Should the American automakers...

[j2k4]

As you can tell, I finished the book*.

The Reckoning by David Halberstam is an amazing look at the American auto industry.
Highly recommended.

I give it my highest compliment, which is to say it does what a book is supposed to do, and to the nines.

It is especially and fortuitously relevant at the moment, as the "American Auto Industry" (their italics, not mine) begs unfettered access to the government trough as if that vessel is replenished by magic, in order to subtract the taxpayer from the equation.

I think it would be perfectly polite of me (in my presumptive editorial pose) to say they ought to file chapter 11, hope for the best, and get the survivors back to work.

The rest can do as so many of us have done:



















START THE FUCK OVER!

Most of the the rest of us have done it a few times, and believe me, there's nothing at all special about any of you, so get on with it.

[clocker]

GM is emailing Saturn owners, begging them to contact their reps and plead for GM's bailout.
Full text here (along with some hilarious responses).

The line that absolutely jumped off the page at me was this....

GM has closed the quality gap with the imports...

So, let's see...
The largest carmaker in the world, from the country that created the industry, thinks that it's to their credit that they've finally (and I would consider this very debatable) "closed the quality gap" with cars from a country that was in ruins after WWII? That didn't even start making cars till the fifties and didn't have the product to export until the late sixties/early seventies?

Oh yeah, I'd be bragging about that.

[j2k4]

GM is emailing Saturn owners, begging them to contact their reps and plead for GM's bailout.
Full text here (along with some hilarious responses).

The line that absolutely jumped off the page at me was this....

GM has closed the quality gap with the imports...

So, let's see...
The largest carmaker in the world, from the country that created the industry, thinks that it's to their credit that they've finally (and I would consider this very debatable) "closed the quality gap" with cars from a country that was in ruins after WWII? That didn't even start making cars till the fifties and didn't have the product to export until the late sixties/early seventies?

Oh yeah, I'd be bragging about that.

Right.

I remember vaguely that Saturn was created so as to exemplify GM's interpretation of the best possible melding of the American and Japanese manufacturing models.

One might argue that GM managed to wreck Saturn in a fraction of the expected time, and so deserves a uniquely and oddly colloquial type of kudos (in the shape of a bailout) for their efforts.

[devilsadvocate]

In answer , no bailout.

Oh, I forgot to mention-

The average employee at GM Ford and Chrysler makes $73.50 an hour, which translates to about $150,000 per year, assuming no overtime.

Can you tell me where you get this figure from please?

Because I've come up with this

The base pay is about $28 an hour. If health care cost per worker average $12,000 per year, that adds in another $6 an hour. If the pension payment takes up 25 percent of base pay (an extremely high pension), that gets you another $7 an hour, bringing the total to $41 an hour. That's decent pay, but still a long way from $70 an hour.

How does the NYT get from $41 to $70? Well the trick is to add in GM's legacy costs, the pension and health care costs for retired workers. These legacy costs are a serious expense for GM, but this is not money being paid to current workers. The person on the line in 2008 is not benefiting from these legacy costs.

[clocker]

I remember vaguely that Saturn was created so as to exemplify GM's interpretation of the best possible melding of the American and Japanese manufacturing models.

Ah, the Saturn.
An acquaintance purchased one of the very first for his (then) 16 year old daughter.
The main sell point was the plastic body panels- the better to survive the expected "oopsies!" of a new driver.
Seemed reasonable till winter set in and the fender cracked when hit by a shopping cart.
Sigh.

Saturn always struck me as vaguely cultish...much like Apple, but without the quality to back it up.
Of course, Saturn's big claim to fame- "The price on the sticker is the price you pay!"- just points up how ridiculously the rest of the industry was playing the game.
That's how we ended up with thousands of Jerry Lundegaards- "Well, we've never done this before. But seeing as it's special circumstances and all, he says I can knock a hundred dollars off that Trucoat".

[j2k4]

In answer , no bailout.





Can you tell me where you get this figure from please?

Because I've come up with this

The base pay is about $28 an hour. If health care cost per worker average $12,000 per year, that adds in another $6 an hour. If the pension payment takes up 25 percent of base pay (an extremely high pension), that gets you another $7 an hour, bringing the total to $41 an hour. That's decent pay, but still a long way from $70 an hour.

How does the NYT get from $41 to $70? Well the trick is to add in GM's legacy costs, the pension and health care costs for retired workers. These legacy costs are a serious expense for GM, but this is not money being paid to current workers. The person on the line in 2008 is not benefiting from these legacy costs.

The $28/hr. figure you've cited I have seen mentioned relative to janitorial positions; I hope you can live with this, however:

According to Forbes:

Labor cost per hour, wages and benefits for hourly workers, 2006.

Ford: $70.51 ($141,020 per year)

GM: $73.26 ($146,520 per year)

Chrysler: $75.86 ($151,720 per year)

Toyota, Honda, Nissan (in U.S.): $48.00 ($96,000 per year)

According to AAUP and IES, the average annual compensation for a college professor in 2006 was $92,973 (average salary nationally of $73,207 + 27% benefits).

Bottom Line: The average UAW worker with a high school degree earns 57.6% more compensation than the average university professor with a Ph.D. (see graph above, click to enlarge), and 52.6% more than the average worker at Toyota, Honda or Nissan.

Many industry analysts say the Detroit Three, and especially Ford, must be on par with Toyota and Honda to survive. This year's contract, they say, must be "transformational" in reducing pension and health care costs.

What would "transformational" mean? One way to think about: "transformational" would mean that UAW workers, most with a high school degree, would have to accept compensation equal to that of the average university professor with a Ph.D.

[clocker]

Some marginally interesting news...
The representatives for the Big Three flew to Washington to beg for money in a Ford corporate jet.

Really neither here nor there in the greater scheme of things but a stunningly poor move media-relations-wise.
They should have driven down from Detroit in a Chevy Volt.
Oh, wait...

[devilsadvocate]

@j2k4

That's labor cost per hour, which is different from wage received and seems to include the legacy costs.

[j2k4]

@j2k4

That's labor cost per hour, which is different from wage received and seems to include the legacy costs.

Yup, and the worth of the contract accruing to the employee equates rather precisely with the cost to the corporation.

What's your point?

[devilsadvocate]

The point is it is a figure that is padded up as a propaganda tool instead of an accurate take home. We don't subtract non employer supplied health insurance or pension costs from hourly wage statements.

I object to bonuses being paid when the companies fail, especially when the payments are to be funded with bailout money. I have no objections to the good wage made by the workers, I don't even object to CEO's getting 6-7-8 whatever million annually. Sometimes I feel they don't earn that money, but When the companies were making the money to fund it that was fine. I do believe now they need to restructure.
Personally I think this starts with losing the management that made the bad product choices, replacing them with good management, then trimming downwards through the grades. The pain should be felt across the board and not just the workers.

This should be done under chapter 11, but I can see how in their case that would make it almost impossible to sell their product as customers like to know their warranty is worth the paper it's written on.