June 14, 2007

Big 3 Want 30% Paycuts

The big thing in the news around here the past couple days is the leak from the Big 3 that they want the UAW to take a 30% hit in wages and benefits during the upcoming contract talks.

Of course sides have been taken and name calling abundent (mostly from the white collar to the blue collar).

Detroit's Big Three, facing their worst crisis in decades, are seeking unprecedented concessions from the United Auto Workers union in a bid to narrow what they say is a $30-an-hour labor-cost disadvantage against Asian rivals like Toyota Motor Corp. and Honda Motor Co., auto executives say.

Yesterday's articles all said it was only a $25/hour disadvantage. Guess by the
end of July when the contract talks unoffical start it will be upto around $50/hour.

In recent years, the union has agreed to work-rule changes and benefit cuts for its retirees designed to save the auto makers billions of dollars a year. However, UAW President Ron Gettelfinger, who declined to comment on the coming negotiations, has argued his workers shouldn't bear the entire cost of Detroit's restructuring.

Especially when the line workers don't manage, design or engineer the vehicles.
I still don't see how you can blame the line workers for consumers not wanting
to buy the ugly assed designs Ford has.

Not to mention the fact that over the past 3 years consessions have been given up and last year the contract re-opened and a wage consession was given. But of course nobody is ever going to hear about wage consessions from the UAW. That would make the UAW sound cooperative and caring.

GM, Ford and Chrysler have eliminated about 70,000 UAW jobs over the past two years through buyouts and other means. The three, which currently employ about 210,000 of the UAW's 520,000 active members, say they pay union workers $70 to $75 an hour, when wage, health-care and pension expenses are factored in. By comparison, according to Big Three estimates, Toyota and other Asian auto makers, pay $40 to $45 an hour (yesterdays articles claimed it was $50/hour at their U.S. plants, which together employ about 62,300 nonunion workers.(emphasis mine)

Gee, I wonder why the Big 3 have a larger costs then the Asian Auto Makers, they employee almost 4 times the amount of people then the Asian Auto makers. Employee more people, costs are going to be larger. And since actual wages are the same, it's the benefits that the Big 3 are paying out that makes the difference. And again, back to the fact that the Big 3 employees more people means they have larger benefit costs.

All three domestic auto makers "will move investment in plants and people outside the country" if they don't bring U.S. labor costs in line with those of Toyota and the other foreign auto makers, the executive said.

First off, I would love to see them move all their plants outside of the U.S. I can
guaran-damn-tee it would never happen. And even if they did, who the hell would they have to buy their products. If you lay off the people who are actually buying your products there is nobody that will beable to buy them. Because getting rid of the line workers and plants will not effect just them but will effect all the suppliers that supply that plant. Because if they move all plants overseas you don't expect them to keep the U.S. suppliers do you? Nope, so then your, by proxy, laying off all the workers at suppliers. So that would be approximately another 840,000 people.

Threats are not going to work and it makes you look like a spoiled child.

The Big Three's competitive problems extend far beyond labor costs, a point UAW bargainers have made in the past and will likely make again. Union leaders have said the auto makers should invest more in improving the quality and design of their vehicles.

Again, the line workers don't manage the company nor do they design or engineer the new vehicles. Build what people like and they will buy.

With this new revolution by the Big 3, the contracts talks should be very interesting and if Management pushes to hard for huge cuts they will have a huge strike on their hands.

Management will not own up to the fact that it's their mis-management and bad
decisions that are the brunt of the problems facing the companies right now. I
think if they owned up to that the UAW would be more understanding and willing to work with management, but management keeps saying all their problems are because of the UAW and their wages.

Mr Weenie and I talked about this yesterday and agreed that if management is not willing to budge on their 30% paycut demands they can go to hell, even if that means the company goes out of business. Just because they get paycuts doesn't mean overnight they are going to have good looking vehicles that people are dying to buy. They will still have the problem of ugly vehicles that nobody wants to buy, paycuts will never change that. And I can guarantee that if they get paycuts, management will immediately get huge raises/bonues to celebrate their accomplishment of getting those cuts.

So to review, if they want huge paycuts they can kiss our ass.

Posted by Quality Weenie at June 14, 2007 07:54 AM | TrackBack

Not to mention how LONG they'll have those ugly a$$ vehicles that no one will buy. I know in many of the area's I've worked in, design is out 2 or 3 years. At least.

I'm with you on this. They aren't looking at the TRUE picture.

Posted by: Tammi at June 14, 2007 08:33 AM

I disagree with both sides. I think they are both half wrong and half right. The union wages are a disadvantage, sorry it's true. Bad management is bad management. It'll take a combination of the both in order to pull things out of their arses.

Posted by: Contagion at June 14, 2007 05:41 PM