backtop

Print E-mail del.icio.us 186 comment(s) - last by The0ne.. on Nov 12 at 11:31 AM
America's two largest automakers are in dire straits -- what will the the government do?

With the good news -- Ford's cool new Fusion and GM's hot upcoming Chevy Volt -- it's easy for some to forget about the dire economic climate for America's top automakers.  Today was a stark reminder of the problems that both Ford and GM are facing -- problems which demand drastic action either internally or externally.

Ford led off the bad news by reporting a $3B USD operating loss.  In the face of dwindling cash reserves, Ford is cutting 10 percent of its salaried worker expenses via pay cuts such as eliminating merit pay, bonuses and the company's matching contributions to their retirement accounts.  It plans on also possibly cutting additional salaried workers.

Hourly workers were hit equally hard.  Ford is cutting an additional 2,600 hourly jobs via buyout packages.  The company already sold two major assets -- Jaguar and Land Rover -- this year to try to generate the cash it desperately needs.  It is looking at potentially selling other brands or resources. 

Ford Chief Executive Alan Mulally says he thinks his company is on the right track, but bemoaned that he sees no end in sight for low demand of autos.  He states, "We believe the downturn in industry volume will be broader, deeper and longer than previously expected."

Losses are expected to continue until 2010.  The quarterly loss was $1.31 a share, much worse than the analyst forecast of 93 cents a share.  Ford's sales dropped 25 percent, while it lost $9B USD in revenue, dropping to $32.1B USD for the quarter.

The only good news for Ford is that it still has the largest cash reserve of any U.S. automaker, with $18.9B USD in cash (despite burning through $6.3B USD in cash this quarter).

The news for rival GM is even worse.  The company is nearly out of cash after posting a mammoth loss.  GM lost $4.2B USD over the quarter, excluding special items.  The loss, which amounted to $7.35 a share, blew away analyst expectations, which were predicting a $3.70 a share loss.

After burning through $6.9B USD in cash over the quarter, GM says that it "will approach the minimum amount necessary to operate its business" during the new quarter.  In a grim assessment, the company reported that its "estimated liquidity will fall significantly short" of the amount it needs to continue operating.

Dave Cole, chairman of Michigan think-tank the Center for Automotive Research says GM is likely to file for bankruptcy unless the government does something.  He states, "This is not something that can go on and be dealt with in the next year, it needs to be dealt with in the next few weeks.  When your cash is gone, you're gone."

Some were speculating a merger between GM and Chrysler, but GM says the talks have been tabled to deal with the cash issue.  GM is planning to cut 10% of salaried employment costs to go with the 20 percent in cuts already planned.  Significant layoffs are expected.  The company is also cutting capital spending in 2009 by $2.4B USD, a move likely to set back many of its programs.

GM is weighing its options after losing $72B USD since 2004.

Both Ford and GM met with lawmakers over the last week to plead for new loans.  They're asking for the lawmakers to allow them to take a slice of the $700B USD bailout pie, something that lawmakers have thus far emphatically refused.  The companies also are asking for the government to double the $25B USD low-interest loans given to them to make fuel efficient cars.

Comments     Threshold


This article is over a month old, voting and posting comments is disabled
should...
By nah on 11/8/2008 9:53:26 AM , Rating: 5
some industries be subsidised--however temporarily ? and if some are--who decides what will be ? why should unemployment matter in some industries and not others ? should umemployment be acceptable in industries which are not efficient ?




RE: should...
By mdogs444 on 11/8/2008 9:59:52 AM , Rating: 5
quote:
why should unemployment matter in some industries and not others ?

Because its the backbone of the US manufacturing industry. Its not just the automakers that would be out, but all the other companies who make parts and services for those automakers. You'd see about a 50% -75% rise in unemployment right there.
quote:
should unemployment be acceptable in industries which are not efficient ?

Its not the cars that are efficient. Its the way they are operated - Unions. The health care and retirement costs in those US industries are what makes them not competitive with other countries. Abolish unions in those fields, increase sales & efficiency, and lower costs of the products.


RE: should...
By nah on 11/8/08, Rating: -1
RE: should...
By mdogs444 on 11/8/2008 10:46:58 AM , Rating: 5
quote:
But manufacturing makes up only 25 of the value of the GDP of the US

Um yes, $3TR of the GDP isnt sufficient?
quote:
Hardly--the automobile industry only contributes to around 10 % of total employment

Yes, and if you get rid of 10% of the employment in the US, how much will the unemployment figures increase? Yes - 50-75%.
quote:
Therefore the industry is inefficient--

The way its operated is inefficient, that's what I said - mostly due to union benefits. There's a reason they are requesting $25B to pay for health care costs of retired workers.
quote:
But this exists in other sectors as well--especially the service sectors--why not subsidize call-centres ?

Err..call centers are not unionized, nor do they typically get benefits of salaried workers. Typically, they are hourly jobs. In fact, most IT jobs are not unionized - as those workers realize that Unions only benefit the bottom of the barrel workers and hold back good workers looking to move up the ladder.


RE: should...
By nah on 11/8/08, Rating: 0
RE: should...
By KernD on 11/8/2008 1:27:49 PM , Rating: 5
quote:
Other industries have such benefits as well---why aren't they inefficient-- ?


They are, the car-making industry isn't the only one in trouble, I hear news every month about places like paper manufacture that close because the market is down and there not competitive, and that's a kind of factory where you need to have the natural resource near, unlike the cars where you can import part from china.

These kind of place have big unions and have been milking there employer of decades. These companies never managed to stand up to those unions, so they will die with them.


RE: should...
By nah on 11/8/2008 7:04:25 PM , Rating: 4
quote:
hear news every month about places like paper manufacture that close because the market is down and there not competitive,


so they close down--they aren't propped up by subsidies


RE: should...
By TSS on 11/9/2008 7:53:43 AM , Rating: 5
it's not just the unions. it's the entire economy. right from CNN:

"On Friday, the Labor Department reported that the U.S. economy sloughed nearly 1.2 million jobs through October. "

meaning untill october this year. it's an article about another 15,000 job cuts in the first week of november.

let them fail, take the hit and start rebuilding. if they can't afford unions they'll get rid of them, or die with them and the next person that sees a market takes them over. thats the thing about a free market, it has it's ups and downs (and resets) but it's the best system we have up untill now.

if GM+ford BOTH get a 25B bailout, while they burned through 6 billion in cash both, they will ask again for one next year. 6 billion in a quarter x4 = 24 billion in a year. and their both predicting 2009 to be worse.

take the hit, kill the company's. why? because if you save them now, once they will go down (and they will), it will cost you everything it costs now + all the bailouts you've given them, which is money lost then.

i figure they know this. their just getting the bailout, securing the assets for the most rich then go out of business. the exec's will stay rich, everybody gets laid off, and it's all payed for by the tax payer. brilliant!


RE: should...
By Dwayno on 11/9/2008 9:19:16 AM , Rating: 3
quote:
let them fail, take the hit and start rebuilding. if they can't afford unions they'll get rid of them, or die with them and the next person that sees a market takes them over. thats the thing about a free market, it has it's ups and downs (and resets) but it's the best system we have up untill now.

There will be no "hit"...unless the hit you are talking about is the same "hit" you get after leaping from a plane without a parachute! The economic impact and the subsequent "ripple" effects will not be felt for years but for decades. And do you think the companies that are going to "fill" the void are going to do so at the same cost level?

In the world of autos, depending on which month, GM is top dog. GM has made, and continues to make, tremendous advancement in that world (GM drove the battery industries to produce the batteries used in the Volt). GM has enormous buying power. The price of cars WILL go up (imagine Intel or Microsoft going out of busines...do you think that their collapsing would not have an impact on the computer or gaming world pricing or that this void can be filled overnight?).

The economic impact of GM closing has already been estimated to cost the taxpayer a minimum of $150 B. in the first year! All the government of the world either owns or subsidizes their auto industries. We are the only country that does not do so.


RE: should...
By TSS on 11/9/2008 1:18:31 PM , Rating: 4
http://online.wsj.com/mdc/public/page/2_3022-autos...

the reason why their failing is because their too big .

if they can't move a truckload of cars, they can't buy in so many parts to make more cars. right now, the american consumer can't afford more cars. downsizing right now is neccesary, if not completly making sense. the gap will be filled. it wont be fast, it won't be pretty, but the result is exactly what we need.

you want to know why i'm so worried, even though i'm not even an american? because of my age.i am 21 years old. i'll have to work till i'm 65, so that leaves another 44 years untill retirement. here's why i'm worried:

it's impossible to borrow money like america has been doing for another 44 years. within my lifetime,i will start working to pay off the national debt

and that is something NOBODY has thought about. ever. even obama and mccain didn't mention it.

even though i know i'm screwed, for a change, i'll take it upon myself to work and solve it. break the chain of greed, and leave a better world for my children, not a worser one.

letting GM/ford fail will bring the proverbial apocolypse. i don't have a doubt about that. but i'm ready to face that. i'm not ready, nor will i ever be, in letting my children face it.

i'm not an american, but the above doesn't just go for america, it goes for the entire globe. america will just be hit the hardest because in america, everything is bigger. and so the crash will be too.


RE: should...
By stilltrying on 11/9/2008 5:36:54 PM , Rating: 3
I would rather them fail now for me than later when my kids have to face it too. By the way the national debts of countries can NEVER BE REPAYED because every dollar (or most countries money) in circulation has interest attached to it by means of a private central bank.


RE: should...
By Lerianis on 11/9/08, Rating: 0
RE: should...
By cokbun on 11/9/2008 11:58:10 PM , Rating: 2
if you're comparing GM to intel, when intel falls people will use AMD, they will replace with whatever replacement is available, named "Honda","Toyota",etc.. maybe this is just their " pentium 4 phase "


RE: should...
By rudolphna on 11/8/2008 5:02:58 PM , Rating: 3
I really hope you are not as big of an idiot as you appear. If the US Domestic car industry shuts down, the economy will crash completely. They make up such a huge part of our economy, that it would be absolutely devastating, and likely, unrecoverable. It is imperative that Automakers stay in buisness.


RE: should...
By walk2k on 11/8/08, Rating: 0
RE: should...
By mdogs444 on 11/8/2008 6:47:48 PM , Rating: 1
Yes it will, and you're being quite naive.

Those workers "just" getting jobs at Toyota and Honda plants will just send more US money outside of our own domestic economy, cripple ourselves while boosting the economy of Japan.

The wages stay here, but the profits leave. When that happens, so bye-bye to any new manufacturing starting here and the US controlling its own job market.


RE: should...
By Lifted on 11/8/2008 8:16:25 PM , Rating: 1
quote:
The wages stay here, but the profits leave.


Are you striving for the Daily Tech 2008 Clueless Award?

To be fair, you'd made a few good points up until this doozie.


RE: should...
By rudolphna on 11/8/2008 10:54:23 PM , Rating: 2
So tell me, how does it work? Explain it to me please since we are all clueless apparently.


RE: should...
By spluurfg on 11/9/2008 3:59:17 AM , Rating: 4
quote:
So tell me, how does it work? Explain it to me please since we are all clueless apparently.


I can tell you how it works. Toyota Industries is a publicly listed company in Japan. Thus the profits go to whoever owns the shares. The same is true of other publicly listed companies such as Ford, GM, Exxon Mobil, Google, etc.


RE: should...
By Ringold on 11/9/2008 4:14:02 AM , Rating: 3
I for one question the utility of debating the national identity of any multi-national corporation.. They have global footprints, so their money will go to places where it is treated nicely and can be put to good use, and their money will flee places where they can't profitably do anything with it or it is treated badly (aka taxed, regulated, etc).

On that basis, I see Toyota & Honda as equally American today as General Motors.


RE: should...
By Dwayno on 11/9/2008 9:52:20 AM , Rating: 3
quote:
On that basis, I see Toyota & Honda as equally American today as General Motors.

Except that GM American profits has been used to build plants in other markets that will only let them sale auto there if they build plants there. This is true of Canada and Mexico (our NAFTA "partners"), it's true of India and China, who charges the auto companies 50% and 100% tariffs (respectively) on imported cars...they must protect their market from the unfair advantage GM had as an auto manufacturer. Toyota use to ship trucks over here in the 70's without their beds to circumvent the tariff placed on them. That is how Toyota started their auto assembly plant history...as a truck bed manufacturing plant in Calif.

Dell doesn't manufacture computers...they assemble them from parts made by other manufacturer. Neither Toyota, Honda, or Hyundai have manufacturing plants in the US...they only have ASSEMBLY plants. Find a engine maufacturing plant from any of these 3 auto companies in America. They also use parts manufactured at Japanese plants that have set up manufacturing in America. By using parts from Nipondenso and the like, they meet the 70% American parts required to define an auto as American made. This is the North America as defined by the NAFTA agreement. That's right, parts made in Canada and Mexico are considered to be American parts and count towards that 70% requirement.


RE: should...
By Hoser McMoose on 11/9/2008 7:49:18 PM , Rating: 3
quote:
Except that GM American profits has been used to build plants in other markets that will only let them sale auto there if they build plants there. This is true of Canada and Mexico

So far you're 100% false. There is absolutely NOTHING that prevents GM (or anyone else) from selling U.S. made or assembled vehicles in Canada or Mexico completely free of all duties.

Back in the AutoPact days of the 1960's the American Big-3 did agree to build some cars in Canada to the tune of 3 built in Canada for every 5 sold there. This part of the ruling didn't change production nearly as much as the removal of tariffs anyway which saw the lower paying assembly jobs moved to Canada and higher paying engineering, design and management positions moved to the U.S. The rule was also abolished years and ago had been made irrelevant in the 80's.

quote:
Find a engine maufacturing plant from any of these 3 auto companies in America.

You mean like the plant where they build the Toyota Tundra V8 engines in Alabama? Or the Kentucky plant where they build I4 and V6 engines for the Camry? Honda's single largest engine plant in the world is located in Ohio and they have another in Alabama as well as one in Ontario, Canada. Believe it or not, some of these engines actually get exported back to Japan for sale there.
quote:
That's right, parts made in Canada and Mexico are considered to be American parts and count towards that 70% requirement.

And similarly cars made primarily in the U.S. and Mexico are tariff free when shipped to Canada and cars made primarily in Canada and the U.S. are tariff free when shipped to Mexico. It's called an integrated market and it's a net benefit for all those involved. Without it we would all be paying higher prices for lower wages because we would have less competition and smaller markets.


RE: should...
By rudolphna on 11/9/2008 8:30:27 AM , Rating: 2
Ok. Now, where do you think people own more shares? I dont know who owns shares of who, but dont you think it seems reasonable that people in japan have more stock in Toyota, while people in america have more stock in Ford/GM etc?


RE: should...
By elgueroloco on 11/9/2008 12:42:46 PM , Rating: 2
No. I think the shares of both companies are spread all over the developed world, wherever people have money to buy them. There are investors almost everywhere, and huge, solid companies will draw them. Unfortunately, our automakers aren't so solid anymore, though I hear Toyota is taking losses now too.

As for our companies, I have no sympathy for them. They were once on top of the world, but became complacent, churned out years of dogsh-t cars, and tried to hide their lack of effort behind the flag, telling us we had to buy their garbage to be patriotic.

Once the Japanese entered the market, and their quality surpassed ours, the American auto industry improved their quality significantly because they had to for survival. However, they never have shown any interest in putting out true quality. They used to be the best, but they obviously don't care about that anymore. They put out tech that's years behind everyone else, and their reliability is still inferior. They put forth the bare minimum effort necessary to gull patriotic Americans into buying their still-inferior cars.

I remember reading an article last year about a new concept GM was putting into production. It was supposed to be this really bold new step into the future. Know what it was? A compact car with a small, fuel-efficient gasoline engine. Wow. I seem to recall about 17 years before that, GM introduced a compact car with a small engine that took the market by storm. It was called a Geo Metro, and it got 60 MPG. This new car wouldn't even get that. So they were telling me this new car was a bold step into the future, when it couldn't even match what they did 17 years beforehand. F-ck GM and Ford both. They are embarrassments to our country, and prime examples of the complacency and laziness that have sent us into decline.

Sorry that was so long.

/rant


RE: should...
By Hoser McMoose on 11/9/2008 8:16:04 PM , Rating: 2
quote:
I seem to recall about 17 years before that, GM introduced a compact car with a small engine that took the market by storm. It was called a Geo Metro, and it got 60 MPG

The most fuel-efficient Geo Metro sold has an estimated EPA rating of 43 mpg city/51mpg highway. This was mainly due to the use of a 49hp engine. Most Geo Metros were rated in the 30-40mpg range, even with the 3 cylinder 55hp engine.

These cars probably wouldn't sell very well today, North American consumers haven't shown much interest in sub-100hp vehicles for some time now. The planned Chevy Cruze is expected to get similar fuel economy to the Geo Metro but it'll have a 140hp engine.

Also the old Geo Metro was not entirely GM vehicles, they were designed and originally built in Japan by Suzuki. For the North American market many of them were manufactured at CAMI (joint GM/Suzuki plant) in Ontario, Canada, while others were imported from Japan.


RE: should...
By DrKlahn on 11/10/2008 11:06:56 AM , Rating: 3
quote:
They used to be the best, but they obviously don't care about that anymore. They put out tech that's years behind everyone else, and their reliability is still inferior. They put forth the bare minimum effort necessary to gull patriotic Americans into buying their still-inferior cars.


Absolutely untrue. I can't think of any major technology present in foreign makes not found in Domestic makes. Differences in quality are in the tenths of a percent per 100.

quote:
F-ck GM and Ford both. They are embarrassments to our country, and prime examples of the complacency and laziness that have sent us into decline.


I'm not embarrassed to own either. I would be embarrassed buying a vehicle where the primary design and engineering is done elsewhere and that ships a good portion of it's profit elsewhere.

quote:
Sorry that was so long.


I'd be sorry that this is untrue and hateful.


RE: should...
By Ringold on 11/9/2008 3:10:08 PM , Rating: 3
quote:
but dont you think it seems reasonable that people in japan have more stock in Toyota


That doesn't necessarily have to be the case. Go to you finance website of choice, and look up "TM" and "HMC". They have ADRs, or American Depository Receipts, that trade here. Perhaps they do have greater Japanese ownership, but that certainly doesn't have to be the case.

Also, E-Trade and other platforms let you trade basically where ever you want to trade around the world.


RE: should...
By nah on 11/8/2008 6:46:54 PM , Rating: 2
www.cargroup.org/pdfs/Alliance-Final.pdf

According to the manufacturers themselves--the automobile industry contributed 3.3 % of GDP in 2002--which they themselves agree was well above their average in the 1990s, mostly because 2002 was a recession year.

I'm tempted to add personal insults as well--but I'll pass


RE: should...
By Masospaghetti on 11/8/2008 8:07:38 PM , Rating: 3
And for every job that is directly employed by the auto industry, about 8 more are indirectly dependent on them (suppliers, etc) -- therefore getting back to the 25% mark.


RE: should...
By nah on 11/8/2008 10:15:47 PM , Rating: 2
the industry employs about 1 million people--total civilian (excluding military ) labor force is 151 million. Even if we accept yr *8 figure (some data to back this up) it becomes 8 million---that's still roughly 1/20 or 5 % of the total civilian labor force--check out the BLS links below


RE: should...
By JediJeb on 11/9/2008 3:24:32 PM , Rating: 2
But, since the wages in the auto industry are above average, then the number of people lost on a percentage is lower than the dollars lost as a percentage. You won't find many autoworkers working for minimum wage. The people I know working in the auto industry start out at $20/hour or higher. Here in town we have a plant that makes parts for Chrysler and those people start out over $10/hour. So if all these jobs are lost, that will add up to a good sized chunk of money lost from the economy.

Then the ripple starts, where those out of work from the auto industry cut back on purchasing things like electronics, furniture, clothing, food, housing, entertainment, ect, and that causes losses across the board. It adds up very quickly.


RE: should...
By spluurfg on 11/9/2008 3:54:26 AM , Rating: 2
quote:
And for every job that is directly employed by the auto industry, about 8 more are indirectly dependent on them (suppliers, etc) -- therefore getting back to the 25% mark.


Assuming they are using the GICS or ICB industry classifications, this percentage most likely includes their suppliers (e.g. in GICS: Automobiles and Components).

The suppliers of their suppliers such as auto specific industrials or materials might add something to this, but usually companies who derive most of their income from the auto sector are categorized in the auto sector.

I'm assuming specialty retailers like Audi paraphernalia stores are a negligible part of the economy, if that is okay with you guys.


RE: should...
By Samus on 11/9/2008 5:45:58 AM , Rating: 1
I don't think people are actually aware...

The Japanese motor industry employes MORE American workers than the American motor industry does. People often forget how much bigger Toyota is than GM/Ford/Chrystler, along with forgetting most, if not all Toyota's, Honda's, Nissans, etc, are built HERE.

There are technicalities such as the engines are often built overseas and many components are foreign, but the steel is often domestic (which is good, because Japanese steel sucks, and they know it)

The only Japanese cars I've seen that weren't built here were certain Mazda's. By no surprise, the heads of the bolts on the underbody snap off after only a few years because of the low grade of steel used.


RE: should...
By Dwayno on 11/9/2008 11:16:23 AM , Rating: 5
quote:
I don't think people are actually aware...


Judging by the facts, I don't think YOU are aware:

quote:
The Japanese motor industry employes MORE American workers than the American motor industry does.


From Honda (http://corporate.honda.com/america/):
"Honda has been a major contributor to the U.S. economy for more than 45 years. Today, Honda employs more than 25,000 people in all 50 states."
From Toyota (http://www.toyota.com/about/our_business/toyota_in...
"Toyota in the United States
U.S. Direct Employment: 36,632"

Ford, GM, and Chrysler EACH have laid OFF more employees than Toyota and Honda employ COMBINED!!

quote:
People often forget how much bigger Toyota is than GM/Ford/Chrystler, along with forgetting most, if not all Toyota's, Honda's, Nissans, etc, are built HERE.


Only cars destined for the American markets are made here. The bulk of Toyota, Honda, and Nissan vehicles (including ALL of the Lexus, Acura, and Infinity) are built in Japan.

quote:
There are technicalities such as the engines are often built overseas and many components are foreign, but the steel is often domestic (which is good, because Japanese steel sucks, and they know it)


Actually, Japan imports over 90% of their steel and 100% of their aluminum. Japan gets the bulk of their raw steel from America and use their own steel plants to manufacture it.


RE: should...
By Hoser McMoose on 11/9/2008 8:33:25 PM , Rating: 2
quote:
The bulk of Toyota, Honda, and Nissan vehicles (including ALL of the Lexus, Acura, and Infinity) are built in Japan.

That's not quite true, there is a Toyota/Lexus car plant in the city where I live (Waterloo, Canada.. err technically the plant is in Cambridge) that builds the RX350. Meanwhile there's a Honda/Acura plant about an hour away from me in Aliston, Ontario that builds the Acura CSX and MDX. Honda operates another plant in Ohio that builds Acura TL and RDX vehicles.

I don't know about Nissan, but I believe they've got at least one or two Infiniti models coming out of their Smyrna plant (if they don't, they should since that's pretty consistently ranked as one of the best car plants in the world).


RE: should...
By headbox on 11/8/2008 2:45:52 PM , Rating: 5
Get a grade-school education or a calculator. If national unemployment goes from 5% to 7.5%, that means an increase of 50%. No one is saying 50% of the population would be unemployed. You're what they call an "idiot."


RE: should...
By Alexstarfire on 11/8/2008 2:55:12 PM , Rating: 1
That's true, but you can't say that if you posted that exact line in a newspaper or something that the ENTIRE population is going to misinterpret that. Include the 5% to 7.5% and it then becomes very clear.


RE: should...
By nah on 11/8/2008 6:52:10 PM , Rating: 1
quote:
Yes, and if you get rid of 10% of the employment in the US, how much will the unemployment figures increase? Yes - 50-75%.


the original post was this--if you got rid of 10 % of the total employment---the level of unemployment would increase by 200 %

Perhaps you should get a calculator and double check before making asinine comments


RE: should...
By MamiyaOtaru on 11/9/2008 11:37:00 PM , Rating: 2
I'm staring at it, and it says 50-75% You have no point.


RE: should...
By nah on 11/10/2008 5:54:22 AM , Rating: 2
quote:
I'm staring at it, and it says 50-75% You have no point.


It's astoundingly easy to argue out of ignorance...right now unemployment is at around 6 %---if total unemployment increases by 10 %--the rate of unemployment jumps from 6 % to 16 %---thats a 200 % plus rise


RE: should...
By mdogs444 on 11/10/2008 6:45:35 AM , Rating: 3
quote:
right now unemployment is at around 6 %---if total unemployment increases by 10 %--the rate of unemployment jumps from 6 % to 16 %---thats a 200 % plus rise

No it doesn't. You need to go back to middle school to learn how to translate written math problems.

If it is currently at 6%, and increases 10%, then basic algebra shows:

0.06 + (.06 * .10) = 6.6%

If someone says they just increases their profits by 50%, you do take 50% and add .5 to whatever their current number it. It means you multiply it by .5

Therefore, if current unemployment is at 6% (or .06) and increase it by 50% then...

0.06 + (0.06 * 0.50) = 0.09 or 9%

These are very simple calculations and understandings. Perhaps you need to raise your D average in math.


RE: should...
By mdogs444 on 11/10/2008 6:47:43 AM , Rating: 2
p.s - its too early in the morning for grammar checks on myself, but the math principals are correct :)


RE: should...
By Jim28 on 11/10/2008 1:36:44 PM , Rating: 2
Your math is too hard! Folks what actually have to THINK for 5 seconds or so to figure that out. (That have paid attention in 3rd grade.)


RE: should...
By BZDTemp on 11/8/2008 1:18:35 PM , Rating: 2
You blame the unions but doesn't car makers in other countries have a work force that are in strong unions?

Unions are not the reason the US car industry is in trouble - it's their products. Forever they have been focusing on the home market and even that market is one they only kept somewhat successful in due to government aid with selling trucks and so forth all of which is basically old technology in shiny packaging.

For the government to start putting cash directly in the pockets of Ford, GM and Chrysler would just be to prolong the death march. Plus it would also pretty un-american!

Sure it was done with the financial system but in a sense that is simply infrastructure just like road, bridges, harbors and airports. Car markers are not infrastructure and car makers only really good at making gas guzzlers where only the engines are of really good quality are relics best left dying.

For the US economy it would make more long run sense to focus on environmental friendly cars regardless of who makes them. Anything is socialism or worse!


RE: should...
By mdogs444 on 11/8/2008 2:04:38 PM , Rating: 3
quote:
Anything is socialism or worse!

For the hard worker who wants to move up the ladder and save for his family's future while providing an upscale current lifestyle... nothing is worse than socialism.


RE: should...
By oab on 11/8/2008 2:15:37 PM , Rating: 3
Except for communism right?


RE: should...
By Tamale on 11/8/2008 8:28:15 PM , Rating: 3
socialist nations everywhere are crying as they read this clueless drivel


RE: should...
By SavagePotato on 11/9/2008 3:57:08 PM , Rating: 1
Fallout 3 recently gave me a great many laughs and made me think of the hardcore capitalist psychos that litter dailytech.

I was almost rolling with laughter for entire liberty prime sequence where he is spouting ultra conservative/capitalist propaganda.

Or the town of cannibals still pretending to live the american dream, where the one guy has a line something like "It's every Americans duty to vote for his or her favorite republican candidate, not for those damn liberal hippy commie bastards"

Or the old guy in megaton that goes around saying "God bless the united states of america!, and nowhere else!"


RE: should...
By TheFace on 11/8/2008 2:18:11 PM , Rating: 5
Other nations such as Japan and Germany have higher percentages of mechanization in their processes for making automobiles. These advances in mechanization that other nations have taken advantage of have been blocked by the unions of America, as they would require less workforce.

To put cash into the pockets of auto manufacturers is un-american. But what are the alternatives? We just let them die or be bought by other companies? The automotive industry is very essential to the US economy. It directly employs maybe 7-10% of the American workforce. Then you include the parts manufacturers, the maintenance people (mechanics etc..) and other various indirect jobs related to the automotive industry and you have, by most estimates, almost 15-20% of the American workforce. Obviously a lesser percentage of the indirect jobs would be lost but there would still be a definite hardship suffered by those people.
Then you could figure in the cascade effect that this amount of loss would have on a nation, well throwing money at the problem is an investment worth attempting.


RE: should...
By ebakke on 11/8/2008 3:37:32 PM , Rating: 1
quote:
Then you could figure in the cascade effect that this amount of loss would have on a nation, well throwing money at the problem is an investment worth attempting.

We've been throwing money at the problem for years. GM and Ford don't have sustainable business practices. Let them change, or let them fail.


RE: should...
By ebakke on 11/10/2008 9:56:31 AM , Rating: 3
Instead of a drive-by down rating, take a few minutes to defend your position. Tell me why you disagree, and why we should dump $25 billion more into these two.


RE: should...
By nah on 11/8/2008 7:24:32 PM , Rating: 1
quote:
It directly employs maybe 7-10% of the American workforce.


According to BLS http://www.bls.gov/cps/tables.htm#annual
total manufacturing employment was at 16.47 million--which was around 10 % of the total civilian work force-excluding the military-car manufacturing's share of that--according to the manufacturers themselves
http://www.cargroup.org/pdfs/Alliance-Final.pdf
is at roughly one million--this includes both motor vehicles and equipment-- so car manufacturers share of total employment is 1/16 of 10 %--or roughly 1 %


RE: should...
By Ringold on 11/9/2008 3:39:49 AM , Rating: 3
Your view of "car manufacturers" is far too myopic. Car manufacturers just assemble. The bulk of the job losses would be in the more broad manufacturing sector. CNBC has been reporting on this the last couple weeks in detail, and it's become pretty clear that if one auto maker fails then the entire shared supply chain of all the manufacturers would grind to a halt in North America. Estimates were 2.5 million jobs lost if a single auto-maker went in to bankruptcy, or about 1.5 - 2% of total active labor force. Then you have to consider feedback throughout the economy, which would be substantial given that a lot of these union jobs pay a lot of money. If a car manufacturer failed and the government did nothing to soften the blow, I think 5 to 10 million could easily lose their jobs over a period of a year or two, mostly in the rust belt where some entire local economies would have their base taken out from under them.

Of course, that 5-10m number is my own estimate, and impossible to substantiate, but obviously there would be a large feedback in parts of the country where substantial incomes are still derived from the industry and its supply chain.


RE: should...
By nah on 11/9/2008 5:10:20 AM , Rating: 1
quote:
Your view of "car manufacturers" is far too myopic.


It's not --maybe you should read this--its a far better statistical treatment than vague 'estimates'

quote:
the industry employs about 1 million people--total civilian (excluding military ) labor force is 151 million. Even if we accept yr *8 figure (some data to back this up) it becomes 8 million---that's still roughly 1/20 or 5 % of the total civilian labor force--check out the BLS links below


RE: should...
By Ringold on 11/9/2008 3:13:09 PM , Rating: 2
No, it is obviously too myopic, and you didn't even try to deny that the supply chain is really the greater concern than the car manufacturers themselves, though what you quoted does at least acknowledge that total related employment would be larger than just the manufacturers themselves.

There's also probably other industries that get contract work, such as media and advertising firms, plus these days companies with environmentally minded technologies such as battery companies. Those are also hard to quantify, but obviously not zero.


RE: should...
By nah on 11/9/2008 9:44:46 PM , Rating: 1
quote:
No, it is obviously too myopic,


Why ? I'm pretty sure that all of the companies you mentioned don't employ more than 7 times the auto industry's total number of workers---obviously there would be spillover effects, known in economics as the effects of the multiplier,but that's a different thing entirely--we were arguing about unemployment--not it's cumulative effects on the economy


RE: should...
By technohermit on 11/8/2008 10:39:59 PM , Rating: 2
quote:
Other nations such as Japan and Germany have higher percentages of mechanization in their processes for making automobiles. These advances in mechanization that other nations have taken advantage of have been blocked by the unions of America, as they would require less workforce.

Prove that.
I am union, and I despise that statement. Union people, contrary to the popular opinion, DO want machines that keep their companies competitive. We know that a competitive employer pays our bills as well as theirs. A shitty boss means a short term job, no matter how hard you work.
Maybe you don't realize that union members are human just like the salaried ones? Do you think unions are just big anti-corporate entities trying to put companies out of business?? That is illogical. A worker is a worker, and I as a union member give a good days work for a good days pay. It is up to my company to buy me the machinery that will keep his business growing and keep his overhead down. Sometimes those two things dont go together.
Maybe Ford and GM thought they could just keep the same old crap machinery making the same old crap cars, while other AMERICAN plants like HYUNDAI, HONDA AND TOYOTA (thank Reagan for his foreign policy) did invest billions, with the UAW to keep the workplace happy and their businesses making money. Ford thought building in Mexico would make them more money than new tools in Detroit. Guess what? It didn't. They are now burning more cash than a Union could suck out of them by having to re-tool their US plants, and bring their innovative European cars here. Good luck Ford! I for one don't like to see any employer out of business, and I own Ford stock, so especially them. I just hope they can get their shit together before it truly is too late.


RE: should...
By Dwayno on 11/9/2008 3:08:30 AM , Rating: 2
quote:
Maybe Ford and GM thought they could just keep the same old crap machinery making the same old crap cars,...


Ford and GM tried to update their factories. Yhe UAW told them they could do so, but they couldn't replace a single UAW member with a robot...they had to keep the same number of employees. So, economically, it made no sense to update machinery when the workforce stay the same.

quote:
...while other AMERICAN plants like HYUNDAI, HONDA AND TOYOTA (thank Reagan for his foreign policy) did invest billions, with the UAW to keep the workplace happy and their businesses making money.


Hyundai just built their first plant this decade. Toyota built their first plant in the 70's. Honda was the only plant to be built during the start of the Reagan years. Everyone of these auto companies built their plants new from the ground up using the American car manufacturers as the models for their ASSEMBLY plants, not manufacturing. The American car companies actually were building cars from raw materials; the Japanese/Korean companies were shipping their parts from overseas. The Japanese/Korean car companies came with billions of dollars earned from the sales of their cars in their home and world market (especially from sales of their cars in the US market...a market that severely restricted the importing and selling of American cars).

quote:
Ford thought building in Mexico would make them more money than new tools in Detroit. Guess what? It didn't.


Actually, Mexico is still profitable for Ford...that's why Ford is converting its Mexico City plant to production of the European Fiesta for '010. All of the European cars that Ford will be selling are being tooled up for production in North America...NOT imported!


RE: should...
By DrKlahn on 11/10/2008 11:16:57 AM , Rating: 2
quote:
Unions are not the reason the US car industry is in trouble - it's their products. Forever they have been focusing on the home market and even that market is one they only kept somewhat successful in due to government aid with selling trucks and so forth all of which is basically old technology in shiny packaging.


Really? I thought all manufacturers complied with CAFE requirements. I didn't realize that Domestic manufacturers got a pass. You should probably let them know.

Enlighten us as to this shining new technology that Foreign makes possess that Domestic makes do not. I've been an auto enthusiast for years and can't think of any major technologies not present in Domestic autos.

As for labor have you done any cursory research on cost union vs. non-union? What were your findings?


RE: should...
By Some1ne on 11/8/2008 2:07:56 PM , Rating: 5
I say let them die. They're not in trouble just because of the sagging economy, they're in trouble because they ignored their core market for so long, and failed to adapt quickly to changing demands. If a company does that, for as long as the American automakers have, then it deserves to fail.

Case in point, people have been clamoring for more fuel efficient vehicles for years now ("more fuel efficient" meaning vehicles that can get around 40+ MPG), and the best American automakers have been able to offer has been lipservice in the form of "mild hybrids" that only deliver something like ~25 MPG. Sure it's a small improvement, but it's ignoring what most people really wanted, and it was stupid of the automakers to think that sticking "hybrid" on their vehicles would cause people to start buying again, when the fuel economy wasn't even close to being competitive with real hybrids. The consumer landscape has changed, and the American automakers failed to react to that change swiftly or effectively.

Granted, the Volt is a nice gesture, but it's not slated to even become available for purchase until 2011. If a company is trailing the market by that many years, there's no way it can remain viable, even with government subsidies.

Companies survive (and thrive) through innovation, but a lot of American companies seem to have convinced themselves that the road to success is instead paved by doing the exact same thing that used to work in the past. So I say let them die, and good riddance to old philosophy. Hopefully whoever steps up to replace them will understand the importance that constant innovation plays in running a successful business.


RE: should...
By Chaotic42 on 11/8/2008 7:13:56 PM , Rating: 2
A couple of things here. GM and Ford did release fuel efficient vehicles 15 to 20 years ago. No one wanted them. Gas prices were low and everyone wanted large, safe vehicles. GM and Ford produced them.

The clamor for small, fuel efficient has come up very quickly. Gas prices shot up and have now collapsed.

I don't know how they have "ignored their core market for a long time". Their core market wanted trucks and SUVs. That's what was made.

I'm also not sure about your theory of 25MPG hybrids. I have an 08 Impala with a V6 and my mileage is in the mid to upper 20s (I've yet to go through a whole tank). My 95 Mazda 626 got 30, and they aren't even the same class of vehicles.

What exactly are you looking for?


RE: should...
By kilkennycat on 11/9/2008 12:06:18 AM , Rating: 2
quote:
A couple of things here. GM and Ford did release fuel efficient vehicles 15 to 20 years ago. No one wanted them. Gas prices were low and everyone wanted large, safe vehicles. GM and Ford produced them.


One other reason why nobody wanted to buy them was the truly awful reliability of any car at that time from any US manufacturer. Dig into back issues of Consumer Reports if you do not believe me....That was the time when Toyota, Honda and Datsun started grabbing huge chunks of the US market, starting with the small (reliable) fuel-efficient cars and then later working up to their own versions of gas-guzzlers.


RE: should...
By Masospaghetti on 11/8/2008 8:16:56 PM , Rating: 1
I don't back the current GM management at all - in fact, I think they've blundered far too many times - but remember the EV1? Despite what some greenies will say, the EV1 project was cancelled because demand was far too low, IE NOBODY WANTED IT. Everyone was driving a huge SUV. People only started "clamoring for fuel efficient vehicles" for about the past year, maybe two when gasoline became so expensive. The unions also add a lot of red tape to their operations and make them slower to adapt because its more difficult to change workforces at different plants and they often get paid even when not working.

Tell me this -- Who supplied all of the military vehicles and tanks during WWII? If the domestic industry goes under, where are we going to get Humvee's from? How about tanks? When WW-III rolls around, it might be a bit harder to convince Toyota to build us some trucks.

I think the government needs to step in, abolish unions and change upper management. GM and Ford have proven they CAN produce world-class vehicles. The 2009 Malibu (non-hybrid) gets 33 mpg which is the highest in its class, the Silverado gets 21 mpg which is also highest in class, the Cobalt gets 37 mpg which is, again, highest in class. These companies are failing due to past faults and legacy costs and they need help.


RE: should...
By flurazepam on 11/9/2008 4:39:33 PM , Rating: 2
quote:
Despite what some greenies will say, the EV1 project was cancelled because demand was far too low, IE NOBODY WANTED IT.


Really? Guess you didn't see Who Killed the Electric Car. Point is, the people who bought (actually leased, as you could never own the EV1) the GM electric, loved it so much, they protested and rallied to save the car. Why was the project killed? Well many reasons, mostly oil industry based though. GM at the time purposely poorly marketed the car with disturbing, if not frightening advertisements. Moreover, there was a deliberate lack of marketing as well. If you actually wanted to sell a car, why not showcase it as the greatest new vehicle to own not market it with disinformation. Anyway, I digress...

Fast forward to 2008, watch the interview with Bob Lutz on 60 mins. He admitted it was a huge mistake to kill the (electric car EV1) project. They could have had a whopping 16 year lead in research and development in electric car technology had they kept the project going. Now, they're scrambling with no infrastructure in place. The Volt is going to come out with no "real life" testing (i.e. people living with the cars - not environmental testing). Hopefully it will succeed for them, otherwise it will be difficult to portray an image of innovation and concerns for fuel efficiency and alternative energy given the competition, including competition from little car manufacturers like Tesla, which incidentally was started by silicon valley execs and not car guys.


RE: should...
By Hoser McMoose on 11/9/2008 8:53:53 PM , Rating: 2
quote:
the people who bought the GM electric, loved it so much, they protested and rallied to save the car.

Yup, all 20 of them!

Masospaghetti was absolutely correct, the EV1 was a disaster as a commercial product. The prospect for sales at $40,000 were dismal and it cost GM closer to $80,000 to build the thing! THAT is why GM canned their project just like Toyota, Honda, Ford and EVERYONE else canned their electric vehicle projects!

Hindsight being 20/20 I'm sure GM now wishes they kept developing the EV1 as a prototype; if they had they might be able to sell the Volt this year instead of in 2010. However GM was hardly alone here, EVERY major car manufacturer in the world missed the boat on this one. Keeping the EV1 on sale as an actual product though? That was a non-starter, the thing was nothing but a giant money pit for the company.

The real irony about the movie "Who Killed the Electric Car" is that they gave GM such a hard time because GM actually TRIED to build the car and failed. They let companies like Toyota, Honda and Ford off lightly because those folks gave up WAY before GM did.


RE: should...
By flurazepam on 11/10/2008 2:31:40 PM , Rating: 2
The real irony about the movie "Who Killed the Electric Car" is that they gave GM such a hard time because GM actually TRIED to build the car and failed.

Then why wouldn't GM allow anyone to own the car? Why did the car have to be destroyed? What harm would it have been for people to hang on to their cars? The ones in the museum contain no internals. Why?

As for everyone missing the boat - you'll have to talk to the oil companies about that one.


RE: should...
By Reclaimer77 on 11/10/2008 6:01:39 PM , Rating: 2
I agree.

Let them die. Look folks, you were told there is a " bailout " for this. You were lied to. There is no quick fix. We can either let it fix itself now, or keep putting off the problem for future generations.

Its going to hurt either way, so lets just get it over with. No more handouts or bailouts.


RE: should...
By tubalcain on 11/8/2008 3:27:39 PM , Rating: 3
Unions are the only way to stand up to unchecked corporate power. They hate unions, ask Walmart. If we had universal healthcare in the U.S. that is one less thing the auto industry and many other industries would have to worry about. The real enemy in this is globalization and so called free trade, why should GM or any other company open more plants in the U.S. when they can pay Mexicans, Chinese & Indians way less? You can't compete with that.


RE: should...
By mmntech on 11/8/2008 4:47:03 PM , Rating: 5
Unions are partly to blame for the problem. I worked in civil construction for a number of years, which is unionized. (I worked in the office doing data entry for accounting and payroll) There, a senior skilled labourer might make $30-$50 an hour tops. At GM in Canada, unskilled labourers make $30-$70 an hour depending on seniority. The unions demanded those inflated wages, not to mention cradle to grave benefits. Effectively, the workers and their fat cat union priced themselves right out of the labour market. Nobody else in private sector manufacturing makes that much.

Of course one cannot place the entire blame on the union. It's still mostly the fault of the management at the Big Three. European and Japanese automakers saw the writing on the wall 10 years ago while North Americans still kept poring huge sums of money into SUVs and light trucks. Now they just sit on the lots rusting. Both the US and Canadian governments have bailed them out time and time again and what have they done with that money? Absolutely nothing. GM's latest idea to help the Canadian auto industry, build the gas guzzling Camero in Oshawa when fuel was sitting at $1.40/L. It's a shame that people are loosing their jobs but we are seeing no return on the taxpayer dollars we've been investing in these people. The money just ends up in the hands of the greedy management and union bosses. We might as well just nationalize the North American auto industry at this point. Public money is the only thing keeping it afloat already. Maybe if we stopped giving them handouts each time they screw up, it might force them to innovate instead.


RE: should...
By Regs on 11/8/2008 7:20:05 PM , Rating: 2
The union had more adverse effects other than employee compensation. Really, what's 30-50 dollars an hour now to a huge corporation?

The real problem was the legal quagmire in the middle. How can a company like GM be able to change their product line and be as versatile as the over sea's manufacturers when they spend months if not years dealing with union lawyers trying to get a robot to take a workers place? Even if they did get the robot to do the job, they had to make up some un-useful job for the employee that got the boot from the robot. If GM actually introduced something more efficient, and more profitable for their company, they'll then have to deal with works walking out on the job and striking. How productive can this be?

How about UAW coercion and extortion from the union? GM lost litterly billions!!! To get a worker not making his cut, they had to offer them a service package (ransom) to get them to leave.

How about equal pay? Why should I work harder when everybody else gets the same rate? There is no incentive to progress, refine, retool, or expand.

"What is happening is cruel justice, imposed by a reality that willfully ignorant people thought they could choose to ignore as long as it suited them: the reality that prosperity comes from the making of goods, not the making of work; that it comes from the doing of work, not from the shirking of it; that it comes from machines and methods of production that save labor, not the combating of those machines and methods; that it comes from the earning and reinvestment of profits not from seizure of those profits for the benefit of idlers, who do all they can to prevent the profits from being earned in the first place." - Daily Article by George Reisman

I'm all for comeptitive pay and employees rights. Though there has to be a limit and a balance.


RE: should...
By FITCamaro on 11/8/2008 10:56:51 PM , Rating: 3
What's $30-50/hr?? Are you serious? Many engineers don't make $50/hr. But someone doing a job barely requiring a 5th grade education deserves that kind of pay? No. Most auto industry jobs are maybe worth $20/hr. Not $30-50/hr or higher.

Hell GM probably has some people designing the cars that make less than the workers building them.


RE: should...
By andrinoaa on 11/8/2008 11:51:35 PM , Rating: 3
Fit, you surprise me with your ignorance and blinkered logic. You live in a capitalist system where the object is to get what the market will bare. If Gm can sell a box of shit for $100k, why would they sell for $20k? Same as Unions, when the going is good, they get what they can get. Same as politicians, they make sure they get what they can get! I certainly don't think politicians are worth more than 2 x the average wage. If their wealth was tied into the average Joe Blow, we would all be better off!
Gm's problem is multi faceted.
1/ they painted over the crystal ball and were flying blind.
2/ people are not buying their cars in quantities they were used to.
3/Maybe a certain amount of vehicle saturation has occured too.
4/ Looking at their modus operandi, I don't think they actually made any money for a while.
The only solution is massive downsizing until they make money. If the government is stupid enough to bail them out, the minimum requirement is totally new management.


RE: should...
By omnicronx on 11/9/2008 12:24:35 AM , Rating: 4
quote:
Same as Unions, when the going is good, they get what they can get. Same as politicians, they make sure they get what they can get! I certainly don't think politicians are worth more than 2 x the average wage.
Just a little fact for you here.. In canada, an elected representative gets paid around 140K a year at the highest level. Yet a 20 year worker at GM can make more money. Canadian auto workers get paid 20% more money than any other developed nation when it comes to auto workers, yet they complain when GM tells them they have to cut jobs. Face it, the workers get paid too much money, with most of the workers having little to no education, and whats worse is they think they deserve it.

P.S The President of the United States only gets paid 400k a year, or a little more than 2x the top paid GM line workers. Your entire logic is flawed if you think because we live in a capitalistic system that a line worker should get paid half the salary of the President of the United states.

Whats worse is that 50+ year old workers are just refusing to retire, and it is the younger workers that get asked to leave. I live in a city that is home to a GM plant, and union officials were told to try and trick workers into signing release documents they did not have too, so that they did not have to give the normal severance packages. Auto unions are just plain out of control, they are even going as far as moving into markets that have nothing to do with the auto industry, just to collect union dues. And when these people are layed off, they are told they are out of luck because they are not true auto workers.. something has to be done about this.


RE: should...
By andrinoaa on 11/9/2008 5:31:35 AM , Rating: 2
There you again, why do people extrapolate what others say.
Please show me an example where an auto worker gets more than $140k. I would have thought the average would have been around $50k. There are exceptions but everyone? All politics of envy here. If GM is sick, they should renegotiate with the unions, how hard is that? But if Wagner slashes wages then increase his, I think the union labour would be entitled to play hard ball!
The president gets more in other benefits. Accomodation, free flights to his holiday home, free use of servants and many more I am sure. I don't think the president is even aware what the average wages are.


RE: should...
By Regs on 11/9/2008 11:30:20 AM , Rating: 2
I agree that's it's more like 50k a year, but the benefits for them is what really is costly. The pensions that GM can't afford, the severance pay for firing/laying them off, and the added overhead for legal disputes. 50k is more than with-in reason, though that's highly opinionated. I know most of us started working in tougher higher-skilled jobs making less. Hell, I'm sure there are people working for Wal-Mart that work harder that get 9.50 an hour so you can enjoy a 6 dollar piece of crap that you don't need. Though some one has to pay for these 25k cars that they're selling or that 2k monthly mortgage for a 2 bed room town house.

This is what happens when a country goes 7 trillion in debt and the rate of inflation sky-rockets, hence our own way of life is threatened. That 50k is not worth much anymore when we're paying thousands of dollars of tax and inflation penalties each year. Education is not the problem, and should not be a meal ticket either. The real problem is keeping productivity at it's maximum. You can't possibly blame employees for trying to make a living. How hard would you work in a factory for 25k a year with no health benefits or vacation? I'm not saying everybody should be paid more than they worth in society or paid more than their employer can afford. I'm saying that for the past decade everybody has been living with tunnel vision that these problems no longer effect them because they're a Harvard grad. There are larger problems at hand which has to be fixed which are now starting to trickle down to micros of our economy.


RE: should...
By FITCamaro on 11/10/2008 9:00:33 AM , Rating: 1
Except the going has gotten good to the point where the employer can't afford to stay in business anymore much less pay these ridiculous wages.

If the automakers fall, it will be the fault of the unions. Their strong arming has jacked wages up to a ridiculous height and that doesn't even take into account the health benefits and pensions. That has left less money for the automakers to put into their products and made them unable to lower their prices.

So UAW workers. Enjoy the jobs while they last. Either you're going to lose those high wages or you're going to lose your jobs.


RE: should...
By Reclaimer77 on 11/10/2008 6:08:03 PM , Rating: 2
Your are ignorant if your list of Gm's problems doesn't include GROSS corporate mismanagement and excessive amounts of retirement, bloated pension plans, and Union's driving labor costs to insane amounts.

Gm wastes billions a year by actually paying people NOT to work.

And Fit is dead on. No way someone with a high school education should be guaranteed 30-40k$ a year. By your merits ? Sure, this is America. But because of Union bullyism ? No, thats not the way. And Gm is paying the price, big time.

Your analogy is flawed in that respect. Union driven wages are not what the market would naturally bare without their interference. To argue otherwise is pointless.


RE: should...
By Reclaimer77 on 11/10/2008 6:09:54 PM , Rating: 2
quote:
30-40$ an hour


Edit


RE: should...
By lagomorpha on 11/10/2008 6:11:20 PM , Rating: 1
"You live in a capitalist system where the object is to get what the market will bare. If Gm can sell a box of shit for $100k, why would they sell for $20k? Same as Unions, when the going is good, they get what they can get."

Except that when businesses come together to agree to certain prices it's called PRICE FIXING. Workers coming together to fix prices are no different.


RE: should...
By Dwayno on 11/8/2008 7:44:07 PM , Rating: 2
quote:
European and Japanese automakers saw the writing on the wall 10 years ago while North Americans still kept poring huge sums of money into SUVs and light trucks. Now they just sit on the lots rusting.


Eh...Toyota just open up a large truck manufacturing plant in Texas. Now their trucks are sitting on THEIR lots and rusting as well.

quote:
Both the US and Canadian governments have bailed them out time and time again and what have they done with that money? Absolutely nothing.


Chrysler was the only American auto manufacturer that was bailed out by the government...and that was in the form of a loan which they paid back. That was over 20 years ago. And what they got back was that for a while, Chrysler was an independent company.

quote:
We might as well just nationalize the North American auto industry at this point.


Every auto manufacturer in the world is either nationalize or supported by their government, with the exception of one country. Would you like to venture a guess which country? Do you think that Toyota was able to bring the first hybrid vehicle (Prius) to market for only $20,000 WITHOUT government subsidies (I read that each vehicle was subsidizes to the tune of $10-15K).


RE: should...
By Hoser McMoose on 11/9/2008 9:03:07 PM , Rating: 2
quote:
At GM in Canada, unskilled labourers make $30-$70 an hour depending on seniority.

Average cost of employment for GM in Canada is about $70/hour of which wages make up roughly 1/3rd of that. Average wages for GM Canada workers are about $25-$30 an hour. Someone with seniority might be making up to about $40/hour ($80,000