Aaron's opinion: Should we bail out the Big Three?
A bunch of people have been asking my opinion on the "Big Three Bailout", so I've finally gotten around to writing a rather lengthy editorial on why I think we should help and how it should go down. Disclaimer: I don't have an MBA -- I'm just a guy who drives cars and writes about them for a living. That said, driving as many cars as I do (around a hundred a year), I have a pretty good idea of where the domestics sit compared to the competition.
Naturally, I'd like to hear your comments on the possible bailout -- should we and, if so, how should we? And your opinions on my opinion are also welcome (just please do me the courtesy of reading my whole editorial before ripping me to shreds!). Click the "comments" link below and make yourself heard. -- Aaron Gold
Other About.com opinions:
- Bailing Out Detroit by Christine and Scott Gable, About.com Alternative Fuels
- Top Ten Reasons to Save American Car Makers by Michele and Tony Hamer, About.com Classic Cars
- For Used Cars Sake, Auto Manufacturers Need a Bailout by Keith Griffin, About.com Used Cars
- Changing Times and a Big 3 Bailout by Jonathan Lamas, About.com Mustangs
- A Better Way to Save Detroit? by Robert Longley, About.com US Government Information
Photo: Tim Sloan/Getty Images
Comments
The root of the Big 3’s problem can be summed up in three letters: UAW.
Aaron makes a good point about the stranglehold the UAW has on the big 3. How much money do you think an auto assembly worker should make? The average wage of a UAW worker is $39.68 an hour PLUS another $33.58 for healthcare, pension and other benefits. That is $73.26/hour or around $150,000 per year. How much education and training does it take to assemble a car?
What is the difference between an assembly worker in a Toyota factory versus a Ford factory? Does it take special talent to assemble Fords versus Toyotas? Of course not.
We are one labor market in the USA and the UAW workers will have to compete with other workers eventually one way or another. It is just a shame that it is coming to this.
If we DO bail them out, we are continuing to encourage a bad or proven unsuccessful business model. If it was good, then why are all three failing and have been losing market share for decades and billions in recent years. I can’t say that’s a sound model. However, if we give the money with airtight provisos, such as money can only be spent toward new green technologies and high MPG cars exceeding 30MPG average…well that’s more palatable but hard to implement in a short time. If we Do bail them out we maintain a world class manufacturing base that we can rely on should we get into a REAL war in defence of our country. If we DO bail them out it signals that our government is there for any institution that if it hires enough people, they can run a bad ship and still be protected.
Now if we DON’T bail out the auto companies we sound the death knell for the United Auto Workers, who virtually can take their labor contracts and stick them… Now that’ll make a lot of union haters happy out there, but it is a terrible blow to unions nationwide. Remember when unions disappear, wages will be driven down throughout the marketplace. Could be good or bad, depending where you sit in the labour market. If we DON’T bail them out we will lose a huge manufacturing base should the companies fail and that definitely is not good for the country as a whole. If we DON’T bail them out, you’ll see the corporate execs in their private jets kicked to the curb. That’ll make almost everyone happy, but their families and their limo drivers. If we don’t bail them out, all three will probably go chapter 11 and try to restructure…I’m betting that most consumers will NOT buy a car from a bankrupt company due to lack of parts and no resale value…check resale values on a Daewoo. If we DON’T bail them out, I expect the divisions to be carved up and the best lines be sold off to other companies. My guess about 40% of jobs will return without unions. As far as retirement plans the US Govt. will offer some help, but benefits and $ will drop big time. If we DON’T bail them out expect 3,000,000 new unemployed within 1 year. Within a year of that about 1,200,000 will be re-employed again in the same sector.
If I was a US Senator I would let them fall. Their corporations have been ill for a long time. It doesn’t deserve resuscitation. The cancer is too entrenched. However, I would consider special govt. funding after the Chapter 11 reorganization, with special govt. guarantees for stockpiled parts. The money provided would only go for high efficiency cars, green cars and factories operating in the USA. (Canada and Mexico can do similar support funding of their own) .If after 10 years there’s no improvement…BYE BYE!!!!
Aaron,
We (US Govt.) is likely to help. We cannot loose what’s left of the manufactoring industry in this country. With an economy based on mostly services, the US will cease to be a “super power”.
A working solution for the auto makers needs to be transformational/revolutionary. Some things that must be open for change:
1. Reduce costs - Yes, this will require a complete review and re-negotiation of contracts with labor. Also, it will require reduction in executive packages.
2. Reduce the number of brands - Do we need 4 “flavors” of the same car? (GM - Chevy, GMC, Pontiac, Buick => keep Chevy or GM, Cadillac and Saturn)
3. Do a better job in product management. Build the cars people need and want. Use quality materials.
4. Reduce the number of dealers.
My 2 cents…
Aaron,
I like you balanced approach to this matter. I also like Mike’s idea about reducing the number of brands. We have way too many choices. I’d rather see fewer brands, but well made. We don’t need three major car companies in this country either. Also, in the years that I’ve driven and owned a car, no one asked me what I’d like to drive, and I don’t like the way cars are marketed: just because I’m not so young doesn’t mean that I wouldn’t drive a smaller quality hatchback. You also mentioned several cars that you’d buy without hesitation: why can’t American car manufacturers but the same effort into smaller, safe, more fuel efficient cars. I agreed with you 100 percent that we the driving public are to blame. Most people don’t need four wheel drive or a behemoth SUV. What did we ever do before the SUV? I’m all for safety,but at what cost in terms of our gas usage? The reason that the gas prices have decreased is because of decreased gase usages. This is a value that we need to embrace as drivers. I also agree with Mike that there should be fewer dealers. Cars should be sold at a fixed price with a complete explanation on the sticker.
Aaron, I think to let these three go under would be a mistake. But, to allow them to return to Washington with a small list of proposed changes with their cups in hand will not resolve this.
The UAW needs to go….Anytime an organization can single handedly threatens a companies existense by organizing a work stoppage in order to get more out of a company that pays them. They have way too much power. Now this may not be popular, but we are talking about the big three right now, not Honda BMW, Toyota, all who are still thriving WITHOUT the UAW dictating which way their toliets flush. Next make a quality product that Americans want. Where is Fords 4 door Sport sedan ? What does any of the big three make that will compete with a 3 series, IS 300, G35, 370z, GTR, 7 series, 5 series, M35 See where I’m going with this. Oh and where is the TDI sedan that gets 40 plus MPG. It does not exist. So Short version is I think we need them, But they need to make some BIG changes. Uprooting and moving all three to “right to work” states in the south would not be too severe in my opinion.
Thanks Aaron. Its a tough and complex issue. I agree completely but can sure see plenty of room for debate and honest differences here.
Mike, I think that the Cadillac CTS is a very worthy contender in the main segment you mentioned. That is a major part of Aaron’s argument: that the big 3 ARE beginning to make desirable products.
Aaron,
You gave much too little attention to the UAW and it’s role in the demise of the industry. Without large concessions from the UAW no plan will work. A loan or bailout would only be a bandaid.
My fear is that the Democratically controlled congress is beholden to the unions for much of their gains over the last 4 years(Republican behavior is the major contributor). I see Reid and Pelosi caving into a watered down negotiated loan with lots of wink wink nudge nudge going on behind closed doors. Of course, Democrats are rabid about building green cars which sounds good but could bury the U.S. industry if taken too far.
My first instinct is to let them file BK. But I agree that a loan could be the answer as long as it’s tied to an ironclad agreement with the industry including the UAW and some understanding from congress.
C
Before you place all the blame on the UAW, which should carry some, let’s look at a more direct comparison of wages and benefits paid to the other non-UAW workers. Foreign auto makers with plants in the US have newer factories,tax incentives from Sunbelt states, and for all we know, subsidies from their governments.
Another thing to account for sluggish sales, aside from the economy, is the longevity of modern vehicles. All the automakers have over-planned the demand for new vehicles. The market is oversaturated with new and late-model used.
Support for the Big 3 should be made, in the form of loans with tight strings attached.
CAFE rules could be relaxed a bit to more practical levels. There will always be a need for heavy-duty trucks used by the trades and other businesses. Plumbers and electricians can’t get by with Cobalts and Civics.
MORE ON BRANDS:
I agree that the plethora of brands is part of the domestics’ problems (particularly GM). The problem is the dealerships. Most are “bundled”, i.e. Pontiac-GMC or Buick-Cadillac or Lincoln-Mercury. If you cut a brand, you cut a large part of a bunch of dealers’ product lines. The Pontiac G3 (Pontiac’s upcoming Chevy Aveo5 clone) is a great example. The folks at Pontiac and GM aren’t stupid. They know the G3 is a bad idea; they know it’s a mediocre car that is going to harm the reputation that Pontiac is trying to build as a purveyor of cheap speed. I don’t know for sure how this went down, but I assume it went something like this: Sales of the Honda Fit and Toyota Yaris started to go through the roof, and the Pontiac-GMC dealers started looking around and saying “Hey! We’ve got nothing small to sell!” (Ignoring the G5 coupe, which is actually a nice little car.) So they complain to GM, and GM caves in and gives them the G3.
Now imagine if GM decides to fold another brand and says to some dealerships “We’re going to cut half your product line,” and to others “You’re going to shut your doors.” What are the dealers going to say? I bet it includes the word “No ****ing way.” I’m sure lots of dealers will agree that GM needs to shed brands — but how many of them would be willing to sacrifice their own once-profitable business to save the company? Not many, I’m thinking. — Aaron
Aaron - Do the dealers really have a choice? If GM decides to eliminate 1/2 of their product line, in order to save the company, how much say do the dealerships have in that decision?
I have noticed that every one has the same basic idea CHANGE IS NEEDED NOW for the Big 3 American auto makers.
Keeping the status quo is not a option at this point IF we in America want to keep a US auto industry.
Giving loans to bail out Detroit is NOT going to change the way they do business at this point.
Breaking up the GM same as same brands is a step in the right direction.
Getting the plants out of Detroit and out of the UAW is by far the best idea so far.
Giving the Automakers $$ to accomplish this step IS the right thing to do.
As far as the dealers, most are multi brand owners already and could condense the 2 brands that should be remaining or purchase new contracts with GM help. No Matter which way you go there will be pain to pay to get to a place where we have a competive US build auto market.
The alternative is we all loose weight and drive a KIA.
Charlie — We’re getting into an area that I know dangerously little about, but I imagine that the agreements between dealerships and automakers would protect the dealers against any sort of catastrophic changes that could totally turn their business upside-down. If anyone knows more about this, please let us know! — Aaron
It’s a moot point because the UAW needs to either go or make serious concessions that they won’t make, but…
Blaming the problem on the UAW doesn’t get to the root cause of the problem. It’s management problem and always has been.
The UAW is but another symptom of inept management. When the big three owned the US market, there was no reason to not be overly generous to the UAW. As long as all three automakers were in the same situation, there was no competitive disadvantage to giving in to the UAW. All three had about the same contract with the UAW and they could just pass the cost on to their consumers.
The only viable solution I see is a speedy chapter 11, emerging without the UAW and with competent management. Dumping the UAW will me messy but is doable. Where they will get competent management is the bigger question.
DB You are right on the mark. where does one come up with competent management in this type of market? I would start by looking at someone outside the Big Three who is working with a company that has it’s head above water right now. I imagine that there are some Asian/European middle managemnt looking for their big break, But as long as everything needs to be approved by the UAW it will never be a reality, so it has to be a combination of events, New management, and No UAW to hinder new mangement from making qick and effective changes.
RE dumping one of the brand lines… Its worth mention that you can’t buy an Oldsmobile or a Mercury in Canada anymore. The dealers were just switched to Chev and Ford, respectively. More competition in the same geographic space? Yes and no… They were really selling the same cars to begin with, even if they had different nameplates on them.
Allow the big 3 to declare chapter 11 bankruptcy, wipe out present management, start anew and rehire workers who will vow to save the company. Require management composed of MBA’s and CPA’s. As the present day corporate structure is a bottomless money pit, it can no longer exist.
The bailout is more for the UAW and shareholders than anything else. I think the best solution is for the automakers to file chapter 11. Then they can have a fresh start free from the unsustainable union and dealer obligations they have.
Aaron: I agree with statements made by all and your thoughts also. The UNIONS made America but now they are COSTING America. The WORKERS are to blame in a large way! (Oh Boy am I going to get jumped on!) My youngest son, when going to Geo Tech had a summer job at an auto plant (no brand names please)! He could not believe the “monkey business” that went on at the lines and in the areas where parts were being pre-assemblied. If a “white shirt” said anything or yelled at the workers then the whole line shut down. Remember when GM spent millions training their workers and lower management on how to improve quality? What has happened? Those workers are gone..retired or bought out..and now what is in the plants! I really don’t know but the workers are their own worse enemies! Also every auto worker where I live have a big house “up north” and a big power boat and all the gadgets that go with it! Why..because of LABOR MANAGEMENT said they had to have it! Will it change..NO because LABOR MANAGEMENT CONTROLS WASHINGTON.
Does anyone agree or am a just a son of a small time shop employee who was paid for the fine work that he did and we (his sons and a daughter) were taught work hard and you will get your rewards!
Bail out Ford but let GM and Chrysler go into chapter 11 bankruptcy. Giving Ford money will allow it to survive. Giving GM and Chrysler will be like shooting a bottle rocket into the Grand Canyon - the money won’t solve their respective financial problems.
Agent Mike, I agree on trying some foreign managers. Seems fair to me, the domestic managers outsource labor.
Seriously, any one of the CEOs for the big three makes more money that the top 10 execs together at Toyota! I have long thought that the astronomical pay packages paid to high level US corporate brass attract a specially greedy type of person who is more interested in raking in money for their selves than in the long term viability of the company they are charged with running.
The comment on bailing out Ford makes absolutly no sense whatsoever unless you are a Ford employee.
Bailing out the automakers is too complex for me to have a rational opinion on. However, isn’t Chrysler now a private company no longer publically traded? If so, then why in the world should they get one cent?
And another thing. $40 an hour average is off the hook. These wages should be cut in half. How hard is it to guide a robotic arm into place? It’s not! It takes very little skill and hardly any training to do the vast majority of these jobs. Not to mention look at where these factories are for the most part. They are in parts of the country that have a very low cost of living, comparatively speaking. Kind of makes you wonder why the folks at the non-union factories seem to be doing just fine financially at $14 an hour. Hell, $40 an hour is an excellent wage here in the bay area and we have pretty much the highest cost of living in the entire country. Don’t even get me started on these selfish greed mongals at the head of these companies.
I’m getting mad and I don’t like to be mad just before bedtime.
By the way, I’ve been a proud union member since 1992. But enough is enough already. It’s called REALITY!
why bail them out again and how many times are we going to do it ,,,, every time they needed bailed out they send more jobs over seas , if we bail them out part of the agreement should be bring all the jobs back to the usa or ask the other countrys for the money
Well put. It’s been said a “few” years ago that “where GM goes, so goes the country.” The UAW and the Big Three got together in the late sixties and began the course to where we are now at today. Time to pay the piper. We can and must help the Big Three. We can and must bust the stranglehold of the UAW. How long will you be able to drive and maintain your American auto with no Big Three? or even without one of them? Time for everyone to quit whining and get it done. Thank you for an on target editorial.
While we are talking about inefficient use of funds, how about this? I know someone whose job is waiting for a specific shipment to arrive during the shift. That’s all they do is wait around at $25/hr for the truck to arrive so they can inspect the load for half an hour. Couldn’t someone else step away to do it? No, the union won’t let them.
As for those saying to let the automakers go under to “flush out the union”. I don’t even know if that’s possible unless the company totally shuts down for good. If a company’s assets are purchased, does the union contract come with it?
If we don’t do something, everyone will suffer. It’s not just the big guys, it’s the little ones that supply the nuts and bolts, the springs, the paint, etc., etc. If the big 3 go down, it will be a tsunami across the world.
But, I want to comment that if the oil companies had not “gotten in bed” with the govt years ago, we would have economic cars now. The technology has been around for a very long time. I worked for an oil and gas company for over 30 years, and I know how powerful the lobbyists were and are.
My dad told me of a card built back in the 30’s or 40’s that got over 50 mpg, but the oil companies and our govt said no.
And, all of the govt regulations requiring the seat belts and the special seats for children have made it necessary for the SUV size vehicles. You can’t fit a family of five with small children in a regular size automobile. And our wanting all the bells and whistles on our cars…. Think about it! We, the consumer are part to blame and we have allowed govt to bring about a lot of our problems. And they are putting all the blame on the car manufacturers. The car companies have been telling the govt for years that they have the plans ready….just untie their hands and let them go. The other side of the story never gets told, does it?
No private company should ever be allowed to get “Too big to fail”. That’s the part that is just so dumb.
We should save the big three under the following conditions for the car companies itself and by implementing necessary changes in government policies towards all industry-branches in our country:
1. Max $500K salaries for Top Managers. That’s it! They are employees for God’s sake. More money cannot be earned by anybody, even if they work day and night, 24/7.
2. Max $35.00 hourly wages for car workers. (For comparison: Porsches’ subcontractor in the assembly line for the model Cayenne in Leipzig, Germany pays minimum hourly wage of 10Euro = $12.50).
3. We need a more effective quality control for autos made by the big three in order to compete with the world quality.
4. 50% of the money for membership paid towards the Union must be invested in accounts of capital gain and accumulated money to be paid back as retirement-aid to the Union members.
5. Government is responsible for the well being of its citizen, not the employers. Therefore the Government has to collect, manage, monitor and support the money needed (50% from the employers and 50% from the employees) for all insurances related to health, retirement, unemployment, new training in new trades for disabled working people, etc.
6. Instead of giving $25Billion to the big three, the Fed Reserve to pay $10K each to 2.5Million potential car buyers to buy exclusively cars made by the big three in the US. All parts made for these cars to be produced and cars to be assembled in the US.
7. Broad education across our country is needed for young people, they would like to learn a trade in the young age of 14 or 15 years old to become Skilled Workers in a two year program (at least): Electrician, Machinist, Blacksmith, Tool and Die Maker, Carpenter, Painter, Auto Mechanic, Photographer, Waitress, Office Clerk, Beautician, Nurse, etc., just to name a few. Chamber of commerce to monitor this program nationwide. Program to be financed proportionally by all registered companies in the US.
8. Education in the High Schools has to be lifted up. The current level of knowledge on the end of a High School education doesn’t allow our American Students to compete with the rest of the world. Who is not capable of achieving the set standards in the High Schools for each year has to leave and finish his or her education on a lower level. The current education model is creating a worthless title-inflation of pseudo-knowledge and a huge mass of uneducated or limited educated young people, there are lost in this world of tough economics.
9. Finally, we need people they are willing to work. Only work creates value add to each product manufactured, designed or for services provided in a living community. All profit-speculations with special Hedge Funds, Insurance bundles for mortgages, etc. are not providing any value add, as we can see now. Only a few get rich, the majority has to pay for it.
AARON: you got ALDEGOD’s e-mail address! CONGRAT HIM for the best plan that I have ever heard! His idea of voc schools is just what we need! I am an ole guy of 84 but when I was living in Cincy in the late 30s/early 40s there were FIVE (5) voc schools. NOW NONE! Where did that idea that EVERY KID has got to go to a fancy high school. Several in my old neighborhood went to voc school and worked in the Chevy plant in Norwood (OH). Today they are well off and PROUD yet they bitch about their grandchildren who have dropped out of hi school. Some how along the line/tim going to a voc school was dumb! It wasn’t for them but it was for their sons and their sons pushed their children to schools that they didn’t want to study and WORK at to get an education. NOT EVERYBODY needs to go to college yet in the voc schools of the 30s/40s there were english, math, reading etc classes along with shop! ALDEGOD I believe in your thinking and I will bet dollars to doughnuts that your parents didn’t go to fancy schools but taught YOU that a good education can come through WORKING, LISTENING and READING. We need more ALDEGODS in the USA.
Thank you, Billie Joe for your kind words.
I don’t know, if people want to read what I have to say here. But i write it anyway, because i strongly believe we all here in this great country are currently sitting on the wrong steam boat and in addition we are sailing in the wrong direction.
The problem with the big three is not at all a cause for the difficult situation the car companies are in. It is a symptom for our whole society. It is a result of many, many years of wrong doing on many levels of our public lifes.
Yes, you are correct. My parents never went to High School or College. Both were Farmers.
My mother didn’t have any school education. My father had a four year Elementary School education (during WWI). My grandfather sent him to apprenticeship to become a Machinist when he was 12 years old (School on Sunday 8 miles away from his home – he had to do walking, not driving). Today, we would call this child abuse.
Later, after WWII, he became Technical Director (today we would call him a CTO) in a big agricultural company. Not because he had a “summa cum laude” - education. No! Because, he knew, what he was doing to run a company successfully and how to tread his employees with respect.
The most important lesson I learned from him was: it is NOT the profit in a company, what is the most important for a society! It is the full employment in your community. Full employment keeps crime and violence low, makes families prosperous. Prosperous people are successful and happy and these kinds of people make this world safer and worth live in it in peace.
When I was 14 and living in West Germany, I finished the 9 year Elementary School and I wanted to go to High School in order to get the needed degree to enter the University. My father didn’t allow that. I had to take an apprentice ship in Electro Mechanics. I cried and was very unhappy the first few weeks. Then I turned around, became one of the best in my class.
Later I took further education all the way up to Mechanical Engineering. The beauty about my vita is: During my time as a student in the University I didn’t have any problems with any of the technical or theoretical subjects. And still as of today I sometimes remember my basics in Materials, Machining, Electronics, and Assembly, etc. Various subjects, I learned during my time as an apprentice.
Even being now the president in a high tech company here in Silicon Valley, I have not forgotten my roots and I still see what hard work means and who is working hard and smart and I respect every ones quality work. But also, I recognize very fast sloppiness and I hate that.
AARON: Have you ever had so many well written and INTERESTING replies as your request for comments generated? This has been great. I have found myself reviewing comments. It is too bad only those who visit your internet site can see, read and think about the discussion(s). I have never been so interested in reading other opinions since the JFK tragedy when so many people thought Oswald was the only shooter. (Oh, I couldn’t leave well enough alone, could I!!!)
Aside from the current financial malaise, I think I’d prefer to sail in the direction of capitalism not socialism. I think people who own their own companies have a right to run their companies as they want. I think profit isn’t a dirty word for without it their would be no employees. Employers are citizens too. I want the government out of my life as much as possible.
I agree with Jimmy about companies being “too big to fail” without some kind of oversight. The biggest problem is the overseers are incapable of managing their own house and can’t be trusted to manage others.
Somehow we’ve come to the perfect economic storm. I’m a mortgage broker and never sold a single option arm and not one subprime loan. If a dumbass like me saw the fallacy of the 100% A paper loans and the 100% option arm subprime loan, why couldn’t our elected officials? Greenspan, Bernanke, Bush, Clintons, Barney and a host of about 550 other politicians had no clue? Now they’re going to concoct a slippery plan to let the auto industry, financial industry etc off the hook. We’re living on a house of cards and the wind is picking up my friends.
C
Billie Joe — One of the many things I love about my job and this site is the quality of comments we get here on the blog. I read every single comment that gets posted here — and I learn a lot from my readers!
Aldegod — If you want to say it, say it — there are thousands of us out here who want to hear what you have to say. I think your ideas are interesting and plausible. It’s often the down-to-earth stuff that works best. — Aaron
Aaron
ABSOLUTELY NOT!
As to the $70 per hour that UAW workers supposedly get, well that is a totally bogus number that was contrived by a New York Times columnist by the name of Sorkin. Then it got bandied about by union haters like Newt Gingrich as if it was fact. The truth is that UAW workers get about half of that with all their benefits included(actual pay is $28 @ hr.). What he did was add up all benefits paid to all workers, past and present plus benefits to deceased spouses and divided them by total hours worked. So $70 @ Hr is nothing but urban legend and if you base your argument on legend your argument will fail. No union, regardless how powerful could pull off negotiating those kind of numbers! I’m no lover of the UAW, especially Bob White, but we shouldn’t use bogus numbers to support our arguements.
Don I’m curious….maybe you can explain more fully why that figure wouldn’t be accurate. Wouldn’t that ($70.00 per hr.)be the true cost of employment–benefits included; especially retirement benefits? Were real wages higher in the past? Is that why the $70.00 figure comes up? I’m asking this non-rhetorically by the way. I’m just curious because, to me, the formula that Sorkin used would indeed include all costs even if it comes off as being a bit misleading–unless, of course, past employees made far more. Trouble is I really don’t know what the true costs of employment are at other non-union automakers. I feel safe in assuming they are lower. So there is probably room for concessions by the UAW. If there isn’t, one has to wonder why the costs built into an “American car” are higher.
Anyway, fill me in. Cheers
If we are to consider terms such as “true cost of employment”, perhaps we should throw in the millions paid to upper management(they are employees) at the big three, plus bonus, stock options etc., then divide them by the hours worked by rank & file and management. The number would rise into the hundreds per hour. (The top dog at Toyota gets $1million no extras last I heard). However, the reality is debt on plants that are closed and other long term acquired debts from doing business here for many decades are not even mentioned, yet they add to the cost of every car. That’s why I believe that Chapter 11 relief is really the only way left to the Big 3. Tossing around a certain “hourly wage” that is never realized by the guy cashing the check, seems to be a tactic used by union-bashers to strengthen their arguments. I’m just looking for fairness in the bases of all the arguments.
I as well think that fairness and especially reality should be the basis not just of arguments but hopefully of solutions as well. I desperately hope for an answer that doesn’t include bankruptcy. While I think that the UAW could do more I am by no means a strict union basher. I will “bash” unions when I *think* that they are destroying the industry that provides the means and rationale for the union’s existence. For example here in Minn years ago dock workers went on strike in Duluth and shut down the harbor for many weeks. Shippers had to establish new ways of distributing their products…one that wasn’t so beholden to such a monolithic and arbitrary power as the union. End result–when shipping was resumed, there was little to ship. Today Duluth is mainly a tourist town and the grain that went through “the world’s largest inland port” is mainly shipped by truck and train. I think unions provide a vital role protecting the rights and safety of workers. But it is possible for these organizations to lose perspective, become myopic and even paranoid in their quest for more money and power. You bring up an interesting point about the inclusion of management salaries in the employees’ hourly wages. Gotta wonder if that is, in fact, the way the $70.00 per hr figure was arrived at. Anyway, thanks for the response.
to help
No, I do not believe we should bail out the auto makers. I believe in a free enterprise system and if the Detroit 3 were making a product the general public wanted they wouldn’t be in this mess. Also their management teams have been lacking in forsite for a very long time now and are in need of a reality check. Showing up in a private jet to ask for a handout, nicely planned out.
I think we should let them declare chapter 11 and let the chips fall where they may.
That said I have always been loyal to the pontiac brand and I plan on purchasing a new Cadilac CTS in the near future.
Mike in Minn, I couldn’t agree with you more. Though unions as a concept offer great advances in worker security, safety and abuse protection as can be seen by most of our labor laws and HR corporate policies. But unions like the UAW are to me as much of the problem as management. In my eyes,they have been in bed with each other for years. Most of what they do is posturing before accepting prearranged agreements that were made between them and Big Three management months before in those infamous smoke filled rooms. If you go to the forum I could tell union horror stories that would curl your ears. Not enough space here.
thanks