US vs Japanese Cars and Workers
I've seen this argued by both sides before, and I was just wondering what the union guys had to say about this. I don't have the link but it came from the Chicago Tribune. $10 billion is a lot of money.
Contract talks promise drama, plenty of tension
Big Three automakers, UAW prepare to battle over gap in labor costs
By Jim Mateja
CHICAGO - Soon it will be time again to shake hands and come out fighting.
This contest pits grown men in business suits against each other. In this corner, white collar; in that, blue. Those employed by General Motors, Ford and Chrysler against those in the United Auto Workers who labor for them.
In just a few weeks, both sides will gather in a large room, exchange pleasantries and smile for the cameras.
When the photogs leave, the opposing groups will sit down and start calling each other names, questioning the parentage of those across the table. This goes on for months until they run out of nasty names, and finally flip a coin and declare both sides winners.
They ink a contract, and everyone goes home claiming to have won.
This description is to prepare you for the screaming and shouting and carefully orchestrated theatrics known as the 2007 contract negotiations. There will be tension and drama, fear and loathing, threats and accusations. Not to mention snarls and finger-pointing.
The automakers will say they can't afford to invest in new cars and old workers at the same time; the workers will insist that they make so little they have to scavenge for food to survive.
Although official negotiations don't begin until later this summer, the preliminaries are under way.
The Detroit News reports that Ford Motor Co. sources are saying that unless the UAW agrees to whittle the $71 an hour its workers make in wages and benefits to $50 an hour, Ford will go out of business.
End-of-the-world scenarios are popular at this point in contract talks, as are work slowdowns and strike threats.
While UAW members receive $70 to $75 an hour in wages and benefits, workers for Toyota and its Japanese brethren receive $40 to $45 an hour, or a difference of $30 an hour and about $10 billion a year less than the domestics, one reason the Japanese are thriving and domestics aren't.
The Wall Street Journal, meanwhile, points out that while Toyota and Honda have been opening nonunion plants in the United States, GM, Ford and Chrysler have closed plants and cashiered 70,000 union jobs in the last two years.
The Journal quoted an unnamed Detroit executive who said the domestics will move plants and people outside the U.S. to build their products if the UAW doesn't agree to bring labor costs in line with those at Toyota and the other Japanese.
Never mind that moving work outside the United States would prompt an immediate stoppage by the UAW at any U.S. plants, so the automaker would only cripple itself. But the threat of building Chevys in Iceland, for example, does make for good drama.
The person with the most difficult task is Ron Gettelfinger, president of the UAW. He has to play tough so that neither his union nor the automakers think he has gone soft, yet all the while realizing the enemy isn't GM, Ford or Chrysler, it's Toyota, Honda, and Nissan and the 62,000-plus nonunion workers they employ. Stay tuned.
Chrysler is investigating whether to offer longer warranty coverage on its 2008 models.
``We always look at it, but we're stepping up the talks a little because General Motors got more aggressive with its warranty for 2007,'' said Chrysler Group spokesman Jason Vines.
GM raised its warranty coverage to 5 years/50,000 miles from 3/36 or 4/48. Chrysler stayed at 3/36, which it went to after offering 7 years/70,000 miles between 2002 and '05.
``We're looking at whether GM is enjoying an advantage because of its warranty and whether it's helping them close more sales,'' Vines said.
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