How short does the "haircut" need to be?

[povertyknob]

I read many posts on this forum demanding that the unions accept competitive pay packages. Given the existing agreement to start most new hires at $14.00 per hour and the establishment of the VEBA for retiree health care , exactly how would you re-structure a new labor agreement to satisfy those who refuse to buy our products because of what they feel is lavish compensation? Some suggest dumping legacy costs. Is there way to do that without simply putting retirees at the mercy of the Feds? Huge pay cuts for active employees? That would be fine with those who are angry that UAW wages are higher than theirs. Realistically , though , transplants hourly rates aren't much lower. If for no other reason than PR the jobs bank is probably history , as is the right to refuse out of zone transfers. I'm not a financial guru so I don't know where the biggest savings are. I think a reasonable person can see ways to fix things outside a bankruptcy court but it seems some folks just want to see heads roll. Anyone have any ideas for an acceptable agreement that would allay the public perception that the UAW is greedy and overpaid? How do we reduce that $73 dollar/Hr number without the haircut becoming a scalping ?

[Ralph Greene]

Your post asks a reasonable question. Many of us on here believe that a company with a Unionized work force has extra costs above the hourly rate. I believe the hourly rate paid to a UAW worker is not the issue anymore. The cost of a work force is a lot more than just the hourly rate.

 

My experience in dealing with a Union left me with a bad taste. I could not move my workers around....example....I could not take an idle worker off a machine and get him unloading a truck. I had to keep two lightly working workers around. In many jobs, I had to be way over staffed. It was my busines, and my investment, and my risk....but I couldn't just fire someone for not working hard. I was not in control of my work force. My labor costs were way higher than on some non union jobs I did. The inefficiency of trying to run a business with those union guys was just off the chart in my construction company.

 

I realize that times have changed a lot, and Unions have improved a lot also in how they work...they understand what I'm trying to say. But they are still a Union....trying to keep as many guys hired as they can. I know any company with a unionized work force is at a disadvantage when competing with a business with no union. Especially when struggling for survival.

 

Rightfully or wrongly....that's what we think. And I know I also wish no worker to lose his job. But I also believe any worker in a unionized work shop is at high risk to lose his job....when you have to compete on a global basis. You no longer just compete with big 3. So to answer your question....get the head count down to same as non usion shop, and agree to same time off, health care, hiring/firing policies, etc. The Gov't wants work rule changes, they say. And that will do it I imagine. Good luck in your future.

Edited December 23, 2008 by Ralph Greene

[charly]

Your post asks a reasonable question. Many of us on here believe that a company with a Unionized work force has extra costs above the hourly rate. I believe the hourly rate paid to a UAW worker is not the issue anymore. The cost of a work force is a lot more than just the hourly rate.

 

My experience in dealing with a Union left me with a bad taste. I could not move my workers around....example....I could not take an idle worker off a machine and get him unloading a truck. I had to keep two lightly working workers around. In many jobs, I had to be way over staffed. It was my busines, and my investment, and my risk....but I couldn't just fire someone for not working hard. I was not in control of my work force. My labor costs were way higher than on some non union jobs I did. The inefficiency of trying to run a business with those union guys was just off the chart in my construction company.

 

I realize that times have changed a lot, and Unions have improved a lot also in how they work...they understand what I'm trying to say. But they are still a Union....trying to keep as many guys hired as they can. I know any company with a unionized work force is at a disadvantage when competing with a business with no union. Especially when struggling for survival.

 

Rightfully or wrongly....that's what we think. And I know I also wish no worker to lose his job. But I also believe any worker in a unionized work shop is at high risk to lose his job....when you have to compete on a global basis. You no longer just compete with big 3. So to answer your question....get the head count down to same as non usion shop, and agree to same time off, health care, hiring/firing policies, etc. The Gov't wants work rule changes, they say. And that will do it I imagine. Good luck in your future.

 

 

 

Let's take this one step further, do YOU run your business in the same manner as a comparable business in India? China?, Mexico?....same end product. I thought not.

I'm not trying to demean your statements, some of it rings true.

[RichardJensen]

Most Ford facilities have agreed to work rules that are as flexible as the non-union facilities the transplants run.

 

However, I would draw the line at suggesting that (for instance) Ford replace a number of union workers with, say, temps (as the transplants do).

 

--

 

Curiously, unions were not, initially, about job protection. It was only with increased mechanization that the union (unwisely, IMO) made job protection a first priority. Granted, it's easy to understand why job protection (e.g. head count protection) became priority numero uno for the UAW, still it is just as easy to see that such a course was ultimately self-defeating.

[fordworker]

If they match the Toyota plant in kent. then GM will cut the pay rate and benefits to $48 an hour. So about a $10 cut in pay and benefits X 40 hours=$400 per week X 52=$20,800

They will also want to cut the $16-18 an hour for the retirees also. they paid about $4 billion last year in retiree insurance plus more for the pensions. There gonna come after that or else they will go chapter 11.

Chapter 11 would mean no VEBA. Whatever they do it aint gonna be easy.

Bloomberg article said they wanted $24 bills from the creditors and $10 bills from the workers or else there going to chapter 11.

[davdog]

Let's take this one step further, do YOU run your business in the same manner as a comparable business in India? China?, Mexico?....same end product. I thought not.

I'm not trying to demean your statements, some of it rings true.

 

So Charly you're saying that if you ran your business you would pay your workers thrity three percent more then you had to just because you were a nice guy?

 

the weakness of your argument is that ford wouldn't even need to leave north america to realize the 33 percent gain in labor costs. You offer a job in any d3 city today at $21 an hour and you could set up a pretzel stand to accomadate the line. In you case it could be a union pretzel stand.

[simplesituations]

So Charly you're saying that if you ran your business you would pay your workers thrity three percent more then you had to just because you were a nice guy?

 

the weakness of your argument is that ford wouldn't even need to leave north america to realize the 33 percent gain in labor costs. You offer a job in any d3 city today at $21 an hour and you could set up a pretzel stand to accomadate the line. In you case it could be a union pretzel stand.

peat and repeat, all he wants to hear is that it's the unions fault and we should all take pay cuts to equal the transplants, that's all

[jm2607]

peat and repeat, all he wants to hear is that it's the unions fault and we should all take pay cuts to equal the transplants, that's all

Yep, your right, and all I hear is blah,blah,blah......... ALL his post are the same.

[davdog]

peat and repeat, all he wants to hear is that it's the unions fault and we should all take pay cuts to equal the transplants, that's all

 

I don't want you, or anyone else, to take a pay cut. I just want the d3 to be able to hire for whatever wage it takes to get someone in the door.

 

Is that so hard for you to understand?

 

Any organization that forces someone to pay more for labor then they would have to otherwise is doomed to failure, but you are already finding that out.

 

whose up for quitting?

[simplesituations]

I don't want you, or anyone else, to take a pay cut. I just want the d3 to be able to hire for whatever wage it takes to get someone in the door.

 

Is that so hard for you to understand?

 

Any organization that forces someone to pay more for labor then they would have to otherwise is doomed to failure, but you are already finding that out.

 

whose up for quitting?

do you think we all came into our jobs at top pay scale right at the beginning, no we didn't.

[rn4]

I don't want you, or anyone else, to take a pay cut. I just want the d3 to be able to hire for whatever wage it takes to get someone in the door.

 

Is that so hard for you to understand?

 

Any organization that forces someone to pay more for labor then they would have to otherwise is doomed to failure, but you are already finding that out.

 

whose up for quitting?

Here davdog read this article most of it is refering to peoplep like you and akirby.

 

http://worldnetdaily.com/index.php?fa=PAGE...mp;pageId=84328

[RangerM]

The debate comes down to two basic viewpoints:

 

Either the Big 3 are for-profit industries that exist to produce cars, and do it by purchasing labor, tools, and equipment.

 

or

 

The Big 3 are (Government) programs whose purpose is to provide jobs and healthcare, and finance it by making cars.

 

In either case, Labor won't get away without giving up something, because the bondholders will never agree to bear the burden completely. If Labor intends to maintain its existence, it'll give up whatever is necessary to keep the Big 3 OUT of bankruptcy.

 

The bondholders and labor will either cooperate, or there will be mutually-assured destruction.

 

We will all find out where the bread is buttered by April 1.

[charly]

So Charly you're saying that if you ran your business you would pay your workers thrity three percent more then you had to just because you were a nice guy?

 

the weakness of your argument is that ford wouldn't even need to leave north america to realize the 33 percent gain in labor costs. You offer a job in any d3 city today at $21 an hour and you could set up a pretzel stand to accomadate the line. In you case it could be a union pretzel stand.

 

You never answered my question.

And yes I would pay my coworkers more than average, it encourages loyalty and goodwill. I'll bet I would have far less turnover and a higher quality pretzel operation.

It would be my job to ensure that I could market my superior pretzels and make a profit. I would not expect my coworkers to pay for my marketing ineptitude for the past 80 years.

 

 

The higher wages that we get as autoworkers allows us to have a better lifestyle, it also infuses cash back into the economic cycle creating jobs, maybe even that well paid pretzel stand.

 

Now answer my original question.

[RangerM]

I would pay my coworkers more than average, it encourages loyalty and goodwill. I'll bet I would have far less turnover and a higher quality pretzel operation.

It would be my job to ensure that I could market my superior pretzels and make a profit. I would not expect my coworkers to pay for my marketing ineptitude for the past 80 years.

 

What if a competitor came along, and produced an equally superior pretzel, but did it at a lower cost, and could sell his equally superior pretzels at a lower price than you?

 

If you can't make a profit (or break even) selling your pretzels at the same price as your competitor, what do you do?

 

(NOTE: Do not attempt to place blame. The question is how do you fix the problem going forward?)

Edited December 24, 2008 by RangerM

[Critic]

What if a competitor came along, and produced an equally superior pretzel, but did it at a lower cost, and could sell his equally superior pretzels at a lower price than you?

 

If you can't make a profit (or break even) selling your pretzels at the same price as your competitor, what do you do?

 

(NOTE: Do not attempt to place blame. The question is how do you fix the problem going forward?)

 

You import over 55% of your pretzels from your overseas plants, where you have the gov. there paying for all your 'benefits' . Then you go to the southern states and say you want to open up a new factory and employ the workforce and raise up those peoples standard of living. Those states will give you the land and put in roads for you and offer you 'training grants' and you will then be making them a lot cheaper than you use to be. Don't forget to tell your workforce how it was you that came to offer a better life and to keep this going, your always going to have to keep things on the downlow, you can get favorable gov. breaks from those same S. Gov. officials because you have started a battle for the lowest pay offered.

 

But if times really really get tough and things don't work out as well, you just continue to import more and more of your pretzels and let it seem like your still offering the best product and beating your competition. You can't allow protection barriers to pop up, because your overseas workforce making these pretzels depends on it's exports for complete survival of the mother company.

[RangerM]

You import over 55% of your pretzels from your overseas plants, where you have the gov. there paying for all your 'benefits'. Then you go to the southern states and say you want to open up a new factory and employ the workforce and raise up those peoples standard of living. Those states will give you the land and put in roads for you and offer you 'training grants' and you will then be making them a lot cheaper than you use to be. Don't forget to tell your workforce how it was you that came to offer a better life and to keep this going, your always going to have to keep things on the downlow, you can get favorable gov. breaks from those same S. Gov. officials because you have started a battle for the lowest pay offered.

 

But if times really really get tough and things don't work out as well, you just continue to import more and more of your pretzels and let it seem like your still offering the best product and beating your competition. You can't allow protection barriers to pop up, because your overseas workforce making these pretzels depends on it's exports for complete survival of the mother company.

Your competitor lost money last year, too. You are placing blame on (or at least alluding to) why your competitor is able to undercut you. Stay away from placing blame. It solves nothing.

 

What do you do in the near term? How do you become more competitive?

Edited December 24, 2008 by RangerM

[Critic]

Your competitor lost money last year, too. You are placing blame on (or at least alluding to) why your competitor is able to undercut you. Stay away from placing blame. It solves nothing.

 

What do you do in the near term? How do you become more competitive?

 

it can't be answered, and no matter how you want to disguise this, we are talking auto's and their hasn't been a level playing field to begin with.

[RangerM]

it can't be answered, and no matter how you want to disguise this, we are talking auto's and their hasn't been a level playing field to begin with.

 

It must be answered, because the company is going under without a solution.

 

In order to "level the playing field" there are a couple of options.

 

(using the pretzel analogy)

 

Solution No. 1

You can put an artificial tariff on the competitors' pretzels, thereby raising the price of the pretzels to a level that allows you to sell your pretzels at a price that you can withstand.

 

Problem No. 1

Raising prices only lowers demand, or drives the consumer to a substitute. In every business there is a "break even" point. In order to pay for the overhead of your factory, you must sell a minumum number of pretzels (at a minimum net). If the consumer decides to purchase fewer pretzels, or worse, switches to Fritos, then you can't maintain your overhead, and there is no business left to save.

 

 

Solution No. 2

You can lower your cost of doing business, by de-contenting your pretzels

 

Problem No. 2

Joe Consumer likes salt on his pretzels, and your competitors' still have it. Your market share declines, and you're in worse shape than before

 

 

Solution No. 3

You can lower your cost of doing business, by re-negotiating your suppliers' raw materials contracts for your pretzels.

 

Problem No. 3

This can work, but suppliers have overhead they must meet as well, and this can only work for so long and at such a discount.

 

 

Solution No. 4

You can lower your cost of doing business, by reducing your cost of labor.

 

Problem No. 4

If the wage level you must meet is below the prevailing wage for similar skill levels at other companies, or competitors, you will not be able to keep your workforce.

 

 

Again, what is the solution in the near term? (NOTE: Please identify where I am disguising anything.)

Edited December 24, 2008 by RangerM

[Critic]

it can't be answered, and no matter how you want to disguise this, we are talking auto's and their hasn't been a level playing field to begin with.

[davdog]

Here davdog read this article most of it is refering to peoplep like you and akirby.

 

http://worldnetdaily.com/index.php?fa=PAGE...mp;pageId=84328

 

Hey, you just moved into my neighborhood. Next time it snows we're going to negotiate what it costs you to get plowed out and you're going to pay 5 times as much as you did at your old house. We know that now that you're in it it's pretty tough to pick up and move a house, and if you try to get less expensive labor that is willing to clear out the snow for less money, well we'll just block the access to your house. We can wait you out. How long can you wait? You'll have lost a lot of money from no income by the spring.

 

We'll just call this new rate you're going to pay a fair days pay for a fair days work.

 

And have fun trying to sell your house.

[Critic]

You have chosen to ignore all posts from: davdog.

 

· View this post

· Un-ignore davdog

 

You just got to love this little feature. It helps control the echo.

[davdog]

It must be answered, because the company is going under without a solution.

 

In order to "level the playing field" there are a couple of options.

 

(using the pretzel analogy)

 

Solution No. 1

You can put an artificial tariff on the competitors' pretzels, thereby raising the price of the pretzels to a level that allows you to sell your pretzels at a price that you can withstand.

 

Problem No. 1

Raising prices only lowers demand, or drives the consumer to a substitute. In every business there is a "break even" point. In order to pay for the overhead of your factory, you must sell a minumum number of pretzels (at a minimum net). If the consumer decides to purchase fewer pretzels, or worse, switches to Fritos, then you can't maintain your overhead, and there is no business left to save.

 

 

Solution No. 2

You can lower your cost of doing business, by de-contenting your pretzels

 

Problem No. 2

Joe Consumer likes salt on his pretzels, and your competitors' still have it. Your market share declines, and you're in worse shape than before

 

 

Solution No. 3

You can lower your cost of doing business, by re-negotiating your suppliers' raw materials contracts for your pretzels.

 

Problem No. 3

This can work, but suppliers have overhead they must meet as well, and this can only work for so long and at such a discount.

 

 

Solution No. 4

You can lower your cost of doing business, by reducing your cost of labor.

 

Problem No. 4

If the wage level you must meet is below the prevailing wage for similar skill levels at other companies, or competitors, you will not be able to keep your workforce.

 

 

Again, what is the solution in the near term? (NOTE: Please identify where I am disguising anything.)

 

 

I'll answer, I'll answer

 

I'd lower my cost of labor until one of my employees actually quit to take a job elswhere for more pay.

We know they can't get fired but has a uaw worker ever actually quit?

 

I've heard that voluntary attrition for a uaw worker is less then 1 percent. Can anyone confirm this?

You know you're overpaying when no one EVER quits.

 

Do they remove the word quit from your vocabulary when you sign on with the UAW?

 

Be patient ford fans, things will work themselves out here and we'll all still be able to buy our favorite fords. For no less mind you but at least they'll still be around.

Edited December 24, 2008 by davdog

[RangerM]

I'll answer, I'll answer

 

I'm not trying to beat up on you here, but many have come before you with the same answer, and have failed miserably.

 

Labor cannot bear 100% of the burden in cost reduction. There are basic standards of fairness (not to mention safety) that must be met. If you pay to the lowest common denominator, then that is exactly what you will get.

 

The answer I'd see is something akin to "all of the above" (except the part about tariffs).

 

Government has long stood in the way of industry not because of its LACK of regulation, but BECAUSE of regulation. If America were a more attractive place to conduct business, tariffs would not be seen as the cure-all that many claim it to be.

 

We all hear about "Corporate Welfare" and corporate taxes, without really understanding that corporations don't pay taxes (ultimately). The taxes that a corporation pays are eventually paid for by consumers (with higher prices) and/or shareholders (with lowered share prices or dividends).

 

Somehow I don't hear anyone complaining that the Big 3 bailout (or loan, if you prefer) is "Corporate Welfare". How is free money, or an artificially-low interest loan, anything less than Corporate Welfare? Now I am on record as saying I favored a bailout (in the form of free money, which I guess makes me a hypocritical Republican), provided that the Government kept its hands OUT of business, but come April 1, if the new administration decides its time to influence business, in the fashion of our old friends in the USSR, they will see no greater opponent.

 

The loan should only be enough to give the Government time to get out of the way. I am only against unions, insomuch as I am against the "closed shop".

Edited December 24, 2008 by RangerM

[akirby]

It must be answered, because the company is going under without a solution.

 

In order to "level the playing field" there are a couple of options.

 

(using the pretzel analogy)

 

Solution No. 1

You can put an artificial tariff on the competitors' pretzels, thereby raising the price of the pretzels to a level that allows you to sell your pretzels at a price that you can withstand.

 

Problem No. 1

Raising prices only lowers demand, or drives the consumer to a substitute. In every business there is a "break even" point. In order to pay for the overhead of your factory, you must sell a minumum number of pretzels (at a minimum net). If the consumer decides to purchase fewer pretzels, or worse, switches to Fritos, then you can't maintain your overhead, and there is no business left to save.

 

 

Solution No. 2

You can lower your cost of doing business, by de-contenting your pretzels

 

Problem No. 2

Joe Consumer likes salt on his pretzels, and your competitors' still have it. Your market share declines, and you're in worse shape than before

 

 

Solution No. 3

You can lower your cost of doing business, by re-negotiating your suppliers' raw materials contracts for your pretzels.

 

Problem No. 3

This can work, but suppliers have overhead they must meet as well, and this can only work for so long and at such a discount.

 

 

Solution No. 4

You can lower your cost of doing business, by reducing your cost of labor.

 

Problem No. 4

If the wage level you must meet is below the prevailing wage for similar skill levels at other companies, or competitors, you will not be able to keep your workforce.

 

 

Again, what is the solution in the near term? (NOTE: Please identify where I am disguising anything.)

 

Bingo! But these guys don't want to hear it. They still believe Ford's only reason for existence is to provide them a job with great pay and benefits for life. They don't understand that it's a business that has to compete to stay in business and to do that requires changes.

[simplesituations]

Bingo! But these guys don't want to hear it. They still believe Ford's only reason for existence is to provide them a job with great pay and benefits for life. They don't understand that it's a business that has to compete to stay in business and to do that requires changes.

 

 

 

you like the word bingo so much here's a card for ya, don't forget your dobber