So, there goes Detroit and US Manufacturing... - Page 2

Your 40-hour work week? Paid vacations? Two weeks notice? etc. etc. You wouldn't have those without the efforts of unions.

I've been in a union for 12 years. I pay union dues for one year equal to about one month of most health insurance costs for a family, and have had total coverage for my family for all of those years. In eight years I'll have a full pension. I've moved around 5 different companies as a union employee and my health insurance plan hasn't changed. I love my union. I wish everyone could have the amazing health insurance that I get through the union.

ElCap, are you willfully misinterpreting my point? I'm not even going to defend my analogy about the slave-owner mentality.

And to add on to what you're saying, not only are Toyota workers doing well:
But here's a question for you: if the UAW never existed, do you think Toyota's workers would be doing so well?

The UK tried a similar thing with it's car producers in the 1970s, they still went to shit and the government had to keep on bailing them out over and over until it got to the point where the autoworkers were demanding the money, becoming less and less efficient every year (as the unions allowed them to become lazier and more coddled - and the feeling of being entitled to be inefficient).
Longbridge plant in Birmingham was one of the last vestiges of it. If it had had a bullet put in it 30 years ago, the UK government would have saved billions in the long run.

I'm pro-government helping out private employment initiatives but firmly anti-bail out as there's no guarantees the money will help long-term and most of it will end up in CEO/shareholder pockets in the end, think of it as a an un-productivity bonus. Industries fail in cycles, Railways, gold-rush, uk textiles, buffalo - something else will come along, that's the free market system.

Not bailing them out will force them to re-organise replace their management, get rid of the deadwood and streamline - change their products perhaps - make fuel-efficient cars rather than the same cars and pretend they are fuel efficient.

As for the Union argument - was in a union for 10 years in the UK and they did fuck all for me, the one grievance I had was ignored, but I stayed in it as an insurance against being fucked over - the thing about it that sickened me was all the lazy cunts at my work who had the union behind them 100% and could not be fired despite of being - criminally underqualified, totally work shy, absentee motherfuckers. The organization just kept them because it was less hassle than trying to get rid of them. That is what Unions are responsible for, inefficiency - sure in developing countries like the USA the unions help with healthcare benefits etc. and that's great, but remember Wall-mart and their stance on unions. The Unions crippled the UK economy in the 1970s and thatcher had to reform them (like her or hate her), similar reform may be needed in the USA.

As for detroit, what happened to that delta city plan?

Here's another fun bit of irony: remember the $700 billion bailout to the banks? Well they're just sitting on the money and not loaning it out like they're supposed to. And since people can't get loans, they can't buy cars.

But yeah, let's fuck people who actually build things for a living, work hard (I'd take a job in a cubicle over a job where I have to wear safety equipment any day), and have already made concessions.

If you think it's a coincidence that the GOP senators who are trying to kill this thing and then blame the American autoworker for its death just happen to be from the states that subsidize foreign car makers, then you are adorable.

Why is it luck? Did you stop for a second to think maybe ElCapitan works his ass off and EARNED his pay and position? Shocking, I know.

As for the bailout, honestly, why can't the auto makers go into bankruptcy? I don't think the serious decisions that need to be made (model and line consolidation being one of the biggest) will be made without bankruptcy via the courts.

And I HATE the term "American" auto maker. Bullshit. My Honda was made with more American labor and parts than my old Ford. And thats a fact.

JudgeSmails, people who say that we should just let the US automakers go into bankruptcy aren't seeing the big picture. It's a national security issue. It's a supply line issue. It's a major economic issue. Our manufacturing base goes belly up, all the suppliers go belly up, the foreign car manufacturers go away, millions of people flood into unemployment. During WWII, FDR mobilized the manufacturing base in the country to start making equipment, vehicles and artillery for use in the war. We couldn't do that today. If the Big 3 goes, we become even more vulnerable. I don't want to live in industrialized China. I like the idea of a healthy society and a healthy economy. I don't like seeing homeless and desperate people who can't feed their kids while the country's aristocracy socks its billions away in Dubai or the Caymans. I want a decent vision of America - one that operates from a place of decency, true justice and a good quality of life for all of us. The quality of life of your neighbor affects you, inevitably. It's good for all of us to correct what's wrong with our system - namely that free market trickle-down economics doesn't work because people are inherently flawed and personal greed distorts the market and creates a RIGGED system.

Yt, you make some good points. But I disagree on the fact that I don't believe Bankruptcy would destroy these firms...but make them leaner, meaner and better able to compete in the 21st century. I do want a healthy US Auto industry. I just think the current one is broken and giving them bailout money without demanding they reorganize top to bottom is wrong.

And here's my biggest problem with this, which I brought up in the original bailout thread. Where does this all end? There are milions of people who don't work in the auto industry who are seeing their jobs go away. Why does the Govt get to choose Auto over them? For example, I work in healthcare and without my company there would be adverse impact to the hundreds of thousands of people we provide services for. But you sure as hell don't see Congress and GWB talking about a bailout for healthcare. Or what about Computers, Consulting, Engineering, Farming, Retail, etc., etc. When does this stop?

Bankruptcy would end the union contracts. If they reorganized, it would be without union labor. It's also a big IF. It would also take time. The corporate media won't tell you this but we are on the bleeding edge of real Depression. The employment numbers are higher than they've been in decades -- and every president, dem or repub, has fudged unemployment numbers, so the official number is much lower than the real one.*

I agree with you that mismanagement is at the heart of this. Read this great article by Joseph Stiglitz. He breaks down the cause of the economic implosion we're enjoying, one of which is "faking the numbers," i.e. CEOs getting stock options and monkeying with their profit data to inflate share prices. The greed of the CEOs, coupled with 30 years of Republican free-market bleeding, has created a disaster for the economy -- the widest rift between the very rich and everybody else since the 1920s.

I agree with you that these bailouts are ridiculous. But you have to remember that when Wall Street came along with hat in hand, Congress bent over. The auto manufacturers - which actually MAKE something, which actually put millions of people to work, as opposed to hundreds of hedge fund managers and rich investors - are asking for a bridge loan. Another car manufacturer, maybe Ford, I can't remember, got a government bridge loan and paid it back with interest a few years ago.

I'd love to see the auto workers put on the board at the Big 3. Hell, I'd love to see the US govt outright buy the three companies, refit them for 21st century manufacturing, and then sell them to shareholders with a percentage of majority shares going to the workers. Maybe Obama will come in with brilliant ideas to force the management of these companies into the 21st century and out of the greed business, but a bankruptcy at this point will only hurt workers. And the interruption of the supply line, as I pointed out above, could have devastating consequences across the industry.

As far as healthcare, government already bailed out healthcare but indirectly. The medicare bill was a vast giveaway to the industry at the expense of the most vulnerable. That's why profits are healthy right about now. But I hope for your sake that your job can't be outsourced to Bangalore because under Bush and the Republican Congress, that's where a lot of healthcare companies were sending jobs -- for the profit of the CEOs and shareholders, at the expense of the US economy. Do you see where I'm going with this? Our system is broken. It coddles the rich and powerful and punishes everyone else. It gets away with this through ownership of media and heavy, heavy propaganda. A good example of said propaganda is blaming the auto workers - who account for less than 10% of the cost of a car - for the auto industry's financial woes.

PS: We're now seeing the beginning of what Naomi Klein aptly called the shock doctrine on the eve of the big Henry Paulson announcement of the $700b bailout. Once that money goes to the banks and their rich shareholders, the shock and chaos don't affect the beneficiaries of the bailout - it affects the rest of us. Once everything else is collapsing, the money is gone, so major cuts have to be made, and those cuts will be made to important things like US jobs, education, infrastructure, emergency healthcare for the most vulnerable, etc.

*To say nothing of what these bankruptcies would do to the stock market.

I don't doubt he works hard; I don't doubt there are people working as hard who haven't been as fortunate.

Probably in the past, but today, I get the benefits I have because I could go to another company and help it be more successful if I'm not happy with my current employer.

As for health benefits, I'm all for socialized healthcare, so the solution for me on that one on the long term is get the govt. involved. In the meantime, I do have kickass health benefits because my company values my talents.

I'm for socialized heathcare too, so on that we agree.

But ElCap, your company doesn't give you all those things that labor unions got for you out of the kindness of their hearts and appreciation of your talents. They would cut all of it if they thought you were desperate enough to stay in spite of the cuts. If unions ceased to exist, that would be the world we'd drift to. And if people like these union-busting southern senators like Shelby have their way, that's the world we're going to get, and you will find that your company won't be as magnanimous and appreciative as it is now. The shareholders are more important to them than the workers, period. And paying you less, giving you less vacation pay, healthcare and other benefits looks better on their bottom line, and therefore benefits their shareholders.

You're gonna need them. You're Chewer Nbr 1 when it comes to who will soon need a rabies shot.

Wrong thread...

haha, I haven't had a good laugh like that for ages. I love the way neo-cons that have run out of arguments simply say it's a national security issue.

All that would happen with the big 3 is exactly what happened with the UK car companies, they'd be bought up by foreign companies (german and chinese usually), stripped and re-organized. That's what happens when piss-poor management and ball-breaking unions inadvertently conspire to bankrupt a company. The ford name isn't going anywhere, it will simply have new foreign masters, and in a era of multinational corporations like GM and ford that doesn't matter a toss as most of the shareholders are foreign anyway.

if you want another economic titbit - try this stuff about synthetic CDOs. Fascinating.

Mr. Adam, that is the economic picture we're dealing with. And as for the CDO and CDS scam, we've been debating that for four months in the economy thread. Because it's so "sophisticated," most people don't figure it into the situation and look for other scapegoats - like union auto workers - to finger. You're probably right about foreign buyers, and that would certainly help take a hatchet to our economic health. There is an immense cloud of foreign investment hanging over all of this - the Middle East owns half our interests anyway. But in terms of intertwined shareholders, check out theyrule.net/. Anyone who doubts how interconnected all the multinational corporations are will get an eye opener.

yt is a neo-con now? Wonders never cease!

Oops, will have a look for that now- I didn't know there was an .

as for the "hatchet to your economic health" it's not looking very rosy at the moment, why should re-organising and making the industry more efficient and profitable cause ruination? It won't - it's just some scare tactic rustled up.

Propping up what are a copuple of fatally flawed couple of lame-ducks on some vague nationalistic pretense when the money (that should be used to greater purpose elsewhere) will just be thrown into a black hole, emerging in the pockets of shareholders all over the world, is a waste and will only need another bail-out in a few years or next time they feel like a few billion extra on the profit line.

Nope. Its obvious that you arent seeing the big picture.

Unless youre a financial institution, bankruptcy does not equal evaporation into thin air.

People said the same things before the airlines went into bankruptcy.

"Oh dear God! Nobody in the world would ever fly on a bankrupt airline!"

People seem to have a problem believing that the large financial institutions are completely necessary at this point in time. For better or worse, thats the way our country's (and the world's) economic system works.

The country doesnt need the Big 3 in their current form.

Seriously. I wonder where you get this stuff.


The market opened down 1% today when everybody thought the Big 3 were toast. The market has already factored this in. Hence the less than 1% increase after news that Dubya may use the TARP.

The market factored in a bankruptcy the first time Congress denied the automakers.

A good breakdown of the whole UAW compensation issue.

Plus its from the New York Times so its safe to assume everybody here will believe it.

http://www.nytimes.com/2008/12/10/bu...ardt.html?_r=1

With apologies to Venkman, I feel so funky.
Efficient maybe, profitable - for whom? Corporate profits don't go back into the economy. And the other side of that is: If union protection gets gutted then those who do ultimately get re-hired will be hired back at a fraction of their pay. Considering the poverty, joblessness and bankruptcy statistics, that would be more devastation to the economy as a whole. It's not scare tactics. If it were scare tactics, the Republicans would be shouting it from the rooftops. It's the uncomfortable reality of our current economic picture. You can only starve the beast for so long.

I agree with you here. I think there needs to be oversight with this bridge loan and the Wall Street bailout -- oops, too late.

The airlines went bankrupt and when they reorganized, there was no more union protection for the workers, The Closer. More free market economics run amok.

In all the news sources you evidently elect not to read.

Maybe the market is waiting for the other shoe to drop.

Uh-huh.

And the result is they are still around and in better financial condition then they were prior to bankruptcy. And they still have lots of employees.

No. Its apparent you passed the Economics 101 chapter in school. Like it or not, bank failures = no jobs for anybody due to no credit for anybody. Its pretty basic. Big banks = necessary. Simple as that.

Well have to wait and see (naturally) to know for sure, but if you study the charts and look at the VIX over the past few weeks, specifically focusing on the day Congress said no and today, you would probably see what I mean.

Wrong. Have you flown lately? Notice the difference? Like the auto industry, the airline industry is due for another meltdown. The oil speculation bubble nearly killed them.

I never had any interest in economics until I realized that every one of us has to take a crash course to understand how royally all those economic "geniuses" with PHds from Princeton are reaming this country. Big banks = too big to fail = bailout. I'm much more interested in monopoly-busting such that if a bank fails, our entire economic system won't go down with it. Bring back the Sherman Anti-Trust Act.

I'll be watching.

Hold on a second. I might be just too drunk right now to get the deeper meaning of that post. But who exactly is responsible for aid/subsidies/deals with foreign companies in the states? How much leverage do the states have to form their economy as opposed to the federal state of the US of A?

Because reading this, it just might add another layer for me to this discussion. And remember, it is the curiosity not the cat talking here.

I fly often. Mainly Southwest though, and they are awesome. But air travel has always been a pain otherwise, hasnt it?

Point is they are still around and still in business. Plus, oil bubbles aside, they are more financially sound compared to 8 years ago.

Ok. Doesnt change the fact that the big banks are a necessity. We can go back and forth about how right or wrong that is or who gets paid what and the notion of whats "fair," but that doesnt change anything.

As will I, naturally. I may be wrong (thats the beauty of the market, after all) but thats whats apparent as of right now.

The market reacts (positively or negatively) on surprises. A GM bankruptcy wouldnt surprise the market. Why do you think the market has gone up over the past 2 months on the day that unemployment numbers are always worse than expected?

Because the market knows things suck.

Are you kidding? Rights such as these wouldn't be provided by any employer if not for the unions.

I know that many of you were exposed to the whole "Rah, rah, let's bust the unions and their shady mob connections for keeping the American businessman down" bullshit so prevalent in the US, but you seem far to intelligent to display such rigid ideology. Your attitude seriously reminds me of some people that grew up behind the Iron Curtain that I had a chance to talk to.

And this coming from someone who's on the right politically and lives in a country that has been objectively economicaly hurt by too powerfull unions. Unions strong enough to actually pose a threat to the employers are absolutely necessary.

We don't have unions in my profession, and we don't need them. Of course they don't give us benefits because of rainbows and ponies, we get those benefits so we can stay in that company and not go use our talents at the competition.

During my masters, I stayed at my company basically because they were paying 100% the cost of my graduate school. Some of the companies I liked as well, didn't pay at 100% (or at all).

Later I got a nice set of stock options, and that motivated me to stay. Why did they give me stock options and salary increases? Take a guess, but it had nothing to do with unions.

Unions might be needed in some industries for some type of jobs, but you can't really say that they are the driver of salaries and benefits that all of us get in today's global economy.

Hate to jump in like this, but as a business owner/employer/manager that's a rather stark view of what we're doing -- especially in this downturn.

Now things up here on the Left Coast aren't as desparate as down there, but the pain is being felt all around -- business is easily down 15% YOY for the entire sector in our economic region (Metro Vancouver).

Note that the vast majority of our employees are all professionals -- accreditation, degrees, etc. The few that are unionized are those who work for universities -- the other 99% are non-union employees, sub-contractors (a small percentage) or temporary (a small amount, with some full-timers doing temp work on the side).

In this labour market, there's suddenly a glut of people looking for work -- many highly experienced.

Time to twirl my mustache and laugh from the diaphragm, right?

Hardly -- a sensible employer will recognize that keeping a good team together (and content, if not outright "happy") far outweighs trying to squeeze them due to economic anxiety. We're actually considering ways to increase compensation that [turn on management speak] will both motivate and align the employee's interests with our own.

However, business is down. So, we've found ourselves overstaffed for the amount of work we have and have let one person go. The labour rules up here are very stringent -- due compensation is explicitly described in the code and can be a barrier to companies trying to adjust to market conditions. Nevertheless, we decided to greatly overpay severance in order to cushion the blow.

To wrap this up: if an employer sees a valid and robust business model built around the employees, its not in anyone's interest to start playing petty games. I feel its an indictment of the business model the Big 3 and their unions are trying to keep alive that these massive labour-management battles are a regular occurrence.

Caveat: obviously I'm speaking from a small, private corporation perspective.

Your example extends to everyday minutiae, as in coffee being freely supplied by a small company, yet not by a large one - the larger the workforce, the greater need for unions. If you're interacting with your regular working stiffs on a day-to-day basis, it seems unlikely to me you'd be cheap like that; yet, if you pulled in billions, you'd be afforded the chance to be a superior cheapskate. I'm employed at a rather large bank and the emphasis is on your fellow coworkers to distribute niceties like coffee, end-of-year gifts or bonuses, pizza lunches and the like, out of our own pockets. The suckers even pool money together to win the lottery and give their earnings to charity, which is only supported by the company to look good without actually contributing something itself.

ElCap and SunWuKong, my point isn't that your place of work has to be unionized now. It's that without the historical existence of unions, the working conditions in America wouldn't be what they are (read Upton Sinclair's The Jungle). And though I see this from a half-empty perspective and don't hold much faith in corporate scruples and responsibility, in the "free market," where profitability trumps all, things like happy employees and a good team don't amount to much if you end up with corporate leadership that sees higher profitability in eliminating jobs.

Example 1. When I was a contractor with a large telecom the corporate employees came from two different worlds: the union staff were usually disinterested and unengaged with the corp outside of their own immediate department, and management moved in this world of constant turf wars and weird, ambiguous commandments from Above.

The result: it was a fight to get anything done and no one had an incentive to make it better. Workers roles were so hyper-defined and aggresively segregated that they couldn't take the initiative without a committee and management was a hundred hands on the tiller of the ship and each was looking through a telescope of their own in a different direction.
---
Example 2. A startup I joined grew from a dozen employees to around two hundred in about a years time with the help of venture capital. With the cash infusion came a bunch of conditions: an imposed business and technical infrastructure (e.g., from OSS to a Windows-based network), a schedule of (technically vague) performance targets, and a mandate to "grow".

Every missed target (e.g., hardware versions) resulted in two things: an upgrade of the target (e.g., new version + new features) and a huge surge in hiring to make the new target. Marketing and executive management was maintaining the optimistic public relations game while becoming less connected with the technical issues on the ground. The technical staff became overly focused on their own technological turf and would frequently get sidetracked by short term benchmarks (e.g., deliver demo) and compensation/benefits schemes (e.g., share allocation).

The result: the key technical staff left within a year of delivering a product the market no longer cared for and, seven years after startup, the company was dissolved in a buyout that generated 1 blog entry.
---
In neither example were the employees underpaid -- in fact, in both cases compensation was far higher than the industry national average.

In the first example, I'd argue that there was far too much deadwood in the union ranks (not to mention up above) but the bureaucracy of the corp and the contracts left no room for dumping the bad performers. To this day this telecom company has generally lousy service and second rate technical performance.

In the second example the worker ranks were filled with individual star players, all of which are still relatively high profile in their respective technical areas. Unfortunately their managers had very limited success in keeping their focus and the near term, artificial milestones generated a lot of cynicism and technical flailing about. Nobody got punished and salaries kept going up as the fear that losing these stars outweighed the need to get them working effectively.

Shit, if the government reduced my pay I would actually riot...hopefully with others...I guess there's always chaining yourself somewhere and starving to death, too (may as well if you're just going to starve on your lonesome anyway.)

Excluding their own, presumably.

Here is to hypocrisy.

Gotta love the free market, small government ideology.

That's why anyone who identifies themselves as a Republican is a mongoloid fucktard.

True the Republican have been socialistic since the 70s. They Definitely do not believe in things like the free market, and small government ideology. Republican minus the racism and totalitarianism are pretty much the Nazi Party.

Youre special.


Now, back to common sense. I would be interested in seeing if anyone could offer any suggestions as to why the following idea wouldnt work out for the best (considering the situation we find ourselves in, natureally):

-Government assists GM & Chrysler into Chapter 11.
-Get rid of top management, starting with Wagoner.
-Government guarantees all warrants.
-Government guarantees all loans made from banks to GM & Chrysler.
-Elimination of Job Bank (which would save something like $10Billion per year alone).

Yes, equity holders would be wiped clean but its easy to argue theyve been expecting that over the past few months. A few suppliers would be left unpaid for the time being. However, with the government guaranteeing all loans/warrants, you would find that the big names (BofA, WF, JPM) would have no problem extending credit due to what we can only assume would be a attractive interest rate. You wont have to deal with that bullshit argument of "Well nobody would buy a car from a company who wouldnt be able to live up to the warranty it provides."

We didnt learn from others obviously smarter than us regarding the bank rescue (see the Swiss), so why would we ignore the mistakes the British made when they went throough a similar situation a few decades ago?

Any idea if statutory severance obligations in your laws survive bankruptcy? Can the board enact a poison pill that will guarantee management contractual severance conditions?

Also, can the government act as the trustee in a bankruptcy? Is it better for the government to form an "independent" body as adminstrator?

Maybe add a limit on future warranty and buyer incentive programs?

Also, shouldn't there be reasonable limits (both time and amount) on the loan guarantees?

That is a good question. Not 100% sure to be honest with you, but being Uncle Sam Im sure that they could make it happen if they wanted to.

Also, I do know for the fact that all pension/retirement benefits would remain in tact via the magic of the PBGC.
They would most likely set up an "independent" (for the lack of a better word) body with the "Car Czar" and all those folks who would "report" directly to the Fed/Treasury.


Maybe add a limit on future warranty and buyer incentive programs?

Also, shouldn't there be reasonable limits (both time and amount) on the loan guarantees?[/QUOTE]

Yeah, guarantees on the warranties (for existing owners and those who purchase new autos for the first 3-5 years, lets say) would be essential.

I do know that interbank loans, due to TARP, are guaranteed up until the end of 2009. For a situation like this, perhaps 5 years would suffice?

How high up are these on the liabilities totem pole? Are they at the same level as other secured creditors, e.g., the banks lending them the bailout money?

Would that be the first term of the loan or the entire amortization? Assuming, of course, that they wouldn't just be paying maintenance (deductible?) interest during those 5 years.

Wikipedia says that it took about 4 years for Chrysler's 1979 guaranteed loans to be paid off.

And so it begins

A nice little Merry Christmas to all and to all who work for us, a fuck you!

But somehow no one will lose their job right?

They said on the news that the workers would be paid throughout the closing. That should give them plenty of time to work on their resumes.

Better this than laying people off. I mean, if consumers aren't buying your existing stock, why waste money making more of it?

Even with paying the workers, they'd still see a sizable savings on utility costs, shipping costs, supply costs and maintenance.

I don't know what Detroit will do with the overstock of cars they have now. But I hope when the smoke clears they get back to building good, safe, reliable cars, instead of overpriced starships with home theaters that real people can't afford. I just want to get back and forth to work. I don't plan to appear on MTV's "Cribs".

Oh, and I would like to be able to do minor repairs myself. I don't want to have to haul it in everytime I need the plugs or oil changed. No more of these locks on parts that void the warranty if I should try to take a peek under the hood and check things out.

So Bush continues his track record of bad decisions and gives $15Billion to GM and Chrysler:

I dont like how non-specific the term "competitive" seems to be in this language.

I do like, however, that there was no BS about some sort of quota of more fuel-effecient cars...especially considering they make more 30mpg+ cars than any other manufacturer. That obviously hasnt helped them recently.

I do not see how Detroit is going to fix its problems without some combination of eliminating factors/production lines, firing workers, reducing pension overhead, and consolidation. I think the above steps are actually more important than coming up with great designs for new cars, as you must remove the broken structure before you can think about rebuilding.

If someone else understands how they are going to avoid the above-steps, please tell me.

Synergy.