Filed under: Government/Legal, Hirings/Firings/Layoffs, Plants/Manufacturing, GM, UAW/Unions
GM/UAW concession talks commence
To ensure long-term viability, General Motors has pledged an arm and a leg (and maybe an eye) to satisfy conditions imposed by the federal government after the automaker received billions in taxpayer-funded loans. In addition to reducing debt and condensing the number and type of vehicles it produces, GM has promised to revamp labor contracts -- not an easy task. With that in mind, GM is entering historic talks and negotiations this week with the United Auto Workers, bondholders, dealers and others to help transform the automaker into a lean and profitable company. It's a monumental task, but GM needs to undertake serious financial concessions to implement their restructuring plans. These include eliminating up to 31,000 jobs, closing down nine assembly plants, shutting 1,750 dealerships, and possibly eliminating the Saturn brand. Of course, they also have to renegotiate the 2007 UAW labor contract with GM. The UAW has resisted wage and benefit cuts, but without union compromise GM could be forced to file bankruptcy... something none of the players wants to see happen.
[Source: Detroit News]
Reader Comments (Page 1 of 2)
snp 4:56PM (1/06/2009)
1 word: "...whoa..."
So are they saying they should cut an additional 31k uaw workers and close 9 more plants than what has already been scheduled and planned? That seems like a lot. That would bring their workforce down to what's in line with Ford...
I think all this talk about renegotiating the 2007 talks is too much. Salaries and current benefits are already close to inline with non unions. The whole purpose of joining a union is to be able to demand better worklife. Why pay union dues if everybody makes the same amount and has the same benefits?
The only thing i think should be changed is Medical benefits and Pensions. Those should be modified to be 401k + company contributions higher patient copays.
I dont know what the current UAW retirement age is too, but if a UAW worker can join at 20 and retire at 50, then I think they should raise the retirement age too.
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Scott 5:21PM (1/06/2009)
"Why pay union dues if everybody makes the same amount and has the same benefits?"
That about says it all. The UAW now has to defend their worth, when the golden goose can't lay any eggs. If they can't deliver higher wages (and very soon, they won't), then why allow them to skim your paycheck?
The next question: how long for the average line worker to figure this out? Tick-tock.......
montoym 11:13PM (1/06/2009)
quote from snp: -
"The only thing i think should be changed is Medical benefits and Pensions. Those should be modified to be 401k + company contributions higher patient copays." -
That's basically exactly what GM is proposing I imagine. For instance, the 2007 renegotiation already mandated 401k's with new employees getting them first.
The problem is, that new contract isn't going to begin until 2011. New workers are held to the terms of the new contract, but when was the last time you heard of GM hiring new workers? So, in other words, that new contract doesn't mean anything right now.
My guess is, they want to negotiate for an earlier start date for the new contract than 2011. Plus, they will probably ask for more concessions on benefits as well.
Going back to another comment of yours and one that was touched on by Scott, it's already a well-know fact that UAW workers make pretty close to what non-union autoworkers make(it's less than a $2/hr difference in wages, not total compensation). So, that's not where the cuts are going to be made, it's in the benefits and healthcare that are costing the Big 3 so much more than their non-union counterparts.
I still think it is funny that the UAW claims to push for higher wages and better benefits while at the same time mentioning that they won't agree to more cuts because their workers already make almost the same as their non-union counterparts. So, what exactly are the union workers paying for??
Honestly, the benefits are no longer as extravagent as they once were, for instance no more guaranteed pension plans etc. I'll admit that a large part of the benefits cost are legacy payments to cover workers who no longer work for GM and as those retirees die off(crude, but that's the truth, they get lifetime benefits and pensions) those costs will come down. That can still be 20-30 years down the road though. Therefore, other cuts need to be made in order to make the company more competitive and viable in a World where the Big 3 no longer have a monopoly over the US auto market as they once did.
Dude 5:06PM (1/06/2009)
Unless they abolish the UAW, I don't see this doing anything to fix the problem.
http://laborpains.org/index.php/2008/12/12/22-pounds-uaw-rules-and-regulations/
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firstplace 5:07PM (1/06/2009)
They should have bought there way out of union contracts long ago. The union had its place long ago, now it is just a leech.
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Coco 5:07PM (1/06/2009)
It's amazing GM is still alive with over $50billion in medicare/social security liabilities, "job bank" programs (where people show to play crossword puzzles), etc
don't GM print more pay checks each month for people not even working? just amazing...
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Carlos 5:16PM (1/06/2009)
Or they could just move all of their plants to right to work states and bye bye UAW.
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pmurvay1 4:38PM (3/21/2009)
carlos, how much do you think it cost to build an assembly plant, and aquire the land for it. Bill
Yikes 5:31PM (1/06/2009)
I think this clears up many of the problems with the UAW.
http://www.clickondetroit.com/video/15908257/index.html
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fuser197 5:35PM (1/06/2009)
So, no one's going to say it? Fine, I will, "@#%& the UAW".
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no detroit 5:46PM (1/06/2009)
I'm with you, kick the UAW to the curb, stop paying full benefits to retirees (some who went into retirement at 55 years old) and move the factories to non-union states.
hyundaifans.com 6:11PM (1/06/2009)
I'm with you. The union has forced domestic makers to their knees. "Gently fingered" and his henchmen have to go!
Dave 5:58PM (1/06/2009)
GM wages for new workers (actual wages worker take home) now amounts to $14.00 an hour while Toyota is $27.00 and hour. It';s the legacy cost that killing the domestics car makers. Toyota, Honda and the rest does not have that burden because they don';t have any retirees,yet. Between Ford, Chrysler and GM there are 750,000 retirees. How in hell can the domestics compete with that? The US government should have never have allowed such disparity. I know this in reverse would never have happened in Japan..
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snp 5:02PM (1/06/2009)
I think there should be court orders for situations like this. Back when GM wanted to shrink labor costs, UAW went on strike for months and costed GM billions. I think govt should step in at some point for some industries.
Here in NYC there was a strike a few years back. City transportation workers wanted better benefits with 55yr old retirement with pensions and 50k+ salaries. It locked down the city for several days. The city ordered it illegal and fined every worker who went on strike and the union boss had to sit in court. Now that UAW laborers are collecting taxpayer money as a salary, they essentially waltzed right into the one group they cant strike against.
geo.stewart 5:29PM (1/06/2009)
the union is a premonition of the country's woes.
based on the above comment, there are more retirees than UAW workers and its breaking backs.
Wont be long before that is the US as a whole.
Conundrum 6:18PM (1/06/2009)
@geo.stewart...
You nailed it! So keep working hard and break out the check book... Oh come on...you'll need to open it wider than that!
scott 7:42AM (1/07/2009)
I guess we will all just have to live on our social security when we get old.....
midnightriderz 9:09PM (1/06/2009)
All three American Auto Manufactures have similiar problems;
1) Toyoto has under 2000 dealerships nationwide. The big three average approximately 7900 each on dealerships. You have to make a lot of cars to stock that many dealerships.
2) When an autoworker is laid off, they receive 95 percent of their salary, for four years, and sit in a job bank. Where is the incentive for that person to go find another job?
3) GM specifically was paying approximately 11 million dollars a year in Viagra. Now if someone needs help getting it up to get off, then said person should pay for the drug, not insurance. While some will argue, it is not life threatening to get your sexual satisfaction, so insurance should never pay for those drugs.
4) While the quality of the big three cars and trucks have risen in quality, Toyota and Honda still build the best vehicle. Let me give you a personal example. I bought a 1999 Chevy Malibu, brand new. That was a great car. It ran fine and the body lines were pretty. The lower intake manifold gasket blew, thankfully to the outside. I paid for the repair and began investigating. Seems GM used the same gasket, knowing it was bad on 3.1L, 3.4L, and whatever the next size engine from 1996-2002. I called GM on several occasions voicing my complaint. I was told the car was out of warranty and we are sorry. It took a class action lawsuit for GM to finally admit the problem was created by Dexcool. I filed my claim and am getting my $575.00 back. However, many buyers had the gasket leak to the inside and blew the engines before the problem was realized. I was a fourth generation GM buyer. I am now the proud owner of two Honda Accords that run w/o problems.
montoym 11:28PM (1/06/2009)
quote from Dave: -
"GM wages for new workers (actual wages worker take home) now amounts to $14.00 an hour while Toyota is $27.00 and hour." -
Your figures leave out a couple of important pieces of info. The $14/hr wage is for noncore, nonproduction jobs. Read more about the contract here: http://www.autoblog.com/2007/09/28/uaw-gm-contract-details-revealed-local-leaders-vote-unanimously/
The average production worker makes closer to the upper $20/hr range, within a dollar or two per hour as thier non-union counterparts.
Including the benefits and healthcare costs though, the Big 3 spend far more per employee and that's where the biggest difference between the UAW wages and those of non-union plants comes from.
Read more in these two similar articles
http://www.nytimes.com/2008/12/10/business/economy/10leonhardt.html?_r=2
http://blogs.moneycentral.msn.com/topstocks/archive/2008/12/11/do-auto-workers-really-earn-73-an-hour.aspx
stratojet 9:25PM (1/06/2009)
I watched the video from Yikes. Here's my take:
I work for GM as a salaried employee in Canada. What is depicted in the video is absolutely true. The same thing is going on with blue-collar for the City of Montreal. They followed one of their crew last year who were supposed to repair the pot holes. In a day and a half, a crew of 6 men repaired only three of four holes. This was broadcasted in the evening news and the Union had the nerves to say that this was a plot to make the Union look bad.
The UAW is a Cancer that has eaten their host and will soon destroy their own membership if not stopped. I don't like Bush, or the Republican and Senator Shelby. However, I truly believe that targeting the UAW is more than fair.
Enough is enough.
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