Fate of US auto industry

[Cyclone90]

What the heck do we do about the not-so-big three? It makes me cringe seeing headlines in which GM and Chrysler might need a 21.6B "loan".

Automakers turnaround plans ask for more federal help - Feb. 17, 2009

We can't afford to let them fail and we can't afford to keep funneling money into companies that probably aren't viable in the long run either. I think the US auto industry is about the only one that hasn't consolidated in the past quarter century. So what's the solution...make GM and Chrysler merge before giving them the money? Let them go bankrupt? Some argue people won't buy cars from them if they go belly up and have to re-organize, but nobody's really buying cars anyways so is that really different than the situation they are in now.

I don't really have an answer, but it better not include three companies when the dust settles. The worst, likely Chrysler, needs to go away or merge. They have the worse global presence and chance of appreciable rebound.

 

[Cyclones_R_GR8]

What the heck do we do about the not-so-big three? It makes me cringe seeing headlines in which GM and Chrysler might need a 21.6B "loan".

Automakers turnaround plans ask for more federal help - Feb. 17, 2009

We can't afford to let them fail and we can't afford to keep funneling money into companies that probably aren't viable in the long run either. I think the US auto industry is about the only one that hasn't consolidated in the past quarter century. So what's the solution...make GM and Chrysler merge before giving them the money? Let them go bankrupt? Some argue people won't buy cars from them if they go belly up and have to re-organize, but nobody's really buying cars anyways so is that really different than the situation they are in now.

I don't really have an answer, but it better not include three companies when the dust settles. The worst, likely Chrysler, needs to go away or merge. They have the worse global presence and chance of appreciable rebound.

As far as I'm concerned, the number 1 issue needed for the big 3 to survive is to get rid of the UAW. They have sucked them dry for years. The union should not be making your business decisions.

 

[Knownothing]

As far as I'm concerned, the number 1 issue needed for the big 3 to survive is to get rid of the UAW. They have sucked them dry for years. The union should not be making your business decisions.

You are correct. They still don't want to budge. They are still trying to hammer the car companies for more crap. It's truely unbeleivable.

 

[Cyclone90]

I'd agree. I'm no lawyer, but wouldn't bankruptcy force their hand to re-renegotiate the UAW deals? I'm beginning to think that's the best solution. The airline business was nearly as bad off as the US auto makers and United exited from bankruptcy.

 

[CYKOFAN]

The UAW made some concessions for the first bail out and I thought I heard they just made more. The average wage for uaw workers is very comparable to U.S autoworkers at the foreign automaker plants in the south, and the foreign automakers are also losing a lot of money (despite not having nearly as many pensions and health benefits to pay for retired workers and getting huge tax concessions from states like Alabama and Tennessee). This economy stinks for the entire auto industry, not just the big 3.

 

[Cyclone90]

$154 an hour average wage plus benifits for the big 3s workers.

So the average UAW worker makes $300K? :skeptical:

 

[kingcy]

So the average UAW worker makes $300K? :skeptical:

Insurance, 401K, pension, pay, all that adds right up. That number may include all the benifits they get after they retire also.

 

[tec71]

The UAW has made concessions, including a two tier wage structure. New hires are making similar amounts as the non union comparables. The obligation to fund retiree health care and pension obligations is what's left, as well as work rules and contractual commitments to keep open certain plants that are huge inhibitors to productivity. Bankruptcy would allow almost unilateral rewriting of those Collective Bargaining Agreements. The UAW cannot afford to voluntarily agree to CBA's that essentially mirror what the non union employees get, otherwise what value can they say they are bringing to the deal. The only way to get there is through unilateral termination of the agreements.

 

[Cyclone90]

$154 an hour average wage plus benifits for the big 3s workers.

So the average UAW worker makes $300K? :skeptical:

Insurance, 401K, pension, pay, all that adds right up. That number may include all the benifits they get after they retire also.

Including benefits seems somewhat more believable.

 

[jdoggivjc]

The UAW has made concessions, including a two tier wage structure. New hires are making similar amounts as the non union comparables. The obligation to fund retiree health care and pension obligations is what's left, as well as work rules and contractual commitments to keep open certain plants that are huge inhibitors to productivity. Bankruptcy would allow almost unilateral rewriting of those Collective Bargaining Agreements. The UAW cannot afford to voluntarily agree to CBA's that essentially mirror what the non union employees get, otherwise what value can they say they are bringing to the deal. The only way to get there is through unilateral termination of the agreements.

That's precisely the point - what value DOES the UAW bring to the table other than driving up the cost of labor anymore? Or most unions for that matter? I get there was a need for them in the 1800s and early 1900s as workers worked in inhumane conditions with very little compensation, but Federal regulations have made the sticking points of the point of those union arguments Federal law. That pretty much leaves the unions with driving up the cost of labor as the only thing left that they can do. The current union model is absolutely obsolete, and if it wasn't for the fact that union bosses owned the Democrats and Republicans have to tread lightly around them if they want to keep their jobs, the union model would have been changed a long time ago.

 

[kingcy]

That's precisely the point - what value DOES the UAW bring to the table other than driving up the cost of labor anymore? Or most unions for that matter? I get there was a need for them in the 1800s and early 1900s as workers worked in inhumane conditions with very little compensation, but Federal regulations have made the sticking points of the point of those union arguments Federal law. That pretty much leaves the unions with driving up the cost of labor as the only thing left that they can do. The current union model is absolutely obsolete, and if it wasn't for the fact that union bosses owned the Democrats and Republicans have to tread lightly around them if they want to keep their jobs, the union model would have been changed a long time ago.

That is very true.

 

[CYKOFAN]

Huh? $154 an hour? Where did you get this? The figures I'm sure I've heard quoted from the big 3 auto makers that the average workers wages are in the $55k range and around $75k when you include benefits (which for some reason also includes the benefits of former workers' pensions and health benefits getting averaged in). I'm sure I also heard the big 3 ceo's say that their starting wages are in the $30k range and is very comparable to the starting wage for autoworkers at the foreign plants in the south. Many foreign automakers are also subsidized by their own governments as well as state subsidies and tax breaks they receive for building in the U.S. As usual some people paint the unions as the bad guys because they have been able to negotiate good wages and benefits to help create a strong middle class, but these workers who sweat in the factories are nowhere getting rich. Zero in on the wall street crowd if you're looking for people knocking down millions while they run their companies into the ground.

 

[aeroclone]

That's precisely the point - what value DOES the UAW bring to the table other than driving up the cost of labor anymore? Or most unions for that matter? I get there was a need for them in the 1800s and early 1900s as workers worked in inhumane conditions with very little compensation, but Federal regulations have made the sticking points of the point of those union arguments Federal law. That pretty much leaves the unions with driving up the cost of labor as the only thing left that they can do. The current union model is absolutely obsolete, and if it wasn't for the fact that union bosses owned the Democrats and Republicans have to tread lightly around them if they want to keep their jobs, the union model would have been changed a long time ago.

I couldn't agree more. I can see why at one point they were necessary and did a lot of good. I don't see that purpose existing today, however, so just what are they good for other than lining the pockets of their members? The only thing I can see is that they dump a lot of money into the political system to protect their own interests.

I know there are some pro union people on the boards here. Anybody care to share the other viewpoint?

 

[kingcy]

Huh? $154 an hour? Where did you get this? The figures I'm sure I've heard quoted from the big 3 auto makers that the average workers wages are in the $55k range and around $75k when you include benefits (which for some reason also includes the benefits of former workers' pensions and health benefits getting averaged in). I'm sure I also heard the big 3 ceo's say that their starting wages are in the $30k range and is very comparable to the starting wage for autoworkers at the foreign plants in the south. Many foreign automakers are also subsidized by their own governments as well as state subsidies and tax breaks they receive for building in the U.S. As usual some people paint the unions as the bad guys because they have been able to negotiate good wages and benefits to help create a strong middle class, but these workers who sweat in the factories are nowhere getting rich. Zero in on the wall street crowd if you're looking for people knocking down millions while they run their companies into the ground.

Maybe my mind put the 1 infront of it . My mistake.

 

[Wesley]

As far as I'm concerned, the number 1 issue needed for the big 3 to survive is to get rid of the UAW. They have sucked them dry for years. The union should not be making your business decisions.

Sounds like we need to put the union retirees on universal health care.

 

[Cyclonepride]

We can't afford to NOT let them go belly up. They are not sustainable. Propping them up will be a never ending process. The figure I heard for the Big 3 was $76 an hour with benefits compared to foreign automakers in the South at around $43. We have a whole bunch of bitter pills to swallow, but swallow them we must. Thanks Washington!

 

[GoCy]

I'd agree. I'm no lawyer, but wouldn't bankruptcy force their hand to re-renegotiate the UAW deals? I'm beginning to think that's the best solution. The airline business was nearly as bad off as the US auto makers and United exited from bankruptcy.

This is precisely why the Federal Government won't let this happen. Being very pro-union, Obama will do everything he can to keep the Big 3 from going through bankruptcy. The unions have as much at stake with avoiding bankruptcy as the shareholders and upper management. I would guess that they will continue to loan or give money until the economy improves.

 

[dmclone]

If you're considering buying a Hummer, Saturn, Pontiac, any Chrysler, etc. please read.

Concerns about buying from a 'dying' car brand - Oct. 22, 2008

Where it really hurts
The real impact for owners of Oldsmobile and Plymouth vehicles was that their cars' resale values plummeted after the brands died.
"What happened with Oldsmobile was that the used car values of Oldsmobile dropped a lot quicker than for brands that were still in business," said Champion.
A year after each brand went out of existence, a two-year old Oldsmobile or Plymouth suddenly had the value of a five-year-old car, according to Kelley Blue Book.
The difference continues today. A recent sampling of dealer ads on Autotrader.com showed sellers asking about $2,500 more for a 2000 model year Pontiac Grand Prix than for the similar Oldsmobile Intrigue.
Some used car buyers, unfamiliar with the workings of the auto industry, may not understand that the cars can still be serviced at any Chrysler or GM dealer, Champion said.
Another reason may be the taint of failure that surrounds an orphaned vehicle. Buyers might reasonably surmise that the vehicles must have been somehow flawed.
"They didn't have enough faith in the brand to continue the brand," said Kelley Blue Book's Eckard.
Given the heavy cost of depreciation, she said, buyers would be wise to consider the impact of brand survival on resale value, even if it is just a matter of one being phased out by an otherwise healthy manufacturer.

 

[CYKOFAN]

No problem Kingcy, I've made plenty of mistakes myself and I'm not 100% sure of what I heard recently from the automakers either (maybe somebody better on the computer than I can give the actual current wages). But while the big 3 autoworkers have made good money, and will now continue to have to make concessions as well as a lot of them lose their jobs, I'm a lot more upset about the people at the top in nearly all big companies who enrich themselves by the millions and hundreds of millions thru greed and sometimes pure corruption, and have played a big part in bringing our economy to its knees.

 

[BryceC]

If you're considering buying a Hummer, Saturn, Pontiac, any Chrysler, etc. please read.

If they all drastically drop in value, I may actually consider one. :wink: