Should The Government Bailout GM?

[Slingin Sammy 33]

Originally Posted by saden1

Blame everything on the unions...I have never bought an American car, if you're going to blame the unions might as well blame me as well. People act like the unions want to see these companies go out of business...like they're not willing to concede perks such as having union members flown on private jets.

Certainly the unions can do things better but lets not act like they're to blame for all that is ill in Detroit. When they're selling cars and making money everything is great, when they're not it's blame the union time. What's really killing these companies are 1) bad product, 2) health care costs, 3) the completion.

Certainly the unions are not the only ones to blame, but they have played a major part in this problem. A $ 25 per hour disparity from Detroit to competitors in labor costs are largely the unions doing. If you read the very bottom of the article you linked to one of the last paragraphs sums up the union's blame pretty good.

Health care costs outside of things negotiated by the union are not an issue, as Toyota, Honda etc. have the same health care overhead with their US plants. Product and competition play a large role, as well as incredible mismanagement and executive compensation that is way out of line. If I was in Congress and found out these CEOs came to beg for $ 25B but were stupid enough to fly in on $ 20K per flight private jets, I would pull the rug on any bail-out on that principle alone.

Restructure under bankruptcy and independent oversight (negotiated hopefully, if not court-appointed) seems like the best way out. $25B is just a band-aid on a severed artery IMO.

[firstdown]

I've never said the unions where the total blame but they have driven the cost of American cars way up. Here is a quote from your link "That could be a big help for a company that spends upwards of $70 an hour on wages and benefits for janitors." Janitors making $70.00 an hour PLUS benifits. Thats just one example. Yes, the CEO's need to go if the federal gov gives them thes loan but that will not happen.

[JoeRedskin]

Originally Posted by firstdown

I've never said the unions where the total blame but they have driven the cost of American cars way up. Here is a quote from your link "That could be a big help for a company that spends upwards of $70 an hour on wages and benefits for janitors." Janitors making $70.00 an hour PLUS benifits. Thats just one example. Yes, the CEO's need to go if the federal gov gives them thes loan but that will not happen.

The way I read it - The janitors don't make 70.00/hour plus benefits - the cost to the company of salary, benefits, and taxes for a janitor is 70.00/hour. A 70/hour wage works out to roughly 140k a year salary. Pretty sure that's not the case.

Still, you figure that the actual wage is somewhere in the 30 - 40 bucks an hour. Damn good pay for a janitor.

[EternalEnigma21]

The labor rates given to the UAW workers directly reflect the problem. If you think for one minute that the management is going to negotiate to overpay the grunts and take home only a fair amount of earnings for themselves you're crazy... And half those guys don't do anything to help the company.

[redsk1]

Originally Posted by JoeRedskin

The way I read it - The janitors don't make 70.00/hour plus benefits - the cost to the company of salary, benefits, and taxes for a janitor is 70.00/hour. A 70/hour wage works out to roughly 140k a year salary. Pretty sure that's not the case.

Still, you figure that the actual wage is somewhere in the 30 - 40 bucks an hour. Damn good pay for a janitor.

GM pays an average of $33 an hour, and those selfish other companies pay a mere $19 plus a host of benefits.

From the beginning article. That's $14 more an hour vs their competition per employee on average. That's one of the reasons.

[Monkeydad]

No.

Bankruptcy will actually benefit the companies because they can restructure everything and if they have brains, eliminate the Union(s).

Unions are the problem. They are no longer necessary because the Government has put so many regulations about working conditions, fair hiring and even a minimum wage (although auto workers will be making far more than that).

They're turned into a way to fight for fairness for employees to a political machine that in itself is a business trying to get rich for themselves. They protect bad workers and prevent companies from hiring or even affording good workers.

[cpayne5]

Angus MacKenzie, editor of Motor Trend, had a wonderful editorial in the December issue articulating the case for bailing out the big three. I don't think there is an electronic version, so you should check out the print version if the opportunity presents itself. Here is a blog entry of his that touches on some of the same points, but is not as polished as the one appearing in the magazine.

[firstdown]

Originally Posted by Buster

No.

Bankruptcy will actually benefit the companies because they can restructure everything and if they have brains, eliminate the Union(s).

Unions are the problem. They are no longer necessary because the Government has put so many regulations about working conditions, fair hiring and even a minimum wage (although auto workers will be making far more than that).

They're turned into a way to fight for fairness for employees to a political machine that in itself is a business trying to get rich for themselves. They protect bad workers and prevent companies from hiring or even affording good workers.

I had a budy who worked for Ford and there was a running joke that if you need a two week paid vacation fail a drug test. If you failed they sent Fl. for two weeks to rehab.

[firstdown]

Ok, I read that again and a janitor cost them $70 an hour total cost but thats still around $150,000 just for a janitor. I'm not knocking the job or that a person is making that much but those kind of cost are going to drain any company. I also do not give the CEO's any slack either and even though they are way over paid alot of that comp. comes in a form of a stock bonus which is not looking to goo right now.

[FRPLG]

Originally Posted by cpayne5

Angus MacKenzie, editor of Motor Trend, had a wonderful editorial in the December issue articulating the case for bailing out the big three. I don't think there is an electronic version, so you should check out the print version if the opportunity presents itself. Here is a blog entry of his that touches on some of the same points, but is not as polished as the one appearing in the magazine.

Wow, someone who actually knows what he is talking about. I don't know enough to argue with anything he said at all. But it all sounds pretty reasonable to me.

[dmek25]

Originally Posted by Buster

No.

Bankruptcy will actually benefit the companies because they can restructure everything and if they have brains, eliminate the Union(s).

Unions are the problem. They are no longer necessary because the Government has put so many regulations about working conditions, fair hiring and even a minimum wage (although auto workers will be making far more than that).

They're turned into a way to fight for fairness for employees to a political machine that in itself is a business trying to get rich for themselves. They protect bad workers and prevent companies from hiring or even affording good workers.

this is as about an uneducated post that i have ever read around here. your saying that the government will take care of these auto workers? the place i work at could definitely use a union. they make millions upon millions, cut jobs, add more and more responsibility to the remaining work force. they raise our health care co payments every year. meanwhile, the C.E.O's still receive their multi million dollar bonuses. on top of that, their stock options. does this seem fair to you buster? my average raise has been about 2% over the last 5 years. with my benefits costing me more, its like no raise at all

[70Chip]

The bailout isn't for the companies. Companies can go into bankruptcy and come out the other side in much better shape. The bailout is for the Union. That's why a better strategy for the CEOs would be to say, "We don't need your money". They should be threatening to file bankruptcy. Call the Democratic bluff. Pelosi and Reid will still be desperate to give them a fat pile of cash anyways because the UAW needs it far worse than the executives do. I'm forever amazed at how politically hopeless these CEOs are, though. It's not surprising that we are in the shape we are.

[firstdown]

Originally Posted by dmek25

this is as about an uneducated post that i have ever read around here. your saying that the government will take care of these auto workers? the place i work at could definitely use a union. they make millions upon millions, cut jobs, add more and more responsibility to the remaining work force. they raise our health care co payments every year. meanwhile, the C.E.O's still receive their multi million dollar bonuses. on top of that, their stock options. does this seem fair to you buster? my average raise has been about 2% over the last 5 years. with my benefits costing me more, its like no raise at all

Sounds like your lucky to have an employer who pays your health ins. I pay $7,968 a year for health insurance and that does not include deductables or co-pays. I'm not complaining but I think people do not realize the cost to business to provide this coverage.

[dmek25]

i understand this completely. but my company set an unrealistic goal of 13% return on capital. 4 years in a row we exceeded it. this year, to date, we are at 11%. in today's turmoil, this is outstanding. we have proved we can flourish in today's market, but my raises are always 2%. how fair is this?

[firstdown]

Originally Posted by dmek25

i understand this completely. but my company set an unrealistic goal of 13% return on capital. 4 years in a row we exceeded it. this year, to date, we are at 11%. in today's turmoil, this is outstanding. we have proved we can flourish in today's market, but my raises are always 2%. how fair is this?

Well first off if they set a goal and you guys reached the goal then it was not unrealistic. LOL I don't have time to reply because I have a meeting but will. Take care.