UAW kills auto bailout bill in Senate
NY Times:
The auto business can be very profitable when the sales volume is high enough and it is a real loser when it is not. Ford has tried to deal with this situation by buying other car companies when profits or high and selling them off during tough times. That may be one reason why it is in better shape than the other two. It has also been making better vehicles.
Some in the media will try to blame this breakdown on the Republicans, but the real problem is with the UAW. Until it gets realistic these companies are going to be in trouble if they exist at all.
Update: In a comment below it is suggested that the Senators who were pushing for the UAW concessions were doing so to protect the foreign builders in their state. However, if the UAW had accepted the proposal they were pushing, it would have made domestic producers more competitive with those foreign producers. It is in fact the UAW's reluctance to make the domestic producers competitive that will benefit the foreign producers the most, since they will have less domestic competition.
The Senate on Thursday night abandoned efforts to fashion a government rescue of the American automobile industry, as Senate Republicans refused to support a bill endorsed by the White House and Congressional Democrats.The Washington Times reports:The failure to reach agreement on Capitol Hill raised a specter of financial collapse for General Motors and Chrysler, which say they may not be able to survive through this month.
After Senate Republicans balked at supporting a $14 billion auto rescue plan approved by the House on Wednesday, negotiators worked late into Thursday evening to broker a deal but deadlocked over Republican demands for steep cuts in pay and benefits by the United Automobile Workers union in 2009.
...The Republican leader, Senator Mitch McConnell of Kentucky, said: “We have had before us this whole question of the viability of the American automobile manufacturers. None of us want to see them go down, but very few of us had anything to do with the dilemma that they have created for themselves.”
Mr. McConnell added: “The administration negotiated in good faith with the Democratic majority a proposal that was simply unacceptable to the vast majority of our side because we thought it frankly wouldn’t work.”
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...This is an example of the Kamikaze labor leadership that has destroyed the domestic auto business and now is unwilling to do what is necessary to save what is left of it. What the union should have counter offered is an acceptance of that pay scale with the potential of bonuses from profits in the future should the business turn around. That would have given them an incentive to make the companies profitable.
The talks broke off when the United Auto Workers refused Republican demands that the union set "a date certain" by which its members would have a lower pay scale, one comparable to such manufacturers as Nissan and Volkswagen.
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The auto business can be very profitable when the sales volume is high enough and it is a real loser when it is not. Ford has tried to deal with this situation by buying other car companies when profits or high and selling them off during tough times. That may be one reason why it is in better shape than the other two. It has also been making better vehicles.
Some in the media will try to blame this breakdown on the Republicans, but the real problem is with the UAW. Until it gets realistic these companies are going to be in trouble if they exist at all.
Update: In a comment below it is suggested that the Senators who were pushing for the UAW concessions were doing so to protect the foreign builders in their state. However, if the UAW had accepted the proposal they were pushing, it would have made domestic producers more competitive with those foreign producers. It is in fact the UAW's reluctance to make the domestic producers competitive that will benefit the foreign producers the most, since they will have less domestic competition.
The UAW & supoorters will have no one to blame this catastrophe on but themselves when it is all said and done. If this has to happen I pray for the death of the UAW. The time for unions was once a great need and they did great things for many people many many years ago. Now it is run by the Fat Bastards of association. I pray for this Country...
ReplyDeleteI wholeheartedly agree. The UAW has destroyed more than one industry, but is not totally responsible for this. The feds have contributed their share through consficatory taxation and unrealistic overregulation. No wonder the auto industry is about to go belly up.
ReplyDeleteUAW represented Autoworkers account for 10% of the total automobile cost.
ReplyDeleteIn 2001 Smyrna Tenn. A Nisson earned at low average wage was $24.00 per hour in addition to health and fringe benefits.
Union represented workers have rights guaranteed by federal law and the National Labor Relations Act. Non union workers are at the will of the company and have no rights no voice.
The two Republican Senators most vehemently opposed to the bridge loan are the two from Tennessee and Alabama; states where Honda, Nisson, and Mercedes Corporations have received multi millions in tax breaks, and Free land to build.
Now lets question them as to the number of friends and family members holding positions in higher management at these companies. Lets question the Senators about their friends and family sitting on the company board. Lastly lets ask how many of these name plate vehicle's are parked in their garage.
Unions are an outdated and counterproductive.
ReplyDeleteEmployees of companies that offer stock options and other incentives tied to the overall success AND are not robbed of this incentive by accounting slight of hand have thrived. Sadly, greed takes over and ruins this whole system. Greed is also what has held the current union system in place.
Instead of truly rewarding employees for their hard work and dedication to a company, CEOs and upper level management have done everything they can to hoard profits at their levels, which has contributed to the reason we now have a president-elect that feels it is necessary to INCREASE regulation in order to 're-distribute wealth'.
If corporations don't want big governments, then they should do what is right for society and the US rather than lining their pockets, outsourcing their labor problems to foreign countries, and leeching off their resources without any environmental responsibility.
I think Henry Ford would roll over in his grave if he knew how his company was being run. The term "Fordism" doesn't only pertain to the mass production of a large number of inexpensive automobiles, but high wages for his employees. He believed that paying people a fair wage would lead to a sound consumerism and a recession-proof economy and ultimately world peace! If a company that started out with such high moral standards can end up like it is now, how could the other companies even have a chance?
Ever wonder what a UAW contract looks like? It is over 2200 pages and weighs 22 pounds. It no wonder the big three can not compete in the global market. Honda and Toyota don't have to deal with that kind of crap. It would take a team of lawyers just to understand this document. 2215 pages of inefficiency brought to you by the UAW
ReplyDelete