Home > Jay Bookman > Archives > 2008 > December > 08 > Entry
DEL.ICIO.USPutting politicians in charge of Detroit?
The Atlanta Journal-Constitution
There’s no question that the bailout billions flowing to Wall Street firms have been granted too freely, with few if any conditions on their use. So as Congress considers bailing out Detroit as well, there’s a real desire not to repeat the mistake. But at first glance you have to wonder whether a board of Cabinet secretaries is the right kind of oversight for such an effort.
Among other things, would its decision-making be more political than business-oriented?
But then again, what would be the model for such a board? We’ve never done this kind of thing before on this kind of scale, so if this mode of oversight is too intrusive and political, what would the right kind of oversight look like?
We are straying into dangerous and unknown waters, and the bad part is, we probably have no choice but to do so.
WASHINGTON - A bailout plan for the failing U.S. auto industry could include a Cabinet-level oversight board and a provision to withdraw the money if the overseers decide the companies are failing to take steps to overhaul themselves.
The plan would draw the emergency aid from an existing loan program meant to help the automakers build fuel-efficient vehicles. The size of the package hasn’t been finalized, but it is expected to be about $15 billion, several congressional aides said.
It would create a board composed of Cabinet secretaries from the departments of Treasury, Energy, Labor, Commerce and Transportation plus the Environmental Protection Agency administrator to oversee a broad auto industry restructuring. A congressional aide outlined the emerging measure on condition of anonymity because it is not yet completed.
In return for the money, the carmakers would have to agree to terms similar to those placed on banks that receive funds under the $700 billion Wall Street bailout: to limit their top executives’ pay packages, cease paying dividends, give the government a chunk of future gains and guarantee that taxpayers would be reimbursed before any other shareholders, the aide said.
The bill under discussion would place the special investigator overseeing the bank rescue in charge of keeping tabs on the auto bailout.
The White House and Democratic congressional leaders are narrowing their differences over the auto bailout, but had yet to agree on specific legislative details, officials said.
Sen. Chris Dodd, D-Conn., chairman of the Banking Committee, said Sunday that General Motors Corp.’s chief executive, Rick Wagoner, “has to move on” as part of a government-run restructuring.
“I think you have got to consider new leadership,” Dodd said on CBS’ “Face the Nation.”
Criticized for staying on the sidelines until now, President-elect Barack Obama voiced support Sunday for the bailout legislation being drafted in Congress. He accused car industry executives of a persistent “head-in-the sand approach” to long-festering problems.
In an appearance on NBC’s “Meet the Press,” Obama said Congress was doing “the exact right thing” in drafting legislation that “holds the auto industry’s feet to the fire” at the same time it tries to prevent its demise.
UPDATE: I hadn’t seen numbers like this before. To borrow Gen. Petraeus’ famous line about the invasion of Iraq, “so tell me how this ends.”
From the NY Times:
“A comprehensive bailout for Gerneral Motors, the Ford Motor Company and Chrysler could cost as much as $125 billion, and even the companies themselves are hard-pressed to dispute that figure.
Mark Zandi, chief economist of Moody’s Economy.com, testified before Congress last week that the Big Three’s request for $34 billion in loans “will not be sufficient for them to avoid bankruptcy a some point in the next two years.” He said from $75 billion to $125 billion would be needed to pay for a full-scale reorganization of the automakers.”
Comments
By AJC/DNC Management
December 8, 2008 7:06 AM | Link to this
I know it will never happen but what about fixing Congress and the government first?
They are the bigger failures in this story.
The automakers are a booming, profitable enterprise compared to the money sucking disaster in DC.
By spankmonkey
December 8, 2008 7:10 AM | Link to this
Unfortunately… this pinko Lib (had to beat Andy to the name-calling today, and since I’m the first one here, I guess I just have to call myself names…), anyway, this Pinko Lib feels the only way to get the “Big 3” turned around is with some major consessions from the Unions. MAJOR consessions. As a matter of fact, some of the “bailout” money should go to buying them out of the equation somehow. That would be huge in the long term picture.
Unions have their uses, but in the case of Detroit, they’ve killed the master they serve. Depending upon how you look at it, that could be thier constituency (the workers) or the Auto Industry in this country.
Oh yeah, and I’m a Pinko Lib that makes Andy sick! Sick I tell thee…
By spankmonkey
December 8, 2008 7:18 AM | Link to this
Pulled as a personal attack….
Don’t make me ban you, monkey.
By DB, Gwinnettian
December 8, 2008 7:40 AM | Link to this
“Among other things, would its decision-making be more political than business-oriented?”
How could it not be? Why shouldn’t it be?
I’ve nothing but a big shrug in response to your apparent concern about this particular angle—it seems pretty obvious that if the nation’s taxpayers are going to inject funds into a business, those taxpayers’ collective needs—as opposed to the corrporation’s mission to provide income to shareholders—have to have a voice. I know of no way other than through politics to bring that public influence to bear, here.
By Paul
December 8, 2008 7:42 AM | Link to this
[[We are straying into dangerous and unknown waters, and the bad part is, we probably have no choice but to do so.]]
That says it. Which means they probably won’t get it right the first time. If their reaction to the financial bailout is a guide, they’ll be reluctant to assess and adjust. That’s where the foreboding comes in.
Sen Dodd: “He accused car industry executives of a persistent “head-in-the sand approach” to long-festering problems.” Now that’s pot calling the kettle black. Three decades with no increases in miles per gallon standards. Zip on incentives for hybrid development. “Solutions” in the form of agribusiness payoffs (ethanol). Encouraging large, expensive SUV production through the “Buy American” act, giving tax credits (not a deduction, but an offset against taxes owed) for buying SUVs.
This doesn’t excuse the Big Three. But really, they built the vehicles the customers bought in record numbers that provided the greatest dividends to shareholders. Even Honda and Toyota saw what was happening and introduced larger, heavier, higher horsepower vehicles and their corporate average fuel economy went down.
What were the Big 3 to do five years back (remember development and production times)? Say “we’ve making lots of money selling lots of vehicles. But we’re going to significantly increase research and development on alternate technologies. We know that at current gas prices most people won’t buy it. It will also reduce profit and reduce dividends to shareholders. But we’re trying to be socially responsible and are trying to divine the world political situation five and ten years down the road.”
Congress wouldn’t have had to call for new leadership. Their boards of directors would have fired them.
By Bud Wiser
December 8, 2008 7:49 AM | Link to this
Once again Congress will defy the will of the people (61% against) and throw money at the auto makers. Prior to the event, polls had @78% of the people opposed to bailing out Wall Street. So what has throwing money done for the financial industry so far?
Nothing.
What will this do for the auto industry? Other than paying huge sums of money into the UAW retirement and pension plans, NOTHING.
They say not doing it will put us into a full blown recession? Prove it.
When our airlines were failing and going into bankruptcy, one after the other, Congress did absolutely nothing. Some emerged leaner, defaulting away pension plans (I know that for a fact because I am one of those), reducing wages and benefits, and continued to operate; in fact, they continued to operate while they were accomplishing all of the trimming down. However, some failed, and just went away. That’s the way the market works … put up a product or offer a service that people will use, you succeed.
Put out an inefficient, costly, and labor intensive product, stuff your pockets with consumer money while you can, then ask the government to bail you out when the public looks elsewhere seems to be the new business ‘model’.
Let them fail.
Let them fail.
By Observer
December 8, 2008 8:05 AM | Link to this
A government bailout in the form of writing a large check to domestic auto makers is a huge mistake. We already have a mechanism in place to help them deal with their financial crisis – it’s called bankruptcy. This same mechanism was employed very effectively by the airline industry and enabled several carriers (Delta among them) to emerge reorganized and in much better financial shape.
The auto makers (like the airlines before them) need to completely overhaul their union contracts. At its peak, Delta Airlines had senior captains on international routes making in excess of $300,000 annually to fly eight days per month. The protections offered by the bankruptcy courts enabled them to completely revamp their contracts with the pilot’s union. Today, we have senior assembly line workers at the “Big Three” making in excess of $80 per hour plus overtime for anything over 35 hours each week. This is ridiculous. The benefits of the UAW healthcare plan are equally ridiculous. $1,600 OF EVERY GM CAR OR TRUCK SOLD goes to pay for the GM healthcare plan. That’s insane!
Let the “Big Three” reorganize in bankruptcy and bring their cost structure back in line with the real world before we go handing them a blank check. So far, the tab on our “bailouts” is up to $7.5 trillion. If we (the government) keep writing checks to everyone who comes to Washington with their hand out, we are going to bankrupt the nation. And no, that is not hyperbole – that is a very real possibility. Anybody remember what caused the collapse of the Soviet Union? They spent themselves out of existence.
By Road Scholar
December 8, 2008 8:32 AM | Link to this
The idea of having the auto companies go through reorganization by filing for bankrupcy has some merit. As noted, others have done it and have succeeded in getting back into the profitable market.
Maybe this paper could actually contact some of the financial experts and ask them to respond to this issue? Why not? Please have them explain to us the positive and negative risk on allowing bankrupcy follow its course.
Oh by the way, I’m sure that there are experts at GSU and GT that could provide enlightening feedback. You don’t have to go far…
By Bud Wiser
December 8, 2008 8:45 AM | Link to this
By Observer
At its peak, Delta Airlines had senior captains on international routes making in excess of $300,000 annually to fly eight days per month.
So where did you come with that one? Just another fool falling for the media garbage perpetuated myth about airline pilots and the numbers their management teams would have suckers like you believe.
I was one of those international captains at Delta that you speak of before I retired, and I can tell you most assuredly that wherever you came up with those numbers, they are flat out wrong. And if anyone told you that, they are a liar.
So, I’d be a little more careful in the future with my statements before trying to push that trash as truth. A little research never hurt anyone … clears and then fortifies the mind.
You may be an Observer, but in this case you are wrong.
By "The Corporal"
December 8, 2008 8:48 AM | Link to this
Let’s get serious.
We need a Secretary of NASCAR to try and get it back to what it used to be.
By Paul
December 8, 2008 8:58 AM | Link to this
Off topic: Management the other day posted some references to the farfarleft not happy with Obama (some had posted there was ‘no problem’). This just in from Politico: “Liberals are growing increasingly nervous – and some just flat-out angry – that President-elect Barack Obama seems to be stiffing them on Cabinet jobs and policy choices.
Obama has reversed pledges to immediately repeal tax cuts for the wealthy and take on Big Oil. He’s hedged his call for a quick drawdown in Iraq. And he’s stocking his White House with anything but stalwarts of the left.
Now some are shedding a reluctance to puncture the liberal euphoria at being rid of President George W. Bush to say, in effect, that the new boss looks like the old boss.”
Also, Jay - all the talk about Pres-elect Obama’s incoming national security team: any idea why he’s having such a difficult time finding anyone with experience willing to take the post of CIA Director? Seems prospective candidates view the possibility as nothing short of toxic.
By dilligaff
December 8, 2008 9:04 AM | Link to this
My brother is a Delta pilot and not ‘senior’ nor ‘international’. His pay before the renegotiation was well over $100,000 per year, so I imagine the senior/international pilots would have earned significantly more.
By "The Corporal"
December 8, 2008 9:04 AM | Link to this
Trouble in Paradise
Headline 12/7/08:
Liberals are growing increasingly nervous – and some just flat-out angry – that President-elect Barack Obama seems to be stiffing them on Cabinet jobs and policy choices.
By @@
December 8, 2008 9:10 AM | Link to this
Paul:
Quick post, then I’m off.
Q: why he’s having such a difficult time finding anyone with experience willing to take the post of CIA Director?
A: Eric Holder
By getalife
December 8, 2008 9:35 AM | Link to this
“so tell me how this ends.”
Not well Jay.
Obama: Gun owners do not need to stock up…
I have a bad feeling all hell breaks loose next year.
By Ben
December 8, 2008 9:46 AM | Link to this
Instead of giving all this money to failing businesses, it should be available to businesses that are doing well. We are supporting bad business at the expense of good business and that’s the best way to send the entire country to the poorhouse as soon as possible.
Instead of this fake bankruptcy with some random politician in charge, they should go through a real bankruptcy and have an experienced bankruptcy judge helping them restructure.
For sure even die-hard liberals have to admit that businessmen can run a business far better than a random politician. Look how much debt our country has, and you want to put those same people in charge of huge businesses, too? Maybe if they had shown good decision-making in running the government, it would be different story.
By Cheryl
December 8, 2008 9:50 AM | Link to this
Those hourly figures of $80 per hour etc are blatantly false, they were used to misconstrue the public opinion, and very very exaggerated.
If you have a problem with $1600 of every car going to pay for healthcare, perhaps you should be in favor of universal healthcare. That is exactly what the people of this country have been screaming about. The high cost of healthcare. So, why are you begrudging them healthcare, if it comes from the product they make. Have you ever worked in an assembly plant, it is a dangerous place and not a very healthy environment.
As for pensions….. Why is that your business, if they worked for 40 years day in and day out, and contributed to their pension plans, then why should’t they be able to count on it being there. Funny, how so many people here, don’t seem to understand organized labor, but of course, that is socialism.
Let’s try this on….. If your major gripe is that people who work, everyday, sometimes 12 hours or more, to create a product in America, and they are having problems now because AMERICANS would rather buy foreign cars, because they are “cooler, want to blame the AMERICAN auto makers for running a deficit because they pay their AMERICAN workers a decent wage. The Unions and the Auto Industry created a Middle Class in this country, one in which I assume you live in or you probably wouldn’t have the time to sit at a computer all day……. Well you get my point.
What would you have them to do about it. Maybe you chest beating “I Love America” “These Colors Don’t Run” hypocritical blabbermouths should put your money where you mouth is and STOP buying Foreign Cars……. Support American products is you are so worried about it and the problem will be much smaller!
I will tell you what you don’t see much of in Detroit, Foreign CARS! At least they buy what they make….. Here, every other car is a Foreign CAR. Now that’s patriotism for you!
By Mrs. Godzilla
December 8, 2008 9:52 AM | Link to this
Funny thing…..
The conservatives are saying the liberals are unhappy this way or that with Obama.
Remember if they say A, B it is.
By Kevin
December 8, 2008 9:56 AM | Link to this
Please keep in mind that our US auto industry also includes American auto workers who are employed by Toyota, Honda, Nissan, KIA, and Hyundai. So it is a bit disingenous to say there will be no more US auto industry if Ford, GMC and Chrysler go under. But if you build a faulty product, should the market not punish you?
I ahve a friend who bought a Ford diesel truck three years ago and has about 60,000 miles on it. Had he not bought the extended warranty, he would have been saddled with about $6,000 in two repair bills. All on a vehicle that has under 60,000 miles on it! And he heardly ever uses the truck.
By For States rights
December 8, 2008 9:58 AM | Link to this
Why is reorganization under the US bankruptcy laws not sufficient for the auto industry. The only difference between them and a smaller company is the number of employees that they have. Is it true the bankruptcy law allows a company to reorganize and get its finances in order? Isn’t that what they are asking the Congress to do; IE: keep them afloat with money rather than reorganization? I say let them go bankrupt, reorganize and move forward. What is so hard about that?
By Observer
December 8, 2008 9:59 AM | Link to this
Bud Wiser - My Delta info comes from a neighbor and client of mine who retired as one of Delta’s most senior captains. For obvious reasons, I will not name him here but I have left a message for him this morning and invited him to post here for himself.
As for the data on the UAW, the source of my data is several recent news reports and therefore, I will concede that the data may be flawed. I did not take the time to verify it independently.
Having said that, the specifics of the respective pay packages are not relevant to the bigger issue I was attempting to point out - that there is already a “government assistance” program in place for the auto makers. It’s called bankruptcy.
By Ray
December 8, 2008 10:04 AM | Link to this
Cheryl,
They need to make a better product to fit the needs of 2008, not concentrate on vehicles like the GMC Yukon and Ford F 150 which are gas guzzlers but huge profit makers for the companies. America is still not convinced that we have a problem as long as there are no long lines at gas stations and they can still get gas, even at $4 a gallon. Pampered America still doesn’t get it. Neither does GMC.
Some of the union wages in some companies pay $80/hr. At least my friend in MI was making that the last time I talked with him. Most of the foreign car plants are non union and pay is close to half that much. Even $45-48/hr is not a bad wage for auto workers when many nurses in hospitals make less than $20. An earlier post outlined how the unions are killing American auto workers. There is more truth than fiction to that.
By AJC/DNC Management
December 8, 2008 10:05 AM | Link to this
Oblahma: Gun owners do not need to stock up-Chicago Sun Times
You have to remember how these Muslims work, they send out coded messages to their zombie following disguised inside of some mindless rant, I’m figuring this one is for the Brady crowd and it is telling them that “the first chance he gets…..”
Better get out a buy one now.
By Paul
December 8, 2008 10:06 AM | Link to this
Mrs. Godzilla 9:52
Here’s the rest of the story. As you see from the quotes, the people and the organizations, it isn’t “the conservatives” who say liberals are unhappy - it’s liberals.
I wondered earlier who’d be the firstest with the mostest unhappiness - the farleft of the farright. Answer’s in -
Link: Liberals voice concerns about Obama
For the record, I think Pres elect Obama illustrates the difference between a liberal pragmatist (adjusts to circumstances) and a liberal ideologue (holds to doctrine regardless of new information or circumstances). And, I think it’s a good thing -
By Sam
December 8, 2008 10:15 AM | Link to this
I’ll bet a $100 right now that Cheryl shops at Wal-Mart(where EVERYTHING is made in Asia)
By Mrs. Godzilla
December 8, 2008 10:16 AM | Link to this
Completely off topic…..
but very funny
the dog house
By Ray
December 8, 2008 10:19 AM | Link to this
Management,
Was at Bass Pro last weekend buying target ammo for my Glock 40. 250 rounds priced at $74. Clerk stated to me that Bass Pro is the largest seller of rifle and pistol ammo in the US. Stated that there was a bill before Congress to up the Federal tax about 300% for this type of ammo. Has Bass Pro sort of upset. Stated also that a blue coating was to be put on the jackets of rounds that were sold under the 300% increase and after a certain period of time, the non colored ammo bought before the tax rise would be illegal. Your liberal government at work.
Seems also that Buckwheat supported a 500% tax increase on guns and ammo while a state senator in Illinois. If it walks like a duck……….
By Cheryl
December 8, 2008 10:21 AM | Link to this
We don’t have a Union problem, we have a trade problem and a bad case of the “I want” problem.
We American’s want everything! We don’t care how much it costs us, or who it hurts, we just want what we want. And what we want is always what we think someone else has. We wanted Japanese and Korean Automobiles. We wanted Bigger vehicles. Our automakers are innovators. They invented the Car, the Station Wagon, Mini-Van (fuel efficient by the way, just not to our tastes), the Pick up truck, and yes, even the SUV, then then the foreign competitors take it and make it cheaper. We bemoan that fact, but we have no idea what it costs…..
If you go to Tokyo, you will see lots of cars…. they are grossly overcrowded and the pollution is so thick that it makes LA look like Heaven. The only time you see the sunshine is after the daily rain for about an hour, and the stench is unbearable. Yes the cars are cheaper, but the cost of living is so high that the families who build them, live together in very small 2 room apartments. No room for a bed, they hang their futons over the rails of the apartment during the day. Your Children, their spouses, their children all live with you…. because nobody can afford their own home, ever. As a matter of fact, hardly anyone owns a home period.
Chances are if you work at Honda, or Toyota or Mitsubishi, then your entire family works there too. If you or a member of your family are fired from your job, then your entire family who works there are also fired, and shamed. Those worker abuses are why we have unions in the first place. To protect workers from he greed that is inherent in our psyche. This is what we want to compare ourselves with?
They can sell a cheaper product, the Koreans can sell a cheaper product, but their standard of living is far below the American’s and Europeans and as long as we buy them, they stay in business here and we will continue to drive us down until we are Just like them! is that what we want in America? What is the real cost of a cheaper car?
We must take responsibility for what we sew, because it is what we are reaping. If we decide that we will buy American autos, then we will be on our way. By the way, I said it’s a trade problem because when you go to Japan to check my facts, note what you don’t see….. Our cars……. They are not allowing what has happened to us, by them to happen to them! They only buy what they make. I wonder why Americans are not so loyal?
By Sam
December 8, 2008 10:24 AM | Link to this
Bet anyone $100 that Cheryl shops at Wal-Mart where everythings made in Asia
By Observer
December 8, 2008 10:26 AM | Link to this
Cheryl - You are correct. Apparently the hourly rate is not quite $80.00 for UAW workers. According to the link below, it’s $73.26. That’s $39.68 in base pay, shift differential and overtime plus an additional $33.58 per hour in pension, healthcare and other benefits.
People like you like to report only the base hourly rate of approximately $28.00 but the actual hourly cost to GM (and the other auto makers) to employ someone includes all of the other “add ons”.
$73.26 per hour for an assembly line worker is obscene. Until that cost structure is completely revamped to bring it more in line with the real world, there will be no viable salvation for the auto industry.
Average hourly wage of UAW workers
By Cheryl
December 8, 2008 10:27 AM | Link to this
We don’t have a Union problem, we have a trade problem and a bad case of the “I want” problem.
We American’s want everything! We don’t care how much it costs us, or who it hurts, we just want what we want. And what we want is always what we think someone else has. We wanted Japanese and Korean Automobiles. We wanted Bigger vehicles. Our automakers are innovators. They invented the Car, the Station Wagon, Mini-Van (fuel efficient by the way, just not to our tastes), the Pick up truck, and yes, even the SUV, then then the foreign competitors take it and make it cheaper. We bemoan that fact, but we have no idea what it costs…..
If you go to Tokyo, you will see lots of cars…. they are grossly overcrowded and the pollution is so thick that it makes LA look like Heaven. The only time you see the sunshine is after the daily rain for about an hour, and the stench is unbearable. Yes the cars are cheaper, but the cost of living is so high that the families who build them, live together in very small 2 room apartments. No room for a bed, they hang their futons over the rails of the apartment during the day. Your Children, their spouses, their children all live with you…. because nobody can afford their own home, ever. As a matter of fact, hardly anyone owns a home period.
Chances are if you work at Honda, or Toyota or Mitsubishi, then your entire family works there too. If you or a member of your family are fired from your job, then your entire family who works there are also fired, and shamed. Those worker abuses are why we have unions in the first place. To protect workers from he greed that is inherent in our psyche. This is what we want to compare ourselves with?
They can sell a cheaper product, the Koreans can sell a cheaper product, but their standard of living is far below the American’s and Europeans and as long as we buy them, they stay in business here and we will continue to drive us down until we are Just like them! is that what we want in America? What is the real cost of a cheaper car?
We must take responsibility for what we sew, because it is what we are reaping. If we decide that we will buy American autos, then we will be on our way. By the way, I said it’s a trade problem because when you go to Japan to check my facts, note what you don’t see….. Our cars……. They are not allowing what has happened to us, by them to happen to them! They only buy what they make. I wonder why Americans are not so loyal?
By Mrs. Godzilla
December 8, 2008 10:30 AM | Link to this
Observer
dig a little deeper
how much of that number is for pension and benefits of retirees…….not the specific employee
By Observer
December 8, 2008 10:31 AM | Link to this
Cheryl - You are correct. Apparently the hourly rate is not quite $80.00 for UAW workers. According to the link below, it’s $73.26. That’s $39.68 in base pay, shift differential and overtime plus an additional $33.58 per hour in pension, healthcare and other benefits.
People like you like to report only the base hourly rate of approximately $28.00 but the actual hourly cost to GM (and the other auto makers) to employ someone includes all of the other “add ons”.
$73.26 per hour for an assembly line worker is obscene. Until that cost structure is completely revamped to bring it more in line with the real world, there will be no viable salvation for the auto industry.
Average hourly wage of UAW workers
By Midori
December 8, 2008 10:33 AM | Link to this
Cheryl,
I really enjoy reading your posts.
You bring much needed facts and knowledge to this blog.
Don’t let the adolescents get to you.
By Mike
December 8, 2008 10:39 AM | Link to this
Let these companies declare bankruptcy and restructure. That way,all of these insane union contracts could be voided. Let the UAW and the executives who were fool enough to give in to them clean up their own mess. If anyone is waiting for me to feel bad for a bunch of people who have been getting massively overpaid for clearly inferior products , keep waiting.
By DB, Gwinnettian
December 8, 2008 10:39 AM | Link to this
Observer, two things:
1) You’re citing a “yahoo answers” page. Please.
2) “pension, healthcare and other benefits” include legacy costs of ALL workers still around AND their beneficiaries. The only way to knock that cost down would be to renege on deals struck in the past.
By Midori
December 8, 2008 10:41 AM | Link to this
Mrs. G —
Myth No. 7: Their union workers are lazy and overpaid
Reality: Chrysler tied Toyota as the most productive automaker in North America this year, according to the Harbour Report on manufacturing, which measures the amount of work done per employee. Eight of the 10 most productive vehicle assembly plants in North America belong to Chrysler, Ford or GM.
The oft-cited $70-an-hour wage and benefit figure for UAW workers inaccurately adds benefits that millions of retirees get to the pay of current workers, but divides the total only by current employees. That’s like assuming you get your parents’ retirement and Social Security benefits in addition to your own income.
Hourly pay for assembly line workers tops out around $28; benefits add about $14. New hires at the Detroit Three get $14 an hour. There’s no pension or health care when they retire, but benefits raise their total hourly compensation to $29 while they’re working. UAW wages are now comparable with Toyota workers, according to a Free Press analysis.
By Observer
December 8, 2008 10:41 AM | Link to this
Mrs. Godzilla - The cost per hour is what it is. It doesn’t matter how much is going to pensions or healthcare, etc. The total amount represents how much it costs the company per hour to employ one person. Allocate the cost any way you want but that bottom line hourly cost is what must be addressed.
By Mrs. Godzilla
December 8, 2008 10:44 AM | Link to this
Autoworkers Making $70 An Hour? Not Really New Republic: Debunking The Myth Of The Exceedingly Well Paid U.S. Autoworker
Again, B it is….
By Observer
December 8, 2008 10:46 AM | Link to this
Mrs. Godzilla - The cost per hour is what it is. It doesn’t matter how much is going to pensions or healthcare, etc. The total amount represents how much it costs the company per hour to employ one person. Allocate the cost any way you want but that bottom line hourly cost is what must be addressed.
By Sam
December 8, 2008 10:46 AM | Link to this
I’ll bet $100 that Cheryl shops at Wal-Mart
By Truly Inspirational
December 8, 2008 10:52 AM | Link to this
The bottom line is that retirees just live too long. And, on top of that, they’re “high maintenance* in their old age. We need to stay the course as set by the Republicans and get rid of things like the EPA, FDA, OSHA, clean air and water standards, etc., so retirees won’t live so long. Also, we need to make sure that we follow the Republican plan of eliminating medicare and medicaid and make everyone pay for their health care in an unregulated open market. Once the country goes through one health care bubble, where prices for office visits peaks at about $5000, the prices will plummet and doctors will be slashing prices down to much more reasonable levels and all will be right with the world once again. We should all give thanks to the Republican philosophy of price control through bursting bubbles.
By spankmonkey
December 8, 2008 10:59 AM | Link to this
awww shucks… (kicks the dirt) I waz jus havin sum fun…
By JR
December 8, 2008 11:02 AM | Link to this
Cheryl, If you will check I think you will find most sewing is done outside the country. And, by the way, the unions are the problem and are going to get worse because the Messiah has promised them he will eliminate the secret ballot. The most UN-American proposal I have ever heard!
By mike hussein smith
December 8, 2008 11:03 AM | Link to this
Observer’s specious claim about autoworkers making as much as $80 an hour has been widely discredited as just another lunatic smoke screen. That figure was supposedly reached by adding up everything one carmaker was paying for salaries, insurance, retiree pensions, etc. and then dividing the total by the current number of active workers. It’s a classic case of “damn statistics” being twisted to create a big lie. Union officials put the average pay at about $30 an hour.
AC/DC — “Drill, Baby Drill” is one of those secret-coded Muslim messages you warned us about. It means: Keep those Americans hooked on Saudi oil.
By Cheryl
December 8, 2008 11:05 AM | Link to this
I don’t shop at WalMart for anything. I like everyone else am guilty of purchasing non American products but it is almost inevitable, they are everywhere. However, there is a limit, and I try to go with that limit whenever possible. That is what I can do. What can we all do to make it a little better except talk about what the Unions should do.
The union members are real people, not an institution, and we would do well to remember that. Also, that $76 hourly figure above still would include Straight pay, plus holiday overtime which is double time and a half, if you are talking about take home pay. If you are adding in benefits, I ask, how much additional would be added to your salary when benefits are considered, and which of them in your opinion are fluff, healthcare, pension (if you are lucky enough to have one these days) vacation, dental, vision? How do we measure what is and isn’t an appropriate benefit for someone who works hard?
I have ALOT of family and friends who still work in at the plants, union members, and NOT one of them make $158,000 per year, not even close! Not even those that are supervisors….. Hell, I worked at GM/Fisher body, and though it was in the late 80’s I started at $12.00 per hour. I have a masters degree, and it was the most dangerous job I ever had. I can tell you for certain that the wages in Michigan have NOT increased 4 fold in Michigan! All you have to do is look up the Median Household Income in the state to realize that that is a bogus number. That figure is just out of this world.
Every car has the potential to be a burden, its the price we pay to have them.
Support our American Industries and they will continue to support us!
By Mrs. Godzilla
December 8, 2008 11:08 AM | Link to this
OBSERVER
A truly observent individual would observe the obvious difference between “$73.26 per hour for an assembly line worker is obscene” and “The cost per hour is what it is”
Of course the bottom line must be addressed and FAIRLY…..
What is your hourly rate? But before you tell us, add in the cost of your employers expenses for the retired…..
By DB, Gwinnettian
December 8, 2008 11:09 AM | Link to this
Midori, it’s like I said last week—the “73 dollar an hour” uppity UAW blue-state worker is a Zombie Lie that refuses to die. Expect to hear a lot more of it.
By Midori
December 8, 2008 11:14 AM | Link to this
DB,
Yep — much like the case of the elusive birth certificate.
It just won’t go away.
BTW - SCOTUS declined to accept the case.
By cubalibre
December 8, 2008 11:20 AM | Link to this
It should go without saying that the Big Three shouldn’t get anything without first drawing up a comprehensive plan showing how they would use the funds to turn things around. If they have nothing new to offer other than business as usual, why should they get anything? It seems to me that all of the articles and pundits that want to lay much of the blame at the union workers’ door overlook the grotesquely inflated salaries and incentive packages enjoyed by the Big Three’s top executives. I read that GM’s chairman alone took in $24 MILLION per year in 2006 & 2007, and this was when the company was already starting to go under. While the argument can be made that the execs’ pay & perks still total a smaller percentage of the labor cost overall, it would seem that these companies should be looking at what they got from those execs in exchange for these monumental salaries. It simply isn’t justified! I’d bet that the lowliest union line assembly person does more actual work in a day for his/her salary than the hogs wallowing at the top of the chain.
By JR
December 8, 2008 11:27 AM | Link to this
Not only is that a lie about $73.00 an hour, it is also a lie about people in job banks getting paid for not working. There is not one single UAW member that is not underpaid for the job they are doing. After all, where else do you see pride in workmanship that the UAW produces. When you buy a car that was made with UAW labor you can be assured you have one of the finest, trouble free, vehicles on the road.
By Observer
December 8, 2008 11:29 AM | Link to this
Mrs. Godzilla - I don’t get paid an hourly wage but the cost to my employer for my services is substantially more than what is represented by my net pay. This is true of everyone who is not self employed. The cost to a company to employ somebody is much higher than just their hourly wage. When analyzing the cost structure of the auto makers (which was the purpose of my original post), the total cost is the only relevant number.
By Truly Inspirational
December 8, 2008 11:31 AM | Link to this
I personally have a hard time reconciling any whining about auto worker’s hourly wages plus benefits without first tossing in the hourly pay plus benefits of all the management and executives. The bottom line is that all expenses must be paid from those sales. Then, expand that discussion to include Wall Street and all the brokers, insurance companies and their expenses, executives throughout corporate America and their pay… We the people need to take a closer look at ourselves at all levels and ask many questions.
By Abomi Nation
December 8, 2008 11:32 AM | Link to this
All this talk about the average auto worker salary and benefits but barely a word has been said about the salaries and bonuses of non executive financial workers. We gave them a 700 billion dollar bailout with just about no scrutiny. No comparisons between our system of compensation vs foreign system of compensation. Nothing, just a big fat check.
According to the WSJ, Goldman, Morgan Stanley, Merrill, Lehman and Bear have paid a total of $312 billion in compensation and benefits to its employees.
No one is quoting the average pay of a Japanese stock broker. All we ever hear is how the US auto worker has ruined the US auto industry.
By Observer
December 8, 2008 11:34 AM | Link to this
Mrs. Godzilla - I don’t get paid an hourly wage but the cost to my employer for my services is substantially more than what is represented by my net pay. This is true of everyone who is not self employed. The cost to a company to employ somebody is much higher than just their hourly wage. When analyzing the cost structure of the auto makers (which was the purpose of my original post), the total cost is the only relevant number.
By Observer
December 8, 2008 11:39 AM | Link to this
mike hussein smith – You refer to my claim as specious yet you offer no supporteing data. I offered a link to verify the source of my claim and until you can refute it with something other than your opinion, I’ll stand by my claim of an hourly cost to the auto makers of $73.26.
Midori – You claim “The oft-cited $70-an-hour wage…” is innacurate yet you, as well, offer nothing more than your opinion to refute this claim. I offer you the same challenge issued to Mr. Smith – put up or shut up.
I am not above being proven wrong and I will willingly admit it when faced with factual evidence. Thus far, none has been presented.
By mike hussein smith
December 8, 2008 11:43 AM | Link to this
Why is it you wingnuts seem so fixated on a German-made gun? To hell with Glock — buy Daisy instead.
Observer, you keep doing the backstroke and by noon, I’d bet you’ll try to deny that you never made that specious comment about autoworker pay. And please get us confirmation on your Delta huff and puff.
By Peadawg
December 8, 2008 11:43 AM | Link to this
I’m getting really sick of all these bailouts/handouts with no regulation/stipulations.
By DB, Gwinnettian
December 8, 2008 11:43 AM | Link to this
Let’s say you run a small consulting firm. You contract-hire people as you need them on either a W-2 or 1099 basis.
Let’s say in 2007 business was up. You had one guy who asked for tax purposes to be allowed to take half of his 200K he’d billed, as deferred pay in 2008.
Let’s say in 2008 business stinks. The only guy you’ve hired, for a total of a hundred hours over the course of the year, is the guy who cuts your lawn and spreads pine straw. You pay him ten bucks an hour… but
Hey looky—Landscaper guy’s “Total Labor Cost” is actually over ONE THOUSAND DOLLARS AN HOUR!” This is an outrage!
Ok, it’s not. But isn’t it fun to pretend that it is?
By Cheryl
December 8, 2008 11:48 AM | Link to this
Sam wrote:
Sam, I will be happy to tell you where to send the $100 you lost…. or maybe you wish to donate it to charity? Hosea Feed the Homeless is in need, they take cash or food.
lol…… I keep saying we should be careful how we generalize people!
By JR
December 8, 2008 11:55 AM | Link to this
Cheryl, Are you saying you have never been in a Wal-Mart? Not even to check the sewing?
By mike hussein smith
December 8, 2008 12:06 PM | Link to this
“I did not take the time to verify it.”
Observer, you should have checked out Mrs. G’s post at 10:44. It will take you to an article written a couple of weeks ago. It quotes a very solid source, something you have failed to do yet. What you claim as a source is a year old. Perhaps you should look at the fine print before putting your faith in Yahoo Answers. The person who asked the question got to pick a response that was pleasing to him/her. In short, it’s rigged. Quit wasting our time with cr!p like that.
By Cheryl
December 8, 2008 12:08 PM | Link to this
Observer wrote:
mike hussein smith – You refer to my claim as specious yet you offer no supporteing data -
Midori – You claim “The oft-cited $70-an-hour wage…” is innacurate yet you, as well, offer nothing more than your opinion to refute this claim. I offer you the same challenge issued to Mr. Smith – put up or shut up.
Mike Hissein Smith I believe cited his source as the UAW
Midori cited her source as the Detroit Free Press
Mrs. Godzilla broke it down with the article from the New Republic, but just do a little research on your own, that includes real numbers, not opinions and you will see.
Many on this post have legitimately refuted your incorrect supposition. It is factually inaccurate to claim that UAW auto workers are paid on a average of $80 or $73 or what have you per hour. It is just not true, no more than it is true that bus drivers in Atlanta make an average of $80 per hour. They just don’t. It is dishonest. If the average auto worker earns a cap of $28 per hour, then do the math and what is his gross taxable earnings? That is what every other taxpayer in America is judged upon, and it is dishonest to say they are obscenely overpaid.
Do you want them making minimum wage and making the cars you place your life in and that of your family. These people are not unskilled labor, they run complex systems, and they do a big job. Thank them, don’t pi*s on them.
oooooh I just cannot abide HATERS!
By Abomi Nation
December 8, 2008 12:08 PM | Link to this
Just today!
(Reuters) – Merrill Lynch & Co Chief Executive John Thain has suggested to directors that he get a 2008 bonus of as much as $10 million…
Your bailout dollars at work.
By Midori
December 8, 2008 12:13 PM | Link to this
Midori cited her source as the Detroit Free Press
As they say, Cheryl: READING IS FUNDAMENTAL
Observer - now that I’ve “put up”, do I still have to “shut up”?
By Cheryl
December 8, 2008 12:27 PM | Link to this
JR wrote:
Cheryl, Are you saying you have never been in a Wal-Mart? Not even to check the sewing?
Ha Ha Ha, No I don’t shop there anymore, haven’t for a few years now. It’s just a choice I made, to do what I can, lots of other people also have made that commitment. I decided not to support the corporation because of their policy on workers organizing, horrible employee relations, and their wages are so low, and hours are so few by design that most WalMart workers earn well below the poverty level, and cannot afford the benefits at the cost they are offered. So I choose not to support WalMart because they make an obscene profit, which profits the people who work there little to none.
This dates back to 2000 for me personally. Like I said, we want everything cheap, but we don’t know how much it really costs! I decided to have a conscience about it, and choose carefully where I spend my few dollars. That’s all, just a choice I made.
By JR
December 8, 2008 12:31 PM | Link to this
Cheryl, You are a real trip. I was making fun of you because you say you have a Masters degree and yet don’t know the difference between sew and sow!
By Abomi Nation
December 8, 2008 12:41 PM | Link to this
Cheryl, You know you have them on the run when they result to such petty insults. That seems to be all they have. Good job.
By American Made...Please
December 8, 2008 12:49 PM | Link to this
General Motors and Ford are GLOBAL companies, much like Honda and Toyota. GM and Ford build “American” cars in Canada, Mexico, heck even South Korea (Chevrolet Aveo). Honda and Toyota build cars in the US. Which is more American? Buying your Chevrolet Impala that was built in Canada or buying the Toyota Tacoma that was built in the US? Oh, and the UAW actually builds the Toyota Tacoma but will probably lose the job in 2009 when the contract expires because, according to Toyota “wages are growing faster than profits”. Go figure. (I am unsure of the current status, however, because it was reported in late 2007 the UAW was “playing nice” to keep the contract and trying to keep Toyota from moving the plant to Mexico. Contract is actually with NUMMI, a company controlled by Toyota)
The Unions abused the Big 3 but management has grossly mismanaged the companies. If the US has to go into a depression while they go through bankruptcy, then so be it. The car companies will come back better, stronger and more innovative. I think the airline comparison is a good one. It will be a struggle, but the country will be better off for it. I understand the “BUY AMERICAN CARS” slogan, but it is more of an emotional argument.
While we are at it, I also don’t understand those that completely absolve the unions of any responsibility and want to argue over hourly wages, cost of benefits, etc. The companies are going out of business. They can’t charge enough for the cars they make to pay for the cost of building them, ergo, if you can’t charge more, you have to cut cost. What’s the problem? The jobs belong to the companies, not the workers that are employed by them.
By cubalibre
December 8, 2008 12:50 PM | Link to this
Cheryl @ 11:48: don’t pay it any mind. I’m learning that the rightwingers engage in sophomoric name-calling when they realize that someone who holds a different viewpoint makes a cogent point. Yesterday, on Wooten’s blog, I got called “Fidelistic” by some crackpot calling itself “Jill”, and was asked by “Dusty” why I left Cuba, after making an asinine reference to my moniker supposedly standing for “Cuba” and “liberation”. (Although I’m of Cuba descent, I’m 100% American, but I figured if she didn’t know that a Cuba Libre is a cocktail— and a darned tasty one— any clarification would be lost on her.) I’m glad you and others have furnished the information about the real breakdown of the auto workers’ salaries— it underscores the point I made earlier about the executives’ pay rising while the companies’ profits were tanking being the real injustice here. Heckuva job, Nardelli!
By JR
December 8, 2008 12:51 PM | Link to this
Ab, Believe me I have a lot more but it would be over your head so why bother?
By tcoach
December 8, 2008 1:02 PM | Link to this
Cheryl if the workers at Wal-Mart do not like their pay they are free to go find other employment. If they choose not to do so then they should be thankful they have a job.
BTW- I think most of the Wal-Mart employees are college kids, high school aged children, and some senior citizens, who are also drawing retirement/ social security. I know it was when I worked there. I do not think that Sam Walton or any of the CEO’s of Walmart ever intended their customer services positions to be high paying jobs. Seems from the people they hire the ideal employee is usually a part-time employee who is only looking to supplement their income, or for those not looking for anything other than spending money. The guy who hired me even said as much in my interview. That was over 8 years ago, but I worked there throughout college and the practice never seemed to change, but I did leave 4 years ago.
I did check and the average hourly salary is over 10.11 per hour.
That may not sound like much but that is bringing home nearly $300 every week, if working full time, which sounds like a livable wage.
that is $1200 per month. I think a 2 bedroom can be rented under $500 per month. That is way more than I made and I was able to pay my rent and all my bills, still had spending money too.
Everyone is not going to be wealthy.
By Cheryl
December 8, 2008 1:34 PM | Link to this
Well, If you believe what you just said, I would invite you to go to your nearest WalMart, and see if most of the people working there are college kids, or high school kids and senior citizens. Walmart is the largest employer in the US, it cannot be made up of college, or high schoolers or even Seniors and meet that statistic. The Part-time gigs are on purpose, so that Benefits don’t have to be provided….. More Money for WalMart….
Working for Wal-Mart Forbes magazine, polling business executives (not employees) has ranked Wal-Mart among the best 100 corporations to work for. Yet the employees on average take home pay of under $250 a week. The salary for full-time employees (called “associates”) is $6 to $7.50 an hour for 28-40 hours a week, which is typical in the discount retail industry. This pay scale places employees with families below the poverty line, with the majority of employees’ children qualifying for free lunch at school. When closely examined, this amounts to a form of corporate welfare, as the taxpayer subsidizes the low salaries. One-third are part-time employees - limited to less than 28 hours of work per week - and are not eligible for benefits.
The company is staunchly anti-union. Whereas Wal-Mart employees start at the same salary as unionized employees in similar lines of work, they make 25 percent less than their unionized counterparts after two years at the job. The rapid turnover - 70 percent of employees leave within the first year - is attributed to a lack of recognition and inadequate pay, according to a survey Wal-Mart conducted. Yet this can work to the company’s advantage, since it is more difficult for unions to organize when there is constant employee turnover.
Source: PBS - Store Wars- WalMart.
Organize, Educate, Adjitate!
I do what I can.
By Abomi Nation
December 8, 2008 1:35 PM | Link to this
Buy American.
Yet just about every single Southern state tries to out do one another with huge tax breaks to bring foreign auto plants to their state. Do the tax breaks enhance competition?
By Cheryl
December 8, 2008 1:39 PM | Link to this
JW - LOL!!!! Thanks for that, I completely missed the joke, and that was a funny typo, and equally funny joke! Good one! Yes I do know the difference, between Sew and Sow, I just didn’t read what I wrote…… Thanks Again, I really did laugh out loud when I read your post! All of them, even though I was missing the joke!
:-)
By JR
December 8, 2008 1:44 PM | Link to this
Cheryl, Thank God you have a sense of humor. Others on here are so full of themselves they don’t get a joke!
By Jake
December 8, 2008 1:49 PM | Link to this
Are we bailing out Walmart now, I’m getting confused? The government hasn’t run anything better than private enterprise for a long time. However, the continuous rewards for failed execs like Nardelli are unbelievable. Arthur gave hiw $150M to leave Home Depot after running it down, now he’s making big bucks destroying Chrysler. Capitalism at it’s worst.
By GaLiberal
December 8, 2008 1:52 PM | Link to this
One thing that people should not forget. This is not about what is economically sound, it is about electoral votes. If you’re the party that lets the car companies fail, then you don’t get the electoral votes. You don’t get senators or representatives. You lose your power in DC. So go ahead all you Rethuglicon ‘Let the free market work.’ garbage spewers. Vote against the bridge loan. I’m very certain the Democrats won’t mind picking up a few more seats in the mid-term election. And maybe the next as well.
When you vote Rethuglicon, you vote against your own best interests. And not supporting the bridge loan is living proof.
By American Made
December 8, 2008 1:58 PM | Link to this
Abomi One Kenobi (sorry, couldn’t resist).
I don’t think it enhances competition one bit in the auto industry. That is all about state politicians enhancing their stature (“look at all these jobs I brought to the state”) and enhancing the state and local economies, has nothing to do with the auto industry itself.
I may be misquoting, but if my memory serves, foreign automakers (meaning automobile companies whose corporate headquarters are outside the United States) now build more cars in the US than they import. Honda used to send the Honda Accord Wagon TO Japan from their plant here in the US.
I was attempting to point out that buying an American car isn’t the same as it used to be. Simply buying a Chevrolet Silverado (made in Mexico) and a Chrysler Town and Country (Made in Canada) doesn’t make you better than the person that has a Honda Accord (made in Maryland) and a BMW Z4(made in South Carolina). Who drives the American car there?
All carmakers are struggling. Honda just quit Formula One due to lagging sales of their cars. The difference is carmakers such as Honda and Toyota are not hemmorgaging billions of dollars to cover costs associated with an out of date labor system (ie the UAW). Jusy my .02 though.
By American Made
December 8, 2008 2:18 PM | Link to this
Wal-Mart. Good for the 70% that leave. If the other 30% aren’t happy with their pay and benefits, they can leave too. Wal-Mart has the jobs. An employee can chosse to or choose not to work there. Period. Let’s say Wal-Mart introduced new benefits and pay increase to all their employees resulting in a 15% increase in the cost of labor. As a result increased prices 15%. What would be the outcome? Fewer shoppers at Wal-Mart maybe? A new competitor down the street with lower prices perhaps? Wal-Mart then maybe goes the way of KMart?
By Abomi Nation
December 8, 2008 2:32 PM | Link to this
American Made, you are right foreign car makers are struggling to sell their cars here, right along with the Big 3.
LONG BEACH, California (Reuters) - From pricey luxury sedans to popular hybrid cars, automobiles made overseas are stacking up at ports and parking lots around the United States as supplies far outstrip demand amid the nation’s worst auto market in more than 25 years….
By Cheryl
December 8, 2008 2:49 PM | Link to this
So what if you had to pay a little more at the store? So what? You ARE ALREADY PAYING more than you think is the point.
If You pay taxes, you are paying for WALMARTS workers to have healthcare - NOT WALMART is the point!
If you pay taxes, you are paying for WalMart workers to get food assistance and Section 8 rental assistance or public housing because they don’t make enough to even buy the food or pay rent.
The truth is, that Walmart pays more in advertising per year, then they do for employees wages and benefits so what is more important? Do we really need to see a Walmart commercial every time the show breaks, or could we get the message if they just bought every other break, and maybe pay the workers a little more! Do you know how much a :15 or :30 second spot costs on Network TV? Or how much they spend print advertising each day?
AND NO, Congress is not bailing out WalMart, YOU ARE! They already receive hefty employee subsidies at the taxpayers expenses, they don’t need one big check, they get theirs monthly!
Everybody will not be wealthy, but there is NO reason for people who work to be in poverty, this is America and we can do better.
By American Made
December 8, 2008 3:04 PM | Link to this
Abomi…foreign automakers are not just having a hard time selling cars here. Japan’s sales are down 18.2%, Sweden down almost 36%, South Korea down almost 10%…it’s everywhere. Interesting note. Here is the US Toyota only had 2 models gain in sales..the large SUV’s the Sequoia and Lexus LX. Sales of the Prius are down 48%. Only vehicle lines to post gains so far in the US…Mini, Rolls Royce and Ferrari. I’ll take my 599 GTB in red please.
By American Made
December 8, 2008 3:23 PM | Link to this
First, I have rarely bought anything at Wal-Mart. Actually can’t remember the last time I did. Target for me.
Second, just to offer a counterpoint. Sounds like Wal-Mart possibly does more good than harm: *Jason Furman of New York University notes that Wal-Mart and other discount stores make “consumers better off by the equivalent of 25 percent of annual food spending.”
But only at the price of wage slavery? No, Wal-Mart’s average wage of roughly $9 an hour is on par with other retailers. Because the jobs tend to be low-skill, retail workers earn less than the average wage for all U.S. workers. According to Furman, this has been the case for the past 20 years and holds true even in areas without Wal-Marts.
Three-quarters of Wal-Mart workers are full time. Other retailers have work forces that are only 20 percent to 40 percent full time. And Wal-Mart offers health insurance to full-time and part-time employees, which is rare in retail. Eighty-six percent of Wal-Mart employees have health insurance; 48 percent through Wal-Mart’s plan.
Although The High Cost attacks Wal-Mart as a welfare queen, only about 5 percent of Wal-Mart employees are on Medicaid, the same proportion as other retailers. Furman points out that a Wal-Mart worker who has to decide whether to buy the company’s family insurance policy at a cost of $1,800 annually or take Medicaid coverage instead is wise to go on Medicaid. “The beneficiary of choosing Medicaid is the worker,” Furman writes, “not Wal-Mart.”
Because Wal-Mart is a behemoth, critics assume that it can change its wage and benefits policies on a whim. According to Furman, Wal-Mart earns $6,000 per employee. That’s below the national average of $9,000 per employee. Wal-Mart makes $288 billion of revenue on $277 billion of costs, a 3.7 percent profit margin on costs, which leaves little room for error.*
I would bet there aren’t many cashiers out there in the world that make much more than $9 an hour, from McDonalds to Pep Boys to the mom and pop convenience store down the street. Should Wal-Mart have to pay more just because they are Wal-Mart?
By American Made
December 8, 2008 3:31 PM | Link to this
Seems like Wal-Mart has a bunch of company in underpaying it’s cashiers.
The median expected salary for a typical Retail Cashier - Full Time in the United States is $19,585. This basic market pricing report was prepared using our Certified Compensation Professionals’ analysis of survey data collected from thousands of HR departments at employers of all sizes, industries and geographies.
By Old Physics Teacher
December 8, 2008 3:41 PM | Link to this
One of the signs of old age is, “I remember when…”
Sigh, I hate to say it, but I remember when Home Depot started. I was one of their first employees at their first branch. I desperately wanted to get out of retail because it was difficult to have a family and work retail hours. It wasn’t because of the pay. Arthur and Bernie were paying extraordinarily high wages, and I stayed in the field. Retail used to pay significantly more than office work or manufacturing. We had to know our product line and why you should buy from us. This philosophy was why Home Depot blew their competitors away. They paid their employees top dollar and expected top dollar work. If we didn’t, we got fired. I had to take a huge cut in pay to get out of retail. Now, there are no salesmen in retail, the prices are cheaper (and so is the quality - because the company buyer only cares about the price points), customers buy the wrong products because there’s no one there to educate him/her (just because one product is cheaper than another does not mean it’s the better buy), and retail companies’ profitability is down and executive pay is up.
I made enough working retail (at assistant manager - and lower levels) to support a stay-at-home mom and two kids. Corporate bosses have screwed up the retail business. I seriously doubt Sam Walton meant for 1/2 of his workers to have to take government subsidies to live. He’s probably rolling over in his grave from what the execs are doing to his company now.
Now all you Right-wing wingnuts can jump on me now.
By razmus
December 8, 2008 3:47 PM | Link to this
The one thing nobody has touched on here is the question, is someone who tightens nuts on a car chassis with a air-driven wrench worth $32.00/hour? I know people with college educations that make less than that. That is and has been the root of the union problem for many years. I know, I know, but the CEO’s,blah, blah, blah. Yea, they are to blame to but the greed permeated the whole industry. I have a GM dealer that lives down the street from me that lives like a King. He has thousands of acres of land and multiple homes which he purchased with a GM line of credit. I say, let them all go bankrupt and a pox on any politician that bails them out. Let them dig their way out.
By Cheryl
December 8, 2008 3:53 PM | Link to this
By American Made wrote:
Should Wal-Mart have to pay more just because they are Wal-Mart?
Yes they should, but those are good points.
When WalMart rolls into town, or your area, jobs are lost, family businesses go under, and the entire economy decreases. This is why so many communities protest Walmart building in their area. So that family who ran a store is out of business, the stores who leased property are gone, and Walmart becomes in many cases the Landlord for business in the area. We may get lower prices up front, but there is a price… and it’s considerable.
Other retailers cannot compete with them they are just too big! Target gets those who do not want to shop there, and KMart is going under. There was nothing wrong with KMart, they are just not big enough to handle it. Sears…… Once the place where America shopped, is struggling, and their appliance, once the staple of American homes, Kenmore is fighting against those who moved to Mexico. My parent’s bought their house (no lie) at Sears and had it delivered and built it themselves.
The Medicaid figures are deceptive. Most do not receive Medicaid, because they are not eligible, however, they are able to insure their children an disproportionate rates in areas where there are Walmarts through the state’s SCHIPP programs, like PeachCare, which are tax payer funded.
No company has to provide for benefits for any employee, it is a benefit, however my point is that the cost of getting lower prices….. or what we think are lower prices, often times as in this case are not really lower it just shifts someplace else. And if we are going to be purchasing all this foreign made stuff which costs jobs here, then it should benefit somebody here. Besides us as consumers.
We should be conscience of that when we choose where we shop, or what cars we buy, which was how we got to talking about WalMart in the first place.
By Observer
December 8, 2008 3:56 PM | Link to this
Cheryl – In your 12:08 post you claim that my challenge to Michael Hussein Smith, Midori and Mrs. Godzilla was met. You wrote: Mike Hissein Smith I believe cited his source as the UAW Midori cited her source as the Detroit Free Press Mrs. Godzilla broke it down with the article from the New Republic, but just do a little research on your own, that includes real numbers, not opinions and you will see. Many on this post have legitimately refuted your incorrect supposition. It is factually inaccurate to claim that UAW auto workers are paid on a average of $80 or $73 or what have you per hour. It is just not true, no more than it is true that bus drivers in Atlanta make an average of $80 per hour. They just don’t. It is dishonest. If the average auto worker earns a cap of $28 per hour, then do the math and what is his gross taxable earnings? That is what every other taxpayer in America is judged upon, and it is dishonest to say they are obscenely overpaid. Claiming to get your information from the UAW is not a citation, it’s a claim. In order to be a citation, there needs to be a link to the source. I would have expected you to know the difference. Midori, and Mrs. Godzilla did, in fact, offer citations to bolster their arguments and I applaud each for doing so. This blog is filled with people making opinionated claims without a shred of supporting evidence. As to each of their citations, they serve only to confirm my position. If you actually READ the referenced links, they confirm that the cost to the auto makers is in excess of $70.00 per hour per employee. If you actually READ my 10:26am post, you will see that my contention is not that UAW workers make in excess of $70.00 per hour but rather that the COST TO THE COMPANY for those employees is in excess of $70.00 per hour. I am still waiting for you (or anybody else) to refute that assertion with any factual evidence. The cost to the company is the real issue at hand because that cost structure is what is causing them to ask each of us – yes, it’s our money – to bail them out.
By Observer
December 8, 2008 4:03 PM | Link to this
BTW - I appologize for the formatting of my last post. I had it broken down into several paragraphs and it seems to have consolidated it into one.
By American Made
December 8, 2008 4:10 PM | Link to this
The truth is, that Walmart pays more in advertising per year, then they do for employees wages and benefits so what is more important?
Just so it’s clear:
Taken from Walmarts 2007 Annual Report
Advertising $2,000,000,000 Wages and Benefits $15,799,000,000
Not even close. They advertise to bring in the customers to pay their employees. The nerve of them.
By Cheryl
December 8, 2008 4:19 PM | Link to this
Observer - I would stand corrected if that is what you said. but this is what you said at 8:05 : “Today, we have senior assembly line workers at the “Big Three” making in excess of $80 per hour plus overtime for anything over 35 hours each week. This is ridiculous.”
At 10:26 you revised to say: “Cheryl - You are correct. Apparently the hourly rate is not quite $80.00 for UAW workers. According to the link below, it’s $73.26. That’s $39.68 in base pay, shift differential and overtime plus an additional $33.58 per hour in pension, healthcare and other benefits.”
It’s still dishonest to post it the way you did, and other have used that figure to blame the workers, the posts were in response to that sentiment. Your claim that the average senior assembly line worker takes home $80 per hour plus overtime, were wrong.
If you do the same when you negotiate your compensation package and then report that figure to the IRS as earnings, and make sure you include the phone, computer, use of the copier, fax and printers at your job all the stuff that goes into the cost of you to work at your job, then it is fair game, otherwise, it is misleading and you got called on it…… by everyone…
You are right, Mr. Hussein Smith referenced the UAW’s published information, it is not a cited work…. I stand corrected.
Thanks for the correction.
Gotta go to work now. Deadlines to meet Peace all!
By Observer
December 8, 2008 4:21 PM | Link to this
American Made - Thank you for pointing the blantant misrepresentations in Cheryl’s WalMart diatribe. You saved me from having to dig up the wages vs. advertising figures. Those pesky little facts can be so inconvenient to some posters.
BTW - When did this blog morph into being about WalMart instead of the proposed bailout of the big three?
By Observer
December 8, 2008 4:27 PM | Link to this
Cheryl - You are correct. My 8:05 post was poorly stated.
As for the remainder of my argument - it still stands on it own merit and thus far, has not been factually refuted.
By American Made
December 8, 2008 4:33 PM | Link to this
Cheryl…you make some good points as well. Walmart can devastate a small town and saw it happen in my dad small home town in South Carolina. Bottom line though is that it is still up to an individual if they work for Walmart. They apply for and accept the job. The Walmart job bus doesn’t come by and force them on it. Going back to the auto industry, my point was the buying Amercian in thh auto industry is not as simple as buying a Chevrolet. It is also up to the auto industry to make cars that people want to buy and at prices they are willing to pay. That ain’t happening. The Big 3 cannot survive as they are currently structured and the cost of the labor is a major reason why.
By Cheryl
December 8, 2008 4:37 PM | Link to this
Correction noted, but maybe not taken. I’ll look at the RedBook, not WalMart’s annual report and get back to you tomorrow. And the labor department figures as well, they have a way of being objective….. and counting everything, unlike a corporation trying to impress communities and shareholders….. things like tv, radio, billboard, magazine, newspaper, rop, FSI, instore, electronic, ipod, sporting events, local event sponsorships.etc. $2 billion would not be a very big budget given it’s the world’s largest retailer….. There is alot more to advertising budgets than what they report….. pesky details….. I happen to study this stuff…. ALOT
Later
By American Made
December 8, 2008 4:51 PM | Link to this
Observer…because anytime you bring up unions somehow the fact that Walmart is not unionized comes up eventually. Some people believe the job belongs to the employee. It doesn’t, it belongs to the employer.
Just as trivia the WORLDS 4th largest employer (Walmart is #1)…the US Postal Service.
By Cheryl
December 8, 2008 4:54 PM | Link to this
-Republicans……I dont’ get you. I thought you were the party of “family values” but I guess that only applies in the bedroom. It’s really simple. Are you for American workers, small businesses thriving, self-sufficiency, people working for a living, or are you for government assistance and increasing entitlement programs at the cost of the tax payers?
It would seem that a “conservative” platform, whatever that means, you would be against underpaying workers, outsourcing, and increasing foreign production at the demise of domestic production and the advantages of corporate welfare. You know the things that will build up this nation, not tear it down further……
We gain zero, when we devalue our workforce, run over our small businesses and eliminate competition in our markets. NOTHING.
By American Made
December 8, 2008 5:08 PM | Link to this
Cheryl.
Are you for American workers, small businesses thriving, self-sufficiency, people working for a living Absofreakinglutely I am 110% or are you for government assistance and increasing entitlement programs at the cost of the tax payers? Absofreakignlutley not.
But forcing Walmart to pay more than their employees are worth isn’t the answer. Again, why just Walmart? Where does it stop? Go back to personal responsibility and self sufficiency. If being a cashier at Walmart doesn’t cut it, you are going to have to do something else. I think we just disagree on what an employee is worth…and that’s fine. I am curious to know what your other sources say about Walmarts advertising budget though. I would love to see where Walmart “reports” the difference it is indeed very different. I haven’t looked a Redbook in a long, long time. Intersting conversation and your civility (unlike many others on here) is appreciated. I do and shall continue supporting small businesses with gusto, especially since I am one. Don’t get me started on outsourcing. That is due to the tax code, but that shall be for another day.
By Cheryl
December 8, 2008 5:10 PM | Link to this
By American Made Just as trivia the WORLDS 4th largest employer (Walmart is #1)…the US Postal Service. That’s a good fact…..
Cheryl…you make some good points as well. Walmart can devastate a small town and saw it happen in my dad small home town in South Carolina. Bottom line though is that it is still up to an individual if they work for Walmart. They apply for and accept the job. The Walmart job bus doesn’t come by and force them on it.
Thanks and you are right.
By RC
December 8, 2008 8:04 PM | Link to this
Jay, The chickens are coming to roost!
By Meanwhile
December 8, 2008 9:28 PM | Link to this
Meanwhile my 401K and other investments have lost at least 40% of their value and we continue to bail out the UAW and anyone else with their hand out. ENOUGH IS ENOUGH!!! LET THEM FAIL!!!!
By UAW
December 8, 2008 9:38 PM | Link to this
…The UAW did not let up in its demands for better wages and benefits. By 2003, the retirement and healthcare burden per vehicle sold in North America was $1,360 for GM and $180 for Toyota…
The systemic problem (UAW) needs to be cured else the patient, even with life support, dies….
By protect the vote
December 8, 2008 9:41 PM | Link to this
Peter Morici, a professor at the University of Maryland’s school of business, told CNSNews.com that one of the biggest problems the companies face is the UAW’s Jobs Bank – a program established more than two decades ago that guarantees nearly full salary and benefits to out-of-work employees.
“Right now if a plant closes in St. Louis and a new one opens in Kansas City, the workers don’t have to move from St. Louis to Kansas City; they can opt to get a $105,000 payout or go on Jobs Bank where they can collect 95 percent of pay for the rest of their lives,” Morici said.
By fed up
December 8, 2008 9:47 PM | Link to this
Got in here late and maybe it’s been said already but…too much to read. We shouldn’t bail out the auto industry and furthermore a lot of the problems lie in Congress/Washington. They are the last that need to police anybody.
By whatfor
December 9, 2008 8:56 AM | Link to this
The FIRST thing I would do if I before I cut a check to any of the “Big 3” is make the auto industry non-union. Though management has its faults - the Unions are the ones primarily responsible for the problems the auto industry has. The unions are nothing more than parasites. Sure - unions were go for something 50-60 years ago - but no longer usefull. Just parasites. Some people have faulted the industry for making too many big vehicles - like SUVs - but what people fail to remember is that is what a whole lot of people wanted back just a couple of years ago. Very few people wanted to buy a small Euro looking car. What if the industry said “we are not going to make or sell any more big cars or SUVs, you WILL buy our smaller, more fuel efficient cars” - how many of you would have liked that??? No - before the first check is cut - the unions must go.
By Williebkind
December 9, 2008 9:43 AM | Link to this
First, I do not have a link to qualify my statements because this is not an essay or technical writing test. However, that does not disqualify my statements.
Mrs G. must have a list of links given to her by the DNC every morning. She may feel free to plug in as many as she likes.
My statement is that the auto crises fell to the whims of liberals. No oil drilling, no new refineries, no nuclear plants online, and this lie about global warming. Oh by the way on the news last night(for link seekers) the waters off the coast of californication will be cooler for the nest 30 to 40 years.) But not regress, the liberals demanded fuels be reformulated to increase milage while emiting less polution and demanded the automakers do the same. Then the liberals and the liberal media attempted to force our economy to become oil free while demand was increasing. The liberals did not want to gradually wane from an oil based economy but rather do it instantly. For this, the price of oil rose out of control. The failure is of the banks is still a mystery to me. The oil companies, thanks to the liberal ideology, were raking in billions. You can not take that much money from the economy and put so little back without it having a terrible impact. Companies expenses rose and the profits dropped to the point of business closures.
You liberals have it all now—A depression, a liberal president, a liberal congress, a liberal house, a Prince Reid, and a Do nothing Pelosi. You and the liberal media can fix it all. Remember President Clinton signed the NAFTA agreement. Jobs went out of country for cheaper labor but the retail prices changed very little. As for as the automakers, I will challenge anyone here to pick a GM out of the parking lot and then pick a toyota of same comparison and follow the history of the auto. I will bet MY minimum wage earned $100 that the GM will fail before 80,000 miles while the toyota keeps on cruising. It may not be the fault of the auto worker, but the company is putting out trash. Then to add insult on top of injury the Labor Unions are rubbing salt in the wounds by adding their greedy demands. Government got involved trying to save the small farmer and it did the reverse—it wiped out small farms and gave the subsidies to corporations. Imagine that! What will happen to the automakers? I believe it will be a free hand into the treasury of the tax payer. But I am just a conservative—what do I know.
By Realilty
December 9, 2008 10:31 AM | Link to this
Read Eric Bolling’s 12/7 “A letter to Detroit”, the UAW section in particular.
From that Letter -
“Mr Gettelfinger…Your union is the reason why the cost-per-vehicle for Detroit’s Big Three is significantly higher than that of foreign companies (BMW, for example) building cars here with American workers….It is your union, Mr. Gettelfinger, that negotiated absurd items like job banks, where idled workers play crossword puzzles and video games while receiving up to 95% of their pay and benefits. It was you, sir, who refused to grant the wish of every American watching your Capitol Hill testimony: a complete rewriting of your contracts with our auto industry…”.