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Old 06-24-2007, 08:39 PM   #1
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Default 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 Tribune

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.
Longer warranties
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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Old 06-24-2007, 09:15 PM   #2
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Default Re: US vs Japanese Cars and Workers

How does executive pay at Ford compare to executive pay at Toyota? How much more top-heavy is Ford's management? How is the relative performance of the companies affected by the fact that Toyota responded to higher gas prices with better fuel efficiency while Ford cranked out more gas-guzzlers? How much does the comparison of assembly-line workers really matter given that Toyota has a lot of plants in the US and Ford outsources a lot of work to Mexico?
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Old 06-25-2007, 04:52 PM   #3
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Default Re: US vs Japanese Cars and Workers

i bet ford doesn't ask thier $250,000 ,6 week paid vacation exexcutives to take a paycut !!!
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Old 06-25-2007, 04:53 PM   #4
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Default Re: US vs Japanese Cars and Workers

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i bet ford doesn't ask thier $250,000 ,6 week paid vacation exexcutives to take a paycut !!!
Yep, since they put crappy football teams on the field.
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Old 06-25-2007, 08:54 PM   #5
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Default Re: US vs Japanese Cars and Workers

IMO the wage differential is a red herring, although the U.S. creates a competitive disadvantage for manufacturers with its ridiculous system of providing inefficient and overpriced health insurance coverage (at least for some) exclusively through employers.

I am pretty confident your average German autoworker makes at least as much as your typical UAW employee of GM, Ford, and Chrysler while BMW and Mercedes have no problem selling their products in the States.

My last domestic manufacturer American car was a Pontiac Phoenix (from the GM "X" car line that was probably rock bottom for quality, featuring an automatic tranny on my car that failed at 45,000 miles) and I have never regretted my subsequent purchases, one of which was an American made Acura. The domestic automakers problems are lousy cars and terrible management; they gave up trying to market cars and decided to make $$ exclusively on SUVs and trucks. Now the bottom has fallen out of the SUV market while the Japanese manufacturers have the lead on hybrids as the U.S. manufacturers have spent the last 20 years lobbying Congress to keep the lid on increasing mileage standards.

If U.S. manufacturers cut wages they still would have the same problems with quality and unappealing designs; the layoffs need to come in the executive suites.
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Old 06-25-2007, 09:46 PM   #6
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Default Re: US vs Japanese Cars and Workers

Well... I reckon I'll stick with a Japanese brand car. I haven't ever wrecked one of those. I have wrecked an American brand car though. Well... I was in it when a woman driving too fast for the weather conditions slid into my lane and hit me nearly head on.

RIP my 1987 Dodge Daytona Pacifica. *sniff*
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Old 06-26-2007, 06:41 PM   #7
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Default Re: US vs Japanese Cars and Workers

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IMO the wage differential is a red herring, although the U.S. creates a competitive disadvantage for manufacturers with its ridiculous system of providing inefficient and overpriced health insurance coverage (at least for some) exclusively through employers.

I am pretty confident your average German autoworker makes at least as much as your typical UAW employee of GM, Ford, and Chrysler while BMW and Mercedes have no problem selling their products in the States.

My last domestic manufacturer American car was a Pontiac Phoenix (from the GM "X" car line that was probably rock bottom for quality, featuring an automatic tranny on my car that failed at 45,000 miles) and I have never regretted my subsequent purchases, one of which was an American made Acura. The domestic automakers problems are lousy cars and terrible management; they gave up trying to market cars and decided to make $$ exclusively on SUVs and trucks. Now the bottom has fallen out of the SUV market while the Japanese manufacturers have the lead on hybrids as the U.S. manufacturers have spent the last 20 years lobbying Congress to keep the lid on increasing mileage standards.

If U.S. manufacturers cut wages they still would have the same problems with quality and unappealing designs; the layoffs need to come in the executive suites.
I wasn't really looking to get involved, just see what people had to say, but this response was interesting. How can wages be a red herring if the benefits are the culprit in the wages equation? The benefits are almost certainly what make up the difference, and at least some of those are union enforced benefits that aren't necessary.

I also thought the thing about the German cars was interesting. I wonder if it's a cycle that we just haven't been through yet? If you read Consumer Reports, or, better yet, talk to people who would know (owners of the cars and the people who work on them), the quality of Mercedes and BMW's has dropped significantly over the last 10 years or so, but they have achieved such status that they are still able to command premiums. I bet, however, that brands like Lexus and Acura are eating away at their market share as well. Could the US manufacturers do to the Japanese what the Japanese did to them and the Germans?
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Old 06-26-2007, 08:51 PM   #8
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Default Re: US vs Japanese Cars and Workers

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I wasn't really looking to get involved, just see what people had to say, but this response was interesting. How can wages be a red herring if the benefits are the culprit in the wages equation? The benefits are almost certainly what make up the difference, and at least some of those are union enforced benefits that aren't necessary.

I also thought the thing about the German cars was interesting. I wonder if it's a cycle that we just haven't been through yet? If you read Consumer Reports, or, better yet, talk to people who would know (owners of the cars and the people who work on them), the quality of Mercedes and BMW's has dropped significantly over the last 10 years or so, but they have achieved such status that they are still able to command premiums. I bet, however, that brands like Lexus and Acura are eating away at their market share as well. Could the US manufacturers do to the Japanese what the Japanese did to them and the Germans?
My point is that it is always easy for the coach to blame the overpaid and undermotivated players when his own job is on the line. But even if Bill Belichick and Art Shell had the same players my money would be on Belichick - same thing with Toyota/Honda v. GM/Ford.

Detroit automakers getting their ass kicked by the Japanese for the last 30 years has a lot more to do with poor management that they will ever admit. Like the Raiders, Detroit has been on a downhill slide for decades.
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Old 06-26-2007, 09:18 PM   #9
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Default Re: US vs Japanese Cars and Workers

I think we are on parallel thought planes here, I'm just wondering (albeit, optimistically) if it's possible that the US manufacturers could get lean and mean and assume the role that the Japanese took in the late 70's/early 80's?
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Old 06-26-2007, 09:33 PM   #10
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I think we are on parallel thought planes here, I'm just wondering (albeit, optimistically) if it's possible that the US manufacturers could get lean and mean and assume the role that the Japanese took in the late 70's/early 80's?
If the Japanese rested on their laurels like Detroit did after the 60s maybe so, but it is hard to see how they would repeat those mistake, especially with all bets being off once the Chinese figure out how to establish an auto industry.

I was in Pittsburgh in the late 70s when the steel industry went down for the count (including 2 summers working on the coke oven batteries at the J&L Pittsburgh Works where I literally got paid for 8 hours while working 4 hours + double time & 1/2 on holidays) and I see the American auto industry heading in the same direction.

The Steelers practice facility is on the old site of the Pittsburgh Works - maybe GM can sell some land to the Lions.
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