Posted on 11/18/2008 7:20:15 PM PST by Ernest_at_the_Beach
There’s a big push on in Washington to bail out the Big Three automobile companies. It’s the usual “crisis” scenario where scare headlines predict woe and economic gloom if something isn’t done NOW!
But would a bailout of the Big Three actually solve their problems? No. But it would make sure unions which have held these companies hostage to a failing business model don’t get hurt.
Consider this:
GM also famously spends over $1,600 per vehicle on the healthcare costs of current and retired U.S. workers while Toyota pays about $200 per vehicle. Although GM also pays about another $1,000 per vehicle on holiday pay, work rules, plant-shutdown-pay and line-relief to UAW workers — expenses Toyota, for example, does not have.
And this from the Wall Street Journal:
GM has about 7,000 dealers. Toyota has fewer than 1,500. Honda has about 1,000. These fewer and larger dealers are better able to advertise, stock and service the cars they sell. GM knows it needs fewer brands and dealers, but the dealers are protected from termination by state laws. This makes eliminating them and the brands they sell very expensive.
(Excerpt) Read more at floppingaces.net ...
You can bet your ass that the U.S. taxpayers are about to get stuck with paying union thug pensions and also for their heathcare benefits.
Does anyone know more about these state laws that keep smaller car dealers from going out of business?
If GM has 7500 dealers vs. 1000 to 1500 for competitors, that’s a huge amount of overhead right there that they have to absorb. And that’s in addition to the union work rules, benefits, etc. I thought that Toyota, Nissan, etc. workers at the plants in this country were UAW members too, aren’t they?
That's the garbage that put International Harvester out of business.
7,000 dealers ~ in a country with 3142 counties ~ that's more than the combined total of Democrat and Republican county chairmen for their respective parties!
It's almost like the interstate highways weren't built, or that cars were "rare and wondrous" treasures.
I think that's easily ten times the number of serious "salvage" yards.
The unions GOT obama and the democrats elected.
Any questions?
Not from me.
As far as UAW membership is concerned, that's pretty much concentrated in Indiana, Michigan, Ohio and Wisconsin. It's pretty much a regional, industry related union without a widespread national base.
Most workers in newer non-Detroit based autoplants are NOT unionized, nor do they wish to be unionized. Autoworkers are highly paid, whether unionized or not.
If my math is correct and the average Big 3 autoworker makes about $75 an hour (saw that on an earlier thread), and assuming a 35 hour work week and 52 weeks in a year with 465,000 UAW members (membership has been declining), then the government could wipe out the taxes UAW members pay this year and save $12B of the $25B GM, Ford, and Chrysler want. Instead let the UAW members split $400M as payback for the $400M the UAW spent to elect Obama. Give it to the UAW and see how much gets distributed to the rank and file workers. Since this can be viewed as a payback by DemocRATs for getting their guy, Barry Hussein, elected - call it that. $13B can then be spent on retooling. Better yet, let the Big 3 go bankrupt and void the union contracts. They will emerge from bankruptcy in a competitive position with the foreign cars (a lot of which are manufactured here).
Big Three Bailout? Not So Fast
**************************EXCERPT**************************
One of the best reasons why Detroit automakers should not receive a bailout can be found in a General Motors "Jobs Bank" program that, bizarrely, pays employees not to work.
A beneficiary of that program was someone named Jerry Mellon, who worked for GM until his division merged with another in 2000 and he was no longer needed. Except for a brief period in 2001, Mellon received his full salary for not working, which reached $64,500 a year by 2006. Include benefits, and the annual cost to GM exceeds $100,000.
To earn his pay, Mellon was given the formidable task of showing up in a windowless shed, sitting at a table, and doing nothing for eight hours a day for six years, according to a profile in the Wall Street Journal. Jobs Bank employees have the option of attending classes teaching such important manufacturing skills as dealing blackjack and poker.
Crony Capitalism, Predatory Politicians, and the Detroit Three
Auto workers don’t earn near $75 per hour. A long term worker will earn around $28 per hour. Under the latest contract, new workers will earn around $15 per hour.
This is moral hazzard. This is why we need to rescind ALL bailout offers.
That is the question....
I am against any bailout unless the UAW and its members take about a 40% haircut on Wages and fringes. The same applies to the AutoMakers.
Why should AMERICANS pay for the corrupt unions bailout if they won’t take a haircut too. Enough is enough.
I realize there are cost in addition to the basic wage paid the employee. My only concern is that in our zeal to demonize the union, we loose sight of the concessions already agreed to by them and the vast quality improvements made by the manufactures. I recommend the Business Week article at the following link for a good comparison between GM and Toyota.
http://www.businessweek.com/magazine/content/08_17/b4081038999094.htm?chan=magazine+channel_news
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