defined benefit plans are in jeopardy. The Feds can fix these laws by simply making pension funding shortfalls first in line for bankruptcy allocations. Put the vulture chapter 11 lawyers and banks second in line after peoples pensions (which are essentially saving accounts).

3. No national healthcare. This is killing all US industry because we are competing with foreign companies with virtually no health care costs at home. Again, for transplants, the tens of thousands of such people at corporate headquarters are not in the U.S., but back home with free insurance. I’m basically a free market person but U.S. healthcare is so screwed up, and the employer based care creating such a competitive disadvantage, I give up – company paid healthcare must go and something needs to replace it. Watch for a future blog entry on that topic. Even though the transplants provide health care for their workers this is again an order of magnitude bigger problem for the big three because: 1) Corporate staff is back home with free health care, transplant workers are younger and therefore healthier, big three also pays health insurance for a million retirees.

4. Blunt instrument CAFÉ laws. The original purpose of CAFE was to reduce depletion of finite fossil fuel supplies and/or to reduce foreign imports. The Global Warming theory did not exist when CAFE was instituted but CAFÉ supports this as well. These same goals are achieved in almost all other Western counties via very high (on order of $3-$6 per gallon) federal gasoline taxes. That is the primary reason the cars are smaller in Europe and Japan. Our cowardly government did not want to be associated with taxes so instead wrote CAFE laws so the big three could do the taxing. I would argue that such laws fell, and continue to fall, disproportionately on the big three. The laws regulate an average fuel economy for a fleet produced by a given company. This forced the big three to abandon the cars they made money on, and build cars they don’t make money on, usually at a loss. The economics are simple: it takes as many overpaid UAW workers to put a door on a $14000 focus as a $30000 F150. So the bigger and more expensive the car the better the big three can compete. The above mentioned economic disadvantages of the big three are exaggerated on small, lower cost cars. And yes, people expect small cars to cost less. Screwed again by the feds! Ford, for instance, has trucks providing over 50% of sales. A rapidly increasing percentage of these trucks are used in the trades; try carrying a load of bricks or even a saddle in a Focus. Why does the Ford commercial truck have to go into a CAFÉ formula when a Mack Truck or Caterpillar dump truck does not? In the rest of the world, where gas taxes are used to reduce fossil fuel consumption, each company is allowed to compete in the part of the vehicle market where they do best. The customer takes the cost of gasoline with tax into consideration when he decides what size and features he needs, and then shops the brands that play in that market. With CAFÉ, the big three were forced at gunpoint to build and sell small cars at a loss just so they could meet the consumer demand for larger cars and trucks with their greater utility (carried more people for instance). The Japanese entered the market in the small car nitch where their low cost and experience from the sane countries with gas taxes gave them the greatest advantage. The Japanese became associated with small cars and better gas mileage, although for the same size car and performance there was no difference on average.
It it were one or two of these items the big three might have competed better, but between the four the cost disadvantage in thousands per car and the hill too hard to climb. People seem to think Americans are superman, blessed with privilege, and the big three should have been able to overcome these odds against our oriental upstarts. In my opinion the big three did an amazing job lasting this long, as they are only mere mortals; doing the best they can given the stacked deck against them.
In the end it is not the above items that are killing the big three right now. These items and the recent gas spike put the big three in a weak position, but they were recovering with the help of the UAW. Cars sell on credit, and there is no money available. Houses are also credit sensitive, but the housing industry doesn’t have the large capital equipment (factories, labs, buildings) and huge staffs (engineers…) to keep feeding when there is a drop in sales. And the housing industry is dominated by illegal alien workers which they just let go.
This credit crisis in not of the big three’s making by any stretch of the imagination. The most likely biggest wrongdoers in the congress and the federal bureaucracy, will keep their jobs and pensions. The second biggest wrongdoers in the financial sector, are getting a trillion or so dollars of bailouts.
The big three are asking for a 5% loan and all this hate comes out in the press and the web. The gap between perception and reality is staggering.
]]> Thu, 11 Dec 2008 08:55:45 -0500 The following U.S. government policies, many of them having popular support, hurt the big three significantly relative to the foreign transplants:
1. Uneven union laws across states:
a. The 1935 U.S. government Wagner Act granted the right of workers in the private sector to organize labor unions and take place in strikes. What this effectively meant was the labor unions were allowed to seize the plant and prevent its use until they got what they wanted. This created the ridiculous result in the US that workers are paid in proportion to the pain they can inflict by shutting things down. Trains, docks, garbage collectors, police, … get high pay. People in low capital or less critical to safety related industries like restaurants and retail get paid low paid. The relationship of pay to skill, work ethic, hazards goes away. Soon after the Wagner act the UAW took over the auto industry; GM and Chrysler in 1937; Ford in 1941. With no foreign competition the UAW monopoly flourished for about 30 years.
b. The 1947 U.S. government Taft–Hartley Act tried to reign in the unions after a series of post-war strikes. While some provisions were national, the states were allowed to pass "right-to-work laws" that outlawed union shops. Such shops require workers to join the union and pay dues. Said state laws are serious impediments to union organization and viability because few people want to pay dues if not required.
c. The vast majority of foreign owned plants are in right-to-work states providing huge advantages in labor costs and productivity relative to the big three.
d. The big three would find it impossible to change the state laws where they are located due to union dominance of state governments. If they built in the South they have to accept the UAW because they would strike back in Michigan.
e. No other country has this crazy system to my knowledge.

2. Promoted defined benefit packages and kept them in the company name. Did you ever consider how totally stupid it is to pin an employee retirement package, meant to last about 50-60 years from first hire until death, to the viability of their company? The top 10 companies in 1950 were very different than in 2000, with the railroads taking a big dive since then. And in 2020 it will be totally different again. Defined benefit packages were a bad idea, promoted by the US government till this day, and the big three are paying the price. If a company is in decline, due to the other items mentioned here, their retiree pool grows relative to gross income and number of active workers. Costs rise and competitiveness goes down, sales decline in a vicious spiral. Note also that while someday the transplants will pay pensions here in the US, the bulk of their corporate salary people (engineers for instance) back home get pensions from the government. Again, a totally crazy concept promoted by the Feds with widespread public support. And again, affecting the big three orders of magnitude harder than the foreign auto companies.

In most western nations, if there is a defined benefit program, it is paid into a government fund and is divorced from the company. If the company fails, people don’t lose their pension. In the U.S., the Pension Benefit Guarantee Company, a quasi-government / private company (like Fanny-Mae) supposedly fills in when the company goes belly up. But it is really a welfare program, with maximum limits far lower than promised pensions for many salaried workers. The airline pilots at United Air Lines, the current poster child of how wonderful chapter 11 will be for the big three, got screwed out of a large percentage of their “guaranteed” pension. Apparently the courts have ruled bond holders have first dibs on people’s defined benefits supposedly “held in trust”. What a travesty; only in the worse run country in the western world. These plans were in lieu of 401k plans. They are not deferred compensation as some say. There is a pot of gold with the employees names on it.

See the PBS Frontline episode here for what happened at United.

www.pbs.org/wgbh/pages.../

All of you with defined benefit plans are in jeopardy. The Feds can fix these laws by simply making pension funding shortfalls first in line for bankruptcy allocations. Put the vulture chapter 11 lawyers and banks second in line after peoples pensions (which are essentially saving accounts).

3. No national healthcare. This is killing all US industry because we are competing with foreign companies with virtually no health care costs at home. Again, for transplants, the tens of thousands of such people at corporate headquarters are not in the U.S., but back home with free insurance. I’m basically a free market person but U.S. healthcare is so screwed up, and the employer based care creating such a competitive disadvantage, I give up – company paid healthcare must go and something needs to replace it. Watch for a future blog entry on that topic. Even though the transplants provide health care for their workers this is again an order of magnitude bigger problem for the big three because: 1) Corporate staff is back home with free health care, transplant workers are younger and therefore healthier, big three also pays health insurance for a million retirees.

4. Blunt instrument CAFÉ laws. The original purpose of CAFE was to reduce depletion of finite fossil fuel supplies and/or to reduce foreign imports. The Global Warming theory did not exist when CAFE was instituted but CAFÉ supports this as well. These same goals are achieved in almost all other Western counties via very high (on order of $3-$6 per gallon) federal gasoline taxes. That is the primary reason the cars are smaller in Europe and Japan. Our cowardly government did not want to be associated with taxes so instead wrote CAFE laws so the big three could do the taxing. I would argue that such laws fell, and continue to fall, disproportionately on the big three. The laws regulate an average fuel economy for a fleet produced by a given company. This forced the big three to abandon the cars they made money on, and build cars they don’t make money on, usually at a loss. The economics are simple: it takes as many overpaid UAW workers to put a door on a $14000 focus as a $30000 F150. So the bigger and more expensive the car the better the big three can compete. The above mentioned economic disadvantages of the big three are exaggerated on small, lower cost cars. And yes, people expect small cars to cost less. Screwed again by the feds! Ford, for instance, has trucks providing over 50% of sales. A rapidly increasing percentage of these trucks are used in the trades; try carrying a load of bricks or even a saddle in a Focus. Why does the Ford commercial truck have to go into a CAFÉ formula when a Mack Truck or Caterpillar dump truck does not? In the rest of the world, where gas taxes are used to reduce fossil fuel consumption, each company is allowed to compete in the part of the vehicle market where they do best. The customer takes the cost of gasoline with tax into consideration when he decides what size and features he needs, and then shops the brands that play in that market. With CAFÉ, the big three were forced at gunpoint to build and sell small cars at a loss just so they could meet the consumer demand for larger cars and trucks with their greater utility (carried more people for instance). The Japanese entered the market in the small car nitch where their low cost and experience from the sane countries with gas taxes gave them the greatest advantage. The Japanese became associated with small cars and better gas mileage, although for the same size car and performance there was no difference on average.
It it were one or two of these items the big three might have competed better, but between the four the cost disadvantage in thousands per car and the hill too hard to climb. People seem to think Americans are superman, blessed with privilege, and the big three should have been able to overcome these odds against our oriental upstarts. In my opinion the big three did an amazing job lasting this long, as they are only mere mortals; doing the best they can given the stacked deck against them.
In the end it is not the above items that are killing the big three right now. These items and the recent gas spike put the big three in a weak position, but they were recovering with the help of the UAW. Cars sell on credit, and there is no money available. Houses are also credit sensitive, but the housing industry doesn’t have the large capital equipment (factories, labs, buildings) and huge staffs (engineers…) to keep feeding when there is a drop in sales. And the housing industry is dominated by illegal alien workers which they just let go.
This credit crisis in not of the big three’s making by any stretch of the imagination. The most likely biggest wrongdoers in the congress and the federal bureaucracy, will keep their jobs and pensions. The second biggest wrongdoers in the financial sector, are getting a trillion or so dollars of bailouts.
The big three are asking for a 5% loan and all this hate comes out in the press and the web. The gap between perception and reality is staggering.
]]> http://seekingalpha.com/article/109701-the-case-for-making-bigger-cars?source=feed#comment-323946 323946
So you suggestion that they compete at what they are good at is ridiculous. You need to talk to the feds to eliminate CAFE and replace it with gasoline taxes, which is wjat every other western nation uses to get small cars.

The big 3 never said they did not have the technology to make small cars. They said they can't make money on them due to the high labor costs. It takes just as many UAW people to put a door on a $15,000 Focus (Consumer's Report recommended buy, by the way) as on a $30,000 F-150. It is all about economics.

]]> Mon, 08 Dec 2008 13:02:41 -0500
So you suggestion that they compete at what they are good at is ridiculous. You need to talk to the feds to eliminate CAFE and replace it with gasoline taxes, which is wjat every other western nation uses to get small cars.

The big 3 never said they did not have the technology to make small cars. They said they can't make money on them due to the high labor costs. It takes just as many UAW people to put a door on a $15,000 Focus (Consumer's Report recommended buy, by the way) as on a $30,000 F-150. It is all about economics.

]]> http://seekingalpha.com/article/108941-detroit-calling-washington-s-bluff?source=feed#comment-320261 320261
I really want to know the total cost of a UAW worker. I've looked at the UAW site and see two possible articles you may be referring to:

1) A rant by idiot Keith Oberman that pulls $20 per hour of benefits out of thin air.

2) A article by the leftist New Republic which quotes a group called International Motor Vehicle Program that says the benefits are:

"Instead, each active worker is getting benefits equal only to a fraction of that -- probably around $10 per hour, according to estimates from the International Motor Vehicle Program".

This is very suspect. The only number that seems out of line in my detailed list of costs is the health care. The vacation may seem high, but in 2004 the UAW got the following vacation according to a UAW local website:

"Employees shall receive an annual vacation with full pay at the rate of four (4) weeks after one (1) year’s service and five (5) weeks after fifteen (15) years service."

In addition to this there is Christmas week off and many other holidays.No one else gets this kind of days off. $6.63 for vacation seems about right.

I'd be interested in a detailed breakdown of what the UAW thinks they are getting. I'm pretty sure the $70 per hour number is closer than the third part sources on the UAW website. (Keith Oberman is a source??) ]]> Wed, 03 Dec 2008 17:45:29 -0500
I really want to know the total cost of a UAW worker. I've looked at the UAW site and see two possible articles you may be referring to:

1) A rant by idiot Keith Oberman that pulls $20 per hour of benefits out of thin air.

2) A article by the leftist New Republic which quotes a group called International Motor Vehicle Program that says the benefits are:

"Instead, each active worker is getting benefits equal only to a fraction of that -- probably around $10 per hour, according to estimates from the International Motor Vehicle Program".

This is very suspect. The only number that seems out of line in my detailed list of costs is the health care. The vacation may seem high, but in 2004 the UAW got the following vacation according to a UAW local website:

"Employees shall receive an annual vacation with full pay at the rate of four (4) weeks after one (1) year’s service and five (5) weeks after fifteen (15) years service."

In addition to this there is Christmas week off and many other holidays.No one else gets this kind of days off. $6.63 for vacation seems about right.

I'd be interested in a detailed breakdown of what the UAW thinks they are getting. I'm pretty sure the $70 per hour number is closer than the third part sources on the UAW website. (Keith Oberman is a source??) ]]> http://seekingalpha.com/article/108941-detroit-calling-washington-s-bluff?source=feed#comment-319839 319839 Here is a couple year old analysis of UAW wages.

www.cargroup.org/pdfs/...

It includes 2003 actual and 2007 projected values. See page 31 of this PDF for the original. For convenience of readers I typed the 2007 projected values below:

I’ve been to the UAW website and they are denying the $70 per hour figure, and alleging that money for pensions to retired people are allocated to the current workers. They would indeed be an unfair comparison. But the below figure of $4.94 per hour seems reasonable to fund a working persons 30 and out pension. The figure for health care of $13.38 looks high, but the UAW has only 5% co-pay and probably wastes a lot of services.

If the UAW does not like the $70 per hour figure being floated then they should publish a revised figure that shows all of the below categories for actual workers only, instead of blowing a lot of smoke.

Wages:

Wages and Cola (28.44),
Overtime (3.90),
Vacation (6.62),
Bonus (0.60),
Other Misc.( 2.09),

Total Wages( 41.65)

Benefits:
Pensions (4.94),
group life (1.40),
healthcare (13.38),
FICA and UC (3.26),
other misc( 0.35),

total Benefits (23.34)

Grand total (64.99)
]]> Wed, 03 Dec 2008 10:54:16 -0500 Here is a couple year old analysis of UAW wages.

www.cargroup.org/pdfs/...

It includes 2003 actual and 2007 projected values. See page 31 of this PDF for the original. For convenience of readers I typed the 2007 projected values below:

I’ve been to the UAW website and they are denying the $70 per hour figure, and alleging that money for pensions to retired people are allocated to the current workers. They would indeed be an unfair comparison. But the below figure of $4.94 per hour seems reasonable to fund a working persons 30 and out pension. The figure for health care of $13.38 looks high, but the UAW has only 5% co-pay and probably wastes a lot of services.

If the UAW does not like the $70 per hour figure being floated then they should publish a revised figure that shows all of the below categories for actual workers only, instead of blowing a lot of smoke.

Wages:

Wages and Cola (28.44),
Overtime (3.90),
Vacation (6.62),
Bonus (0.60),
Other Misc.( 2.09),

Total Wages( 41.65)

Benefits:
Pensions (4.94),
group life (1.40),
healthcare (13.38),
FICA and UC (3.26),
other misc( 0.35),

total Benefits (23.34)

Grand total (64.99)
]]> http://seekingalpha.com/article/108755-buy-sell-or-hold-gm-s-too-big-to-fail-myth?source=feed#comment-319140 319140
www.cargroup.org/pdfs/...

It includes 2003 actual and 2007 projected values. See page 31 of this PDF for the original. For convenience of readers I typed the 2007 projected values below:


Wages:

Wages and Cola (28.44),
Overtime (3.90),
Vacation (6.62),
Bonus (0.60),
Other Misc.( 2.09),

Total Wages( 41.65)

Benefits:
Pensions (4.94),
group life (1.40),
healthcare (13.38),
FICA and UC (3.26),
other misc( 0.35),

total Benefits (23.34)


Grand total (64.99)


Most lilely this projection was low due to health care inflation.

This is not executive pay allocated to the workers as stated above. I don't believe it includes retired peoples benefits allocated to workers.

It is extensive vacation, and although not stated, every self respecting UAW worker takes all their 10 sick days as vacation. FYI, the salary workers do not do generally do this.

They have 30 and out pensions, and the figure above actually looks lower than I expected.

The health care looks a little high at $13.38 an hour. This would be over $20,000 per year. But they have tiny co-pays on the order of 5% so they probably waste a lot of medical resources since they have no skin in the game. And every crooked doctor in the world has migrated to UAW areas just to milk this cow. The fraud in this area is staggering according to my neighbor who is a doctor, so $20k is possible.

The shame is that the UAW works hard, while they are working. My relative makes this kind of wage and lives in a double-wide. They always viewed themselves as the vanguard of the working man, but the working man, and many otherwise socialist-liberal types have voted with their feet and supported the agressively non-union transplants.

The UAW made some real concessions recently in their retiree health plans. But they only reduced the wages and other benefits of workers who haven't been hired yet. Very magnaminous of you guys!


I suggest that the UAW take significant cuts in benefits. Start with much higher co-pays on medical like everyone else in this country has. Also fewer days off (sum of vacation and sick days), and a couple bucks off the hourly wage. And the sub pay (95% for sitting on ass) has to go immediately.

Then, maybe, just maybe, the taxpayers will support a bridge loan.

]]> Tue, 02 Dec 2008 15:02:58 -0500
www.cargroup.org/pdfs/...

It includes 2003 actual and 2007 projected values. See page 31 of this PDF for the original. For convenience of readers I typed the 2007 projected values below:


Wages:

Wages and Cola (28.44),
Overtime (3.90),
Vacation (6.62),
Bonus (0.60),
Other Misc.( 2.09),

Total Wages( 41.65)

Benefits:
Pensions (4.94),
group life (1.40),
healthcare (13.38),
FICA and UC (3.26),
other misc( 0.35),

total Benefits (23.34)


Grand total (64.99)


Most lilely this projection was low due to health care inflation.

This is not executive pay allocated to the workers as stated above. I don't believe it includes retired peoples benefits allocated to workers.

It is extensive vacation, and although not stated, every self respecting UAW worker takes all their 10 sick days as vacation. FYI, the salary workers do not do generally do this.

They have 30 and out pensions, and the figure above actually looks lower than I expected.

The health care looks a little high at $13.38 an hour. This would be over $20,000 per year. But they have tiny co-pays on the order of 5% so they probably waste a lot of medical resources since they have no skin in the game. And every crooked doctor in the world has migrated to UAW areas just to milk this cow. The fraud in this area is staggering according to my neighbor who is a doctor, so $20k is possible.

The shame is that the UAW works hard, while they are working. My relative makes this kind of wage and lives in a double-wide. They always viewed themselves as the vanguard of the working man, but the working man, and many otherwise socialist-liberal types have voted with their feet and supported the agressively non-union transplants.

The UAW made some real concessions recently in their retiree health plans. But they only reduced the wages and other benefits of workers who haven't been hired yet. Very magnaminous of you guys!


I suggest that the UAW take significant cuts in benefits. Start with much higher co-pays on medical like everyone else in this country has. Also fewer days off (sum of vacation and sick days), and a couple bucks off the hourly wage. And the sub pay (95% for sitting on ass) has to go immediately.

Then, maybe, just maybe, the taxpayers will support a bridge loan.

]]> http://seekingalpha.com/article/107845-detroit-s-big-three-and-the-democrats-economic-illiteracy?source=feed#comment-315425 315425
It does miss the point that the UAW has gotten religion and changed their contract in the right direction. Its amazing what losing about 80% of your membership will do.

They got the retiree health care off the books of the big three for a fraction of the expected cost. This was good, but is still in-process.

They also significantly cut the wages and benefits on NEW HIRES. This bodes well for the long term sustainability of the company.

But here the UAW revealed a level of selfishness and greed that is quite remarkable. They lowered the wages and benefits of people who aren't even there yet, not their overpaid selves. They also implicitly admitted that you can easily fill the plant at half the price of labor.

The UAW has got to cut its current benefits and wages...NOW. The US citizens want to see so action here so they will make the loan. Start with adopting some of the lower benenefits paid to big three salary people for years now, like larger co-pay health care and no-health cate when you reach medicare age. Also get rid of SUB pay; people are totally outraged when they hear about it, as they should be.


]]> Wed, 26 Nov 2008 09:56:42 -0500
It does miss the point that the UAW has gotten religion and changed their contract in the right direction. Its amazing what losing about 80% of your membership will do.

They got the retiree health care off the books of the big three for a fraction of the expected cost. This was good, but is still in-process.

They also significantly cut the wages and benefits on NEW HIRES. This bodes well for the long term sustainability of the company.

But here the UAW revealed a level of selfishness and greed that is quite remarkable. They lowered the wages and benefits of people who aren't even there yet, not their overpaid selves. They also implicitly admitted that you can easily fill the plant at half the price of labor.

The UAW has got to cut its current benefits and wages...NOW. The US citizens want to see so action here so they will make the loan. Start with adopting some of the lower benenefits paid to big three salary people for years now, like larger co-pay health care and no-health cate when you reach medicare age. Also get rid of SUB pay; people are totally outraged when they hear about it, as they should be.


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