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Bail Outs For Auto Industry?


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 We the people have played a role in this mess:  credit card debts up the wazoo, unaffordable houses on adjustable morgages, etc.

The thing that frosts my cookies is that because I bought a house that I could afford, knew how to read a financial statement, kept my nut small and paid off my bills, I'm getting hosed.

How many people did (do) you know that simply bought houses they couldn't afford and now they're able to say mea culpa, mea culpa and get the terms of their mortgage changed?  Whatever happened to personal responsibility and accountability?! :angry:

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frugal pointer
I heard the UAW president make some comments today that I found very interesting.  He said it isn't a bail out it is a loan and it would be paid back.  I'm curious if he is willing to put the UAW's and its member's money where his mouth is and guarantee the "loan".  

Dave

You and I were probably listening to the same radio show this morning.  

I was also shocked by the statements that big bonus checks are for the past years performance.  While I would agree with the premise, I don't recall the past year to be a booming one.

Those of us who don't live beyond our means will pick up the tab for those that do.........FP

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The UAW quote came from CNBC, I have it on in the office during the day.

Here is a quote for Bob I got in an e-mail today:

"The problem with socialism is that you eventually run out of other people's money."  - Margaret Thatcher

Even with the last couple of posts I still haven't made up my mind on this issue but I am certainly leaning against a blank check.

Dave

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I'd like some unbiased info on salary structures in the industry as a whole before I could agree to support a bailout.  Most of the info I've heard comes from biased sources I believe, but they don't speak well of the big three--claiming their salaries are much higher than many white collar jobs with advanced degree requirements.  Walk in the door with a high school degree and make $50-$60 an hour, they say.  

If they aren't competitive with the foreign-owned/US made company's salary structure I have a hard time agreeing to continue that scenario.  

I also admit to scratching my head over things they've been a big part in.  Discussed my search for a new car a bit on the board a few months back, with some bizarre (but traditional) warranty problems and lack of willingness of my preferred big three dealers to even come close to dealing with me...sent me off with a Toyota.  

I know better than to blame employees for a lot of that, but sure don't want the boneheads at the top to benefit if a bailout is agreed to.

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Interesting thread and touchy in many respects. Just a couple thoughts/comments with no intent to incite anyone in any direction based on a few of the comments.

Quote:[it always amazes me when people say the guy sweeping the floor gets 26.00 per hour. If he's still working he would have to have at least 10 year seniority.]

Even then he would be making ~$52/yr plus I assume a little overtime. That is not bad $ for a floor sweeper in that amount of time. For that matter that is not bad money for alot of people in a lot of locations regardless of LOS. I know people who do a helluva lot more than that in high risk jobs that have the potential for personal harm that make half that amount with the same amount of time/service.

Quote: [How much should he be paid for 10 years service?  Shouldn't he have health and pension plan?]    

I don't know and yes he/she should. Again from what I know which is questionable at times the UAW folks have had a pretty good ride for a long time. I compare that group to textile and furnitue manufacturing workers who were lucky to get squat. And guess what those jobs have now gone to other locations where we can not compete on labor cost and frankly the quality is as good if not better in some cases. An argument for unions? I don't think so. Bottom line is bottom line in the end. The end just comes sooner for some than others.

Quote: [The American manufacturers did it to themselve. They have been building crap for years and it's catching up to them. I'm a business man and no one bails me out it I screw up and sink my business.]  Which makes you work more effeciently and with an eye on quality etc... Too bad some of the big boys don't have the same principals. I agree with you.

Someone else asked here or on another forum "Do we really need the Big Three to produce automobiles?" Hell no when someone else can do it better in regards to cost and quality. Frankly I could care less where my ride is made as long as it meets my requirements for asethetics, quality and cost/value.

I remember taking a business class many years ago and the buy American theme roused up. The prof responded by stating something about Walmart and how some folks hated Walmart in one sense (foreign goods) but didn't mind spending their money with Sam. Well Sam apparently told vendors bring me a better product at the same or better price and I'll put it on the shelf. Maybe it's time for that message to hit the auto makers/industry.

Again my comments are by no means meant to incite anyone as I mentioned above. I know alot of folks are hurting and will be hurting from the current situation.  I am simply throwing out my thoughts which are based on personal in my curent profession as well as past experience with textiles and furniture manufacturing

Bailout (as we know it) for any industry? Hell no. Puts some GD accountability and consequences in place for the morons who run the show then I might change my mind.

A good read is "The World is Flat".

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I know this is not a popular reply because it is way more popular to bash management but I have been in the auto industry for my 20 plus working years and have been in lots of plants. I have not been impressed with the work ethic of the union employees. I think the management has not done everything right, but they have been held hostage by legacy cost and a union that is way to powerful. I think the Union has seen the writing on the wall for a long time but try to sell wage cuts and hard work to the membership? In the real world skilled trades workers in my industry make the same wage they made in 1985. This wage is based on productivity and a competitive work envoirment not years of seniority. This crisis will probably take our company out as well as many more. I know bailouts are not popular and I don't understand where the money will come from but the thought that the American way of life should end just to teach those greedy execs a lesson is pure insanity. One thing we can all agree on is that the best business plan is useless without customers. If the jobs and money go somewhere else none of us will have customers to buy our goods.

-Jeff

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Quote:[it always amazes me when people say the guy sweeping the floor gets 26.00 per hour. If he's still working he would have to have at least 10 year seniority.]

Even then he would be making ~$52/yr plus I assume a little overtime. That is not bad $ for a floor sweeper in that amount of time. For that matter that is not bad money for alot of people in a lot of locations regardless of LOS. 0

All of us are worth only a salary of what we can be replaced by someone who can do the same job of equal quality and quanity plus 10% for training.

The UAW has artificially tilted this equation and a reckoning is coming.  Unfortunately, the reckoning will affect us all, some more than others.  

I also agree that managements lack of foresight played at least 50% in creating this mess.

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I have not been impressed with the work ethic of the union employees.

I used to work as an engineer in a Union shop.  The 2 most powerful trades were admins and fork-lift operators. (More on the admins down below).

Here is an actual story of my dealings with the fork-lift operators.

I needed to move a 500 lb piece of equipment from one building A to another building B.  Here was the procedure:

1.  I had to make an appointment with the "fork lift operator people".

2.  When the day came (days later), I had to wait by the box in building A.  If I left the box, game over.

3.  The inside fork-life operator in Building A picked up my box one hour late.  I waited the entire time. He only could take the box from oneside of building A to the door on the other side of building A (union rules you understand).

4.  I waited for another hour for the outside fork-lift operator to pick up my box at the door of building A.  This “Outside fork-lift operator  moved it to the edge of building B, union rules prohibited him from moving the dammed box the extra 100 feet into building B.  All this time I had to stay with the box.

5.  I waited another 2 hours for the inside fork-lift operator to show up at the door of building B.  He finally showed up and took the box to where I needed it.

Let’s see, 3 fork-lift operators to move a box ¼ of a mile and an engineer lost ½ a day.

In my next company, here is how it worked:  I got my truck, looked to 8 big burly guys and asked for their help.  20 minutes later my machinery is delivered.

PS – The reason admins were so important was because engineers were not allowed to type ANYTHING, but rather wait for a union admin to type reports.  That took weeks.

PSS - To say I am happy to no longer work in a union shop is the understatement of the year.

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Our leaders from all parties in the public and private sector have let us down.  The promises that so many have worked for and saved for are melting away with the economy.  It looks like we have years of hard adjustment ahead of all of us.

It ain't just the "leaders".  We the people have played a role in this mess:  credit card debts up the wazoo, unaffordable houses on adjustable morgages, etc.

+1

I too am against it. I agree and disagree with a lot of things said, but am glad to see we can have a civil conversation.

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I too am against it. I agree and disagree with a lot of things said, but am glad to see we can have a civil conversation.

Fine Alex, Screw You !!!!!!  :p  

Is that better?

I had to do it, it's the cocaine mixed with lighter fluid, gets me every time.

In all seriousness I can't think of an industry with heavy union involvement where things aren't screwed up to some extent by union rules.  Airlines, Auto, some Police Depts (crazy rules around details costing tax money needed in other areas), teachers, etc.

From what I have read it appears filing for Chapter 11 will allow the restructuring of the union contracts, which is one of the larger issues facing the US auto companies.  If we "loan" them money with the businesses structured "as is" it would make no sense as nothing has fundementally changed with the business to make it more viable.

When benefits overhead is a larger % of an automobile than raw materials, there is an issue.

Without a complete restructuring of GM, and to slightly lesser extent Ford, I don't see how this isn't the definition of insanity. "Doing the same thing over and over again expecting different results."

I think the question for the US auto industry is "Do you accept some major pain in the short term or do you stay stubborn, continue your ways and face a very real possibility of not exisiting as a company in 5 years?"

As for the mortgage bailouts.  Not a fan.  I understand the implications of letting loans default on a large scale, but the principal is flawed.  As people stated, "responsibility" no longer exists.  A co-worker of mine bought a home 3-4 years ago on an ARM, his payment went from $2500/mo to something like $3600 and they were struggling to make it.  His bank came in and asked him to refinance to another 30 year fixed for something south of 4%.  Are you effing kidding me?  I like this guy, but the principal is so flawed.  We pay our bills, have good credit and can afford our mortgage and we can't sniff anything in that range for a rate.  Makes so little sense.

As usual just my $0.02

Steve

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Quote:[it always amazes me when people say the guy sweeping the floor gets 26.00 per hour. If he's still working he would have to have at least 10 year seniority.]

Even then he would be making ~$52/yr plus I assume a little overtime. That is not bad $ for a floor sweeper in that amount of time. For that matter that is not bad money for alot of people in a lot of locations regardless of LOS. I know people who do a helluva lot more than that in high risk jobs that have the potential for personal harm that make half that amount with the same amount of time/service.

Housekeeping and laborer work has been farmed out to 3rd party companies. It is minimum wage work.

Also the hourly wage of transplant company autoworkers is higher than the domestics.

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Gungho I'm in the pump business.

I had a similar experience at the GM plant here in Ga I had to change a small ( hold it in the palm of your hand size) coupling. Silly me I brought the coupling and a little tool to change it and thought I would be done in 5 minutes like in our shop.

Three hours later and 4-5 people had to be involved because of union rules it was really a eye opener.

If I remember correctly trains still had to have a fireman even when they went from steam to diesel, its no wonder unions have failed their members so badly.

One thing that is not mentioned here and should be is the faliure of high schools to teach business to students.

I hire people that are clueless about why profitability and being leaner that your competition is necessary.

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