http://money.iwon.com/ht/nw/bus/2006...=home&SEC=news
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not wanting to turn to far towards the political, but Delphi's union workers were told the company's financial situation on many occasions, were asked to make concessions that would have allowed Delphi to continue operating at a profit (with wages and benefits for Delphi workers still being some 50% above their non-union counterparts), and refused to do so. Thus, to some degree at least, Delphi's new request for the bankruptcy court to throw union contracts overboard is a 'self-inflicted wound' on the part of Delphi's union workers.
Delphi's workers were asked to work for $10 per hour to stay working last year. I make more than that! I heard this from the workers themselves. For many of them that is more than a 50% pay cut. That might help Delphi run at a profit but it isn't enough to sustain a family or mortgage on.
Currently GM to Delphi is offering to buyout some of the longer staying employees to retire with $140,000 with no medical care. GM is Delphi's parent company. The younger employees say they will take the buyout and get another job. The older employees are then stuck with medicare for their health benefits
The biggest problem with a Delphi strike is the fact they are the number one parts supplier to GM. Without Delphi parts many Gm plants will be forced to shut down operation.
Be that as it may, the fact is that Koreans are making parts for Hyundais and Kia's for $5 per hour or less ! Also, Delphi workers didn't have to undress in front of strangers !Quote:
Delphi's workers were asked to work for $10 per hour to stay working last year. I make more than that! I heard this from the workers themselves.
Again this involves an embedded assumption that an American high school dropout with marginal skills and an uncle in the auto industry who was able to open the hiring door for them is somehow 'entitled' to own a house, send 2.3 kids to college, take a 2 week vacation every year, and watch a 42" plasma TV every night.Quote:
That might help Delphi run at a profit but it isn't enough to sustain a family or mortgage on.
Well, a 50% pay cut on a job that previously paid 2-3 times the 'fair' wage in terms of pay and benefits still leaves them above the national average, and vastly above the 'global' average.Quote:
For many of them that is more than a 50% pay cut.
Again please understand that my comments are made as 'devil's advocate'. Granted that Delphi's financial changes have seriously rocked a lot of people's boats. However, from an 'outside the box' viewpoint, Delphi workers have been riding on the 'gravy train' for decades compared to their non-union American counterparts, and living like kings compared to many of their 'global' counterparts - with their 'gravy train' having been subsidized by charging past American car buyers higher prices for new cars than they otherwise should have had to pay.
Were it not for the union autoworkers' past high wage and benefits demands, and the US automakers willingness to accept these demands and raise new car pricing to pay for them, the Japanese, German, and later Korean automakers would not have been able to seriously underprice American cars while still making a profit and thus capture the large share of the US auto market they currently hold. However, now that foreign automakers are here to stay, the US automakers simply cannot pass on the union wage and benefit costs via increased new car prices any longer. Thus Delphi employees face the reality of accepting a viable pay and benefit package, or seeking employement elsewhere. If the UAW and Delphi employees decide to 'go to the mat' and strike over this issue, it's likely that ALL GM employees will wind up facing the same reality soon afterwords.
I will not continue to beat the skilled vs unskilled debate dead horse to death here.
But I will point out that the workers are not high school drop out bafoons who expect to live like kings. They have managed their lives, like we all do, around their wages. I am sure if your employer told you to take a 50% pay cut so the club to stay open you would balk too. Delphi workers make less then GM employees.
Michigan will soon raise the min wage to seven dollars an hour next year. Two dollars above min wage for a skilled job is crazy. During all of these cuts I have not heard of one managers wages or benifits decreasing. Not one of their perks have been taken away. Why is it always the lower employee that has to take the big hit when they make less?
Foreign cars are made so cheaply then why do cost little less then american made cars? Profits you might say. Well either way you go the real makers, the employees, of cars are getting screwed so that the corp heads can have higher profits.
Gm and Delphi mismanaged their funds and made promises to unions they couldn't keep. Someone should hold them accountable as well. With a Delphi strike both will be held accountable for conceding to union demands they knew they couldn't keep.
Well, me either. From a purely financial standpoint, the Delphi/GM situation is sending the following messages ...
short GM shares
buy Hyundai shares
sell your house and move out of Michigan while there is still someone willing to buy it (or more accurately, while there is still someone in Michigan with a secure job that pays enough to obtain mortgage financing) !
I do not own a home and I am moving this year :P
I suspect, assuming Delphi remains in business, that they will stop manufacturing products that require little or no skill to build and focus on higher tech components which might justify paying higher wages to the line workers and still return a reasonable profit to the company.
Here locally we have around 5 or 6 Delphi plants and one GM assembly plant. I doubt more than one or two of the Delphi plants will be around in 5 years. GM is already outsourcing domestically many many parts that dont require a high level of skill to manufacture. For example, the body side moldings and window and windshield reveal moldings on your new Malibu are made by $8 per hour non union workers, not $20 per hour GM/Delphi employees. This trend can do nothing but accelerate. And increased automation incorporating technology such as robotic vision and assembly systems takes much of the remaining human skill requirements out of the production of said parts. Yes, the parts suppliers will need to keep a couple of people around to maintain this sophisticated equipment but the vast majority of the labor cost component will be coming from unskilled, low paid workers who are probably on some level of public assistance due to their low wages and minimal if any health care benefits.
I think it sucks but the floodgate was opened too long ago to stop it now. I know dozens of people who are in the twilight of their unionized, no to low skill level careers. I'm hoping for their sakes (they are nice folks, living normal lives, raising their kids etc) that some kind of safety net can be maintained. But clearly, any non skilled GM/Delphi workers who are young with little senority should be looking at alternative careers.
As has been stated many times here, the $20 per hour unskilled factory workers who can drop a few hundred at the strip club once or twice a month comfortably are falling by the wayside. Hopefully, those workers will be replaced with others of equal means but employed in higher technology, more stable industries.
FBR
I wonder what the executives of Delphi and GM make and would they be willing to take a 50% pay cut and lose their bennies like they have asked their employees to do ?
TJ I agree. If I was a line worker and saw what some of those folks make it would piss me off too. But even if you fired the lot of them (which would be impractical since companies do need some sort of management team) it would be a pyrrhic victory. If you assume a dozen high level executives making $500K per year, that totals $6 million dollars. A shit load of money in anybodys book. But Delphi is losing literally billions per year. You could fire all those fuckers and turn Delphi into a Marxist co-op and still not be competitive compared to the per piece price available either overseas or domestically at some non union shops.
It sucks but GM is fighting for survival too. Their competitors dont carry the baggage they do (older workforce, non competitive union contracts etc). Its either cut costs or die.
FBR
But if Delphi's UAW workers strike and push GM into bankrupcy, the resulting problems will spread like a forest fire well beyond the confines of the auto industry. GM stock shares, and GM long bonds, and especially 'derivatives' and 'swaps' based on GM bonds, are a mainstay of a huge number of major commercial banks, major public and private retirement funds, major mutual and hedge funds etc. If GM is pushed into bankruptcy it would immediately result in a trillion dollars worth of losses for these major institutions, which could very well send the US economy into a panic mode. Delphi's UAW workers have no conception of how damaging to the country a strike and forced GM bankruptcy could turn out to be.
'Derivatives' and 'swaps' are absolutely scary from the little bit that I have been able to understand about how they work and how potential losses can be compounded. Perhaps one of you has some experience in this area and can offer a better explanation. There seems to be a virtual news blackout on this particular subject in the US financial media, but the european media is definitely speculating already ..
I have a number of customers who are 1st tier GM suppliers. GM is pushing them for accelerated delivery on components like you wouldnt believe, especially parts for the new GM900 trucks and SUV's. I havent talked to anyone connected to GM who is pessimistic in the short term. Who knows what is really going on long term.
FBR
I am with Vamp - yes the unionized workers are causing some troubles - but when you are a part of something that creates such incredible value you SHOULD get a piece of the pie. FBR, I can assure you the VPs and Presidents are doing much better than 500K at GM. The CEO got $9,000,000.00+ in 2004 in options and salary. (Yes, that is $9 x 10^6 in scientific notation.) It doesn't help when the C-suites give themselves bonuses for "cost cutting" for every lower level employee they cut wages on - especially when the business is dying.
Hopefully the principle of greed will kick in and everyone will settle down to making some money. But the management and unions have been so confrontational with each other over the years I wonder if anger is going to get the better of both of them. This is more than making an extra buck an hour - this is about future financial security for these workers. Everyone is seeing pensions going up in smoke - no one really believes in social security AND they see balloning deficits at so many levels of the economy. Hell, I am in my 30's and I am scared about the quality of my life simply ten years from now. The workers are seeing the C-level people "getting theirs before the getting is gone" so they may very well say "so I will too!"
Whenever you try to mix in something of inferiority with something of quality - the quality is always dragged down. This is globalism. It might lift a few boats but it will surely drag a whole lot of them down. There WILL be a "lifestyle" correction for this country if we continue marching down this road. All we are doing is importing poverty to this country.
Globalism is a lie. It was said with NAFTA we would be exporting on the positive side with Mexico. We are not. We have billion dollar trade deficits with them too! And are we getting anything for our money? Just more mexicans fleeing their country into ours. If this country were a ship - we would be leaking on all sides of the craft.
And for those who try to make money without making anything - whether product or service - fuck them. And yes, I am talking about the derivative traders etc. They are so far removed from the actual creation of wealth in this country it sickens me. All they are trying to do is game the numbers. They are not doing anything for anybody.
Oh - I am really starting to feel a rant coming on - but I will hold back on it.
All I am saying is - if your club is middle class or labor class - you better start planning on making some lifestyle changes yourself. The emerging economy just will not support high ticket luxury services like strippers aka the 80's.
unfortunately, this group represents about 50% of all available jobs that pay more than $50,000 per year, and represents the fastest growing sector of US employment too. Actually making things creates pollution, involves working with nasty materials and processes, involves worker safety risk etc. Thus it is arguable that de-facto US policy over the past 20 years has been to pressure US companies to STOP making things here in the USA, to instead encourage US companies to find ways to make money from other people's money (i.e. foreign investors/corporations) because it's cleaner and safer, and for other Americans to provide services to those people in the USA who ARE making tons of money from other people's money !Quote:
And for those who try to make money without making anything - whether product or service - fuck them. And yes, I am talking about the derivative traders etc. They are so far removed from the actual creation of wealth in this country it sickens me. All they are trying to do is game the numbers. They are not doing anything for anybody.
Agreed. However, if a dancer can manage to get hired in a super upscale club that caters to those Americans who are earning huge amounts of money from other people's money - and I'm thinking clubs in cities like Manhattan, Atlanta, etc. which cater to bankers, stockbrokers, accountants, corporate HQ types, personalities etc. - she should do very well ! However, like the rest of the US population, probably only 10% of all dancers will be able to work in this lucrative upper class 'white collar' environment, with the other 90% left struggling to scratch out a 'blue collar' living.Quote:
All I am saying is - if your club is middle class or labor class - you better start planning on making some lifestyle changes yourself. The emerging economy just will not support high ticket luxury services like strippers aka the 80's.
yes we are getting something for our money ... Mexican crude oil at $60+ per barrel. If oil was still priced at $30-$40 a barrel the trade balance would reverse.Quote:
It was said with NAFTA we would be exporting on the positive side with Mexico. We are not. We have billion dollar trade deficits with them too! And are we getting anything for our money?
Are you saying that GM is stocking up on components in anticipation of a Delphi settlement not happening and a general strike being called ? If so I better load up on GM stock 'call options', because near term GM profits might turn out better than expected !Quote:
Originally Posted by FBR
~
Deogol
Whenever you try to mix in something of inferiority with something of quality - the quality is always dragged down. This is globalism. It might lift a few boats but it will surely drag a whole lot of them down. There WILL be a "lifestyle" correction for this country if we continue marching down this road. All we are doing is importing poverty to this country.
Globalism is a lie. It was said with NAFTA we would be exporting on the positive side with Mexico. We are not. We have billion dollar trade deficits with them too! And are we getting anything for our money? Just more mexicans fleeing their country into ours. If this country were a ship - we would be leaking on all sides of the craft.
I totally agree well said!
I passed one of the UAW halls today. The sign outside said " the future is here the fight is now"
[QUOTE=Melonie]unfortunately, this group represents about 50% of all available jobs that pay more than $50,000 per year, and represents the fastest growing sector of US employment too. Actually making things creates pollution, involves working with nasty materials and processes, involves worker safety risk etc. Thus it is arguable that de-facto US policy over the past 20 years has been to pressure US companies to STOP making things here in the USA, to instead encourage US companies to find ways to make money from other people's money (i.e. foreign investors/corporations) because it's cleaner and safer, and for other Americans to provide services to those people in the USA who ARE making tons of money from other people's money !
So once again it comes down to profits. Instead of creating ways to over come pollution or using the technology we have that has a cost just avoid it all together. Let someone else over there destroy their ecosystem and work for slave wages. It will still effect us in the long run. Even if what you have said is true, we are still the number one polluter in the world. Sitting at a desk still creates pollution. Using electricity causes pollution. Using unrecyled paper, trash, etc.
In the end. it always comes down to profits. In the very few cases where iron fisted govt's attempted to run their economies without a profit motive (i.e. Soviet Union, Cuba, Zimbabwe, Mao China etc.) the old adage pretty well summed up the way things actually worked economically speaking "the gov't pretends to pay us, and we pretend to work". The real question is whether or not any of the population other than the very rich/powerful actually benefit from their labors ... in the countries I just mentioned for the most part they didn't/dont. In the countries I mentioned, factory wages and prices for things like bread and gasoline may be tightly regulated, but the result is that there will be widespread shortages of that bread and gasoline since it must be sold well below the world market price ! But when profit motive is introduced all of the people seem to do better from the top to the bottom.
Your repeated argument that US corporate executives are 'overpaid' is basically analogous to the 'ruling class' in the countries I mentioned above. The difference is that US factory workers, union and non-union, are still living at an immensely better standard of living than their counterparts.
Quote:
Originally Posted by Melonie
The difference is that US factory workers, union and non-union, DID live at an immensely better standard of living than their counterparts.
not wanting to inject facts into a perfectly good hyberbole, but ...
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""We're seeing an end to the golden period of extremely low-cost labor in China," said Hong Liang, a Goldman Sachs economist who has studied labor costs here. "There are plenty of workers, but the supply of uneducated workers is shrinking."
Because of these shortages, wage levels throughout China's manufacturing ranks are rising, threatening at some point to weaken China's competitiveness on world markets.
Li & Fung, one of the world's biggest trading companies, said recently that labor shortages and rising manufacturing costs in China were already forcing it to step up its diversification efforts and look for supplies from factories in other parts of Asia.
"I look at China a lot differently than I did three years ago," said Bruce Rockowitz, president of Li & Fung in Hong Kong, citing the rising costs of doing business in China. "China is no longer the lowest-cost producer. There's an evolution going on. People are now going to Vietnam, and India and Bangladesh."
The higher wages come at a time when costs are already rising sharply across the country for energy and land. On top of a strengthening Chinese currency, this is likely to mean that the cost of consumer goods shipped to the United States and Europe will rise.
To be sure, China is not about to lose its title as factory floor of the world. And some analysts dispute the significance of the shortages.
"Reports of a shortage of unskilled and semi-skilled factory workers are overblown," said Andy Rothman, an analyst at CLSA, an investment bank. "Companies are, however, having trouble finding experienced people to fill midlevel and senior management jobs."
The lack of workers is most acute in two of the country's most powerful export regions: the Pearl River Delta, which feeds into Hong Kong, and the Yangtze River Delta, which funnels into the country's financial capital, Shanghai. Wages are rising significantly in both areas.
According to government figures, minimum wages — which averaged $58 to $74 a month (not including benefits) in 2004 — have climbed about 25 percent over the past three years in big cities like Shenzhen, Beijing and Shanghai, mostly by government mandate.
Wages at larger factories operated on behalf of multinationals — which are typically $100 to $200 a month — are also on the rise."
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For a fact, even unemployed US factory workers are still able to live at a vastly higher standard of living than their Chinese counterparts, thanks to our social welfare programs. Even illegal alien US workers are able to do this working at sub-minimum wage jobs compared to a high end Chinese factory wage range of $200 a month, which is why they keep coming across the US border in droves. And as the article points out, there is lots more cheap unskilled / semi-skilled labor waiting for work in Vietnam, Bangladesh etc.
I guess the real point is that the policies of the last 20 years have forced US corporations to explore 'global' options - that the 'paradigm shift' of a corporation building a factory in China or buying parts from Chinese sub-suppliers is now complete - and that US workers, particularly unionized US workers with very high wage and benefit costs, are no longer even close when it comes to the 'value added' actually produced by their labors versus the cost to the corporation of paying their wages and benefits.
Question for anyone who may know the answer:
Did the exec's of GM and Delphi offer to give up any of their pay and bennies to help keep the companies deal with things ? Or did they just expect the only the workers to do so ?
I believe the guy at Delphi works for $1. Nope, looks like he works for nothing. The GM execs seem to be paid in the low-mid single digits of millions.
Of course, all of that is pretty meaningless--Miller will get paid by the board in stock options/restructuring bonuses/etc. at some point.
For anyone and everyone who is complaining about a trade deficit with Mexico or any other country--don't forget that everything that we import from those countries is bought by an American for less than we'd be paying if that good was made by an American. It may not be good news for the people who directly compete with e.g. Chinese shoemakers or seamstresses, but the reality is that the cheap, cheap consumer goods we buy are there because of the low wages paid overseas. Free trade is good for the American consumer, if not for our national savings rate.
http://www.washingtonpost.com/wp-dyn...032401912.html
From this article it looks like GM has cut white collar salaries by 30% and reduced the Ceo's salary. It also looks like they were forced to by shareholders in January to include salary employees in the cuts. So I was wrong in that aspect of my argument.
Melonie I think you keep missing our point. As Deogol pointed out we are importing poverty with globalism. Globalism isn't a necessity of the times. It is something that has been created by corporations with the help of our government to increase their profit margins. If the Us's tactics were not unfair why is the EU sanctioning the Us for giving companies tax breaks to encourage outsourcing?
I am not begrudging companies or shareholders their profits. But whether it is foreign workers or American workers, paying them wages that they can not live on is greed run rampant. Revolutions are started this way.
Lurker] Free trade is good for the American consumer, if not for our national savings rate.
If more and more jobs are exported who is left as an American consumer? With wages decreasing even inexpensive goods will become out of many Americans price range.
Without proper regulations of industry to make sure there is some amount of balance in the economy, American will stop being the largest consumer in the world. Our standard of living will dramatically decrease across the board, not just for a few. It is a dangerous domino effect.
The equation grows unbalanced.