Talk of the UAW getting a seat on the board of General Motors in return for “concessions,” has Automotive News [sub] executive editor Edward Lapham thrilling at the idea of a UAW-run GM. Read only the title of his latest piece “UAW should get on board,” and you might assume it to be a call for more substantive UAW concessions to match the imminent bondholder haircut. You’d be wrong of course. “Nearly three decades ago, Doug Fraser, who was then president of the UAW, got a seat on the Chrysler board until the union recouped the wages and benefits it gave up so the automaker could get loan guarantees,” writes Lapham. “But this time, the union should do more.” Really? More? “Imagine what would happen if the UAW beat its sword into stock shares and invested its $1 billion strike fund in GM,” challenges Lapham. But there’s no need to imagine, because Lapham breaks it down for you. “It would effectively usher in an era of industrial peace and labor cooperation,” he figures. Not to mention the dawning of the Age of Aquarius. And with GM’s market cap treading water at $3b, the UAW could just snap up nearly a third of the company and get several seats on the board. Not only would this “send a loud, clear message to Congress and America that the UAW believes in GM’s chances to survive and thrive,” figures Lapham, “If you believe in the upside, it could be a spectacularly lucrative investment.” Or not. The relationship between the UAW and its employers has been defined by abuse, parasitism and disregard for the perogatives of competition. And it seems like even Lapham understands this, concluding his piece with the dire-but-fun-loving admonition to: “think of all the fun the UAW directors could have. Especially around contract time.” And you think GM is in bad shape now.
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The UAW actually on the board would give them – wait for it – actual responsibility and accountability.
That *would* be rich, wouldn’t it?
I’m sure Mittelfinger would figure out a way to still shift 100% of the blame (and 30% of the profits) his way no matter what happens.
But, it would be Schaden-funny…
This fiasco is going to destroy any remaining public respect for Unions and throw the House and Senate back to a majority Republican.
I would like to think that the UAW investing in GM stock will just lead to the sleazy thugs having their equity wiped out, but in reality it will make it so that even the GM shareholders, who should be completely wiped out in this pseudo-bankruptcy, will be bailed out by the government.
When a Union starts actually running a company historically it has always played out like Robin Hood taking over the Castle, and then behaving just like the Sheriff of Nottingham.
–chuck
This will lead to what I believe we on the intertubes like to call EPIC FAIL
Will the cars run on unicorn farts?
Turns out that as I’ve said here several times, labor costs aren’t the real reason the Big 3 are uncompetitive.
[H]ere’s a little experiment. Imagine that a Congressional bailout effectively pays for $10 an hour of the retiree benefits… the U.A.W. agrees to reduce pay and benefits for current workers to $45 an hour — the same as at Honda and Toyota. Do you know how much that would reduce the cost of producing a Big Three vehicle? Only about $800…. An extra $800 per vehicle would certainly help Detroit, but the Big Three already often sell their cars for about $2,500 less than equivalent cars from Japanese companies….
The cashback on the hood comes out of marketing’s budget. Engineering and materials fight for every penny, but money flows to marketing like manna from heaven.
Somebody tell me all the ad buys in C&D actually sell cars…
M1EK: [H]ere’s a little experiment. Imagine that a Congressional bailout effectively pays for $10 an hour of the retiree benefits… the U.A.W. agrees to reduce pay and benefits for current workers to $45 an hour — the same as at Honda and Toyota. Do you know how much that would reduce the cost of producing a Big Three vehicle? Only about $800…. An extra $800 per vehicle would certainly help Detroit, but the Big Three already often sell their cars for about $2,500 less than equivalent cars from Japanese companies….
And they lose money on them, too. There aren’t huge profits in small cars. Even the head of Honda admitted this in an article posted on this very site.
And you must have missed the article in The Detroit News where UAW head Ron Gettelfinger said that Ford had to built the Fiesta in Mexico, because it couldn’t make money on it if it produced the Fiesta in the U.S. I’m inclined to take his word for it on that one, given that he would probably LOVE to have his members produce this type of car in a time of volatile gasoline prices.
And we’ve been through this before – Toyota and Honda have been moving aggressively into bigger cars, SUVs, crossovers and pickups because the profit margins are much fatter on those vehicles than on small cars.
Unless someone is going to drag out the claim again that the Accord is a somehow a “small” vehicle because it’s smaller than a Suburban.
This may have changed very recently, but up until September, at least, most Honda and Toyota sales were from passenger cars larger than the Fit/Yaris and Civic/Corolla, and from pickups, crossovers and SUVs.
The domestic automakers are converting to government-financed worker cooperatives for the benefit of incumbent executives.
That would be one large that the UAW will never see again.
Just ask any United Airline employee just how great Board membership is (was), or even better – Employee Owned Company is(was).
It’s actually the worst thing for any union movement because now them becomes us.
The reaction from the rank and file when having one of their own tell them that it’s time to cut back is pretty ugly.
United Airlines put union reps on its board and wound up in Chapter 11 anyway.
M1EK: [H]ere’s a little experiment. Imagine that a Congressional bailout effectively pays for $10 an hour of the retiree benefits… the U.A.W. agrees to reduce pay and benefits for current workers to $45 an hour — the same as at Honda and Toyota. Do you know how much that would reduce the cost of producing a Big Three vehicle? Only about $800…. An extra $800 per vehicle would certainly help Detroit, but the Big Three already often sell their cars for about $2,500 less than equivalent cars from Japanese companies….
Its not just the dollars-per-hour, its the employees-per-car, and how effective those employees are at making said car. Management and the UAW are both very guilty for diluting the value in the human capital at those companies relative to what they get from their people vs. say, Toyota, and its reflected in the cost figures cited above.
geeber, once again with the half-truths.
Honda especially has made a LOT of money on small cars. It’s only been relatively recently that they even made anything bigger than ‘small’.
Your contention, though, wasn’t simply that they couldn’t make ‘as much’ money on small cars, but rather that it was effectively impossible to make enough money on small cars to keep the company going with a saner mix of small/large cars and trucks. The article quite clearly elucidates why your claim isn’t worth the electrons it sent down the tubes.
M1EK: geeber, once again with the half-truths.
Yes, you do need to stop relying on those. At least you’re not saying that an Accord is a “small” car because it’s smaller than a Suburban or Silverado, as you were in the previous discussion on this very issue.
I’m glad you’ve given up that argument.
M1EK: Honda especially has made a LOT of money on small cars. It’s only been relatively recently that they even made anything bigger than ’small’.
And Honda made even MORE when it moved into luxury cars, SUVs, minivans and pickups.
And when you can show me why I should take your word over the word of a Honda spokesperson quoted on this very site who said that Honda doesn’t make much money on the Fit, please let me know.
M1EK: Your contention, though, wasn’t simply that they couldn’t make ‘as much’ money on small cars, but rather that it was effectively impossible to make enough money on small cars to keep the company going with a saner mix of small/large cars and trucks. The article quite clearly elucidates why your claim isn’t worth the electrons it sent down the tubes.
You need to stop putting words into other posters’ mouths. I never claimed that, for Honda and Toyota, it “was effectively impossible to make enough money on small cars to keep the company going with a saner mix of small/large cars and trucks.”
You’ll improve your already wafer-thin credibility if you learn to properly state the other party’s arguments. What you THINK I said is not good enough, as it’s wrong about 90 percent of the time, because you go by what you HOPE I said, to make your counter-arguments easier.
Well, this isn’t a blog about attempts to bring mass transit to Austin, Texas, so you can’t rely on snark or four-letter words to attempt to make your point. You actually have to know the subject matter at hand, and be able to articulate counter-arguments based on what the other person said, not on what you think they said.
In our previous discussion, I PROVED that Honda and Toyota sell MORE larger vehicles – cars, minivans and SUVs – than smaller vehicles (Fit, Yaris, Civic, Corolla, Scions).
You denied this, and when I produced the sales figures to prove you incorrect, your frantic tap-dancing to deny what said figures proved was quite amusing.
At one point, you were whining that I had the gall to include Scion figures in Toyota’s total small car sales, even though that HELPED your case.
So, one can largely conclude that they make plenty of money selling larger vehicles, and they invaded this market to improve their profits, because said vehicles are more profitable than small cars.
Actions – in this case, based on product plans, model mixes and total sales – speak louder than words.
Until the full effects of the lastest UAW contract kick in, the DOMESTICS can’t make money on small cars. Ron Gettelfinger agreed with this in a Detroit News article.
I’m more inclined to take his word than yours on this subject matter, as he knows a thing or two about the auto industry. When you can prove otherwise, please let me know.
geeber, your dancing grows tiresome. You claimed car companies can’t make much money on small cars, yet Toyota and Honda built highly profitable businesses on mainly small cars for years and years.
You don’t have to write 200 lines to defend or attack this point. The fact that you feel it necessary shows that you’re attempting to obscure rather than to enlighten. Let me say again: I believe you’re trying to mislead people rather than inform them.
Nobody said large cars weren’t ‘more’ profitable, especially at certain times. What I said was that if you couldn’t make much money on small cars, Toyota and Honda are difficult contrary examples to deal with. The whole implication of your body of work is that it’s not the domestics’ fault they are falling apart because they couldn’t have been expected to make money on small or even reasonably sized cars. This, of course, is a load of crap – they could at least lose $1700 LESS on Cobalts if they made them Civic-quality, according to the report linked here.
Gettelfinger is about as credible as Wagoner. And the $800 vs $2500 figure is going to be a difficult one to hand-wave away too, but I expect another 300 lines from you in an attempt to try.
Seasons Greetings to UAW officers Ron Gettelfinger, General Holiefield, Bob King, Cal Rapson and James Settles …from over 500,000 betrayed UAW retirees.
“AUTO RETIREE HEALTH CARE IS THE SACRIFICIAL LEGACY COST AND THEREFORE RETIREES ARE THE PROBLEM! LET THEM DIE AND DECREASE THE SURPLUS POPULATION!”
All defenseless auto retirees, both hourly and salary are being treated as underclass. They are targeted, have been sold-out by government, corporate and union politicians. Their critical health care benefits are being used as political pawns.
UAW retirees legally owned their health care benefits until UAW officials recently went to court to garner the ability to negotiate them away.
These benefits were negotiated and paid for over a working lifetime of earnings deferrals and hourly contributions but union officials betrayed the trust of retirees, refused to vest the negotiated monies and they were frittered away.
UAW negotiated 30-year auto pensions are overwhelmingly and unjustly unequal. UAW negotiators refused to keep pension buying power up over the years allowing older retirees pensions to fall seriously further and further behind. These older UAW retirees have become America’s elderly poor.
These unappreciated low-income, sacrificial, unionized “legacy-cost retirees”, who have given so much to our nation, are tapped-out with living costs.
After a career of struggling on assembly lines, being denied the innovative pension building tools available to today’s retirees and being exposed to physical hazards unique to past auto assembly these deceived older retirees cannot afford to buy healthcare, which they now desperately need.
Closely read, copy and share the following links…
http://www.speroforum.com/site/print.asp?idarticle=16991
http://unionreview.com/insights-analysis-uaw-betrays-autoworkers
http://westfallmike.tripod.com/Page12.htm
http://michaelwestfall.tripod.com/id6.html
http://www.intellectualconservative.com/2007/08/11/interview-with-whitey-hale/
http://www.uawndm.org/ndmportal/modules.php?name=News&file=article&sid=157
http://westfallmike.tripod.com/Page14.htm
http://michaelwestfall.tripod.com/id17.html
http://www.umflint.edu/library/archives/westfall.htm
http://michaelwestfall.tripod.com/id50.html
http://westfallmike.tripod.com/
http://www.google.com/search?hl=en&rls=com.microsoft%3A*%3AIE-SearchBox&rlz=1I7GFRD&q=mike+westfall+uaw&btnG=Search
WOW Mike! A lot of rage pent up there, eh? Are you a Big 2.5 retiree?
If so, that’s fine, but you’re missing the big picture. Auto manufacture retirees, like their workers have enjoyed a level of compensation and benefits that far exceed market norms and in short are not sustainable. That bubble is bursting and it hurts.
While I’m sure these retirees feel like screwed over victims, they are conveniently forgetting that even with all the economic cram downs, both past and present, they are still some of the best compensated of their demographic.