Owning a Ferrari is like having a mistress. When you're with it/her, you understand exactly why you were willing to risk life, limb, your children's happiness and a huge pile of cash to indulge in inherently selfish, fleeting pleasures. And then the Ferrari breaks/crashes and the mistress goes hinky, as is their wont. And you wonder WTF you were thinking when you bought the Ferrari or indulged your libido [presumably] outside the marital bed. You swear on a stack of fifties that you will never, ever be so stupid as to think you could get away with that kind of shit again as long as you live. You will live within your means, within your sensible, proscribed comfort zone. And then the Ferrari's fixed and the mistress gives you "that" look. If the process becomes an endless loop, there's only one thing for it: buy a Porsche and marry your mistress. My gift to you Justin– and our two fine listeners.
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If you keep this up, my wife’s gonna take away my iPod. That would be a sad day.
$50 billion divvied up amongst 400,000 people is $125,000 each.
I guess I would be the other listener… my Liberal Arts math says given $50 billion and 400,000 workers, each member would get $125,000. I’m pretty sure that for old-timers that is significantly less than 2 years pay, closer to one. They’d be chumps to take a buyout like that in exchange for no more health coverage for the rest of their lives.
The fact that these manufacturing employees, many with no education beyond high school, should be able to scoff at $125,000 probably means that the auto industry is operating in an altogether different dimension from today’s working economy. I’m not saying that uneducated people don’t deserve living wages or anything, I’m just saying absolutely nowhere else can you get pay and benefits anywhere near what UAW enjoys, and I don’t think it can stand in today’s economy.
kazoomaloo:
Especially considering Wal-mart employees top out in the neighborhood of $15 an hour and are required to have the same level of education. I’m not defending or attacking them, but it seems skewed.
Thanks for the math corrections. Now you see why NASA (and the local grocery store) turned down my application for employment.
A $125,000 buy off out is still a hill of beans for people who are taking home $75,000/year + benefits.
Ummm… do we know how it’s structured? If it’s $51B cash or the net present value of a series of cash payments, then, yeah, it’s a solid chunk. If it’s some sort of cash stream or future value thing, then it could be worth a lot less. And if the union agreed to take GM stock, how would a value be computed at all?
I’m also a liberal arts guy but then I took some finance classes – just in case I wanted to join the auto industry and help run it into the ground with a series of accelerated negative cash flows.
That is one hell of a street sign pole.
A $125,000 buy off out is still a hill of beans for people who are taking home $75,000/year + benefits.
But it’s nothing to seniors who may be facing multi-thousand dollar health insurance premiums each month. At $1000/month it’d only last ten years.
GM are currently burning over $5b per year in health care costs, so the manager in charge of the $50b fund will need to generate 10% just to stay above water.
sitting@home:
By hill of beans, what I think I meant was that it’s not enough money to be worthwhile for people.
Ironic, It seems many here want to be able to purchase a competitive domestically built automobile but do not believe those Americans that built said automobile should be paid a real living wage to do so!
If one can state that a UAW memeber is being paid too much than please tell us how much an hour or year an auto assembler in the USA should be paid?
Now I am not here to defend the UAW in any way but if we pay our American Auto workers like we pay a WalMart worker they wouldn’t even be able to purchase a low end Chevy. With out a doubt productivity will suffer and the quality of the workers will definitely be less than those overseas. I do not thin k this fomula will get us the “American” cars that we desire.
IMHO, auto workers do deserve a good pay/ benefit papckage because the work is NOT as easy as some fools here would like to think. In reality the UAW does have a valid point; the wages of the rank and file are related to the slaries of management. If management can pay themselves like everything is all brite and sunny they are responsible to pay the wage earners a wage that is directly proportional to their own. THAT IS WHY WE HAVE UNIONS!
Now the other side of the story
Unfortunately the UAW is actually weak and ineffectual. As both side in this fight are. IF the UAW was serious about it purpose they would be the largest (or one of) shareholders in GM, Ford and Chysler. He who owns the company controls the company! Put another way how much GM stock is owned by the rank and file employees?
For every UAW member of GM that does not have a decent amount of their assests invested in their own JOB deserves to see their future in jepordy.
They definietly make enough money to invest in the company that is feeding their families.
How much GM stock did the UAW take inthe VEBA agreement? (Not up on the latest details)
If the UAW and it memebrs do not have enough faith in GM to invest HEAVILY in GM (their damn future depends on GM) why should anyone buy a car buit by these folks?
whatdoiknow1:
If you want a number, I’ll give you one: $18.00/hour is a living wage; salary that out and you’re looking at close to $40k. That’s mighty fine for someone who never spent a dime or a minute furthering their education. The workers do deserve good pay for good work, but they don’t deserve to only have to show up 90% of the time or have a big job bank of people reading newspapers for $25/hour 40 hours a week – nobody does.
kazoomaloo :
I do not have a problem with them being high paid IF the UAW does own a considerable amount of GM. If this is/were the case than the rank and file would deserve everything they get both good and bad.
Other than that I do agree with you. Hey, we are in the 21 Century and UAW workers are high paid. It is time for them to end the parent/ child relationship they have with the Big 3. As long as the Union itself refuses to behave like a partner of the employeer the employer should be able to call the shots.
Another way of looking at this is GM shouls have turned the table on the UAW and publish a $ figure as to how much they have paid UAW workers over the last 25 years and than asked how much the UAW has invest back into GM. Considering the legacy cost of all of the retirees this quite relavent.
It appears that the UAW position in this whole mess is that it is solely up to GM et al to solve the problems but we demand to be paid well (whether they work or not) in the process………………Wait, GM management is paying itself like they are Toyota????
This truly a fight amoungst fools!!!!!!!
Robert,
I think you just described an addiction. Inability to stop even in the face of consequences. Do they have Ferrari Owners Anonymous meetings?
Well
time to give my 2 cents on this one.
did the union lose no. did gm lose no.
will the 50 billion be in jeopardy. no. the fund will be administered by an outside firm sans the union’s reach per se.
This also sets precedence. The UAW will continue down this path with Ford and Cerebus/Chrysler and beyond. Remember the casino workers in Vegas are now UAW as are a great many nurses in hospitals now. When its all said and done the UAW will be the largest provider of health care in the USA (my prediction) Their calls for nationalized health care has fallen on deaf ears in washington. I tell you what. If they walk up to the front door with a hundred billion in hand all of the sudden they have massive leverage to make the politicians,pharmacuticals and insurance companies bow. These groups are going to be falling all over each other. You will see massive downward cost pressure on those industries. Mark my word.
In the end it will benefit the general public, I truly believe this.
So what did GM get out of the deal. They have the right to drop some 4000 workers and replace them with outside workers at 15 bucks an hour in leiu of some 72. (ie Janitors)
They retained the right to liquidate another 24000 workers in another buyout program. 24000 new workers will be hired in the 15 dollar an hour range in leiu of 72. That effectively reduces GM’s overall wage payout across the union by about 7.00 an hour as 24000 is roughly 1/3 of the 72000 workers. The door opens for 24,000 new jobs for the people who want them and the current workers recieve no pain.
GM offloads the booked liability for healthcare which instantly raises their S&P ratings on their outstanding bonds reducing their intrest rates on those securities substantially.
since their retirement fund is over funded some 17 bill and due to changes in the way those funds can be used (that changed a couple years ago) That fund will be tapped for the veba. Even though the 17 billion is there GM couldn’t tap it for development or other things but thay can tap it for the veba. (its like saying its there but we can’t touch it so it really dosent matter if we use to fund the veba or let it sit. its doing us no good)
The Job bank didn’t go away but the radius of reassignment was greatly increased meaning GM can relocate workers farther so they don’t have near as many workers sitting in a bank. The previous contract limited GM to a 50 mile radius. (so basically they couldn’t assign workers anywhere because their are few plants with another facility within 50 miles) What the new number is I don’t know but I understand its much bigger.
GM also retained the right to have some temp workers on a program for up to a year. This makes the Job bank a moot point as it gives them a much greater ability to adjust the human capacity in their plants.
The fundamental change that occured because of this labor contract cannot be understated. Its a win win on both sides, a fundamental game changer all the way around.
It also appears maybe just maybe They just fixed Stupid. Theres an old saying “When the pain of staying the same exceeds the pain of changing you will change”.
As for the Soldiers you better put on the double wall alumunium hard annodized hat if your reading that. Their akin to the right as Move on on the left. Their fears are founded I’ll give them that as their is risk in anything but livin life in the glass is half empty mode all day is a total drag. I do take exception to their constant rant about salary wages as they always use senior management as the scapegoat when in reality plant workers and engineering workers are not that far off base with each other. Should I as an engineer take the side that Ron is overpaid at 180 thou a year when he makes 2.5 times what I do? Did he take a 200 dollar a week salary during the strike? Not!
nuff said.
While its easy to take stabs at wagoner he inherited a pile of baggage. He has done everything he said he would do. I guess there isn’t anymore excuses. He has made the right moves. Its time to make the doughnuts.
On another note
Lets get real here. while there are many workers that are overpaid given their job assignments there are a great many UAW workers that have jobs greater than bolting on a part or cleaning the head. Youve got electricians,CNC operators,robotic programmers,tool and die makers,transfer line specialists,foundry specialists,plant engineers etc all under the union umbrella. A great many of these folks even have engineering degrees or specialty degrees. While I’m not pro union I feel the public does these people a great disservice by lumping them into (the stereotypical overpaid guy that bolts parts on all day under a UAW umbrella) because its just that, a stereotype and it just ain’t true.
lastly
GM generates some 900 billion dollars a year and if their lucky they may net several million as of late.
For those wishing them into BK think about these facts.
Since GM is grounded in the USA some 750 billion comes back here. the other 250 paying salaries,parts etc elsewhere.
that 750 bill is dispersed amoung the 50 states as GM has some kind of plant in 39 of them and some 330 thou retirees spread throughout. (some 6600 retirees per state if it was an even dispersion)
Thats 15 billion of revenue a state. If you don’t think a GM BK would effect your state just go ask the governor of your state and local businesses you just took 15 billion of revenue off their books. What would that do to your state
And thats just a GM direct impact.
since GM supports 1 in 7 jobs in the USA either directly or indirectly the impact would be unfathomable. It would make 15 bill per state look like chump change.
A single simple example. Did you know GM’s US electric bill is a 2 million a month. If that 2 million vaporized from the power companies revenue do you thing the public would suck it up in increased electric bills. Guranteed.
Crushing cars is such a waste. The podcast notes that police and governments love money. You’d think they’d rather sell all of them rather than crush them. They could always offload the old beaters on a random third-world country if they don’t want the cars to stay in the UK.
As to Bubba Gump: “Did you know GM’s US electric bill is a 2 million a month. If that 2 million vaporized from the power companies revenue do you thing the public would suck it up in increased electric bills. Guranteed.”
It depends where, when, and from what. A coal or gas plant can simply run the plants at a lower capacity. Areas that don’t have enough power, like California can cut their imports of outside power (including a fair bit from BC Hydro in Canada). Or they can delay their next local expansion project for a few months or sell the power in the energy market, among other things.
Bubba,
It would be unfair to begrudge someone a wage they earned on the market. When they get that wage using union tactics backed by government guns, they deserve all the abuse that can be loaded on them.
Second, your whole bankruptcy for GM thing is a seriously good example of how not to look at a business failure. I suppose we should have saved the buggy whip factories? Their model doesn’t work – adapt or die. THe people will go on to other, likely more productive, things.
Lastly, I don’t quite get your healthcare thing and how the VEBA is good for our country. If it gets reduced government regulation and interference in the healthcare market, then yes, it will be a good thing. Otherwise, not so much.