world

U.S. auto bailout deal collapses over union wages

46 Comments

The requested article has expired, and is no longer available. Any related articles, and user comments are shown below.

© Copyright 2008/9 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

©2019 GPlusMedia Inc.

46 Comments
Login to comment

Good riddance to bad rubbish. I agree with the GOP on this one, for a change. Perhaps the union reps can all sit around drinking coffee and talk about how their stubborness and refusal to work for their money caused the loss of their jobs. The union contract is not set to expire until 2011, but how does that work if the companies collapse?

Again, goodbye to bad rubbish.

0 ( +0 / -0 )

Prediction - At least 9% unemployment within 6 months and it could rise to 10% before it's over. Yep, it's the last chance that the republicans had to screw the democrats. The auto industry touches so many more people that this will domino to greater numbers than expected. < :-)

0 ( +0 / -0 )

Holy crap...the dollar is at 89 yen and dropping like a stone, the Nikkei is plummeting...

0 ( +0 / -0 )

Congrats, UAW.

0 ( +0 / -0 )

these companies will need to go into bankruptcy, dump the unions, dump the severance packages, dump the pensions and come out anew. Stockholders will be left with nothing of course.

Buick #1 in China, it's not exactly a quality issue, it's a money issue. GM is one of the last companies to be paying pensions. Some people make 5k+ a month off their GM pensions. GM can barely afford that. Should be all 401k now.

Unions are making a big mistake here.

0 ( +0 / -0 )

http://news.yahoo.com/s/ap/20081212/ap_on_go_co/auto_workers_pay_glance_1

...."Hourly wages for United Auto Workers laborers at General Motors Corp. factories actually are almost equal to those paid by Toyota Motor Corp. at its older U.S. factories, according to the companies. GM says the average UAW laborer makes $29.78 per hour, while Toyota says it pays about $30 per hour.

The difference is in benefits, with the unionized factories having far higher costs.

GM says its total hourly labor costs are now $69 including wages, pensions and health care for active workers, plus the pension and health care costs of more than 432,000 retirees and spouses. Toyota says its total costs are around $48. The Japanese automaker has far fewer retirees and its pension and health care benefits are not as rich as those paid to UAW workers."

0 ( +0 / -0 )

Hope the members of the UAW didn't go nuts back on Black Friday.

0 ( +0 / -0 )

Are the union heads acting independently or what??? Are they taking money from foreign auto makers perhaps? I doubt the union member employees support this unless they know something we don't.

0 ( +0 / -0 )

Prediction: Wall Street crashes overnight, bill supporters say "look what's gonna happen if the bailout doesn't go ahead", bill gets reluctantly approved.

Sounds like something we've seen before...

0 ( +0 / -0 )

A case of the parasite (UAW) killing its host (Big 3).

Enjoy the last drop of the blood, UAW.

0 ( +0 / -0 )

Prediction: Wall Street crashes overnight, bill supporters say "look what's gonna happen if the bailout doesn't go ahead", bill gets reluctantly approved.

Sounds like something we've seen before...

precisely, today Asian Stock markets are proving the same.

0 ( +0 / -0 )

Good article on NYT website "$73 an Hour: Adding It Up". Key points are that the cost of benefits for retirees are $15 an hour (as part of the hourly wage), and that labor costs make up only 10% of the cost of producing a vehicle. Writer concludes the Big3 in their present form are pretty much toast with or without a bailout package.

Anyways, it will be interesting to see exactly what demands the UAW refused to accept. As it stands now, the decision doesn't look too bright.

0 ( +0 / -0 )

travel advistory issued for all Japanese travellers and look-alikes: high pressure storm cloud system and tornado alert for the greater Detroit and metro area.

don't go there. it's a ghetto anyway.

0 ( +0 / -0 )

Don't understand the logic of all this. From an industrial strategy point of view, it makes good sense that the US have a healthy car industry. Then again, you could easily argue that such an industry could be represented by the non-US interests (Japanese, German, etc.) that have transferred production facilities to the US for reasons of political expediency.

I also don't understand the mentality of these unionists. If the Big 3 are really up against the wall, surely all stakeholders have to make some concessions. This includes the unionists. Just a thought, if Christmas for Big 3 automaker employees sux this year, it will be even worse next year if the companies no longer exist.

0 ( +0 / -0 )

Kenji actually brings up a rather interesting point. I've always felt that that most Americans have gotten wiser and more enlightened from the days neanderthals were gleefully stirring up anti japanese sentiments, the likes of which spurred the killing of Vincent Chin. But I truly wonder, one thing that has been constant in life is that it is human nature to scapegoat others for misfortunes in life. Especially if the target of your hatred is anything related to japan, even if relations between the U.S. and Japan are better now compared to decades ago, anything can and will spark anti japan sentiments in the U.S. With such a history between the two (especially in regards to world war 2), Japan/Japanese make convenient targets of hate.

With that recent news of that idiot in south carolina using racially insulting terms to attack japanese cars and the people that buy them, and with the enthusiastic support he got, I really am worried that we will once again see the era of the 80's and early 90's when hating japan was a moral right. I know that the UAW and auto execs would rather their workers and the american public direct their anger and hate towards japan, than having to look themselves in the mirror.

If you are of japanese origin or look asian, be afraid. Very afraid.

0 ( +0 / -0 )

rjd_jr: Not too many people are looking at Japan as any kind of aggressor here, and the few that are are known to be nuts, methinks. So don't come on here and victimize the Japanese, ESPECIALLY in regards to WWII (where it was morally right to hate your Asian neighbours, and still is now, in fact!). No one really cares one iota if you're Japanese or not, save for the said few I mentioned before. YES, it might increase slightly as people in the auto industry lose their jobs and look for someone outside their unions to blame, but you're not nearly in the same kind of danger as if you walk around with a Muslim name, or anything like that.

Bottom line, you don't want to be disliked, don't come on here whining that you are and deserve some kind of victim status for nothing.

I would say that if you are a member of the UAW decision board you should be rightly afraid, but it pretty much stops there.

0 ( +0 / -0 )

RJDjr states...

"Toyota says it pays about $30 per hour."

Really ??? Do the math, as we know the average Japanese worker at Toyota works 12-14 hours a day. At such a rate he should make about $360-$420 bucks a day, or $2,000 plus a week, or $8,000 a month ! Yep, better than $100K a year !!! Orrrr... as many of us have clearly stated, Toyota Japan requires it's workers to work for "FREE" ! There-in lies the problem !

0 ( +0 / -0 )

Auto workers are WAY over payed and pampered. Damn the bloated blood sucking tail-waging-the-dog unions!

0 ( +0 / -0 )

I'm not quite sure what you're talking about smithinjapan. My post has nothing to do with "making japan the victims." My post clearly sounds the warning bell that I wouldn't put it beneath people in the U.S. to start the rallying cry against japanese imports, goods, and the nation itself and anything remotely japanese, simply because of the failure of the big 3. Trust me an outright failure of any of the big 3 or combination thereof, will be a monumental moment in american history such is the tradition of autos in america. And with such catacalysmic failure this will encourage hatred towards all things japanese. When people lose their jobs, again they pick the most convenient targets of their hate and it is relatively easy to hate japan. This has nothing to do with making "japanese victims" or any of that nonsense, this has everything to do with being scared about potential hate crimes from people driven to it by financial conditions. I would gladly be proven wrong but if you didn't know what it was like during the 80's particularly in detroit, then this is not the thread for you.

And also not sure what unklesam's point is. I personally didn't state anything I was quoting an article that stated toyota of USA at its older factories pays its workers about thirty dollars an hour. Not toyota of Japan, toyota of USA. The comparison point being that toyota of USA pays roughly the equivalent per hour as a worker at GM but the union benefits are much higher for GM.

0 ( +0 / -0 )

Well you haven't even touched on the dollar/yen manipulation that the Japanese companies enjoy. This is one of the first times I've ever seen the yen so strong for so long. Any hint of it dropping below 105 used to get the Japanese government to step in to weaken the yen for the specific benefit of their export industries. That was a windfall for companies like Honda and Toyota and a direct cost to the US automakers selling in Japan.

In the end the unions should probably have agreed. They've slowly made a lot of concessions over the years and the big one was the health care pension fund that they agreed to take over in 2010. The problem was that with such a sudden downturn the automakers weren't able to wait that long.

0 ( +0 / -0 )

unklesam: Toyota Japan requires it's workers to work for "FREE"!

If you want to know what Toyota is really like, check out this article:

http://www.corpwatch.org/article.php?id=15182

I know the unions screwed themselves in the US, but I'm hoping Tokoya Japan doesn't try any of these tricks in the US. Those of you who do buy Toyotas, you should check out the system you're supporting.

0 ( +0 / -0 )

Yes, get rid of those high paying jobs, America doesn't need them; only low paying jobs please.

0 ( +0 / -0 )

Even if you got rid of all wage and other disadvantages that posters above are talking about, you would still have the much bigger problem of falling market share for the Big3. And that is caused by other factors. Even if the UAW caved in and the playing field was level with Japan, how does that solve the problem of getting more people to buy their products?

0 ( +0 / -0 )

rjd_jr -- Is there no limit to your imagination or willingness to create pure fantasy in order to bash the U.S.? How in the world can you possibly claim the UAW's unwillingness to settle will become hate crimes aimed at Japanese, and that Japanese people should be "afraid" to be in the states? Please enlighten us all and tell us of any hate crimes aimed at Japanese either living or traveling in the U.S.? Please try to limit the hysterics and stay on the topic -- which is the UAW and the Big 3. Honestly I cannot understand the UAW's position, as this will likley force one or more of the Big 3 into a pre-packaged bankruptcy, which will allow the companies to lower wages, and cut more jobs anyway. But, then again, no one has ever accused union leaders of being the sharpest knife in the drawer anyway.

0 ( +0 / -0 )

And the post of the day goes to: "A case of the parasite (UAW) killing its host (Big 3)."

What a statement and it is totally correct. unions have been getting too much, riding on their heyday when they made sense.

the #2 post goes to Badsey

"these companies will need to go into bankruptcy, dump the unions, dump the severance packages, dump the pensions and come out anew. Stockholders will be left with nothing of course." As for the shareholders, perhaps more of them need to start thinking like investors and of all people should have seen much of this coming. I am sure all of frequent JT'ers have pull our investments out of a bad investment.

"Unions are making a big mistake here." Yeah, but is it going to be politically played that way. According to the article, it isn't.

What is Detroit going to do now? No car companies, crappy teams, and Mo Town is longer a part of it.

0 ( +0 / -0 )

rjd_jr: I'm not going to flog a dead horse here, because this isn't a post about the Japanese and it seems rather pointless to criticize comments about them, but I WILL say that you were painting the Japanese as victims, to an extent.

Don't get me wrong, I'm not saying that PART of what you say is untrue, which I also admitted in the post. I can picture very easily an out-of-work former GM staffer walking down the street, seeing a beautifully made and shining Honda/Toyota and suddenly decided to start kicking it or bashing it with whatever he or she may find at hand. I can also picture similar people getting angry at the Japanese simply out of anger over their situation, and misdirection towards a company which is still thriving, etc. But what were you going on about with the WWII crap? THAT is why I chose to pick on your comment... because you were going off on a rant about how Japanese are historically the victims of unrealistic and misdirected anger, etc.

Drop the woe-is-me Japanese stuff and you're bang on.

Anyway, in general, as I've said, I am happy to see the big three go under. I'm probably not quite taking into account what the ripple affect will do -- hell, the rate of exchange for sending yen back home to Canada already sucks more today (by 5 yen/dollar) than it did this morning! -- but the companies, and clearly the unions, need a good kick in the face and restart. The unions screwed this deal, and no one else... I just hope that's how everyone else sees it (meaning the heaps of people about to be laid-off).

0 ( +0 / -0 )

yeaahhh!! down with the losers.

naff companies which have had decades to sort themselves out shouldn't be propped up, especially after all their loser style complaining.

If they want to not be losers they should use their skills better to understand and make products that more people around the world want. Maybe the us gov can invest in green projecys or infastructure so that the workers that loose their jobs have something better to focus their energy and skills on. Also maybe a chance for them to really turn a new leaf and learn that their gas guzzling ways were long outdated in the world.

Maybe they they realise there are better car companies in the world now.

0 ( +0 / -0 )

The average union wage, which the Big 3 have to pay, is $28 an hour. Non-union workers, who work at the foreign makers, get around $17 an hour. That, along with the astronomical healthcare costs, makes it difficult for the Big 3 to compete.

0 ( +0 / -0 )

GM has a basic two-tier structure for its' hourly workers, something like $12hr starting out --> $18hr. But the older workers are not part of that structure = they make more. GM needs to cut the fat and bankruptcy can do that.

You can't pay assembly work at $40-60hr and be profitable. Should do $12-18hr with profit sharing. Japan companies don't pay that high either, but the bonuses make up for it. Fewer, leaner bonuses these days I would assume --> times are getting tighter for Japanese also.

Would it surprise me if tariffs are again placed on imported cars = No.

0 ( +0 / -0 )

So they say no to pay cuts but because of that it seems that there will be NO pay instead. Is that better?

Bill

0 ( +0 / -0 )

The UAW still think they can dictate the rules to make or break the industry. They are right about the latter one.

0 ( +0 / -0 )

GJDailleult: Even if you got rid of all wage and other disadvantages that posters above are talking about, you would still have the much bigger problem of falling market share for the Big3. And that is caused by other factors. Even if the UAW caved in and the playing field was level with Japan, how does that solve the problem of getting more people to buy their products?

I dunno.....do ya think an extra $50 billion or so in GM's pockets over the last 20 years could have maybe lead to an increase in design quality?

Nah. It's gotta be something else.

0 ( +0 / -0 )

Um, Mods....

The article says the bailout failed because the auto union refused to lower their hourly wage to match that of Japanese competitors. Obviously an article talking about the working standards of Japanese auto workers is relevant, especially one mostly talking about the issue of unpaid overtime, which obviously is part of calculating someone's real hourly wage.

You don't have to take my word on it. Spend a minute and actually read the article you published above and you'll see.

unklesam: Toyota Japan requires it's workers to work for "FREE"!

If you want to know what Toyota is really like, check out this article:

http://www.corpwatch.org/article.php?id=15182

I know the unions screwed themselves in the US, but I'm hoping Tokoya Japan doesn't try any of these tricks in the US. Those of you who do buy Toyotas, you should check out the system you're supporting.

Moderator: The above is just an anti-Toyota rant.

0 ( +0 / -0 )

I don't disagree SuperLib. You could even argue that the financial pressures led to more short-term thinking, like producing the gas guzzlers that had always made money in the past and so were safe. I am just saying that now the problem is much more than just the cost structure. Fix that and you still have the main problem. Doesn't matter if you pay your workers $5 an hour or $50, if nobody wants what you are selling you will go bankrupt, just a question of how fast. (And I don't mean that NOBODY wants their products, that is just to explain what I mean).

0 ( +0 / -0 )

GJDailleult: "Doesn't matter if you pay your workers $5 an hour or $50, if nobody wants what you are selling you will go bankrupt, just a question of how fast."

As you don't disagree with SuperLib, I don't really disagree with you here, either. But methinks the increase in design quality he spoke of could may well be also the cause for the increase in product interest you say is necessary.

Either way, they blew it.

0 ( +0 / -0 )

smithinjapan- Two separate issues here I think. One is long term, how to rebuild the US (and Canadian!) car industries. If that is the issue then SuperLib and others have some good points. Two is short term, you have two companies who say they need billions in the next few months to survive, and a third in almost as bad shape. And if one goes under, they all will, because one bankruptcy will likely wipe out their parts suppliers. Fixing issue one is not going to happen in time to affect issue two. Whether they should be allowed to go under or not, that's another question. But the solutions talked about here will be too late in any case.

0 ( +0 / -0 )

The short sellers are going to make a lot more money today than was on the table. Did the senate vote down the bailout to help their short selling campaign contributors?

0 ( +0 / -0 )

I really think that the UAW should call the Senate's bluff and agree to the wage cuts provided only that the Senators take the same percentage cut and give up health care for retired Senators.

0 ( +0 / -0 )

I really think that the UAW should call the Senate's bluff and agree to the wage cuts provided only that the Senators take the same percentage cut and give up health care for retired Senators.

AGREED!!!! I'd also like campaign contributions by the UAW be banned also.

Your thoughts...Sez

0 ( +0 / -0 )

Sure, as long as we ban campaign contributions from all other organizations and allow personal contributions only.

0 ( +0 / -0 )

Sure, as long as we ban campaign contributions from all other organizations and allow personal contributions only.

Agreed again

Darn that McCain

The Bipartisan Campaign Reform Act of 2002 (BCRA, McCain–Feingold Act, Pub.L. 107-155, 116 Stat. 81, enacted March 27, 2002) is United States federal law that amended the Federal Election Campaign Act of 1971, which regulates the financing of political campaigns. Its chief sponsors were Senators Russell Feingold (D-WI) and John McCain (R-AZ). The law became effective on 6 November 2002, and the new legal limits became effective on 1 January 2003.

http://en.wikipedia.org/wiki/Bipartisan_Campaign_Reform_Act

0 ( +0 / -0 )

OK smithinjapan, agreed then. I wasn't trying to paint japanese as victims or any of that sort. I was just referencing world war 2 because obviously the past relations between japan and the U.S. do still affect the relations between the two today. I was never trying to make it seem as if japan was the victim in world war 2 or anything remotely of that nature. The fact is again, though relations between the two today are good, something like this can light a fuse and the past bad blood between the two nations is an easy catalyst for that out of work auto maker.

0 ( +0 / -0 )

It would be a huge shock to the families relying on UAW wages to suddenly find themselves facing a family budget that was greatly reduced. That would be a disaster for most of us. So what the Senate GOP is insisting on is simply unrealistic.

I don't think the auto companies should be bailed out unless their senior management, BoD, etc are sacked. At least those guys are rich enough that they have a cushion to fall back on. Plus they made the mistakes that got the US auto industry into this mess in the first place. But that's a different discussion.

Sezwho, I like your litmus test. I would love to see the senate get sacked too. And the house. They seem to have dug a pretty big hole for the US as well.

At least GWB is almost history.

0 ( +0 / -0 )

Way to go UAW...now we can kiss the big 3 goodbye, and all your jobs with it.

0 ( +0 / -0 )

Here's 3 links that don't seem too far off about UAW wages.

I think that the GOP is just trying to bust the UAW.

I hear how the auto labors are being paid too much. But I have to ask you, each one of you posters, how much do you make an hour? How much is put away by your employer for your retirement and health insurance, etc. How much in direct and indirect benefits. Now wrap all this together and how much do you make?

Now compare what you get and what UAW autoworkers make. You want trained and experienced workers, you have to pay a decent wage.

I retire 14 months ago and I remember the $100 + hourly wages that were being paid to computer programmers and consultants. And you want to complain about honest wages.

This is just an attempt by the GOP to hurt the middle class once again and bust up the UAW. < :-)

http://www.uaw.org/barg/07fact/fact02.php

http://www.autoblog.com/2008/04/05/that-was-easy-uaw-and-gm-agree-on-lower-wages-after-six-months/

http://www.forbes.com/feeds/ap/2008/11/19/ap5717126.html

0 ( +0 / -0 )

Remember if there was to be any money going to the Big 3 then according to the USA Govt not one penny was to go to outsiders. So no one is to assume Cdn plants would benifit.

I go along with the thinking of Smithinjapan that if you produce or offer something others do not want then you are not going to sell it.

Also seems that rid jr is yattering about WWII to even in the 80s to 90s & what went on during the 80s or 90s for WWII was over & people were learning to forget WWII hard feelings?

I do not know what State, city, or town rid-jr lives in, but I live in a small town in the Okanagan Valley of B.C. Canada. From the day I moved here in '60 so many of my Japanese, Chinese or other Asian neighbors/farmers were my friends as well. While greater percentage of us are Whities from all over. True we have had people from Indian, Pakistan with various religions, but what the heck there is no grief other then them slowly becoming Canadians.

This matter of products made in Japan to Japanese people, good gosh you should look at Walmart, Home Hardward, Canadian Tire to so many other firms to even the Hudson Bay Company & others we are being FLOODED with products MADE IN CHINA that only sell because they are cheap in price though not well made. Soon most of the scooters will be made in China, to good probability even Chinese made cars. Thing is that rather then your bit of trying to frighten those that own cars/trucks made in Japan or same made in the USA by Jpn plants in USA to your warning to Japanese people.

Lastly can you tell a Japanese person apart from one that is Chinese or many of the other Asian population? Persoanlly I cannot.

0 ( +0 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites