Help me out here, please. How can labor Unions be to blame for the Big Three's issues

[Le Jacquelope]

The Big Three produce cars that are cheaper than Japanese cars.

How can labor union wages be responsible for making American cars a hard sell? They're cheaper for God's sake.

How come nobody talks about their shitty gas mileage or parts that come from Mexico? Oh, I know. Because these are the real things that are making people avoid Big Three autos. And you can't blame Union workers on that.

Or is there some other excuse to blame Unions that I missed?

 

[epiphany65]

Blaming unions is just another form of red-baiting -- the favourite passtime of many conservatives. If they think it's bad now, wait till/if one or all of the big 3 go under and are bought-up by companies in China or Saudia Arabia, which is a real and probable concern for some. Instead of driving SUVs named Liberty they'll be driving those named Jihad or Intifada.

 

[lil_elvis]

The labor situation with the big 3 is only part of the problem, there are plenty of other culprits who had a hand in making this mess.

And the labor issue must, at least in part, be laid at the feet of management as they negotiated the contracts that are now such a huge drain on their cash. Simple analysis of the arrangement would have pointed out its long term unsustainability. (Think Social Security and its defined benefit program with ever increasing liabilities drawn from a declining revenue pool. We've been warned of its impending demise for ages, but has a real solution been implemented?)

Management also ignored the long term trend in fuel prices. Sure there are spikes and troughs in the short term, but the long term average is to ever increasing prices. Even with the recent plunge in oil prices, we're still paying more for gas than we were just a few years ago. So the mgt concentrated on profitable gas guzzling SUV's as opposed to money losing cars that were more efficient. There was no incentive to improve (i.e. invest capital) on products that were losing money

Another unindicted co-conspirator is the US government and the way it implemented CAFE. Cars built in the US by the big 3 were treated separately from any they might build abroad and import. Save for the relatively recent building of US factories by Japanese companies, the big 3 competed in the small, fuel efficient car market with companies that were not subjected to the same double standard.

And did you see latest Blue Book figures on resale value? None of the top 10 are US cars. 8 Japanese companies/car lines plus BMW and VW. The top rated cars retain close to 50% of their original value. GM, on average, 30%. Chrysler/Jeep 25%. This goes to the heart of a leased vehicles' payment calculations and certainly should enter into the decision making for a purchase.

 

[Katyusha]

Here's how that works:

Labor union wages force the Big 3 to have more parts manufactured in substandard plants by workers with substandard skills than they would like, but their labor costs are significantly less than they would be if all parts were manufactured here.

It makes American cars cheaper than foreign cars in price, but also in quality.

And that lack of quality makes Americans avoid American cars like the plague.

As for my personal opinion? Wages are only a part of the problem. However, when someone's company is floundering they tend to look for a single problem to blame for their issues instead of looking at the bigger picture; it's a way of shifting blame off of oneself and one's poor business decisions, but it's also because one's opinions about certain issues (in this case, the unions) cloud their ability to see everything that's gone wrong. They could probably leave the wage issue alone if they could see what else needed to be fixed and how it needed to be fixed.

 

[Le Jacquelope]

Here's how that works:

Labor union wages force the Big 3 to have more parts manufactured in substandard plants by workers with substandard skills than they would like,

Considering that every other American industry, union or not, uses parts made outside the country, such an explanation... um... well... okay let's just say that it's an easy piece of red meat to throw at the ultracapitalist crowd.

As for my personal opinion? Wages are only a part of the problem. However, when someone's company is floundering they tend to look for a single problem to blame for their issues instead of looking at the bigger picture; it's a way of shifting blame off of oneself and one's poor business decisions, but it's also because one's opinions about certain issues (in this case, the unions) cloud their ability to see everything that's gone wrong. They could probably leave the wage issue alone if they could see what else needed to be fixed and how it needed to be fixed.

Yup, they could have concentrated on high gas mileage cars. For starters.

 

[oggbashan]

The UK's car manufacturers are also in trouble.

The manufacturers of larger and luxury cars aren't selling their products but smaller, fuel-efficient cars have seen a significant drop in their sales too.

Potential buyers are staying with their existing car. Even the secondhand car market has dropped.

Og

 

[Le Jacquelope]

The labor situation with the big 3 is only part of the problem, there are plenty of other culprits who had a hand in making this mess.

And the labor issue must, at least in part, be laid at the feet of management as they negotiated the contracts that are now such a huge drain on their cash. Simple analysis of the arrangement would have pointed out its long term unsustainability. (Think Social Security and its defined benefit program with ever increasing liabilities drawn from a declining revenue pool. We've been warned of its impending demise for ages, but has a real solution been implemented?)

<amicus>
Hold up, in America we blame the victims and the aggressors.
EXCEPT corporate management. The AMERICAN way of restating what you said was... corporate management was forced to accept those contracts.

And don't you dare bring up contract law and how you're supposed to honor a contract. Instead of relying on private obligations agreed upon by employers - and other socialist ideas - those workers should have bet their retirement on the stock mar... er... wait a second...
</amicus>

Management also ignored the long term trend in fuel prices. Sure there are spikes and troughs in the short term, but the long term average is to ever increasing prices. Even with the recent plunge in oil prices, we're still paying more for gas than we were just a few years ago. So the mgt concentrated on profitable gas guzzling SUV's as opposed to money losing cars that were more efficient. There was no incentive to improve (i.e. invest capital) on products that were losing money

"But I like my big giant 2 MPG Hummer VIII!"

Heh... not anymore.

Another unindicted co-conspirator is the US government and the way it implemented CAFE. Cars built in the US by the big 3 were treated separately from any they might build abroad and import. Save for the relatively recent building of US factories by Japanese companies, the big 3 competed in the small, fuel efficient car market with companies that were not subjected to the same double standard.

Really? Tell me more about this CAFE thing.

And did you see latest Blue Book figures on resale value? None of the top 10 are US cars. 8 Japanese companies/car lines plus BMW and VW. The top rated cars retain close to 50% of their original value. GM, on average, 30%. Chrysler/Jeep 25%. This goes to the heart of a leased vehicles' payment calculations and certainly should enter into the decision making for a purchase.

It's probably even greater than that for Japanese hybrid cars. Fuckin' ay. Quality wins.

 

[Shwenn]

And did you see latest Blue Book figures on resale value? None of the top 10 are US cars. 8 Japanese companies/car lines plus BMW and VW.

According to the economist:

Japanese executives make about 11 x more than factory workers.
German executives make about 12 x more than factory workers.
U.S. executives make about 475 x more than factory workers.

 

[cloudy]

I'm not even close to being an "ultracapitalist," but one of my degrees is in Labor Management, and I don't like unions.

There was a time when they were necessary, but that time is long past. They keep wages so artificially high that it's gone beyond ridiculous. I could have forgone college and still made more money than I did right after graduation had I gotten a job at a unionized shop. When is it right that someone with a damn good education is worth less than someone that quit school in 10th grade, and only possesses the skill to stand on an assembly line and do the same thing hour after hour?

Unions have a long and bloody history that isn't over yet, and I won't even get into the corruption that's inherent in the union system. Those that don't want to join are forced out of their jobs. That's a huge reason why the cars made here aren't worth a shit.

If the wages had been commiserate with skill/experience, we could have been making quality cars with quality parts at a decent price. As it is? Not even close.

So yeah, unions have a lot to answer for.

 

[lil_elvis]

Really? Tell me more about this CAFE thing.

For the benefit of anyone who might not know, CAFE is the Corporate Average Fuel Economy. (The average MPG of all cars actually sold by the car company.) If the company does not meet the minimum standard, they must pay a fine to the gov't.

Aside note - some companies, like Bentley, don't give a rat's ass and just pay up. I think Mercedes Benz has also anted up a few times too. But that's how the game is played. Or should I say rigged?

But back to my point. Let's say GM did a joint venture with Hundai and built fuel efficient cars in S Korea that people actually wanted to buy. They import them and sell them under some GM brand like Chevy. These cars would not enter the calculation for GM's CAFE. That's right, it's like they're made and sold by somebody else.

Such is the wisdom of congress and whoever was POTUS at the time the legislation was enacted.

 

[Shwenn]

Unions have a long and bloody history that isn't over yet, and I won't even get into the corruption that's inherent in the union system. Those that don't want to join are forced out of their jobs. That's a huge reason why the cars made here aren't worth a shit.

Since Japan and Germany make such great cars, their auto industry must have no unions.

 

[cloudy]

Since Japan and Germany make such great cars, their auto industry must have no unions.

Nice straw man, please try again.

 

[stephanie_webster]

I hope that none of this sounds personal and I’m happy to chat about tops. God, I do wish that I worked for a union company and my job was secure but like the rest of us I worry about my job. Do I want to work for a union? Hell no! I see how my coworkers work and there is now way that I want to be treated the same. I work harder and demand to be paid more. I’m not a fan of pay grades.

First one must look at the bigger picture. Honda can build cheaper cars in America, why is that? cuz they are not in a union state.

Okay, here are some issues with union. The union removes the supply and demand component. You have people earning $60/hr when the market supports workers at $20. Yeah for the person earning $60 life is great. However, why shouldn’t a company promote or fire that person and bring in someone at $20/hr?

Secondly the pension system will kill America.

Thirdly, the union being inflexible with robots and technology (course cuz a robot will take a union job).

In addition the union protects some employees that a company should fire. Are unions fully the reason why the big three are having issues? No, it’s mostly an American issue. We bitch about nothing being made in America and yet we shop at walmart and purchase Chinese products.

Blaming unions is just another form of red-baiting -- the favourite passtime of many conservatives. If they think it's bad now, wait till/if one or all of the big 3 go under and are bought-up by companies in China or Saudia Arabia, which is a real and probable concern for some. Instead of driving SUVs named Liberty they'll be driving those named Jihad or Intifada.

 

[Shwenn]

Nice straw man, please try again.

If the issues were inherent with the union system, we would see them in Japan and in Germany. But we don't.

If we are making crap cars while Germany and Japan are making great cars, the problem lies in the difference not the similarities. And Germany's labor unions are the envy of the labor world.

We now know that unions are not the problem.

If I am incorrect and you didn't mean that unions are the problem, then we agree. Unions are not the problem.

If I'm correct, and you do mean that unions are the problem, then I'm not using a straw man. I'm countering your actual argument.

Which is it?

Unions are also not the reason your degree wasn't marketable. A degree doesn't guarantee you a good salary. You have to actually get a desireble degree.

There are tons of degrees out there that will hardly even get you a job and that has never been a secret from anybody.

 

[stephanie_webster]

how can you say that the union is not the issue? In japan what % of the car is made by a robot? Yes they do have unions but those unions work with the companies for the most part. Here, in the states the union is anti managment and fights against change

If the issues were inherent with the union system, we would see them in Japan and in Germany. But we don't.

If we are making crap cars while Germany and Japan are making great cars, the problem lies in the difference not the similarities. And Germany's labor unions are the envy of the labor world.

We now know that unions are not the problem.

If I am incorrect and you didn't mean that unions are the problem, then we agree. Unions are not the problem.

If I'm correct, and you do mean that unions are the problem, then I'm not using a straw man. I'm countering your actual argument.

Which is it?

Unions are also not the reason your degree wasn't marketable. A degree doesn't guarantee you a good salary. You have to actually get a desireble degree.

There are tons of degrees out there that will hardly even get you a job and that has never been a secret from anybody.

 

[cloudy]

If the issues were inherent with the union system, we would see them in Japan and in Germany. But we don't.

If we are making crap cars while Germany and Japan are making great cars, the problem lies in the difference not the similarities. And Germany's labor unions are the envy of the labor world.

We now know that unions are not the problem.

If I am incorrect and you didn't mean that unions are the problem, then we agree. Unions are not the problem.

If I'm correct, and you do mean that unions are the problem, then I'm not using a straw man. I'm countering your actual argument.

Which is it?

Unions are also not the reason your degree wasn't marketable. A degree doesn't guarantee you a good salary. You have to actually get a desireble degree.

There are tons of degrees out there that will hardly even get you a job and that has never been a secret from anybody.

It's a straw man because comparing the labor systems of Japan and Germany to the U.S. is like comparing apples to cats.

I realize you like to think you know absolutely everything about everything (just like your twin, srplt), but, in this case at least, you quite obviously don't.

how can you say that the union is not the issue? In japan what % of the car is made by a robot? Yes they do have unions but those unions work with the companies for the most part. Here, in the states the union is anti managment and fights against change

Exactly.

 

[Shwenn]

how can you say that the union is not the issue? In japan what % of the car is made by a robot? Yes they do have unions but those unions work with the companies for the most part. Here, in the states the union is anti managment and fights against change

I agree with you for the most part.

But you can't, with any honesty, claim that the adversarial relationship is all coming from the side of the unions.

The adversarial relatioship is definitely the problem. But, we know this problem is not a problem inherent in unions, themselves.

Which is exaclty my point.

 

[Le Jacquelope]

I'm not even close to being an "ultracapitalist," but one of my degrees is in Labor Management, and I don't like unions.

There was a time when they were necessary, but that time is long past. They keep wages so artificially high that it's gone beyond ridiculous. I could have forgone college and still made more money than I did right after graduation had I gotten a job at a unionized shop. When is it right that someone with a damn good education is worth less than someone that quit school in 10th grade, and only possesses the skill to stand on an assembly line and do the same thing hour after hour?

So the solution to this is to remove the unions and leave us at the mercy of organized management? Organized labor is somehow more corrupt than organized management? Have you not seen how many millions these organized management types have walked away with while their company goes under?

Organized management will never go away. They'll always hold the power. Without organized labor - unions, even with all their corruption - what will balance organized management?

Unions have a long and bloody history that isn't over yet,

A lot of that history involved workers being shot for striking. The pendulum has now swung the other way.

and I won't even get into the corruption that's inherent in the union system. Those that don't want to join are forced out of their jobs. That's a huge reason why the cars made here aren't worth a shit.

That's not a huge reason why the cars made here aren't worth a shit. The huge reason is their design by non-union people - namely, the design as ordered by organized management. Management wanted cheap parts, and cheap parts are endemic to almost all US industry, unionized or not. That is to say, if unions were gone, GM would still be using cheap substandard parts from other countries. Guaranteed. This is a consistent fact of history.

As for corruption, you get rid of the unions, and you will see corruption from management such as the likes of which you've not seen yet.

If the wages had been commiserate with skill/experience, we could have been making quality cars with quality parts at a decent price. As it is? Not even close.

The best workers in the world cannot put together a great car when the parts they're using are cheap third world crap. Ain't gonna happen.

So yeah, unions have a lot to answer for.

A lot more than the organized management that called for cheap substandard parts and ordered the design of low mile-per-gallon cars? More than that? Really?

 

[cloudy]

So the solution to this is to remove the unions and leave us at the mercy of organized management? Organized labor is somehow more corrupt than organized management? Have you not seen how many millions these organized management types have walked away with while their company goes under?

Organized management will never go away. They'll always hold the power. Without organized labor - unions, even with all their corruption - what will balance organized management?


A lot of that history involved workers being shot for striking. The pendulum has now swung the other way.


That's not a huge reason why the cars made here aren't worth a shit. The huge reason is their design by non-union people - namely, the design as ordered by organized management. Management wanted cheap parts, and cheap parts are endemic to almost all US industry, unionized or not. That is to say, if unions were gone, GM would still be using cheap substandard parts from other countries. Guaranteed. This is a consistent fact of history.

As for corruption, you get rid of the unions, and you will see corruption from management such as the likes of which you've not seen yet.


The best workers in the world cannot put together a great car when the parts they're using are cheap third world crap. Ain't gonna happen.


A lot more than the organized management that called for cheap substandard parts and ordered the design of low mile-per-gallon cars? More than that? Really?

We'll just have to agree to disagree. I could type in my entire thesis but you'd still disagree with me.

The "cheap, sub-standard parts" can be traced directly to a need to cut costs. You know this stuff: the biggest controllable expense of any business is labor. When they can no longer control their labor costs, they'll find someplace else to cut costs....hello cheap parts.

It may be too late to totally un-unionize the industry, but it's obviously not working.

I say let the big three fail. Any other business that ran their operations the way they have would fail, so what makes them so damn special that they have to be saved?

 

[Le Jacquelope]

I hope that none of this sounds personal and I’m happy to chat about tops. God, I do wish that I worked for a union company and my job was secure but like the rest of us I worry about my job. Do I want to work for a union? Hell no! I see how my coworkers work and there is now way that I want to be treated the same. I work harder and demand to be paid more. I’m not a fan of pay grades.

First one must look at the bigger picture. Honda can build cheaper cars in America, why is that? cuz they are not in a union state.

Okay, here are some issues with union. The union removes the supply and demand component. You have people earning $60/hr when the market supports workers at $20. Yeah for the person earning $60 life is great. However, why shouldn’t a company promote or fire that person and bring in someone at $20/hr?

Funny how you say that, but yet American cars are cheaper than non-union Japanese cars.

Secondly the pension system will kill America.

Oh certainly. Perhaps these workers should have invested in the stock market?

Thirdly, the union being inflexible with robots and technology (course cuz a robot will take a union job).

Now that's the first valid union complaint I've heard yet.

In addition the union protects some employees that a company should fire. Are unions fully the reason why the big three are having issues? No, it’s mostly an American issue. We bitch about nothing being made in America and yet we shop at walmart and purchase Chinese products.

I don't shop at Wal Mart. I buy made in the USA whenever I can.

 

[JackLuis]

The Unions and the Managements are both at fault.

Unions should be training their members to be more productive, I mean they are selling labor now. In the old days they were fighting for a living wage. Now they should be fighting for a piece of the world Market.

Management should be working for the health of the Corporation that they are serving. THey shouldn't be covering the gaps in the P&L with paper profits but putting money in R&D and New tooling to compete rather than feathering thier nests with Bonuses based upon bogus P&L's.

The French are loosing thier shirts in the Spanish Car Markets just now. Spain is haveing a credit crunch and new car sales are running 40-50% below last year. So it is not just a US problem.

There is enough humble pie for everyone to have thier fill and it will get worse.

 

[Shwenn]

It's a straw man because comparing the labor systems of Japan and Germany to the U.S. is like comparing apples to cats

That would only have been a straw man if you hadn't said you didn't like unions without any clarification. Japan's unions are unions. So are Germany's. "I don't like unions." That's what you said.

If you meant something else you should have written something else.

I'm not a mind reader.

 

[cloudy]

That would only have been a straw man if you hadn't said you didn't like unions without any clarification. Japan's unions are unions. So are Germany's. "I don't like unions." That's what you said.

If you meant something else you should have written something else.

I'm not a mind reader.

Gee, I thought we were talking about problems here in the U.S. Silly me.

 

[Le Jacquelope]

We'll just have to agree to disagree. I could type in my entire thesis but you'd still disagree with me.

I just want to know where I am factually wrong.

I want to know why organized labor is worse than organized management.

I want to know who aside from the union is going to stand up for the worker when they are pitted against the interests of organized management. Are we expecting a single worker to go up against the entire system of a given corporation, which is designed by nature to favor management and the investors?

I want to know why people think that GM would not have used foreign, cheap parts if they did not have union labor - even though ALL non union industries use foreign parts nowadays.

I want to know how it is that organized labor is at fault for management ordering the production of low gas mileage cars.

I just want to know just these simple things. Can someone help me out here?

 

[cloudy]

I just want to know where I am factually wrong.

I want to know why organized labor is worse than organized management.

I want to know who aside from the union is going to stand up for the worker when they are pitted against the interests of organized management. Are we expecting a single worker to go up against the entire system of a given corporation, which is designed by nature to favor management and the investors?

I want to know why people think that GM would not have used foreign, cheap parts if they did not have union labor - even though ALL non union industries use foreign parts nowadays.

I want to know how it is that organized labor is at fault for management ordering the production of low gas mileage cars.

I just want to know just these simple things. Can someone help me out here?

Please don't misunderstand me....I don't think all of the auto industry's ills can be laid at the feet of the UAW. I think the fault lies within the entire industry, but your op was talking about unions, so that's what I focused on.