28 Thoughts on “Bailout Bullshit

  1. Interloper on March 18, 2009 at 1:13 pm said:

    Somebody (can’t remember who) during the hearings this afternoon said the acronym stands for Arrogance Incompetence Greed.

    I’m sure as heck not thrilled about my taxpayer money paying people bonuses for bad performance.

    But the discussion about ignoring the contracts raises the question (and really, again, it is an honest one): What about the GM bailouts and UAW contracts? UAW contracts are seen as a reason why GM can’t be competitive (adds a bunch to the price of the car). Yet we are bailing GM out, too. What’s the answer?

  2. Ghost of Dude on March 18, 2009 at 1:32 pm said:

    I don’t see how the UAW has a pot to piss in here. If GM is forced into bankruptcy because the UAW doesn’t negotiate, everyone’s screwed.
    Seems to me that having a job with reduced pay and retirement benefits is better than being on the street.

  3. l3wis on March 18, 2009 at 1:49 pm said:

    10% of the price of a car goes to labor (which includes benefits, retirement, etc.) I believe that the non-union carmakers in the US are spending about 7%. So there isn’t much of a difference, just bullshit senators from non-union states are making up to put the American companies out of business or bust up the Unions. Are Unions perfect? No way – but they certainly are not the reason why GM is in the shitter. Lack of R & D and innovation, and a bad economy, also too much dead wood at the top. Even Toyota lost money last quarter.

  4. Ghost of Dude on March 18, 2009 at 1:56 pm said:

    Labor costs are one thing, but a big part is retirement benefits and health care for retirees. Those union guys who’ve been around 20 years get retirement packages that 90% of white collar workers would drool over – and they’re living forever.
    I’ll agree that their biggest problem is that they aren’t selling many cars, which is partly a function of cost, and partly a function of too many layers of “management” between R&D and decision makers.
    Most growing companies in the US are driven and run by R&D. Old companies that are huge and publicly traded are run by accountants and finance people.

  5. Warren Phear on March 18, 2009 at 2:18 pm said:

    Do you have a problem with retirement and health care benefits for retirees? It’s people like us that buy your O’Dell’s IPA, and keep the dollars flowing. (Good stuff by the way)It’s union wages that are the reason non union wages are not under $9.00 an hour. Be thankful they exist.

  6. Warren Phear on March 18, 2009 at 2:41 pm said:

    Oh…and l3wis. Good to see by your post number 3 that not everyone is buying into the anti-union bullshit campaign.

  7. Costner on March 18, 2009 at 2:44 pm said:

    10% of the price of a car goes to labor (which includes benefits, retirement, etc.)

    You keep repeating this, but I’ve yet to see a source to back it up. Even if it is true, that doesn’t include the costs to close a factory due to decreased demand and the inability to retool to produce other models as per UAW contracts GM isn’t allowed to do that.

    I sincerely doubt the total labor costs are only 10% of the cost of the automobile, and if it was true does that suggest they should just ignore it? Thats like saying I got shot but I only lost 10% of my blood….no big deal since I still retain the other 90%.

    If there was a way to stop the bloodflow and even reduce it – it cannot be ignored. GM has many problems, and unions aren’t the only issue at play here, but clearly they are an issue and need to be addressed. GM, Ford, and Chrysler can’t compete against the likes of Toyota, Nissan, and Honda when their labor costs are 30-50% higher. It just won’t work.

  8. Costner on March 18, 2009 at 2:48 pm said:

    By the way Lewis, the AIG bonuses were “only” about 1% of the bailout funds they have received. $160 Million in bonus payments vs. $180 Billion in bailout funds.

    So why is it ok that union labor costs are “only” 10% of the total price of the car but not ok that bonus payments to AIG employees are only 1%?

    I’m not defending AIG by any means – but in relative terms it doesn’t look like they are any more greedy than anyone else these days.

  9. l3wis on March 18, 2009 at 2:53 pm said:

    Well, for one, GM has been paying those wages for years and years, and nobody bitches until they ask for a ‘loan’. AIG handed out the bonuses AFTER they got the bailout money and gave it to people who caused the failure of the company. Union employees didn’t ‘break’ GM. Innovation and the economy did.

  10. l3wis on March 18, 2009 at 3:07 pm said:

    Thank you Warren. I was hoping that Costner was smart enough to find it himself, but of course he has a point to prove about the EVIL unions.

    Coming to South DaCola Fest III tonight? Dude said he is gonna buy you a beer.

  11. Plaintiff Guy on March 18, 2009 at 3:08 pm said:

    Ain’t It Great (AIG). My acronym if I worked there. Pay without work. Failure without responsibility. These guys are con men. When it’s government funding it’s not retention bonus, it’s conspiracy.

  12. l3wis on March 19, 2009 at 6:29 am said:

    And Chris Dodd signed off on the shit. They are all crooks.

  13. Costner on March 19, 2009 at 6:54 am said:

    If I assume those numbers are even valid (and that is a big IF), it still shows a disparity.

    UAW (without VEBA): $71
    UAW (with VEBA): $58
    Transplants: $49

    The difference between $49 per hour and $71 is significant and means the UAW worker is making about 50% more than the non UAW worker. Even with the VEBA costs of $58 it is still 20% more than the non UAW worker.

    You guys seriously think GM and Ford can compete when their workers are making between 20% and 50% more than non UAW labor from Toyota and Honda?

    Get a grip. This isn’t about making unions look evil, but in this case the UAW has been greedy and it is having a direct impact upon the profitability of the automakers. Again, this isn’t to say the union is the only issue or even the largest issue – but it is an issue, and you can deny it all day long but the facts are the facts.

    By the way Lewis – I asked you to provide a source for your “10% of the cost of the car is labor” argument, and the link Warren provided wasn’t it….in fact it has nothing to do with that statement and all and is nothing other than a red herring argument.

    Don’t try that pussy “I was hoping that Costner was smart enough to find it himself” bullshit when both you and I know the information provided has nothing to do with what I asked for.

    If you are going to make statements without supporting evidence that is fine, but don’t expect me to just accept your words as fact just because you say so.

  14. l3wis on March 19, 2009 at 7:13 am said:

    Why are you so dead set against people making a living wage? Doesn’t the average Joe deserve the American dream to for the work he does? Union employees are not getting handouts, they are getting paid what they deserve. If you are against joining a Union, that’s your business, but I don’t see the need to piss on the American worker like you do. The people at the top are the real greedy ones here not the Union employees, so I don’t give a rat’s ass how many figures you want to put up about Union workers, at the end of the day the fat cats f’cked this whole thing up and think it is blantantly honest.

    BTW- The reason I haven’t supplied you the links is because you would just trash them anyway, so what is the point?

  15. Randall on March 19, 2009 at 7:24 am said:

    If you fire one GM executive, how many UAW jobs would you save?

    Did the UAW workers decide to keep making SUV’s, or was that management?

    How does GM executive pay compare with similar jobs at Nissan, Honda, et. al?

    Do Nissan, Honda, etc. workers live in countries with National Health Care? If so, how is it fair to include health care costs in the “wages” of UAW workers?

    The figure of $70/hr has been debunked as so totally false you should be embarrassed to use it – if you have to lie to prove your point; you have no point.

  16. Costner on March 19, 2009 at 7:58 am said:

    Who said I was against people making a living wage? I sure didn’t.

    I just think when a union employee is making (according to the numbers warren posted) $29 an hour to fasten bolt A to hole B that it isn’t shocking to see their parent companies struggling financially.

    Let’s face it – these are non-skilled jobs that require not education. I just don’t see how the average employee should be making $60k a year before overtime and not counting the free healthcare or pension plan. It would be one thing if these were jobs requiring four year degrees or advanced skills, but it is assembly line work, and paying people more than $60k a year to fasten parts together makes it almost impossible to compete in our economy.

    Nice job of making assumptions about how I would respond to your (lack of) evidence though. I noticed when I posted links in the last union discussion you didn’t even bother to read them, so clearly you aren’t willing to even hear the other side.

    Get it out of your head that everyone who faults the UAW is anti-union. This is not a anti-union argument and you will see several times where I have already said GM and Ford have many other issues other than unions, but you cannot possibly deny that the UAW has abused their power over the past few decades and they are a contributing factor for why GM finds themselves in a bucket full of hurt.

    All it takes is one of the big three to go belly up and soon those unions won’t look so good. As GoD said, (and I’m paraphrasing) it is better to have a job with reduced pay than to not have one at all. When the UAW fatcats learn that the actual union worker will be better off.

    So there you have it – yes GM executives are responsible, but so are the UAW leaders. If you look hard enough, it isn’t very difficult to find abuse at all levels.

    Case in point: http://www.detnews.com/apps/pbcs.dll/article?AID=/20070413/AUTO01/704130353/1148

    “The UAW paid its employees $90 million in salary in 2006. Its officers made $2.9 million in 2006, with 22 regional directors, vice presidents and other officers getting more than $100,000 each.”

  17. Ghost of Dude on March 19, 2009 at 7:58 am said:

    $49/hr is a living wage. Hell, $20/hr is a living wage – if you’re single.
    $58/hr is a wage most white collar workers, and nearly all other blue collar workers, would drool over.
    What’s keeping the company from being able to restructure themselves to be able ot innovate and be more flexible is the union contracts. The workers will not lose their good wages in a negotiation – not while democrats run the government.

    I believe it was Henry Ford who said something like “The key to success in this business is to make the best product possible, for the best price possible, paying the highest wages possible.”
    The current payscale for UAW workers is not in the “possible” range.

  18. Costner on March 19, 2009 at 8:02 am said:

    Randall… the $71 per hour was in the link Warren posted. It wasn’t my number, so if you are going to debunk it you might want to actually take two minutes to find out the source. Instead you accuse me of lying because you are too ignorant to actually read the source material.

    As far as the comparison with health care, again you are clueless. They are talking about employees of the US plans for the automakers, so the comparison is US based UAW worker versus US based non-UAW worker. Last I checked the US was not providing free national healthcare – not yet at least.

    If you don’t like the numbers go bitch at Warren – not me.

  19. Costner on March 19, 2009 at 8:10 am said:

    While we are at it – you guys might like this article:

    http://www.reuters.com/article/topNews/idUSTRE52A3YQ20090311?feedType=RSS&feedName=topNews

    Now you can claim it is bs if you wish, but it does provide a source of the claim that only 10% of the cost of the vehicle is labor related.

    However, the point is that the UAW is finally being forced to make concessions. They have agreed to a cut of benefits and wages to about $55 per hour for UAW workers. Now that seems reasonable right – but what is very interesting is how two years ago Ford was trying to get the union to agree to $70 per hour and the UAW flat out refused.

    Oh what difference two years makes.

    Since Ford has 42,000 hourly workers, a difference of $15 per hour costs them $630,000 per hour or around $1.3 Billion a year in labor costs (not factoring in even one penny of overtime).

    Granted a couple of billion isn’t enough to save Ford or GM, but it is one piece of the puzzle and has been my point all along. The greed isn’t only found at the CEO level – it apparently runs all the way to the floor, and if they honestly wish to remain alive it needs to stop at ALL levels.

  20. l3wis on March 19, 2009 at 8:15 am said:

    Still haven’t convinced me. I still don’t get the purpose in blaming the poor sap on manufacturing floor. Jimmy Carter warned the country in the late 70’s about making more fuel efficient vehicles, almost 3 decades have past and the car companies don’t get it, so now we blame the Unions?

    Whatever.

  21. Costner on March 19, 2009 at 8:32 am said:

    Do you actually read posts before you respond to them?

    How many times do I need to say unions are just one piece of the puzzle? Nobody is blaming them for the downfall of GM or Ford or Chrysler – but they are involved.

    You act as if we should just ignore the union issue because the auto companies have other issues, but that is foolish. Everything needs to be examined, and the union issue is one big part of that.

    Fuel efficiency and/or building cars people actually desire is important as well, but the US automakers are at a severe disadvantage there due to the ever-changing desires of the US customer. Everyone wants their gigantic SUV or truck when gas is $1.79 but when it turns to $4 they panic and want to trade them in for a Prius. The automakers can’t respond that quickly, and unlike Toyota and Honda they don’t have their engineering staff located in nations that have always used small fuel efficient cars.

    Until the big three develop some vision and start thinking ahead (being proactive rather than reactive) they will continue to have issues there, but this goes back to the union being more flexible with the plants and allowing them to manufacture more than one platform per plant. If they continue to fight it, the more flexible automakers will continue to chip away at market share.

  22. l3wis on March 19, 2009 at 9:07 am said:

    You really need to rent this Doc, then come back and argue with me about innovation, management decisions, the marketplace and labor;

    http://www.socialistaction.org/caldwell-smith12.htm

  23. Warren Phear on March 19, 2009 at 9:14 am said:

    I worked in a union environment for the last 30 years of my working years. The eight years before that I worked in the trades, some of that time as union, some of that time as non union. Those first eight years in the trades I can say there were pros and cons to the union question.

    This much I did learn of the last ten years of my working years. There were times I did not always understand the union stance. Some grievances just were not logical or reasonable from a management standpoint, or my own personal belief. On the other hand, I did get to see firsthand how management would treat it’s employees if there were no union. Management was allowed to have 10% of the workforce be “part-time”. After six months of continous service, these so-called “part-timers” were to be made into “full-time” with all the benefits that go along with it. So how did management handle this situation? They hired these “part-timers”, no benefits at all, $11.00 an hour, worked em 40, 50, 60 hours a week with the carrot in front of their noses that if they did a good job, they’d make “full-time”. Then a week before their six months of continuos service was up, they’d lay them off, and hire another unsuspecting worker. I knew from watching this, that is exactly how they’d treat everyone if they had the chance.

    Anybody in this town who works in the trades, or the service industry, or works for the city, the state, or federal government, KNOWS if not for the union, EVERYONE would be working for poverty level wages.

  24. Costner on March 19, 2009 at 9:25 am said:

    Lewis – I watched that film a couple of years ago. It was excellent albeit one-sided, but not exactly relevant to my posts.

    Warren – I’m not arguing all unions are bad. There is a time and place for unions and they do a lot of good for a lot of people. I’m specifically talking about the UAW here, and I firmly believe they have given all unions a bad name for decades due to their sheer great and inability to be flexible.

  25. Costner- I agree labor is a piece of the puzzle, but everything is factored in when an economy goes sour, and everything must be looked at to eliminate waste, but just singling out labor is silly.

  26. Costner on March 19, 2009 at 2:34 pm said:

    I agree with that too – GM (and Ford and Chrysler) have a ton of issues. When I find myself in a discussion about auto companies I’ll admit I hear a lot of complaints about the union and less about GM management, and that isn’t fair.

    If they would have the build and engineering quality of some of their competitors, maybe more people would want to buy them. They also need to work on fuel efficiency instead of just trying to keep up with the imports, and they need to be innovative (back to that proactive instead of reactive thing).

    The thing is, GM has so much potential. Look at some of the latest Pontiacs they have been producing. That G6 is a nice (albeit boring) midsize car, and that G8 is actually very nice looking and has gobs of power. The Solstice is great, and heck even the Vibe isn’t a bad car. The thing is, why does GM feel the need to produce the same car under a half dozen different names?

    Here in the US we have Pontiac, Chevrolet, and Saturn all sharing platforms. In some cases Chevy even shares with Cadillac. GMC shares with Chevy and Hummer etc, etc and that doesn’t include the dozen nameplates they use overseas. It all adds bloat and costs millions.

    Kill off Hummer and kill of Chevrolet trucks. Roll all of those into GMC. Then kill off Pontiac and Saturn and roll all cars into Chevrolet. Keep Caddy just because nobody would buy a Chevrolet Escalade, and then work on slimming down the number of foreign lines to do the same.

    It wouldn’t solve all of their issues, but it couldn’t hurt. Just look at Nissan and Honda. They each have their “regular” line, and then they have a luxury line (Infinity and Acura respectively). Having two brands instead of a dozen has to be huge in terms of cost savings.

  27. Plaintiff Guy on March 19, 2009 at 7:17 pm said:

    OK, this is a venue. Newspapers no longer rule. Vent here. Is this the right recourse? No, but it’s the only way the general population gets impartial opinion and might organize without propaganda.

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