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Old 09-25-2007, 08:17 AM
 
Location: Arizona
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What do people think about the UAW strike? Are they just cutting their own throats, or making a necessary stand against globalization?




A strike of two weeks or less would not hurt GM's cash position and would actually improve its inventory situation, Lehman Brothers analyst Brian Johnson said Monday in a note to investors. But a longer strike would be harmful, causing GM to burn up $8.1 billion in the first month and $7.2 billion in the second month, assuming the company can't produce vehicles in Mexico or Canada, Johnson wrote.


Long Strike Could Cost GM Billions: Financial News - Yahoo! Finance (broken link)
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Old 09-25-2007, 08:46 AM
 
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Time will tell. IMO, GM may be happy to go bankrupt, then they could shift ALL of their pension costs to the taxpayer, as well as ALL of the health care costs that are now on the books. The current sum for both of these perks is many billions of dollars. As of 2005, in a piece in the WaPo, GM had put $30B in the pot for these perks, but still owed $54B. Full story is at:
General Motors Getting Eaten Alive by a Free Lunch (washingtonpost.com)

One of the issues driving much of this is health care costs. The USA is the only nation among the great industrial nations that does NOT provide health care for its people. Here, private industry does that, though that is shrinking very fast. Firms like GM, Ford, Chrysler, and many US manufacturers, must add the cost of health care to what they sell, putting them at a huge disadvantage vis a vis foreign competitors, regardless of the industry. With the aging and imminent retirement of millions of baby boomers, all of the bills are coming due at about the same time, a perfect storm of economic fury.

A GM bankruptcy and taxpayer bailout would significantly highlight this issue for the 2008 election, where it already is an issue. I "believe" the Railroad Retirement Board is an example of the Federal Government stepping in to assure the pensions of an industry that was shrinking and unable to fund the pensions of a massive amount of retirees. I believe the retired steelworkers from Beth Steel took about a 2/3 cut in pensions when Beth filed bankruptcy.

Then there were the generous UAW contracts that automaker managements inked years ago in order to get labor peace, thus setting the precendent for today's level of pay and benefits, which are a burden in a global economy. Like the steel industry, the automakers gave in to the demands during a time when we imported little of either steel or cars.

Bankruptcy at GM would clean their balance sheet of these huge obligations, shift costs to the taxpayer (where they are in competitor nations) and allow GM to survive as a new company with lower prices. Though painful, I'm sure that GM is war-gaming the bankruptcy option, which allows them to point the finger solely at the unions, as republican leaders smile from the sidelines and pass the costs on to the average American as more red ink.

s/Mike

PS: discussion boards elswhere have idiots throwing around totally bogus pay numbers, saying the UAW folks make $70 per hour. This is false. The current pay scale is $28.43 per hour for an assembly worker, $33.09 per hour for the highly skilled tool and die makers. The contract now expiring was set in 2003. See this link: Economic Gains - 2003 UAW DaimlerChrysler Hourly Report (http://www.uaw.org/contracts/03/dch/dch02.cfm - broken link)

The message here for most folks, especially the young ones, is to put money like crazy into a 401-K that YOU control.

Last edited by Mike from back east; 09-25-2007 at 09:01 AM..
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Old 09-25-2007, 08:52 AM
 
Location: By the sea, by the sea, by the beautiful sea
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Quote:
Originally Posted by Mike from back east View Post
PS: discussion boards elswhere have idiots throwing around totally bogus pay numbers, saying the UAW folks make $70 per hour. This is false. The current pay scale is $28.40 per hour for an assembly worker, $33. per hour for the highly skilled tool and die makers. See this link:

I don't know if they hit $70/hr but the hourly labor cost rises significantly when the cost of benefits is added to the basic pay rate.

Those that are truly responsible, the executives who signed the contracts that resulted in today's high health care costs, are all happily retired now.
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Old 09-25-2007, 08:56 AM
 
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Originally Posted by bily4 View Post
What do people think about the UAW strike? Are they just cutting their own throats, or making a necessary stand against globalization?




A strike of two weeks or less would not hurt GM's cash position and would actually improve its inventory situation, Lehman Brothers analyst Brian Johnson said Monday in a note to investors. But a longer strike would be harmful, causing GM to burn up $8.1 billion in the first month and $7.2 billion in the second month, assuming the company can't produce vehicles in Mexico or Canada, Johnson wrote.


Long Strike Could Cost GM Billions: Financial News - Yahoo! Finance (broken link)
Is that why they are on strike ? A stand againts globalization! I think not! Its the typical union , what have you done for ME lately scenario. Its never ever enough! I wonder how the average UAW workers pay and benefits package compares to the pay and benefits of the average American across the board? I love the big three, but I never buy a (new) rig for this very reason. Yet they cant figure out why detroits economy is in the toilet, and Toyota is over taking them! I say bring in the scabs!
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Old 09-25-2007, 08:59 AM
 
Location: Your mind
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Originally Posted by silas777 View Post
Is that why they are on strike ? A stand againts globalization! I think not! Its the typical union , what have you done for ME lately scenario. Its never ever enough! I wonder how the average UAW workers pay and benefits package compares to the pay and benefits of the average American across the board? I love the big three, but I never buy a (new) rig for this very reason. Yet they cant figure out why detroits economy is in the toilet, and Toyota is over taking them! I say bring in the scabs!
I wonder how much the average GM corporate executive makes? You think they could stay more competitive by taking a pay cut themselves? Probably don't want to do that.
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Old 09-25-2007, 09:03 AM
 
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Originally Posted by fishmonger View Post
I wonder how much the average GM corporate executive makes? You think they could stay more competitive by taking a pay cut themselves? Probably don't want to do that.
Always the argument in these discussions, not even relevant, if a UAW worker could be a corporate exec he wouldnt be standing on the picket line!
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Old 09-25-2007, 09:08 AM
 
Location: Your mind
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Originally Posted by silas777 View Post
Always the argument in these discussions, not even relevant, if a UAW worker could be a corporate exec he wouldnt be standing on the picket line!
It is relevant... Adam Smith said something about people always complaining about excessive labor pay raising prices when the same can be said of excessive profits.
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Old 09-25-2007, 09:11 AM
 
Location: By the sea, by the sea, by the beautiful sea
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Originally Posted by fishmonger View Post
It is relevant... Adam Smith said something about people always complaining about excessive labor pay raising prices when the same can be said of excessive profits.

And excessive executive compensation....................


I haven't been able to find a link but I remember when United Airlines emerged from bankruptcy they wanted give-backs from the pilots while the executives managed to give themselves nice bonuses.
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Old 09-25-2007, 09:16 AM
 
Location: Arizona
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I read somewhere that the union was willing to negotiate assuming some or all of the retiree health care costs, but it was also trying to negotiate that new autos would come from U.S. plants and not low cost regions, so further plant closures are avoided.
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Old 09-25-2007, 09:16 AM
 
9,877 posts, read 10,788,675 times
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Originally Posted by fishmonger View Post
It is relevant... Adam Smith said something about people always complaining about excessive labor pay raising prices when the same can be said of excessive profits.
What is an excessive profit? Who determines it, and who controls it?
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