Will Americans Support the Big 3

[mettech]

After all of the hype, will Americans go out and support the Big 3 in their time of need?

 

If the Nov and Dec market share for the Big 3 increase, Congress would be more inclined to support the bail out.

 

If the Big 3 market share drops...........

 

The Big 3 has never had more free advertisement. Every American knows they need their help.

 

Will the American consumer support the Big 3 in their time of need?

 

Or will Americans give more market share to the imports?

[NickF1011]

Without any guarantee of help from the government, I don't think Americans are confident enough to stand behind the Big 3 in force.

[BlackHorse]

I already bought an American vehicle this year; prefer to buy American as well. But we have to be honest with ourselves here. The big 3 are in trouble because they have managment teams that apparently have forgotten how to put any real effort into building anything unless it is "a new SUV" "a new pickup" or the flavor the minute "a new crossover" which is just another way of saying a new SUV. Their product lines are, for the most part, unappealing to a lot of people and those people are not buying. Couple that with the fact that you can't hope to be competitive with Honda and Toyota plants here in the south that are non-union while you're paying some UAW guy 73 bucks an hour to bolt a dashboard into a Malibu. In addition, the big 3 suffer from the perception vs reality problem. I support the big 3, but I think the best thing for them to do is declare chapter 11.

[Pioneer]

while you're paying some UAW guy 73 bucks an hour to bolt a dashboard into a Malibu.

 

 

That is a bullshit number, and you know it.

 

Shame on you.

[BlackHorse]

That is a bullshit number, and you know it.

 

Shame on you.

 

 

Uh, no I don't know it. I've heard it quoted a couple of different times on different news shows. I didn't just make it up and if it's wrong then take it up with the news media.

[mettech]

The next two months of sales will be America's vote for support of the Big 3.

 

If market share drops for the Big 3... forget about public support for the bail out.

 

The $73 figure is for total hourly overhead. Not just pay and insurance.

 

 

 

IMHO, the Big 3 are a winner no matter what..... and the UAW if facing a train wreck. Most of the conversation between the Big 3 and Congress was about Ron Gettelfinger, and I don't think he even knew.

[kpc655]

Uh, no I don't know it. I've heard it quoted a couple of different times on different news shows. I didn't just make it up and if it's wrong then take it up with the news media.

 

There's a big difference in what someone is paid vs. what they cost. they might get 30 per hour..but they cost the company 50-100% more depending on the level of benefits.

[povertyknob]

There's a big difference in what someone is paid vs. what they cost. they might get 30 per hour..but they cost the company 50-100% more depending on the level of benefits.

The problem in my view is that the media cites this number compared to the average hourly wage of the transplants and the guy on the street who resents UAW types is more than willing to believe that's an hourly rate. The media knows better(I hope) but they continue to throw it out there to stir up resentment against the UAW. Sure.it costs more to build a car for a domestic automaker. I'd like to know what the accurate numbers are for total cost per hour for the transplant facilities. If they get absolutely nothing beyond an hourly wage then it's a fair comparison. If they do, it isn't an honest comparison. If I get a dime raise,my local paper runs a front page article. I have no idea what the pay rates are at the nearby Honda plant.

[Bored of Pisteon]

Without any guarantee of help from the government, I don't think Americans are confident enough to stand behind the Big 3 in force.

 

Why? Because all the care about is the latest in fashion trends, following what out-of-touch with the real world celebrities do all the time as well as watching stupid TV shows like "Dancing with the Stars", etc...

 

THESE PEOPLE ARE FUBAR. FUBAR! FUBAR!!!

[NickF1011]

Why? Because all the care about is the latest in fashion trends, following what out-of-touch with the real world celebrities do all the time as well as watching stupid TV shows like "Dancing with the Stars", etc...

 

THESE PEOPLE ARE FUBAR. FUBAR! FUBAR!!!

 

I think it has more to do with consumers worrying if their car will even be servicable in another year or not. Yes, people are idiots for plenty of reasons, but not buying vehicles with no guarantee that warranties or parts will be available isn't one I can fault them for.

[lfeg]

If the Detriot 3 have to depend on the support of the american public they are doomed. The american public supports lower prices every day, American Idol, and Oprah. Or whatever they are told to by assorted celebrities.

[NickF1011]

Or whatever they are told to by assorted celebrities.

 

At least they got Denis Leary and Mike Rowe on their side. :bandance:

[taxman100]

Most people I know won't buy an American car - a majority have a very negative image of the UAW employee, plus American corporate executives and their management ability. Both are viewed as very short-sighted and greedy.

 

They buy a Japanese car because they think it is built better by better managed companies. They have no faith in the current system of how American vehicles are designed, engineered, and built.

 

I'm not saying it is true, but that is the opinion of most the people I know.

 

European cars are considered hip. Domestics are not. That is the other group who won't buy American.

[mettech]

The problem in my view is that the media cites this number compared to the average hourly wage of the transplants and the guy on the street who resents UAW types is more than willing to believe that's an hourly rate. The media knows better(I hope) but they continue to throw it out there to stir up resentment against the UAW. Sure.it costs more to build a car for a domestic automaker. I'd like to know what the accurate numbers are for total cost per hour for the transplant facilities. If they get absolutely nothing beyond an hourly wage then it's a fair comparison. If they do, it isn't an honest comparison. If I get a dime raise,my local paper runs a front page article. I have no idea what the pay rates are at the nearby Honda plant.

 

"...General Motors' base wage under the United Auto Workers contract is about $28.69 an hour, or about $59,675 a year. Last year, the union accepted some wage cuts -- to $14 an hour for new hires on sub-assembly lines bringing new work into the plant.

 

That's less than Honda Greensburg base wages. Production workers hired this year will start at $14.84 an hour in Greensburg and receive a $3.71 raise next year to $18.55, or about $38,500 a year...

"

 

Honda Production Underway, Indy Star 11 Nov 08

[06StangAwesomecar]

I already bought an American vehicle this year; prefer to buy American as well. But we have to be honest with ourselves here. The big 3 are in trouble because they have managment teams that apparently have forgotten how to put any real effort into building anything unless it is "a new SUV" "a new pickup" or the flavor the minute "a new crossover" which is just another way of saying a new SUV. Their product lines are, for the most part, unappealing to a lot of people and those people are not buying. Couple that with the fact that you can't hope to be competitive with Honda and Toyota plants here in the south that are non-union while you're paying some UAW guy 73 bucks an hour to bolt a dashboard into a Malibu. In addition, the big 3 suffer from the perception vs reality problem. I support the big 3, but I think the best thing for them to do is declare chapter 11.

 

http://www.uaw.org/barg/07fact/fact02.php

 

In addition to regular hourly pay, the labor cost figures cited by the companies include other expenses associated with having a person on payroll. This includes overtime, shift premiums and the costs of negotiated benefits such as holidays, vacations, health care, pensions and education and training. It also includes statutory costs, which employers are required to pay by law, such as federal contributions for Social Security and Medicare, and state payments to workers’ compensation and unemployment insurance funds. The highest figures sometimes cited also include the benefit costs of retirees who are no longer on the payroll.

 

In 2006 a typical UAW-represented assembler at GM earned $27.81 per hour of straight-time labor. A typical UAW-represented skilled-trades worker at GM earned $32.32 per hour of straight-time labor. Between 2003 and 2006, the wages of a typical UAW assembler have grown at about the same rate as wages in the private sector as a whole – roughly 9 percent. Part of that growth is due to cost-of-living adjustments that have helped prevent inflation from eroding the purchasing power of workers’ wages.

 

 

American autoworkers are among the most productive workers in the world. According to the U.S. Census Bureau, the typical autoworker produces value added worth $206 per worker per hour.1 This is far more than he or she earns in wages, even when benefits, statutory contributions and other costs are included.

 

The total labor cost of a new vehicle produced in the United States is about $2,400,2 which includes direct, indirect and salaried labor for engines, stamping and assembly at the automakers’ plants.

 

This represents 8.4 percent of the typical $28,4513 price of a new vehicle in 2006. The vast majority of the costs of producing a vehicle and transporting it to a dealership and preparing it for sale – including design, engineering, marketing, raw materials, executive compensation and other costs – are not related to direct or indirect manufacturing labor.

[BlackHorse]

http://www.uaw.org/barg/07fact/fact02.php

 

 

LOL, I hope you'll understand when I tell you that I just flat out don't believe anything the UAW tells me about their 27 dollar an hour employees.

[Pioneer]

LOL, I hope you'll understand when I tell you that I just flat out don't believe anything the UAW tells me about their 27 dollar an hour employees.

 

 

But you will believe everything the media tells you about them?

[BlackHorse]

But you will believe everything the media tells you about them?

 

I believe the media doesn't have any interest one way or the other in how UAW is percieved by the public. So to that end I know they are a lot more credible source on what UAW workers make or don't make than UAW is.

[RaZor]

Let's start with the fact that it's not $70 per hour in wages. According to Kristin Dziczek of the Center for Automotive Research--who was my primary source for the figures you are about to read--average wages for workers at Chrysler, Ford, and General Motors were just $28 per hour as of 2007. That works out to a little less than $60,000 a year in gross income--hardly outrageous, particularly when you consider the physical demands of automobile assembly work and the skills most workers must acquire over the course of their careers.

 

More important, and contrary to what you may have heard, the wages aren't that much bigger than what Honda, Toyota, and other foreign manufacturers pay employees in their U.S. factories. While we can't be sure precisely how much those workers make, because the companies don't make the information public, the best estimates suggests the corresponding 2007 figure for these "transplants"--as the foreign-owned factories are known--was somewhere between $20 and $26 per hour, and most likely around $24 or $25. That would put average worker's annual salary at $52,000 a year.

 

So the "wage gap," per se, has been a lot smaller than you've heard. And this is no accident. If the transplants paid their employees far less than what the Big Three pay their unionized workers, the United Auto Workers would have a much better shot of organizing the transplants' factories. Those factories remain non-unionized and management very much wants to keep it that way.

 

But then what's the source of that $70 hourly figure? It didn't come out of thin air. Analysts came up with it by including the cost of all employer-provided benefits--namely, health insurance and pensions--and then dividing by the number of workers. The result, they found, was that benefits for Big Three cost about $42 per hour, per employee. Add that to the wages--again, $28 per hour--and you get the $70 figure. Voila.

 

Except ... notice something weird about this calculation? It's not as if each active worker is getting health benefits and pensions worth $42 per hour. That would come to nearly twice his or her wages. (Talk about gold-plated coverage!) 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. The number only gets to $70 an hour if you include the cost of benefits for retirees--in other words, the cost of benefits for other people. One of the few people to grasp this was Portfolio.com's Felix Salmon. As he noted yesterday, the claim that workers are getting $70 an hour in compensation is just "not true."

 

Of course, the cost of benefits for those retirees--you may have heard people refer to them as "legacy costs"--do represent an extra cost burden that only the Big Three shoulder. And, yes, it makes it difficult for the Big Three to compete with foreign-owned automakers that don't have to pay the same costs. But don't forget why those costs are so high. While the transplants don't offer the same kind of benefits that the Big Three do, the main reason for their present cost advantage is that they just don't have many retirees.

 

The first foreign-owned plants didn't start up here until the 1980s; many of the existing ones came well after that. As of a year ago, Toyota's entire U.S. operation had less than 1,000 retirees. Compare that to a company like General Motors, which has been around for more than a century and which supports literally hundreds of thousands of former workers and spouses. As you might expect, many of these have the sorts of advanced medical problems you expect from people to develop in old age. And, it should go without saying, those conditions cost a ton of money to treat.

To be sure, we've known about these demographics for a while. Management and labor in Detroit should have figured out a solution it long ago. But while the Big Three were late in addressing this problem, they did address it eventually.

 

Notice how, in this article, I've constantly referred to 2007 figures? There's a good reason. In 2007, the Big Three signed a breakthrough contract with the United Auto Workers (UAW) designed, once and for all, to eliminate the compensation gap between domestic and foreign automakers in the U.S.

 

The agreement sought to do so, first, by creating a private trust for financing future retiree benefits--effectively removing that burden from the companies' books. The auto companies agreed to deposit start-up money in the fund; after that, however, it would be up to the unions to manage the money. And it was widely understood that, given the realities of investment returns and health care economics, over time retiree health benefits would likely become less generous.

 

In addition, management and labor agreed to change health benefits for all workers, active or retired, so that the coverage looked more like the policies most people have today, complete with co-payments and deductibles. The new UAW agreement also changed the salary structure, by creating a two-tiered wage system. Under this new arrangement, the salary scale for newly hired workers would be lower than the salary scale for existing workers.

 

One can debate the propriety and wisdom of these steps; two-tiered wage structures, in particular, raise various ethical concerns. But one thing is certain: It was a radical change that promised to make Detroit far more competitive. If carried out as planned, by 2010--the final year of this existing contract--total compensation for the average UAW worker would actually be less than total compensation for the average non-unionized worker at a transplant factory. The only problem is that it will be several years before these gains show up on the bottom line--years the industry probably won't have if it doesn't get financial assistance from the government.

 

Make no mistake: The argument over a proposed rescue package is complicated, in no small part because over the years both management and labor made some truly awful decisions while postponing the inevitable reckoning with economic reality. And even if the government does provide money, it's a tough call whether restructuring should proceed with or without a formal bankruptcy filing. Either way, yet more downsizing is inevitable.

 

But the next time you hear somebody say the unions have to make serious salary and benefit concessions, keep in mind that they already have--enough to keep the companies competitive, if only they can survive this crisis.

[fmorriso]

After all of the hype, will Americans go out and support the Big 3 in their time of need?

 

If the Nov and Dec market share for the Big 3 increase, Congress would be more inclined to support the bail out.

 

If the Big 3 market share drops...........

 

The Big 3 has never had more free advertisement. Every American knows they need their help.

 

Will the American consumer support the Big 3 in their time of need?

 

Or will Americans give more market share to the imports?

I can't speak for anyone but me and the wife, but I hope the following facts help partially answer your question as to whether Americans will support the Big 3 in their time of need.

1. Brand new 2008 Ford Focus SE purchased May 8, 2008 by my wife.
   
2. Brand new 2009 Ford Escape Hybrid Limited purchased October 21, 2008 by me.
   

Edited November 23, 2008 by fmorriso

[Pioneer]

I believe the media doesn't have any interest one way or the other in how UAW is percieved by the public. So to that end I know they are a lot more credible source on what UAW workers make or don't make than UAW is.

 

 

You're a lemming.

[chiefstang]

I can't speak for anyone but me and the wife, but I hope the following facts help partially answer your question as to whether Americans will support the Big 3 in their time of need.

1. Brand new 2008 Ford Focus SE purchased May 8, 2008 by my wife.
   
2. Brand new 2009 Ford Escape Hybrid Limited purchased October 21, 2008 by me.
   

 

 

Yeah, we're all familiar with that one!

[BlackHorse]

You're a lemming.

 

 

Well I guess that makes you an overpaid wrench turner. lol

[Pioneer]

Well I guess that makes you an overpaid wrench turner. lol

 

Actually, I make market wages for my trade.

 

But, thanks for caring!

[BlackHorse]

Actually, I make market wages for my trade.

 

But, thanks for caring!

 

I'm sure you do Pioneer. I'm sure you're a hard worker and you make good cars, but these guys do not.

 

Thousands of laid-off auto workers get paid $31 an hour to sit around and do nothing all year under a controversial program that could continue even if American taxpayers bail out the American auto industry.

 

I don't think my tax dollars should pay for that. In fact I am ardently against my tax dollars paying for that. This is what I mean when I say GM and like companies can't hope to be competitive from a labor cost standpoint. Therefore I will not support any Big 3 bailout package that includes continuing this practice. If it does, I promise you that I will never buy a car from the Big 3 again and I'll make sure to emphasis adopting that same policy to all of my friends and family.

 

http://www.foxnews.com/politics/elections/...ng-workers-sit/