Feel free to discuss.U.S Carmakers to Seek Labor Cost Cuts
Thursday, June 14, 2007 5:37 AM EDT
The Associated Press
By TOM KRISHER
DETROIT (AP) — Contract talks between the U.S.-based automakers and the United Auto Workers formally begin next month, but the key issue is already clear: Eliminating the roughly $25-an-hour labor cost gap between Detroit and its Japanese rivals.
Officials at General Motors, Ford and Chrysler said Wednesday that reducing labor costs to the level paid by Toyota Motor Corp. and Honda Motor Co. — Detroit's prime competitors — will be the top priority.
Industry analysts say that survival of the three U.S. companies is at stake. The three automakers based near Detroit generally pay about 30 percent more per hour in wage, pension and health care costs than Japanese automakers.
And nowhere is it more critical than at Ford Motor Co., which lost $12.7 billion last year and has mortgaged its assets to fund a turnaround plan that includes thousands of job cuts to shrink itself to match lower demand for its products.
Ford, according to its annual report, paid $70.51 per hour in wages and benefits to its hourly workers last year. The company, as well as Chrysler Group and General Motors Corp., will seek to reduce costs to around $48 per hour, about the average hourly cost incurred by Toyota, Honda and Nissan Motor Co., company officials have said.
The costs then would be comparable to Asian automakers, who pay similar wages but have far lower pension and health care costs and make thousands of dollars more per vehicle than the three Detroit automakers.
"We know there are competitive gaps," GM spokesman Dan Flores said Wednesday. "We benchmark Toyota in a variety of areas of the business."
GM and the UAW have worked together to cut health care costs and reduce the company's hourly work force by more than 34,000 in the past year through buyout and early retirement offers.
"However more change is required to structure GM for sustained profitability and growth," Flores said.
GM's annual report says its labor costs average $73.26 per hour, while Chrysler's costs average $75.86.
Negotiations are set to begin officially in July, but the UAW already is talking to the Detroit Three.
UAW spokesman Roger Kerson would not comment Wednesday, but union President Ron Gettelfinger said in March that it made major health care concessions in 2005 to Ford and GM that saved the companies billions, and implied that the union wasn't willing to give more. The UAW has completed an evaluation of Chrysler's finances but won't say whether it will give Chrysler the same deal.
"We addressed health care in '05. You don't get two bites of the apple, do you?" he said in March.
Many industry analysts say the Detroit Three, and especially Ford, must be on par with Toyota and Honda to survive. This year's contract, they say, must be "transformational" in reducing pension and health care costs.
Chrysler's parent company, DaimlerChrysler AG, recently announced that it would sell a controlling stake in the company to private equity firm Cerberus Capital Management LP, and analysts have said Cerberus is likely to demand deeper concessions from the union than Daimler would have. Cerberus has said it will leave the negotiations to Chrysler officials.
Combined, the U.S.-based carmakers have more than $100 billion in long-term retiree health care costs that analysts say must be reduced.
"They're all in the same boat for this," said Aaron Bragman, a research analyst for Global Insight, an economic research and consulting company. "They all need to see the same kinds of benefits and structural changes in order to survive. The big challenge is going to be whether or not the rank-and-file in the UAW can be convinced."
Kevin Tynan of Argus Research, a New York-based equity research company, said Ford's situation is so bad that even a compromise to $60 per hour wouldn't help.
"If they're saying $70 vs. $50, $60 doesn't help anybody. Essentially Ford loses," Tynan said. "That's just to be competitive on labor. Now we're talking about technology and innovation and marketing and design, all that other stuff on the product side that you still have to execute on."
GM shares rose 67 cents to close at $32.10, while Ford gained 24 cents to $8.56 and DaimlerChrysler's U.S. shares rose $1.74 to $89.58. Toyota's U.S. shares rose $1.47 to $123.81.
Virtual_Insanity
Feel free to discuss.
I have a great idea!! How about Ford hires a guy and pays him $250 per hour to asses how to save the company money!
They could always get rid of a bunch of guys at the top...better yet, I'm sure the owners and CEO's have plenty of money...if they are interested in turning the company around they could always work for minimum wage for a couple of years. That's what you do when you have a dedication to your company, product and its comsumers.
They could always get rid of a bunch of guys at the top...better yet, I'm sure the owners and CEO's have plenty of money...if they are interested in turning the company around they could always work for minimum wage for a couple of years. That's what you do when you have a dedication to your company, product and its comsumers.
Ok everyone jumped down my throat for saying people working retail should be paid more than minimum wage, yet everyone is ok with people that do nothing but turn one bolt all day making $75 an hour, and don’t even have a high school education, and people WONDER why the US is going down hill…
Get off there ass, go to school and actually learn to do a job that can NOT be done foe $10 a day in a 3rd world country! That much pay is absolutely insane and not called for. IMO if they refuse to budge, Ford should just close down there US plants and move production to Mexico, cheaper labor, no duty, and easy shipping. $50 a hour for that work is MORE than reasonable, $70 a hour for that work is just ridiculous!
These people need to wake up. There jobs WILL NOT be around in there current form in 5 years PERIOD. Either they give in and accept a VERY reasonable wage for there job (although not AS generous as they are now) Go back to school and actually become more desirable in the work force and change jobs to keep making $70 an hour, or lose there job for the big US companies either going under, going bankrupt, or moving all operations over sea (or all of the above)
Get off there ass, go to school and actually learn to do a job that can NOT be done foe $10 a day in a 3rd world country! That much pay is absolutely insane and not called for. IMO if they refuse to budge, Ford should just close down there US plants and move production to Mexico, cheaper labor, no duty, and easy shipping. $50 a hour for that work is MORE than reasonable, $70 a hour for that work is just ridiculous!
These people need to wake up. There jobs WILL NOT be around in there current form in 5 years PERIOD. Either they give in and accept a VERY reasonable wage for there job (although not AS generous as they are now) Go back to school and actually become more desirable in the work force and change jobs to keep making $70 an hour, or lose there job for the big US companies either going under, going bankrupt, or moving all operations over sea (or all of the above)
No, no, no, let these unions keep doing what they are doing, as we won't rid ourselves of this virus until it fails so spectaularly that something will have to be done. Or quite simply, they'll just destroy all their own jobs and disappear on their own (unfortunately taking a large part of our economy with them). They can continue to ignore the fact that this is a global economy and that everyone's fair wages are dictated by supply and demand economics like it is for everyone in the free world where people earn money based on their actual work ethic as INDIVIDUALS, and more and more American plants will continue to close as the largest auto manufacturing companies in the world continue to shrivel and die...
Btw, anyone remember who the largest auto-manufacturer in the entire world is now? Oh, thats right, GM slashing 30,000 jobs, and closing plants. Wait, haven't we heard that before? Perhaps it was Ford slashing 30,000 jobs. Hey, at least they aren't already completely bankrupt and being passed around like Chrysler (who's stock fetched only 1/5th the price Daimler paid just a few years ago). Only in America. :thumbup:
But hey, on the bright side, if unionization doesn't destroy the industry and jobs so horifically, some people will continue to support this socialist bull****.
Btw, anyone remember who the largest auto-manufacturer in the entire world is now? Oh, thats right, GM slashing 30,000 jobs, and closing plants. Wait, haven't we heard that before? Perhaps it was Ford slashing 30,000 jobs. Hey, at least they aren't already completely bankrupt and being passed around like Chrysler (who's stock fetched only 1/5th the price Daimler paid just a few years ago). Only in America. :thumbup:
But hey, on the bright side, if unionization doesn't destroy the industry and jobs so horifically, some people will continue to support this socialist bull****.
Let me remind all of you, These wages that the autoworkers have strugled for over the years to help a lot of others get better wages so they can make a decent living. One bolt a day, you must never seen how a car is built. These people are making a car every minute. They get $20 to $25 with the other health care, retirement, and other fringe. They work every 45 seconds out of that minute and only get an hour break in a day. Go ahead keep moving jobs and our money to everybody else. Our standard of living is going down and theres is going up.
ok lets clear up this mystery....
This is a LABOR job, the US auto workers are costing $150,000 a year in wages and benefits where as the Toyota workers are costing about $100,000 a year in wages and benefits (so they make about $60,000 a year in wages, and get $40,000 a year in benefits) For a job that could be done in ANY 3rd world country that is VERY reasonable, and that is what the US auto workers are turning down. Only 5% of the US population makes over $100,000 a year but these workers who don’t even need a high school education are demanding that.
You want the US's quality of living to stay high? Then we need people to actually go to school and learn to do jobs that CAN NOT be done in a 3rd world country for $5,000 a year.
These workers are NOT worth $150,000 a year, period, end of discussion.
There is a difference between a "decent" living, and flat out highway robbery.
Either way these high paying jobs are gone because the US companies are NOT MAKING MONEY. There is no money to pay these ridiculous wages. The options are they take a pay cut and make more than they are worth (IMO factory workers are not even worth the $100,000 a year total so that is still very generous) They keep pushing till the companies all go bankrupt (the they lose there job and have nowhere else to go since they have no meaningful job skills of any real value) or they lose there jobs when the US auto companies just pack up and move to Mexico (which for the workers is the same as if the company went bankrupt)
This is a LABOR job, the US auto workers are costing $150,000 a year in wages and benefits where as the Toyota workers are costing about $100,000 a year in wages and benefits (so they make about $60,000 a year in wages, and get $40,000 a year in benefits) For a job that could be done in ANY 3rd world country that is VERY reasonable, and that is what the US auto workers are turning down. Only 5% of the US population makes over $100,000 a year but these workers who don’t even need a high school education are demanding that.
You want the US's quality of living to stay high? Then we need people to actually go to school and learn to do jobs that CAN NOT be done in a 3rd world country for $5,000 a year.
These workers are NOT worth $150,000 a year, period, end of discussion.
There is a difference between a "decent" living, and flat out highway robbery.
Either way these high paying jobs are gone because the US companies are NOT MAKING MONEY. There is no money to pay these ridiculous wages. The options are they take a pay cut and make more than they are worth (IMO factory workers are not even worth the $100,000 a year total so that is still very generous) They keep pushing till the companies all go bankrupt (the they lose there job and have nowhere else to go since they have no meaningful job skills of any real value) or they lose there jobs when the US auto companies just pack up and move to Mexico (which for the workers is the same as if the company went bankrupt)
i do agree that US workers working at a US Automaker plant shouldn't be making more than a Foreign Automakers plant that is also based in the US...what the hell difference does it make, its still an auto plant, one's run by a Japanese/Foreign company another is run by a US company, why should the pay be any different. Fine if they want US workers to make the amount that Ford, GM and DC is making then Toyota, Honda and the others should all make equivalent wages. There is no reason for american automakers to be losing out when the foreign automakers are taking advantage of the workers. $100,000 (say 60ksalaray and 40k benefits) is not bad, NYPD officers can't even make 60k salary after 5yrs in their current contract.
exactally! and the cost of living where allot of these plants are is not all that high. that makes the wages even more outragious!
unions had their place about 100 years ago.... they're totally inappropriate today. The only reason they exist is because these people have no skills (as said before) and want job security. So they unionize so they don't lose the only job they know how to do.
And factory jobs are retardedly easy.... When I worked with the engineers at Pratt + Whitney in CT, the jobs were so freaking easy that someone not even out of high school could do it. However we always had problems with stuff getting done on time, etc. Our guys would take bicycle rides around the plant instead of doing work, and if you tried to call them out you would get a greivence.
I hate unions.
And factory jobs are retardedly easy.... When I worked with the engineers at Pratt + Whitney in CT, the jobs were so freaking easy that someone not even out of high school could do it. However we always had problems with stuff getting done on time, etc. Our guys would take bicycle rides around the plant instead of doing work, and if you tried to call them out you would get a greivence.
I hate unions.
An old boss of mine used to work for a parts supplier in Detroit assembling alternators and such on a line. The line broke down on the first day so he decided to pick up a broom and sweep instead of standing there like a useless lump.
He received a grievance for his initiative, and for weeks every other employee basically black listed him. No one would as much as say "hello" to him for what he had done....work.
He received a grievance for his initiative, and for weeks every other employee basically black listed him. No one would as much as say "hello" to him for what he had done....work.
The fact of the matter is, the Jap companies utilized the principles of economics to gain a massive foothold on our soil. (Let's not even mention our failure to add tariffs to imports, thank you NAFTA and GATT )
For the US Automakers, the cost of the input is way too damn high and you just cannot offset that by lowering the cost of the output, too.
If they don't un**** themselves right now, I don't think they're really going to learn unless/until Ford becomes no more. What are these people (unions) going to do, then, when there's no more company to leech off of?
It ain't just Ford, I can confirm it's just as nasty at GM from my uncle, a former plant electrician. Face it, the fact is there ARE people there getting overpaid to do one simple thing or a basic set of tasks. He's told me many times about how it's often the case that a "specialist" in one task might just show up to work for a while, but basically sleep or do next to nothing until that one small moment where he/she may need to do their thing... oh, and that's IFF the union people get to that point
) For the US Automakers, the cost of the input is way too damn high and you just cannot offset that by lowering the cost of the output, too.
If they don't un**** themselves right now, I don't think they're really going to learn unless/until Ford becomes no more. What are these people (unions) going to do, then, when there's no more company to leech off of?
It ain't just Ford, I can confirm it's just as nasty at GM from my uncle, a former plant electrician. Face it, the fact is there ARE people there getting overpaid to do one simple thing or a basic set of tasks. He's told me many times about how it's often the case that a "specialist" in one task might just show up to work for a while, but basically sleep or do next to nothing until that one small moment where he/she may need to do their thing... oh, and that's IFF the union people get to that point
And whats worse is that not only does this unionized socialist extortion destroy domestic industries and thus jobs (thousands upon thousands will be raising their hands attesting to that), but in this kind of environment it doesn't even foster hard work to justify the higher wages.
UAW workers are higher paid than Toyota and Honda employees, and yet Toyota currently requires on average about 20% fewer man hours to build a car, and consensus is that the quality is superior! WTF is wrong with this picture??!?!? It is simply human nature that to motivate someone to be their best, you have to reward productivity and quality as individuals, so while higher pay is something we want for all Americans it needs to be earned to be sustainable. This makes for higher quality products and higher profit margins for the company which means greater job security and with a class leading product and these rewards for personal effort makes for happier employees that take pride in their work and get long-term job security with that.
Unions served a purpose, but have not only outlived it after accomplishing what was needed, but have become a new beast that is destroying America. More than that, its destroying the American SPIRIT! :thumbdown
UAW workers are higher paid than Toyota and Honda employees, and yet Toyota currently requires on average about 20% fewer man hours to build a car, and consensus is that the quality is superior! WTF is wrong with this picture??!?!? It is simply human nature that to motivate someone to be their best, you have to reward productivity and quality as individuals, so while higher pay is something we want for all Americans it needs to be earned to be sustainable. This makes for higher quality products and higher profit margins for the company which means greater job security and with a class leading product and these rewards for personal effort makes for happier employees that take pride in their work and get long-term job security with that.
Unions served a purpose, but have not only outlived it after accomplishing what was needed, but have become a new beast that is destroying America. More than that, its destroying the American SPIRIT! :thumbdown
I was always told that the transplants payed the same hourly wage as the Big3, it was everything else that made up the difference.
Retirement benefits, health benefits, AWOL workers, job definitions, etc.
I should find a sickening post on FocusCanada where one guy is gloating about how they managed to use some work rules to delay getting something done so a bunch of guys could sit around for days doing nothing....
As for getting the labor cuts.... good luck with that. :lol: They'll strike themselves to the grave before they agree to that.
Given the dire straights Ford is in, they should just let them strike, fire them all, and bring in replacements.
Retirement benefits, health benefits, AWOL workers, job definitions, etc.
I should find a sickening post on FocusCanada where one guy is gloating about how they managed to use some work rules to delay getting something done so a bunch of guys could sit around for days doing nothing....
As for getting the labor cuts.... good luck with that. :lol: They'll strike themselves to the grave before they agree to that.
Given the dire straights Ford is in, they should just let them strike, fire them all, and bring in replacements.
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