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Automotive News & Views United Automobile Workers of America (UAW)
16738 messages, Last post on Dec 03, 2009 at 10:07 AM
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
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Over in Toyota 2009 there's talk about how the noncompletion of the Toyota plant in Mississippi is going to affect the economy there. They've even lost 2000 jobs from Cooper Tire moving out to China. Poor babies. The folks in Michigan, Ohio, Indiana, Kentucky all feel sorry for them having lost a few jobs like that. Imagine if they were in OH, IN, MI, or KY with all the jobs lost through the last decade. |
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I really don't see any way of of this for GM except Bankruptcy. While we can argue about whether the UAW workers are overpaid or not, and whether management is inept or not, I think we can all agree that the current situation is unsustainable. Frankly, I don't think the economy is going to recover fast enough for a few billion to keep GM's suppliers afloat. Remember, it's never about money in the bank, it's about cash flow. You can run a company on a negative net income for a long, long time, if you have cash flow. But, if the cash stops coming in, even for a day - it's trouble in Motor City. So, what's the answer? Let's look at cost cutting measures. You can stop development but that has long term consequences and should be avoided.... and it doesn't have much immediate impact on costs. Bad Idea, especially when your competitors are producing new products. You can stop producing product, but that only saves material costs for GM; since they have to pay their workers the same amount even if they are not working, the labor costs continue The single largest controllable (sic re GM) expense for any employer is labor. The best way to proceed is to increase productivity per worker. However, current work rules prevent that, and, in any case, no one is buying the product, so increased efficiency really gains nothing in the short run. This takes us to reducing current costs by reducing work force. You can cut management staff, and engineering staff, and this should be done. It's a desperation move to cut engineers (they're your future) but in this situation -they've gotta go. In most companies management employees are a cost to the company disproportional to their number as each is more expensive than the hourly paid worker. However the market salary for an engineer is the market salary for an engineer, even in GM. They're well enough paid but not getting rich. In this case, what has happened to GM is that the pay of the average worker has risen to be the equivalent of a lower level manager or engineer. Combine this with the fact that a. the workers are replaceable with comparatively short training periods (they don't need to go get engineering degrees to do their jobs). b. You need to stop producing product that isn't selling. c. These workers in GM are an expense even if they are only sitting in the Jobs Bank playing cards. The only way for GM to shed workers (given the Jobs Bank) is to either get the UAW to change its tune and permit it, or to go through bankruptcy to force the UAW's hand. The UAW won't agree to work force cuts. Even if there were work rule changes to improve productivity, it won't help when you have to keep paying the unproductive workers. Ergo - Bankruptcy is the only answer. 
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Replying to: lokki (Dec 16, 2008 5:02 am) The UAW won't agree to work force cuts. Even if there were work rule changes to improve productivity, it won't help when you have to keep paying the unproductive workers. Job banks are already pretty much gone and soon to be out of the picture. Currently, Chrysler has 711 workers in the jobs bank, GM has 1,404 and Ford has 1,476. "It's not gone yet but it's almost gone," Gettelfinger said. "We're on the verge of eliminating that provision." And new language in the 2007 contract stripped it to a "mere shadow of what it used to be." Gm has been getting rid of hourly employees since at least 2006 with UAW concurrence. 2006 In one of the largest buyout plans in U.S. corporate history, General Motors (GM) will offer money to about 126,000 hourly employees at its plants and at supplier Delphi (DPHIQ) to quit their jobs.GM will offer buyouts to all its United Auto Workers employees, about 113,000, a crucial step toward saving itself financially. The world's largest automaker said in November that it wants to shed 30,000 blue-collar workers. About 35,000 hourly workers at General Motors Corp. have taken buyout or early retirement offers, surpassing the company's expectations as it tries to cut costs by paring its hourly work force, GM Chairman and CEO Rick Wagoner said Monday. 2008 General Motors offered buyouts to all of its 74,000 US hourly employees as the automotive giant continues to downsize operations in response to declining US market share and massive financial losses. With the collaboration of the United Auto Workers union, the automaker plans to push out tens of thousands of higher-paid senior workers, replacing most of them with new hires making half the wages and far fewer benefits. More than 18,000 of GM’s U.S. hourly workers or about a quarter of its American blue-collar work force have accepted the automaker’s buyout packages, the company announced today. Most of the employees are expected to be gone by July 1, 2008. So by July it looks like UAW went from 126,000 employees in 2006 to 56,000. BUT GM has been hiring new UAW employees at greatly reduced wages and benefits.
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Replying to: 62vetteefp (Dec 16, 2008 4:15 am) It would take more than a few Southern Senators to stop the bailout. There are at least 41 Senators that are against it or it would pass. There is resistance to bailing GM out without concessions with a time frame by the UAW. Everything is in the future. Well the future for GM is NOW. I just read somewhere that at least 12,000 workers were still being paid in the jobs bank. When does it end forever? When will all the retirees start paying their own health care? Gettlefinger and the UAW gave nothing in those hearings. Only open ended promises with nothing solid that will help cure the ills at GM. If GM does not have the money to pay into the VEBA. That will be one of the debts that get looked at under a C11 bankruptcy. Along with the other $66 billion they currently owe some entity.
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Replying to: 62vetteefp (Dec 16, 2008 5:57 am) However, what does that leave for GM to do, if they've already cut labor costs like that? What's the answer? This is even more depressing than I thought.
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Replying to: lokki (Dec 16, 2008 7:23 am) What they all can do though is hunker down and try and ride it out. Look for more plant closings and layoffs in both hourly and salarieds. The UAW will have to look at letting more go w/o huge buy outs from their companies and look for health care interruptions at the UAW. GM has been heavily cutting cost for 6 years in all areas. 80% of the reported losses were due to this restructuring. It will continue. |
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Replying to: duke23 (Dec 15, 2008 9:57 pm) 
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Replying to: marsha7 (Dec 15, 2008 6:35 pm) 
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Replying to: snookered (Dec 16, 2008 8:44 am) Not sure what you are talking about. Who did not pay into Social Security and not have Medicare? What is SSD and SSI? All GM salaried's current and future retirees have lost their health care as of 65. The hourly could do the same thing? I am not that familiar with the medicare but I do know that the retirees are buying some other kind of insurance to increase coverage over the Medicare OK I looked up SSI and SSD. SSI is for those who did not work enough to get SS benefits for disabilities before you reach the age of 65. SSD is for those who did work long enough to full disability benefits. Not sure how this plays into GM workforce. I know I paid into SS for my entire life. http://marthachurchill.com/ssissd.htm
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Replying to: gagrice (Dec 16, 2008 7:05 am) Well, 12,000 employees at, let's say, $50K/year would be $600mill/year (did I get that right?). There's some cash flow.
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