Those greedy UAW workers make $75 an hour.” Wrong. This figure includes total labor costs, which dumps the cost for all retirees into the equation. The average worker on the line actually earns $55,000 a year, which comes to about $28 an hour. With benefits, those numbers have been a lot higher in the past. But after last year’s historic UAW contract, those benefits get whacked down to levels neaerly equivalent to the transplants.
But the costs for retirees etc are the problem. Yeah Yeah yeah...new hires get less going forward. If there are new hires. In the meantime the big 3 pay laid off employees 95% of their pay.
Dunno...seems passing strange that Toyota and GM sold almost the same number of vehicles and Toyota made around 17billion while GM lost 38billion.
>>Dunno...seems passing strange that Toyota and GM sold almost the same number of vehicles and Toyota made around 17billion while GM lost 38billion.<<
Yes, and the author didn’t mention that.
Another thing not mentioned is that even if a restructuring relieves the auto companies of their obligations to pay retiree benefits, the taxpayers are still on the hook.
The PBGC, which is another one of those “semi-government” corporations, would cover UAW retirees up about $50K a year for pensions, but the PBGC itself probably had significant investment losses lately, like everybody else. If the PBGC itself went bankrupt, (and IMO that would be likely if it had to cover the UAW pensions), although the PBGC is not funded from tax revenue today, what do you think the odds are of another bailout?
The PBGC does not cover medical benefits for retirees, so there would be another bailout in the future.
Plus, with all those unemployed UAW people, tax revenues, child support payments, etc. etc. would be reduced, so I predict we are going to be sick when we hear the word word “bailout.”
Tommy Lee Jones played a sheriff in the movie “No Country for Old Men. After he saw the bodies from a drug deal massacre, a deputy said, “It’s a mess, ain’t it, sheriff?” The sheriff answered, “If it ain’t, it’ll do till the mess gets here.”
The 38 billion loss is the result of restructuring costs...they have been seriously restructuring. This cost money. The economic tsunami caught them at a bad place in this endeavor.
Not strange at all. The big 3 have the cost of retirees and health benefits. A Toyota plant is new so no legacy costs. Plus they get hunderds of millions in tax breaks to locate there. And their profit goes WHERE? Japan of course