Gettelfinger: Wage cuts won't be part of UAW concessions
General Motors and Chrysler are tasked with gaining concessions from debt holders and organized labor by February 17. If major cuts aren't achieved, the struggling Detroit automakers risk having to pay back the $17.4 billion in government loans that have helped keep the companies solvent. UAW President Ron Gettelfinger told Automotive News that any concessions won't include wage cuts. The Ron points out that Toyota workers at Georgetown average $30 per hour in wages and bonuses, or $2 more than tenured UAW workers. Though the union's $28 per hour wage is likely safe, generous blue collar health care benefits may not be. Pension costs are likely to decrease as well, as part of the loan agreement calls for half the retiree health care trust to be paid for with equity instead of cash.
Gettelfinger has recently questioned whether it was possible to agree to concessions in time for perceived February 17 deadline, but now he sayst that he fully expects the UAW, GM, and Chrysler to have "laid out ground work" to satisfy its portion of the loan deal.
[Source: Automotive News, subs req'd]
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Reader Comments (Page 1 of 3)
Mister D Barton 4:37PM (1/22/2009)
Hmmm...wage cut or no job...decisions, decisions.
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alex 5:14PM (1/22/2009)
It's not the wages that are causing the problem. It's the benefits and the retiree benefits that need to be brought in line. Like the article says, UAW workers make about the same as transplant workers. The difference is that UAW workers get much better benefits and that GM has far more retirees than all the japanese companies combined
Sean 6:42PM (1/22/2009)
How about, instead of cutting the wages of the people who do the actual work, they cut the wages of board members and the like
I think $1M a year sounds like a nice cap.
Across the board.
Unless their entering and input, the work they do, the products they help work on, produce a measurable increase in the gross income for the company, and all other employees benefit as well.
montoym 7:24PM (1/22/2009)
@Sean:
OK, so they do that and save, say $50-100million per year. OK, then what?
They would still be losing Billions of dollars per quarter which 50 or 100 million isn't going to do much to stop.
While it's nice to point out the guys at the top who make a lot of money, that's far from where the money will be saved. They are just scapegoats and a place for everyone to put blame without actually looking at the real issues. That said, I'm not saying that they shouldn't also take a pay cut as well(which all 3 CEO's have already done to my understanding). But, I'm also not coerced into believeing that just cutting the pay of the execs will suddenly right the ships and all will be good.
Do some math, figure GM(just picking one of the Big 3 out for simplicity) has 20K UAW workers(shot in the dark, but probably low). Say you are able to shave just $1/hr in compensation from each worker(not actual pay, but maybe benefit savings). Over the course of a work week, you'd save the company $800K per week($20K/hr x 40hrs). That's with only a $1 savings.
Estimates claim that the Big 3 average about $15/hr over the total compensation of transplant workers from non-union US plants. If they were able to truly get to a level playing field with the non-union workers(not sure it would ever happen), they'd save roughly $12 million/week using my figures($800K/wk x 15).
Remember what Obama and Pelosi have said, "Everyone will have some skin in this".
Your solution is for all the execs to lose their skin while the rest of the workers lose nothing.
I think it's more than fair for the workers to give up a few dollars/hr in benefits(not actual pay) to save the company millions of dollars and save their jobs as well.
Polly Prissy Pants 11:58AM (1/23/2009)
It's not a choice between a pay cut and a job. Bankruptcy will not put most of these guys out of a job. Somebody still has to build cars while GM reorganizes. For the union it's a choice between:
1. Take a cut now.
2. Take what you can get now and hope for the best. What's the worst that can happen? A bankruptcy court forces you to take a cut later? Big deal.
Taking a cut now only helps ensure the continued multi-million dollar compensation packages of the execs. Not much motivation there, that's why they/re not interested.
the vegas style guy 4:42PM (1/22/2009)
Let the idiot anti-union jabs begin.
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ambientFLIER 7:18PM (1/22/2009)
Screw the unions
Justin 7:31PM (1/22/2009)
Union is cancer.
pmiddle5 8:20PM (1/22/2009)
They use to be mandatory though..
They have become greedy and ill managed but there was a day when unions did not exist your life could become absolutely ruined quite easily.
the vegas style guy 8:41PM (1/22/2009)
lol! thanks guys!
firstplace 10:24PM (1/22/2009)
hotel workers or cooks union? Unions are to go the way of the dodo.
robert bell 4:43PM (1/22/2009)
Gettelfinger is just daring GM to go Chapter 11. Guess he thinks the UAW pull with the new Administration is going to protect him from asking his members to give back some more to keep their jobs. If he is right, smart move for him; if he is wrong, disastrous move for his members because once GM goes into 11 all bets are off and the government money will go away and any influence the Congress might have on "reconfiguring" ,i.e a pre-packaged bankruptcy, is kaput. Then every stake holder gets in line and the employess are to the rear if not at the end where the common shareholders find themselves.
As a taxpayer I am going to get real tired real quick of continuing to support a failing business model regardless of it being to support incompetent managment or workers whose compensation package is out of touch with the reality of their industry. From my point of view the sooner GM goes 11 the sooner everyone can get about sorting through the wreckage and start rebuilding a business based on economic reality not political influence. That is going to include a lower wage scale/benefits package for whomever can get work in the plants
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zamafir 5:23PM (1/22/2009)
Very apt!
ronEbear 5:57PM (1/22/2009)
I second that.
Driver X 4:42PM (1/22/2009)
GM has some nice product in the pipeline but how can they ever dig themselves out of this hole? Chapter 11 with a bail out would have made more sense.
A wage concession or unemployment. What's it gonna be UAW?
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MisterDBarton 4:46PM (1/22/2009)
I wouldn't say anti-union, just logic. I'd rather take a pay cut than to lose my job. If the UAW were smart, they'd take a 20% pay cut (which is $5.60) which still leaves the workers with ~$22.40 an hour, and it looks great in terms of the government watching and if the UAW is even smarter, they'll have provisions to start returning those lost wages over time as the company rebounds.
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Red 4:48PM (1/22/2009)
"Gettelfinger has recently questioned whether it was possible to agree to concessions in time for perceived February 17 deadline..."
Perhaps sir, if you didn't waste your time questioning whether it was possible or not and began negotiating, you COULD meet the Feb. 17th deadline...
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caddy-v 4:53PM (1/22/2009)
I was fuming when I read that headline, now I'm fuming to know they make less per hour than Toyoda workers. I don't blame them one bit for not giving in on the hourly pay. Sorry, but $28 per hour for what they do or for what anyone does is just chicken feed.
Last I heard was everyone wanted the UAW to bring wages down to the transplants level, BS. Bring the UAW up to the transplants pay.
To HELL with the transplants, America and American industry first.
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Taco 5:09PM (1/22/2009)
So, $56k /yr is chicken feed? Man, I wish I made chicken feed plus full benefits...
Dazza 5:16PM (1/22/2009)
You seem to forget that GM's $28/hr pay to union workers is currently being funded out of taxpayers' money. Toyota workers' $30/hr wages are not.
I assure you that if Toyota's financial position ever gets to the same depths that GM's is, then that $30/hr will likely be sharply curtailed.
It's a concept known as business. Unfortunately, powerful unions are only interested in this notion when business is doing well.