The myth that unions destroyed the auto industry, it was all poor products and loss..

[Gipper]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

I agree with you here. Once GM (example) has invested in an employee's training? They want to keep him. They want him happy and well paid.

You might agree with me, though, that an employee going in probably possesses no special skills in order to be hired? (Other than the ability and willingness to learn?)

No business likes high turnover, but that doesn't mean that they should cave to artificially high market wages to retain staff. Besides, GM employees could easily live on half their wages.

I've been to a number of auto plants. Their parking lots look like new car dealerships - high-end stuff too, not just some cheap, reliable "Option A" vehicle.

 

[Kushinator]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

It's an unskilled job until the company invests in you and trains you. No special degrees or training needed out of the box.

99.9% of union labor is trained through apprenticeship programs, unless of course someone is extremely connected AND can perform on par with their union counterparts. Automobile manufacturing is not low-skilled labor.

 

[Paschendale]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

It's an unskilled job until the company invests in you and trains you. No special degrees or training needed out of the box.

So then many auto workers would certainly qualify as skilled. Anything involving complex machinery (which includes a lot of factory workers right now), or anything involving computers beyond word and excel, requires specialized training.

 

[Gimmesometruth]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

I agree with you here. Once GM (example) has invested in an employee's training? They want to keep him. They want him happy and well paid.

You might agree with me, though, that an employee going in probably possesses no special skills in order to be hired? (Other than the ability and willingness to learn?)

This getting silly, you want to talk about $55/h workers (whereas the average take home pay is less) and now you believe that those making this level are "unskilled".

It took quite a number of posts to convince you that union assembly workers were not designing the cars, I don't know if it is worth my time showing you that average workers are quite skilled.

 

[Gimmesometruth]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

Then hand a hundred bucks to the grocery store manager every time you shop, to help boost the income of the skilled laborers at the check out lines.

I need a clarification from the judges on this one......does this qualify for an urp or a derp?

 

[clownboy]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

Hmmm, not yet mentioned is gas mileage. That was a huge factor and the US car manufacturers failed to react to that market. They also failed to react to the changing social trends. Still fail in some aspects.

Yes, their overall failure wasn't completely due to union demands. But their inability to react to market pressures wasn't all on the designers, unions must share some of that blame.

And a question for those who claim to be in the know, aren't the auto designers union as well?

 

[KevinKohler]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

Some engineers are, but not designers. Designers rely on reputation, their name is their brand. They are free agents, for the most part.

Not that it makes THAT big a difference. Most cars appear to be designed using tracing paper, lol.

 

[austrianecon]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

(continued from topic title) in market share....

The myth that unions destroyed the auto industry:

"Autoworker wages didn’t make the Big Three uncompetitive by driving prices up; poor value drove prices down. As prices and quality fell together, consumers fled. The UAW’s contracts were almost irrelevant. One way to show this is to compare the pricing of the competitors’ vehicles with the size of the labor cost differential bargained by the UAW. Labor costs make up only 10 percent of the cost of a typical automobile. Before the auto rescue, the Big Three paid $55 an hour in compensation per auto worker while the Japanese paid only $46 an hour. (Company lobbyists and publicists inflated the total Big Three labor cost to $71 by attributing the unfunded pension and health benefit costs for decades of retired workers to the much smaller currently employed workforce2; the legacy costs for Japanese transplants were only $3 an hour.)3 But even if, for the sake of argument, we accept the unfairly inflated $71 figure, the difference in the cost of a vehicle attributable to the UAW (the UAW premium) would be 30 percent of the average 10 percent labor cost, or 3 percent of total cost."

"In 2008, according to Edmunds, GM sold its average large car for $21,518. Assuming GM sold its cars at cost, the UAW premium would have been only $645 (3 percent of $21,518). Did the UAW premium raise the selling price so high as to make GM cars uncompetitive with Toyotas? Not exactly. Toyota sold its comparably equipped average large car for $31,753—$10,000 more than GM.4 It wasn’t price that made GM cars uncompetitive, it was the quality of the product and the customers’ perception of quality."

"“… the U.S. automakers’ loss in market share during the past decade can be explained almost entirely by the difference in the basic attributes that measure the quality and value of their vehicles. Recent efforts by U.S. firms to offset this disadvantage by offering much larger incentives than foreign automakers offer have not met with much success. In contrast to the numerous hypotheses that have been proffered to explain the industry’s problems, our findings lead to the conclusion that the only way for the U.S. industry to stop its decline is to improve the basic attributes of their vehicles as rapidly as foreign competitors have been able to improve the basic attributes of theirs.”

- See more at: Management

Omg.. if it was anymore propagandist I would have thought this was something from Nazi Germany.

Unfunded pension and health benefit costs for decades of retired workers are part were part of UAW's agreement with GM. They had to be met. GM works got sweet ass labor deals such as if a plant had reduced work periods, no worker would take leave without pay but rather get 95% of their salary during that period of "leave". Basically, they got paid not to work. They only had 1 worker per 4.6 million retiree in the pension system.

As Leonard Woodcock (Former UAW President) said: “Our members have the best contract that people with their skills and education could ever hope to get. But we have convinced them that with every new contract, they are entitled to more.”

 

[JP Hochbaum]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

Sure they didn't. Feel free to think that if you want, and keep quoting biased sources to defend your bias.

Unfortunately, I have an economics background, and I know the score. I don't need some left-wing joke sources to tell me how it isn't.

Facts aren't left or right leaning, they are facts. Feel free to try them sometime.

 

[JP Hochbaum]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

Omg.. if it was anymore propagandist I would have thought this was something from Nazi Germany.

Unfunded pension and health benefit costs for decades of retired workers are part were part of UAW's agreement with GM. They had to be met. GM works got sweet ass labor deals such as if a plant had reduced work periods, no worker would take leave without pay but rather get 95% of their salary during that period of "leave". Basically, they got paid not to work. They only had 1 worker per 4.6 million retiree in the pension system.

As Leonard Woodcock (Former UAW President) said: “Our members have the best contract that people with their skills and education could ever hope to get. But we have convinced them that with every new contract, they are entitled to more.”

None of that says anything to the fact that the big three mismanaged themselves into this mess, not the unions.

 

[specklebang]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

American cars are the lamest in the world. Finally, they seem to have gotten the quality thing down but their designs are still off. Add that to the misery of their labor costs and if it weren't for the truck, we wouldn't have an American car industry.

 

[austrianecon]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

None of that says anything to the fact that the big three mismanaged themselves into this mess, not the unions.

Are you serious? Let's actually have you play the role of a CEO. Your Company is Unionized. You need your workers to work or you can't rollover corporate debt. Now a labor contract is expiring in 2 days. You don't want to pay out the increase of benefits but you can't allow a strike to happen or for very long or you fall into default on your rollover corporate debt. You as CEO and your board have absolutely no power. The Union knows you need to settle the dispute in 2 days and you probably have about 5 days or so before you have to rollover corporate debt. They have you by the balls, they know it, you know it and Wall Street knows it.

What do you do? Do you risk a strike lasting longer then 5 days or even Federal Judges or someone from the Labor Department from coming in and trying to negotiate a deal? Do you risk borrow costs jumping dramatically? Do you risk bankruptcy?

I would risk it all and try to break the unions power but I find unions dinosaurs in within the United States with all the labor laws and I am not afraid of being the bad guy.. Would you? I am thinking you would be pragmatic like most CEOs and take the deal because you don't want to be known as the man or women who destroyed millions of jobs overnight. That's where the power comes from.

 

[FederalRepublic]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

(continued from topic title) in market share....

The myth that unions destroyed the auto industry:

"Autoworker wages didn’t make the Big Three uncompetitive by driving prices up; poor value drove prices down. As prices and quality fell together, consumers fled. The UAW’s contracts were almost irrelevant. One way to show this is to compare the pricing of the competitors’ vehicles with the size of the labor cost differential bargained by the UAW. Labor costs make up only 10 percent of the cost of a typical automobile. Before the auto rescue, the Big Three paid $55 an hour in compensation per auto worker while the Japanese paid only $46 an hour. (Company lobbyists and publicists inflated the total Big Three labor cost to $71 by attributing the unfunded pension and health benefit costs for decades of retired workers to the much smaller currently employed workforce2; the legacy costs for Japanese transplants were only $3 an hour.)3 But even if, for the sake of argument, we accept the unfairly inflated $71 figure, the difference in the cost of a vehicle attributable to the UAW (the UAW premium) would be 30 percent of the average 10 percent labor cost, or 3 percent of total cost."

"In 2008, according to Edmunds, GM sold its average large car for $21,518. Assuming GM sold its cars at cost, the UAW premium would have been only $645 (3 percent of $21,518). Did the UAW premium raise the selling price so high as to make GM cars uncompetitive with Toyotas? Not exactly. Toyota sold its comparably equipped average large car for $31,753—$10,000 more than GM.4 It wasn’t price that made GM cars uncompetitive, it was the quality of the product and the customers’ perception of quality."

"“… the U.S. automakers’ loss in market share during the past decade can be explained almost entirely by the difference in the basic attributes that measure the quality and value of their vehicles. Recent efforts by U.S. firms to offset this disadvantage by offering much larger incentives than foreign automakers offer have not met with much success. In contrast to the numerous hypotheses that have been proffered to explain the industry’s problems, our findings lead to the conclusion that the only way for the U.S. industry to stop its decline is to improve the basic attributes of their vehicles as rapidly as foreign competitors have been able to improve the basic attributes of theirs.”

- See more at: Management

I wouldn't disagree with some of what you've said, except that you've specifically exempted the people who made higher-than-market wages to put together p.o.s. cars from responsibility. In the 70's, 80's and 90's, Japanese cars were cheaper, more reliable, and had better fuel economy. The combination of higher price and lower quality should have, in a non-union world, led to a major shake-up in the companies. It doesn't take a genius to see how the Japanese car makers handed GM, Ford, Chrysler their asses. I would agree that their business models were the primary driver, but paying union workers higher than market wages was part of the business model that made cars more expensive. I would argue that quality also suffered as a result of union contracts, but I don't think that's the primary source of quality problems in the auto industry...

 

[JP Hochbaum]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

Are you serious? Let's actually have you play the role of a CEO. Your Company is Unionized. You need your workers to work or you can't rollover corporate debt. Now a labor contract is expiring in 2 days. You don't want to pay out the increase of benefits but you can't allow a strike to happen or for very long or you fall into default on your rollover corporate debt. You as CEO and your board have absolutely no power. The Union knows you need to settle the dispute in 2 days and you probably have about 5 days or so before you have to rollover corporate debt. They have you by the balls, they know it, you know it and Wall Street knows it.

You are missing the major part of this story, before this all happened the CEO managed the big three from a market share of 77% to 44%. Whatever way you spin it the mismanagement happened first.

 

[JP Hochbaum]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

I wouldn't disagree with some of what you've said, except that you've specifically exempted the people who made higher-than-market wages to put together p.o.s. cars from responsibility. In the 70's, 80's and 90's, Japanese cars were cheaper, more reliable, and had better fuel economy. The combination of higher price and lower quality should have, in a non-union world, led to a major shake-up in the companies. It doesn't take a genius to see how the Japanese car makers handed GM, Ford, Chrysler their asses. I would agree that their business models were the primary driver, but paying union workers higher than market wages was part of the business model that made cars more expensive. I would argue that quality also suffered as a result of union contracts, but I don't think that's the primary source of quality problems in the auto industry...

The wages were only 3% higher than Japanese wages, which comes out to about $200 a car. The wages were not the issue, especially since American cars were cheaper!!!!

 

[KevinKohler]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

99.9% of union labor is trained through apprenticeship programs, unless of course someone is extremely connected AND can perform on par with their union counterparts. Automobile manufacturing is not low-skilled labor.

Link to a source for that? All the closed shop union shops round here in CT have no such apprenticeship...you get the job based on connections, and it takes about 3 hours to become a "skilled laborer". And that's at a helicopter manufacturing plant. Outa be pretty similar to making cars.

 

[iguanaman]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

$55 an hour for unskilled labor is hardly a middle-class lifestyle.

That's just what they said when Henry Ford promised all his workers at least $5 a day in 1914. That's about $110 in todays money.

On January 5, 1914, Henry Ford announced a minimum five dollar salary for all elegible employees working eight-hour days. It was conceived as a profit-sharing plan which would motivate Ford employees to adopt efficient and productive habits at both the factory and the home.

The Ford Sociological Department was created to administer the plan by sending field agents into the community to visit workers at home to determine the quality of their home lives. It was believed that influencing the behavior of employees at home would turn them into better workers. All employees over 22 were eligible for the plan, which included a shortened work day from nine to eight hours in addition to the opportunity to earn five dollars per day. In order for a worker to be eligible to receive his share of the company's profits he "must show himself to be sober, saving, steady, industrious and must satisfy the...staff that his money will not be wasted in riotous living." Workers who didn't comply risked being payed half as much for performing the same work as their co-workers, and could eventually lose their jobs.

Ford's plan invoked a variety of responses. Workers viewed him as a friend, while many businessmen viewed Ford's idea as reckless. The Wall Street Journal called it blatant immorality-a misapplication of "Biblical principle" in a field "where they do not belong." Ford disregarded his criticisms because he knew the importance of acknowledging the human element in mass production. He believed that retaining more employees would both lower costs and lead to greater productivity. His beliefs proved his critics false, as the company's profits doubled from $30 million to $60 million between 1914 and 1916. "The payment of five dollars a day for an eight-hour day was one of the finest cost-cutting moves we ever made," Ford said.

Other benefits also resulted in the implementation of the Five Dollar Day. It dissolved the effort to unionize the Ford factory and also turned auto workers into autocustomers. Their purchases brought some of Ford's own money back to him which increased production and lowered per-car costs.

The Five Dollar Day

 

[MaggieD]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

That's just what they said when Henry Ford promised all his workers at least $5 a day in 1914. That's about $110 in todays money.



The Five Dollar Day

Henry Ford realized that, if his company was to grow, his employees (representing the larger segment of American society from an economic standpoint) had to be able to afford his cars. Good on him.

I don't get your point, though.

 

[iguanaman]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

Henry Ford realized that, if his company was to grow, his employees (representing the larger segment of American society from an economic standpoint) had to be able to afford his cars. Good on him.

I don't get your point, though.

The point is that giving workers higher pay does not mean a company fails. Fords profits increased as a result of the doubling of average worker wages.

 

[Kushinator]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

Link to a source for that? All the closed shop union shops round here in CT have no such apprenticeship...you get the job based on connections, and it takes about 3 hours to become a "skilled laborer". And that's at a helicopter manufacturing plant. Outa be pretty similar to making cars.

LOL, you ask me to provide a source only to "annecdotally" refute my statement.

 

[soot]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

If our system can only function when workers have to take the short end of the stick and it falls apart when they require decent pay...

So ~$120,000 a year is just "decent pay" for a high school graduate who has no real skills turning a wrench on an assembly line?

What would you consider "good" pay for mindlessly repeating the same task while standing in the same spot?

 

[KevinKohler]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

LOL, you ask me to provide a source only to "annecdotally" refute my statement.

And yet...no source.


I, however, can provide...

How to get a job at skorsky? - Sikorsky Jobs | Indeed.com

Philip Greenspun's Weblog » Sikorsky’s Chinese factory starts producing

And not for nothing, you can ask most anyone that works there, the jobs cake. The training they get consists of liability ****, safety, OSHA, etc. as for actually doing the job? Minimal training needed for most positions that are hourly(union).

 

[clownboy]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

Facts aren't left or right leaning, they are facts. Feel free to try them sometime.

There are three types of liars. Liars, damn liars and statistics. Just as meaningful/meaningless a statement.

The bias surrounding true facts is in how they're presented. The Robert Reich set are masters at presenting facts in such a way that the truth of the matter is absent.

 

[Mach]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

Unions have destroyed, and are currently destroying, a lot of industries/companies. Auto is just a big shameful one.

Yes your propaganda from union groups promotes the opposite, no different than big oil promotes how clean hydraulic fracturing is.
You do understand that in politics both sides have a mountain of opposite statistics, data, etc. The issue has to do with individual freedom in the economy. Either we can control the business they we own and operate, or politicians catering to get votes from workers restrict business in favor of drastically increasing operating costs (labor, legal, pension, and otherwise), ensuring they are set up to fail long-term if there is any sort of outside competition. Of course if there isn't' competition, its downright criminal to then milk the taxpayer via unions (see public education).

God damned criminals the lot of them.

 

[JP Hochbaum]

Re: The myth that unions destroyed the auto industry, it was all poor products and lo

There are three types of liars. Liars, damn liars and statistics. Just as meaningful/meaningless a statement.

The bias surrounding true facts is in how they're presented. The Robert Reich set are masters at presenting facts in such a way that the truth of the matter is absent.

Yes, stats lie sometimes, I totally agree. But if you can't point out the lies in them, then you are too ignorant to do so, or are the one lying.

So please respond with a valid retort.