[sgarnett]

The Senate, UAW, et al, just gave up (ie failed) on reaching a compromise a few minutes ago.

I don't know how GM will come out after bankruptcy (they just hired the bankruptcy lawyer), but the stock market futures are looking ugly tonight. It actually held up well through some dismal recent employment numbers, but I suspect tomorrow is gonna be ugly. Rebuilding my retirement is going to mean austerity and no new cars for a very long time, and I suspect that will be true for many others. That can't be good for any automaker.

I'll admit I wasn't convinced that bridge loans to March could solve the problems for GM, so I don't claim to know what the right answer was. Nevertheless, this is going to be a big kick in the teeth for the economy.

This post has been edited by sgarnett: Dec 12 2008, 04:07 AM

[C3SS]

I agree it is important but would still like to see more concessions from the UAW. In the admittedly little reading I've done on this, that seems to be the hang-up.

[trackbird]

I agree it is important but would still like to see more concessions from the UAW. In the admittedly little reading I've done on this, that seems to be the hang-up.

I saw them say that they wanted the UAW to take a pay cut to put them in line with the non union import plants in the country. Many of which are located in areas with lower costs of living. Also, even if they are not, many families can't afford to take a 5-25% (I didn't see the exact number) pay cut. Of course going bankrupt and putting everyone out of work is an issue, but it doesn't do much good to keep your job and still lose the house and such due to not making enough money to continue paying your bills.

Don't take this to mean that I'm defending people overspending. But if you have a house and a couple kids (and income that's quite predictable since it's in the contract), your budget is probably pretty well stretched on the current salary. If you knew you were getting a pay cut, you might have kept a smaller car payment (or other bill) instead of buying whatever you may be driving currently. But if you're living (barely) within your means, a large paycut is almost as bad as losing your job. And it's not like you can just sell the house and buy something smaller right now, or sell/trade the car. The market sucks all the way around and you're probably going to be stuck with your current car/house/bills for a while.

And I've heard some mention of a few government officials who are wanting to "bust up" the unions. So, I guess it's a big sticking point.

Of course I'm just thinking out loud. Others may not agree.

[C3SS]

But if you have a house and a couple kids (and income that's quite predictable since it's in the contract), your budget is probably pretty well stretched on the current salary. If you knew you were getting a pay cut, you might have kept a smaller car payment (or other bill) instead of buying whatever you may be driving currently. But if you're living (barely) within your means, a large paycut is almost as bad as losing your job. And it's not like you can just sell the house and buy something smaller right now, or sell/trade the car.

At this point it seems the choices are change the contract (what do they think bankruptcy is going to accomplish?) or lose it all, so I'd think that the former would be preferable. The status quo is what got them into this situation in the first place, and ignoring the problem will not fix it, especially when you are saddling your company with labor costs 30% higher than your competitors. Per the AP:

Hourly wages for United Auto Workers laborers at General Motors Corp. factories actually are almost equal to those paid by Toyota Motor Corp. at its older U.S. factories, according to the companies. GM says the average UAW laborer makes $29.78 per hour, while Toyota says it pays about $30 per hour.

The difference is in benefits, with the unionized factories having far higher costs.

GM says its total hourly labor costs are now $69 including wages, pensions and health care for active workers, plus the pension and health care costs of more than 432,000 retirees and spouses. Toyota says its total costs are around $48. The Japanese automaker has far fewer retirees and its pension and health care benefits are not as rich as those paid to UAW workers.

The UAW has not been able to organize workers at a Toyota plant in this country; it does represent workers at one joint GM-Toyota plant in Fremont, Calif.

http://www.google.com/hostednews/ap/articl...aw_VYgD950S0A84

[trackbird]

But if you have a house and a couple kids (and income that's quite predictable since it's in the contract), your budget is probably pretty well stretched on the current salary. If you knew you were getting a pay cut, you might have kept a smaller car payment (or other bill) instead of buying whatever you may be driving currently. But if you're living (barely) within your means, a large paycut is almost as bad as losing your job. And it's not like you can just sell the house and buy something smaller right now, or sell/trade the car.

At this point it seems the choices are change the contract (what do they think bankruptcy is going to accomplish?) or lose it all, so I'd think that the former would be preferable. The status quo is what got them into this situation in the first place, and ignoring the problem will not fix it, especially when you are saddling your company with labor costs 30% higher than your competitors. Per the AP:

Hourly wages for United Auto Workers laborers at General Motors Corp. factories actually are almost equal to those paid by Toyota Motor Corp. at its older U.S. factories, according to the companies. GM says the average UAW laborer makes $29.78 per hour, while Toyota says it pays about $30 per hour.

The difference is in benefits, with the unionized factories having far higher costs.

GM says its total hourly labor costs are now $69 including wages, pensions and health care for active workers, plus the pension and health care costs of more than 432,000 retirees and spouses. Toyota says its total costs are around $48. The Japanese automaker has far fewer retirees and its pension and health care benefits are not as rich as those paid to UAW workers.

The UAW has not been able to organize workers at a Toyota plant in this country; it does represent workers at one joint GM-Toyota plant in Fremont, Calif.

http://www.google.com/hostednews/ap/articl...aw_VYgD950S0A84

I started to delete that post, but you beat me.

I'm seeing some cases of UAW guys taking home $150k. Ok, that's a bit extreme. But take someone in an "average" $30 an hour position and cut them to $22 or so, and they are going to lose the house in many cases. I wasn't looking at it from the perspective of 80 hour a week/$150k a year guys. Just an average 40 hour job and raising a family on it.

I really think the UAW assumes that GM will "pull it off" and they aren't going to go down until the very end. Once the ship really sinks, they'll probably agree to some changes for the last few weeks. But I don't think they are going to just roll over. It's ingrained in you that "the company is always lying", so I think that's the same issue here.

It's just a game of poker, though a very expensive one.

ouch ...

goodbye recession ... hello depression.

This WILL last for years.

Fixed that for ya! (IMG:http://www.frrax.com/rrforum/style_emoticons/default/nutkick.gif)

Guess I need to go reduce the price on the Camaro...