More on FIAT/Chrysler Deal

[mbouse]

i agree dave. this country survived after Studebaker closed, after AMC closed, after Packard closed (and those were just Indiana based companies)...

i'm no advocate of dropping labor rates and benefits to the level of all those former rice patty farmers. but, i promise that 85% sub pay plus full unemployment benefits plus TWO YEARS full health benefits while laid off or terminated is much, much, much, much, much more than i have had to survive on several times this past decade.

much more.

there is a lot to be given by the union without changing a lifestyle. personal experience talking here.

[Kevin1]

Reality check. Foreign automakers in the US aren't paying low wages. They are fairly close to what their UAW counterparts working for the big three are making. Foreign manufacturers have to pay decent wages to stave off their employees from wanting to unionize. Nobody is making minimum wage building Toyotas, Hondas, and BMWs in the US.

Toyota gave workers at its largest U.S. plant bonuses of $6,000 to $8,000, boosting the average pay at the Georgetown, KY, plant to the equivalent of $30 an hour. That compares with a $27 hourly average for UAW workers, most of whom did not receive profit-sharing checks last year.
Honda Motor Co. and Nissan Motor Co. are not far behind Toyota and UAW pay levels.
General Motors Corp., which lost $10.6 billion in 2005 and didn't issue profit-sharing checks last year, paid its production workers an average of $27 an hour, GM spokesman Daniel Flores said.
Ford Motor Co. and Chrysler Group representatives said GM's base pay figures are similar to theirs. Only Chrysler paid a bonus last year. The $650 bonus was not enough to surpass Toyota's pay.

$27.00/hour gives line workers a base pay of $54,000 per year. It is hard to argue that 54K is small change/minimum wage. The difference comes down to how well managed and how efficiently run the companies are. Toyota, BMW, and Honda all have shown that a car company can be profitable while paying decent wages. Ford, GM and Chrysler need to figure out how they can do the same.

[jimincalif]

More reality check. The foreign manufacturers provide pretty generous benefits to their employees. You can look up any company pension plan form 5500 report online (http://www.freeerisa.com). A check of Toyota shows a number of plans. Looking at just two for hourly workers, there is a pension plan with over $538 million covering 13,102 employees, the average account for an employee in this plan is $41,000 and the average Toyota-paid contribution for each employee was over $3,300.

They also have an hourly employee 401(k) plan with over $1 billion in assets, covering 12,555 employees, for an average balance of over $82K per participant. Toyota contributed nearly $26 million to this plan or about $2,100 each.

These are not UAW-level retirement benefits, but if the average worker made $27 per hour or $54K per year, their retirement contributions paid by Toyota are about 10% of pay per year. Not too shabby.

[mbouse]

and the average Canadian LLC worker won't settle for that? they'd rather lose their jobs entirely & permanently that keep their existing job at over $50k per year? doesn't sound bad to me...and certainly doesn't sound like minimum wage.

i'll trade jobs any day.... i'd "settle" for that kind of pay raise and increase in my benefits!! ANY DAY.

[speedracer]

and the average Canadian LLC worker won't settle for that? they'd rather lose their jobs entirely & permanently that keep their existing job at over $50k per year? doesn't sound bad to me...and certainly doesn't sound like minimum wage.

i'll trade jobs any day.... i'd "settle" for that kind of pay raise and increase in my benefits!! ANY DAY.

Its' very easy and cavalier of you to say that.

But when one is middle aged and has a family of four that is used to making 80K or 90K a year and then he must take 50K a year with little hope of ever seeing another raise, it's not so easy. Have you ever had to take a pay cut of that size? We all attain a life style relative to our salary. So how do you take a 30 or 40 % pay cut while tax's and the cost of living are going through the roof and our dollar is plummeting in real value and soon inflation will hit us hard when the printing press's stop making more dollars?

So all-in-all it's a bleak picture for a guy trying to raise a family and get ahead. Well, forget about getting ahead, just trying to stay afloat!

Maybe your young and 50K sounds like a boat load of money, but where I live, you couldn't live, for only 50K a year...

[mdrburchette]

It's definitely a bad situation all around. The employees have to choose whether to work for less pay or lose their job altogether. I don't envy anyone in that situation. If the auto manufacturers go belly up, it's going to have a ripple affect that none of us can comprehend.

[sjmst]

I am by no means a right wing guy; I was in a union and so were my parents. And of course, I am not saying we should have sweatshops. Still, I have come to believe the business of business is to make money for the principles. When they take their eye off that goal, they are no good to anyone, including the workers.
Yes, there should be some control so there is no employer abuse, but that’s as far as I go.

The analogy here is you have a housekeeper. Times get rough and you have to let her go. What if is she is in a union and says, "No, homeowner, you have to keep me, in fact give me a raise!" Even if that means you can’t go on a vacation with your kids. Heck, even it means you can’t pay your mortgage.
Silly, right? Tell it to the Union workers (the unreasonable ones). No, you cannot abuse the housekeeper, and there are laws against that.
However, neither do you have to keep her on, or keep giving raises, even when it makes no sense.

[Kevin1]

Rant begins here:

Middle aged, kids in college, trying to save for retirement, seen layoffs and pay cuts. . . . .
Been there, done that, still living.
I doubt Mike is being cavalier about the relative pay of an assembly line worker. For what it is, it's pretty good money and benefits. And in many parts of the country $54,000 is a boatload of money. 2x or more than the average income.
What has happened to the US auto industry is shameful, but facts are facts. If GM, Chrysler, and Ford are closing plants people have to go wherever the jobs are. And once things shake out those jobs will most likely be in the south making cars for Toyota, Hyundai, Nissan, etc. Maybe even Fiat.
Aggravating the misery for line workers (and plenty of others too) is that their pay was heavily augmented by the housing bubble for several years. People grew accustomed to a lifestyle that was neither realistic nor sustainable over the long run. 2nd mortgage, home equity loan, cash-out refinancing, interest only payment schedules, no-document loans, 125% financing, zero-down, 3 year ARM. Sound familiar? Eventually everything changes, and you have to be able to adapt. The housing bubble meant that regular blue collar folks could have snowmobiles, motorcycles, new SUV's, a McMansion and vacations every summer as long as they used their homes as an ATM and lived beyond their real means. Did anyone really think this run would go forever? Eventually the bill comes due and you have to pay the piper. I don't remember hearing anyone complaining on the way UP.
No matter how much you make, if you spend it all you are still broke at the end of the day. Now that wages are falling backward in line with the current economic contraction it is somehow perceived as being unfair. Holding the corporations hostage for more raises, bigger benefits, better working conditions when it means the company loses money and folds is not the answer. It's a symbiotic relationship when you work for wages. If the company fails, you fail, too.
People everywhere bought into the "living beyond their means" message they were being sold. Unfortunately that leaves absolutely no room for taking even one small step backward without instigating a disaster. A tough lesson to be sure, and one lesson that I hope people my age will do their damndest to impress upon our kids and anyone younger than us with enough smarts to listen. In a very material way (pun intentional) a good part of the population contributed to this.
This is not anything we want them to repeat.

End rant.

[speedracer]

Rant begins here:

If GM, Chrysler, and Ford are closing plants people have to go wherever the jobs are. And once things shake out those jobs will most likely be in the south making cars for Toyota, Hyundai, Nissan, etc. Maybe even Fiat.

A good rant Kevin.

I agree with much of what you said, especially about everyone living above there means. That was spot on!

But it's just not that easy for a few hundred thousand employees to pick-up and move south where the jobs are. And secondly, while companies like Nissan, Hyundai and Toyota maybe employing American workers, they are foreign companies with foreign suppliers and there profits leave our shores and go home. These companies do little to boost our economy nationally. Heck, they hardly pay any tax's at all, because the southern states gave them sweetheart deals just to move there. And these companies are further subsidised by there governments back home, which is a huge advantage that the Big 3 never had.

The Big 3 were slow to react to the competition, agreed. But there loss cannot be taken lightly. At one time GM was a third of our GNP all by itself. That cannot be replaced by all of the foreign manufacturers combined. The loss of GM will be the death of all true American manufacturing and engineering, at least whats left of it, and it's just damn sad IMO...

[mdrburchette]

It's all a mess and this bubble was bound to burst. The only reason the Southern states made those sweetheart deals was because all of our manufacturing went overseas. I'm still trying to figure out how that's a good thing. We get to buy cheaply made products for about the same amount of money as when they were made here in the US. But our jobs won't be coming home any time soon since we owe so much to China and we sure don't want to upset the apple cart.

[mbouse]

Its' very easy and cavalier of you to say that.

Have you ever had to take a pay cut of that size?

but where I live, you couldn't live, for only 50K a year...

easy, yes. but only from the voice of experience.
Cavalier, no. my statements are from actual and personal experience. i am not making light of this situation.

PAY CUT? yes, after being "between opportunities" for an entire year, i took a job paying 34% less than the previous position...which had been maintained for its last year only with a 20% pay cut... so i'm now bringing home less than half of what i did just a few short years ago. i commute over 50 miles per day just to maintain a living, so when gasoline skyrocketed to over double what it is today, i was hit REAL hard. i continue to "enjoy" related energy costs go up, and never to come back down.

i work in the automotive industry, and have maintained this job only out of the loyalty of the owner to his employees. my prospects for another position in this area are grim; and a pay raise at this facility is out of the question for the foreseeable future. i have a job, and am DAMN happy for it. even though i have in excess of 6 years post-secondary education, and a Bachelor's degree in my field.... i am paid substantially less than a high school or G.E.D. schooled UAW employee.

ultimately, where you live is a choice. HOW you live is also a choice, or a series of choices. millions of americans get by on less than $50k per year. i do now.

[TulsaSpider]

and the average Canadian LLC worker won't settle for that? they'd rather lose their jobs entirely & permanently that keep their existing job at over $50k per year? doesn't sound bad to me...and certainly doesn't sound like minimum wage.

i'll trade jobs any day.... i'd "settle" for that kind of pay raise and increase in my benefits!! ANY DAY.

Its' very easy and cavalier of you to say that.

But when one is middle aged and has a family of four that is used to making 80K or 90K a year and then he must take 50K a year with little hope of ever seeing another raise, it's not so easy. Have you ever had to take a pay cut of that size? We all attain a life style relative to our salary. So how do you take a 30 or 40 % pay cut while tax's and the cost of living are going through the roof and our dollar is plummeting in real value and soon inflation will hit us hard when the printing press's stop making more dollars?

So all-in-all it's a bleak picture for a guy trying to raise a family and get ahead. Well, forget about getting ahead, just trying to stay afloat!

Maybe your young and 50K sounds like a boat load of money, but where I live, you couldn't live, for only 50K a year...

I am sure that where you live has a great deal to do with your cost of living. I am 40, I work 3 jobs, make maybe 24,000 a year and I survive. Oh and 60% of my pay goes to child support. 50,000 a year? I COULD LIVE LIKE A KING!

I do feel sorry for the UAW workers, but there's no way out except accepting lower wages, it's a bad deal all the way around.