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CAW defiant in face of Chrysler's demands

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L

landscaper

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Feb 28, 2007
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from my earlier post Cerberus the company that owns the majority of Chrysler has money in the bank, if they don't want to put money into their company why should we?

The managment / union arguments are interesting, the fact of teh matter is

the business model is broken, labour costs are to high, managment costs are to high, the products are marginal at best ( for the most part there are some good models).

This has been happening for 30 years, in the 70's fit and finish were non existant , the 80's they could not keep paint on oldsmobiles and buicks, the 90's there were so many models lines that produced the same car, they produced an engine and used it that had a 15% failure rate in intake manifold gaskets, they continued production and tried to hide the problem.

All of this is just GM Ford and Chrysler had the similar problems .

The industry is broken through a combination of union greed and mangment incompetance, if CHrysler and the unions can not reasch a deal flush the toilet and see if Ford and GM and the unions see the light if not flush the toilet again sooner or later one way or the other the problem will be solved and a manufacturer that can actually build a decent vehical at an acceptable price and provide good after sale service will fill the gap.
 
R

rama putri

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Sep 6, 2004
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Chrysler, in fact all three of them, should just shut down completely. Today's unions are clueless with the current manufacturing climate in Canada. Actually, they (union management) are not clueless, they are milking it at the expense of their member's jobs. Call their bluff. Pull out.
 
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4nik8or

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The facts are that if all the big 3 workers worked for free...yes free....they would still not make a dent in the companies problems! total labor on a car price tag is 7% that's it! where does the rest of the car prices come from? why not make cuts there? they advertise in every newspapaer in every town in every city all across north america. not to mention radio, television, billboards, buildings. how much is being spent there? why do we continually try to tear someone down who is doing well? why not start with why is that job only paying 8$ per hour instead of sayin they make too much. at thye end of the day we are talking loans.. THAT HAVE TO BE PAID BACK! no one said foul when the banks recieved 700 billion and then gave their exec's all their bonus's. if the big three go down...we are in a recession now...we'll be in a depression for sure! 1.4 million canadian jobs rely on that sector for work. where will that tax base come from? easy for every one to say let em leave, but will be real interesting when you say why are my taxes going up? why am i paying all these user fees?
 
K

KBear

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4nik8or said:
... total labor on a car price tag is 7% that's it! where does the rest of the car prices come from? ...
Click to expand...
So, you feel that $34/hour is reasonable market pay for unskilled labor?

What additional percentage of a car's cost are made up of paid benefits and retirement costs?

Stop advertising, good idea :rolleyes:
 
A

a 1 player

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Feb 24, 2004
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4nik8or said:
The facts are that if all the big 3 workers worked for free...yes free....they would still not make a dent in the companies problems! total labor on a car price tag is 7% that's it! where does the rest of the car prices come from? why not make cuts there? they advertise in every newspapaer in every town in every city all across north america. not to mention radio, television, billboards, buildings. how much is being spent there? why do we continually try to tear someone down who is doing well? why not start with why is that job only paying 8$ per hour instead of sayin they make too much. at thye end of the day we are talking loans.. THAT HAVE TO BE PAID BACK! no one said foul when the banks recieved 700 billion and then gave their exec's all their bonus's. if the big three go down...we are in a recession now...we'll be in a depression for sure! 1.4 million canadian jobs rely on that sector for work. where will that tax base come from? easy for every one to say let em leave, but will be real interesting when you say why are my taxes going up? why am i paying all these user fees?
Click to expand...
Let me do a little math here assuming a single plant with 1,200 people is being closed. Just the labor costs here, none of the fixed costs.

Given:

40 hour work week
52 work week year
Inclusive of hidden labor costs (@ $70/hr.)

$70 x 40 hours = $2,800
$2,800 x 52 weeks = $145,600
$145,600 x 1200 employees = $174,720,000

That sound to me like a tad more than 7% of the total costs of a car, and considering that is only ONE plant.
 
4

4nik8or

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That 7% is including al pension and benifit costs. am i saying they don't make a good wage? absolutlely not. but the little hidden truths is what i am talking about. $70 per hour these people do not make. that is all the pensioners plus all the surviving spouses and whatnot added together then divided by the number of current workers and they are given a total of around that 70 per hour mark. year by year these companies will grow into better shape. there will not be the same amount coming onto the pension plan as sad to say dying off of.

as for the math let's try it this way
the plant has 1200 x 34 per hour x 8 hour day = 166,400 per day labour cost
yet those people produce 1000 cars per day at say average 30,000= 30,000,000 you work the percentage out.
 
A

a 1 player

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http://findarticles.com/p/articles/mi_qn4182/is_19960626/ai_n10090156

TROY, Mich. -- General Motors Corp.'s labor costs for auto parts are $440 higher a vehicle than Ford Motor Co.'s costs and $600 higher a vehicle than Chrysler Corp.'s because GM buys fewer parts from low- cost outside suppliers, according to a new study.

The study, by an independent consulting firm in this northern suburb of Detroit, bolsters GM's position in this summer's labor negotiations with the United Automobile Workers union. GM has been seeking extra concessions this year from the UAW to offset the disadvantage the company has from manufacturing so many of its own parts using highly paid union workers.

Stephen P. Yokich, the president of the UAW, sharply criticized the study. He said Harbour & Associates, the consulting firm that produced the study, had looked only at labor costs and had not included the lower quality and lower productivity at many outside suppliers.

"This study adds nothing to the ongoing efforts of the UAW or the companies to balance the requirements of high-quality, efficient production with the need to sustain the good jobs that drive our economy," he said.

But Linda Cook, a spokeswoman for GM, welcomed the study. "It does point out, right now, a cost advantage" for GM's domestic rivals, she said.

The figures, which do not include Japanese-owned factories in the United States and elsewhere, underline the enormous changes that have taken place over the last three decades in the way auto companies are organized. During the 1950s and 1960s, GM's vast empire of parts factories was widely viewed as one of the company's biggest competitive advantages, providing enormous savings from the large- scale production of everything from car seats to brakes.

But a combination of underinvestment, poor management and numerous wage and benefit concessions to the UAW has turned the parts factories into a liability for GM. The company estimates its hourly cost of labor at $43, including benefits for retirees, while suppliers' costs are half as much for some parts.

Jim Harbour, the founder of Harbour & Associates, said GM's labor costs were too high for it to continue producing labor-intensive parts like seat covers. "Anything that's labor intensive, you're not going to compete in at $43 an hour," Harbour said.

To the irritation of the UAW, GM has said that it is looking for ways to make its parts operations more competitive, and is in the process of selling or merging five parts factories.

Harbour said his firm had prepared Monday's report in response to numerous questions from various news organizations, and the report was not paid for by any auto maker.

Daniel Luria, a former UAW economist who is now an analyst at the Industrial Technology Institute, a research group in Ann Arbor, Mich., said that the Harbour figures might overstate GM's cost disadvantage.

Up to $12 an hour of GM's hourly labor costs comes from pension benefits, retiree health care and other expenses that GM would have to continue paying even if it transfers work to outside suppliers, he said.

Harbour said that only $7 or $8 an hour of GM's costs reflected retirement benefits that would have to be paid in any case. GM pays its UAW workers an average wage of $19.27 an hour and does not give a detailed breakdown of its other labor costs. Overtime pay and taxes like employer-paid Social Security premiums make up the rest of the $43 an hour.

General Motors produces its own car lighting systems, brakes and hardware like seat tracks, while Chrysler and Ford do not produce any. But while GM generally produces the most parts itself, the world's largest auto maker does not make its own car and truck windows, while Ford makes all of its windows and Chrysler manufactures 65 percent of its windows, Harbour said.

The common wisdom in Detroit is that General motors makes 70 percent of its own parts, Ford makes 50 percent and Chrysler 30 percent. But Harbour said that parts production at GM accounted for less than half of its total costs.

Luria has estimated that the work done in GM factories accounts only for 45 percent of the cost of one of its cars. For Ford, the percentage is 38 percent and for Chrysler it is 34 percent, he calculates.

Chrysler, which has the highest profits for a vehicle of any auto maker in the world and is trying to persuade the UAW not to insist on too large a share of those profits this year, said that having the lowest auto parts costs of any American auto maker was not enough.

"GM is not the benchmark, the Japanese producers are," Nicole Solomon, a Chrysler spokeswoman, said.

And this is in America where the average wage is only slightly higher than $19/hr.
 
K

KBear

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4nik8or said:
the plant has 1200 x 34 per hour x 8 hour day = 166,400 per day labour cost
Click to expand...

Think I understand your confusion...

1,200 x 34 x 8 = 326,400

The situation is far worse then you realized. And it will be getting even worse when the number of retirees goes from it’s current level of about 3 per worker, to 5 per worker in a couple of years.
 
B

buckwheat1

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No were in the mess were in because of corperate greed look no furthure then
AIG insurance giving out 150 million ingifts to fat cats at the top of their company. It wasn't the automotive that went down first it was banks and insurance companies
 
B

buckwheat1

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the facts are both management and union agree to contracts management is responsale to share holders at the end of the day. It's always easy to say oh it's the union. Walmart lost money last quarter is that the unions fault to
oh ya by the way so did Honda and Toyota I guess it's the unions fault.
When the liberals (Ontario) balanced the books for 3 straight years it was the unions fault. Now if you read todays Star it says the debt is the publiuc service unions fault.
 
E

elmo

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Oct 23, 2002
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buckwheat1 said:
No were in the mess were in because of corperate greed look no furthure then
AIG insurance giving out 150 million ingifts to fat cats at the top of their company. It wasn't the automotive that went down first it was banks and insurance companies
Click to expand...
The domestics have been losing money for years, banks and insurance companies only for months...
 
A

a 1 player

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Feb 24, 2004
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buckwheat1 said:
No were in the mess were in because of corperate greed look no furthure then
AIG insurance giving out 150 million ingifts to fat cats at the top of their company. It wasn't the automotive that went down first it was banks and insurance companies
Click to expand...
No, we are in this mess due to sub prime lending and a host of other bad choices that many companies have made over the years.

Greed is what keeps the economy moving.
 
C

Cassini

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Chrysler is the company to watch in these negotiations. They have private capital behind them, and that private capital is interested in securing a return on investment. On the other hand, GM and Ford are public companies. To survive as managers, you just need to survive to the next quarter. Unfortunately, as this crisis is showing, survival as a manager is not the same as survival as a company.

A few years ago, someone made the comment that the only companies making money in the auto industry were private companies. I think the situation is still roughly the same. Chrysler is a private company now. The rules are different. Someone is actually pushing for Chrysler to make a real return on investment, instead of just going bankrupt.
 
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