Quote:
Originally Posted by RedlineIRL
Oh really? Where do you get that misinformation from? $14 an hour IS the current new hiring wage for UAW workers.
More misconceptions.
Labor costs are about 10 percent of the costs of producing a vehicle. The other 90 percent includes research and development, parts, advertising, marketing and management overhead.
They ARE willing to make sacrifices. What do you think they did when they construtced their plan that outlined what they are going to do? They are planning on eliminating brands, the CEOs were willing to take a $1 salary with no bonuses for them and reducing top company manages pay, and the UAW has said that they were going to do away with the job banks and other sacrifices if necessary. It's redicilous to say that they were are not willing to make sacrifices.
Hope you have deep pockets and guaranteed secure job if they don't get their "free" money. It's not going to be "free" money, it's going to be a loan as propsed before.
How are you going to be out of money over this? If you are a working American citizen you will ALWAYS pay taxes guaranteed. Why does everyone think that there is going to be a huge tax hike over this? Are you paying more in taxes right now over government money that has been given out in the past? Have you been paying more over the Iraq war?
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Not really misconceptions, fact. The $14 figure is for a non-skilled
non-core only class of starting worker. Typically a high school grad looking for a job.
Detroit 3 near $14-an-hour hiring blitz | 1853 Chairman
Total cost of labor 10%? Not quite.
Save Auto Jobs: Questions and Answers
Q: Do labor costs make up the majority of the cost of producing a vehicle?
A: No. Labor costs are about 10 percent of the costs of producing a vehicle. The other 90 percent includes research and development, parts, advertising, marketing and management overhead.
The answer is an oversimplification. It appears to consider only assembly-line labor costs. Each of the other categories, research, development, parts, advertising, marketing, and management, also have labor costs (and these categories may be far more labor-intensive than final assembly), which must be taken into account. As well, the labor costs associated with extraction, refinement, and transport of the raw materials (and transport of finished vehicles to dealers) must be considered. Finally, the labor costs of energy required for all phases of auto manufacturing, from extraction through final delivery, must be considered.
The real cost of any product is the total cost of labor and materials required to produce the product, plus profit, at all stages of production.
Why GM is in crisis.
GM in Crisis?5 Reasons Why America's Largest Car Company Teeters on the Edge - Popular Mechanics
BTW, Here is the contract language for non-core entry level new hires:
The new entry-level wage structure applies to UAW-represented workers hired into
non-core jobs on or after the effective date of the proposed agreement.
The entry-level wage structure has two key elements:
• New wage rates for three classification groupings.
14.61/16.00 14.00/15.30 14.00/14.50
• A new wage formula that provides annual increases driven by (a) the percentage increase in average hourly earnings, excluding overtime, of workers in the U.S. manufacturing sector or (b) the annual rate of inflation, whichever is greater, up to 3.75 percent. (If the wage formula generates an increase above 3.75 percent, the additional amount will be subject to mutually agreed- upon disposition.) Increase will take effect in the first pay period of each calendar year.
In addition to annual wage formula increases, entry-level workers with seniority as of the designated eligibility date will receive performance bonuses in each year of the four-year agreement. An entry-level worker’s performance bonus will be equal to 3 percent of qualified earnings during the previous 52 pay periods. Performance bonuses will be paid in May 2008, 2009, 2010 and 2011, based on April eligibility dates.
• Entry-level workers will advance from the starting rate to the full rate for their classification in four progression increases, one every 26 weeks.
• Entry-level workers are not eligible for the Christmas bonus or ESS program.
• Supplemental Unemployment Benefits: Entry-level workers with at least one but less than three years seniority will be eligible for 26 weeks of SUB. That increases to 52 weeks for workers with three or more years seniority, which can be extended to an additional 104 weeks.
Entry-Level Benefits
Entry-level workers will be covered by a separate health/pension plan, including the following elements:
• Pensions: The current pension provisions will be replaced by a Cash Balance Defined-Benefit Retirement Plan. Chrysler will deposit 6.4 percent of workers’ wages into a portable retirement plan, which will generate interest tied to the 30-year U.S. Treasury bond. The plan provides for three-year vesting.
• Health Care Plan: Entry-level workers will be covered by a health care plan, with annual in-network deductibles of $300 single/$600 family. Coinsurance will be 10 percent in-network, with an annual cap on out-of-pocket expenditures of $1,000 single / $2,000 family.
Flexible Spending Account
Entry-level workers will be eligible for a credit to a Flexible Spending Account in the amount of $300 for single health care coverage, or $600 for an individual with family coverage.
401(k) Retirement Health Care Plan
Workers hired after the effective date of the proposed agreement will not have company contributions for health care coverage in retirement. In lieu of the contributions for health care coverage in retirement the company will contribute an amount equal to $1for every compensated hour during the working career of all new hires, into the employees 401(k) plan.
Entry-Level Wages
The entry-level wage structure will have a starting rate of $14.20 per hour and a full rate of $15.34 per hour. Entry-level workers will advance from the starting rate to the full rate for their classification in four progression increases, one every 26 weeks.
In addition, entry-level workers will receive annual raises through a new wage formula that will provide increases tied to either (a) the percentage increase in average hourly earnings, excluding overtime, of workers in the U.S. manufacturing sector or (b) the annual rate of inflation, whichever is greater, up to 3.75 percent. (If the wage formula generates an increase above 3.75 percent, the additional amount will be subject to a mutually-agreed disposition.) Increases will take effect in the first pay period of each calendar year.
In addition to annual wage formula increases, entry level workers with seniority as of the designated eligibility date will receive performance bonuses in each year of the four-year agreement. An entry-level worker’s performance bonus will be equal to 3 percent of qualified earnings during the previous 52 pay periods. Performance bonuses will be paid in May 2008, 2009, 2010 and 2011, based on April eligibility dates.
Entry-level workers are eligible for the Christmas bonus, as described on page 26.
Entry-Level Benefits
Entry-level workers will be covered by a modified benefit plan, including the following elements:
• A cash balance defined benefit retirement plan. Ford will deposit 6.4 percent of workers’ wages into a portable retirement plan, which will accrue interest tied to U.S. Treasury bonds. This plan provides for three-year vesting.
• Retirement health care fund. To help fund health care in retirement, Ford will contribute $1 an hour for each hour worked into each entry-level worker's TESPHE.
• Health care plan. Entry-level workers will be covered by the National PPO and will have annual in-network deductibles of $300 single/$600 family. Co-insurance will be 10 percent in-network, with an annual cap on out-of-pocket expenditures of $1,000 single/$2,000 family. To defray these costs, Ford will provide workers with $300 single/$600 family annually in a health care spending account. Entry-level workers will be eligible for dental coverage and a vision exam after three years, and for full vision coverage after five years.
• Supplemental Unemployment Benefits (SUB). Entry-level workers with at least one but less than three years of seniority will be eligible for 26 weeks of SUB. That increases to 52 weeks (which can be extended) for workers with three or more years of seniority.
Not that bad for non-skilled entry-level employment. How does that compare to others?
$12.66: Median hourly wage for production workers in Chattanooga in May 2007, or a yearly pay of $28,180.
$13.53: Median hourly wage for production workers in the United States in May 2007, or a yearly pay of $31,310
$14: Starting hourly wage for some new non-core GM, Ford and Chrysler workers hired under 2007 UAW contract agreement
$17: Starting hourly wage at Honda in Indiana
$24.92: Top hourly wage for production workers at the Nissan plants in Smyrna and Decherd, Tenn.
$26: Top hourly wage for UAW workers
Reported today on America's Newsroom.
For 2007, GM and Toyota both sold 9.3 million vehicles. In 2007 GM lost $38.7 Billion and Toyota made $17.7 Billion. On average, GM lost $4,161 per vehicle in 2007 while Toyota made $1,903 per vehicle.
The difference... well since Toyota workers make about the same in salary, the apparent difference is the higher cost of labor at GM. I doubt GM's cost of materials is higher than Toyotas. The cost of labor for GM is about a third higher than at Toyota. The numbers reported for the cost of labor at GM was $70/hour and for Toyota it was $48/hour for 2007. If GM is to be competitive, and successful, they need to have equal or lower costs to that of their competition. Bear in mind that these numbers are for the 2007 year and are not influenced by the financial meltdown of this year. Things have been going downhill for quite some time in Detroit. This financial crisis just aggravated the problem and showed that the big three specifically, were unprepared for bad times.
Ten things GM needs to do now become a viable company with a future longer than a few months.
1. be price competitive,
2. be quality competitive
3. be able to rapidly react to changing market conditions
4. be able to position their product as the product of choice by the buying public.
5. be able to control/nurture customer satisfaction experience with their dealerships
6. be able to eliminate many underperforming dealerships
7. need to stop competing against themself for sales (Chevy, Pontiac, Buick, Saturn, etc.)
8. need to revitalize their leadership
9. need to manufacture their products for the US market in the US
10. need to renegotiate all their supplier and union contracts.
As to concessions, the CEO's of GM and Ford could do no less than follow when Nardelli said he would work for a $1 salary next year. They agreed to work for a buck for one year then their salary goes back into the tens of millions. Notice he didn't speak to total compensation but only his salary. CEO's get lots of perks, options, etc. The union has agreed to concessions but when asked to move up their giveback by a year they refused. Sad.
I don't envy any autoworker but given that the big three is losing money and is not profitable they need to move even further if they want to remain employed. I believe the company management also needs to be replaced.
As to their plan. Where is the plan to eliminate brands? I saw none presented to congress and I watched the whole thing on CSPAN. I did see that it cost them a couple billion dollars to eliminate Oldsmobile and they said they couldn't afford to do that now as there was no cash to buy out the dealerships.
If they had such a great plan they would attract private capital. They can't, and as such tried to get the government to feed them cash. The senate didn't like their plan either so it failed there. When the UAW was asked to move up by one year some concessions so the government could be assured a pay back of this "loan" the UAW refused.
If I thought they had a chance of repaying this loan I'd be behind it. I don't see any way they can. So lets give them $15 billion and when they can't repay it lets give them some more. Sounds like a plan that assures continued failure. They are unprofitable, loosing money and will need continued bailouts to stay in business. Unless and until the company and the union are willing to make the needed sacrifices to turn a profit they won't get my support.
Giving away "free" government money is a socialist concept that some think is wonderful. It isn't. Someone has to pay. There is no free money. So yes, I'm paying and my sons and grandsons are/will be paying for this foolishness. Don't think it's costing anyone anything? That is delusional.
Funny thing is that I'm in the market for a new car. I looked at the Caddy CTS and the Lexus LS460 recently. The Caddy dealership I looked at was a joke. Their service department was like a grimy, filthy cave. I saw a mechanic wiping a fender off where he had spilled oil with his old shop rag. The Lexus dealership was immaculate. The service manager was delighted to show me his place and beamed with pride when he said that every car is removed from the floor every night so that the floor could be scrubbed clean. They had installed a touchless car wash and every car was washed and blow dried after it is serviced.
See the issues go deep, all the way to how the dealerships mechanics and the customers are treated. Something that seems lost by my local Caddy dealership. Scratch the CTS from my list.
IMO, GM management doesn't get it. They have been steadily loosing market share for years and they still don't get it. I doubt they ever will. So lets give them the money and see how things improve. We'll be back here discussing this second bailout come along March.
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