Ah, but they are connected. If people are willing to pay $21,000 for a car you need to be able to get it to the dealer for around $15,000, ideally, which means you want to be able to make it for around $10,000. If $3,000 of that goes to pensions for retired union employees, suddenly you've got to build the car for $7,000--with the cost of union labor. Sure R&D-car design, market research, techological improvements, plant modernization, are spread out over the production life of a model year, but still, if you're stuck with the high labor costs, you've got to cut corners somewhere. Yup. The GM exec who is managing the Saturn brand should be stripped down, lubed up, stuffed into a giant styrofoam cake, and shipped to a Turkish prison. Saturn was ideally positioned as a no-nonsense, practical car, at an affordable price, that got great gas mileage, and had headache free interaction with the dealers (sales, maintenance, etc). And at some point someone decided "Hmmm... What do people who are in the market for a practical car that gets good gas mileage really want??? A convertable with a big engine that only has two seats! " Like anyone is going to go "Hey baby, come check out my new sports car. It's a Saturn!"
In a bizarre twist, while the rest of the market plummeted, Ford and GM actually ended the day up 10% and 3% respectively.
I don't follow GM as much, but the fact is that Ford has a good plan. They are making good cars, that people want. However when you consider that Toyota spends $200 on healthcare for every vehicle sold, and Ford spends $1500, there is just no way they can compete. And that's just healthcare, think about all the other ways the UAW is strangling them. How many Chris's are out there drawing paychecks for sitting on their ass? How many workers are being overcompensated for work they are doing? If bankruptcy can finally destroy the UAW, and allow these companies to be profitable again, then I am open to the idea.
There is medical/healthcare at issue that is burdening Ford and GM, there are also the retirements and continuation of that same health coverage That is something that even local governments have gotten away from. Add into the mix that UAW got the automakers to sign onto paying people not work and you have a recipe for financial disaster. I think that at least in part the support they have seen so far from Congress is the simple fact that Congress likes a company actually being forced to spend money on coverage for people that is not to disimilar to the retirements and medical plans of the members of Congress. Something that is also yet another financial burden on the US taxpayer.
Well, apparently the plan is to draw funds from the retooling grants the government enacted after they raised the CAFE regulations, and that said grants will have their funds restored by the returns on these loans. That's what Sen. Stabenow just stated on my local news program. All that's required is the song and dance at the beginning of December. Of course, Nancy Pelosi's at war with Michigan, so who the fuck knows.
It all amounts to the same thing. The taxpayers bailing out the UAW and their rather lucratives benefits. As taxpayers we will be supporting the retired autoworkers, the medical benefits for both retired and currently employed auto workers, and those who are being paid to sit on their asses and do absolutely nothing.
About 4,500 at Toyota as of August actually. http://www.autoblog.com/2008/08/18/toyota-refuses-to-lay-off-workers-but-has-great-flower-beds/
Yet, they aren't begging the taxpayers to save their sorry butts. They are also not being paid the same types of outrageous wages that the UAW effectively got GM, Ford, and Chrysler to do. Personally I think bankruptcy is the best path for them. That would get them out from under the agreements they have reached in having to pay some of these outrageous wages, costs and etc. Either that or send home and layoff those that aren't working right now and still collecting a paycheck for whatever the reason is.
Did you even read the link? Extra training? Shifted to busier plants? Classes? Community Service (which Toyota gets a write off for no?)? That compares with running social experiments on WF?
That about sums them up. Why does Congress think we should do anything? What makes these automakers anymore special than pretty much any other business that fails?
They have the same wages I do, just less generous benefits (which have been negotiated away largely, but nobody around the country fucking follows the automotive press). Now, Toyota hasn't been restructuring for the better part of the decade, and they're backed by Japanese banks who are heavily invested in their survival (which, ironically, is causing a slight recession in Japan). They can give zero-percent financing; GMAC (owned by Cerberus) refuses to give out any auto-loans at all. I'm not repeating this, so fucking learn it: It's a credit crunch in a recession. Auto sales haven't been this bad industry wide since 1983.
When benefits are figured into an hourly wage, which every company does, because wages are attached to an employees hourly wage, US autoworkers make almost double what their Japanese counterparts do that work at these US based facilities. They haven't had to restructure because they aren't as arrogant and smug as the big 3 US automakers are. They aren't acting like they are the only game in town for cars. They attempt to design cars that the consumers want to purchase. They do not design cars telling the US consumer this what they will want and have to want. So don't repeat it. You are skewing the reality of the situation. I don't blame you though, why work when you can sit on your ass all day doing nothing and still get a paycheck. You are looking out for own self-interest. Auto sales have declined industry wide especially for SUV's. The difference is Toyota and Honda, still have a thriving business with their more economical, better designed cars. It is pretty pathetic when US automakers can't make a profit on these types of cars because of their own stupidity when they signed onto the contract with the UAW.
Why because people aren't willing to simply roll over and give you their hard earned money for sitting on your ass all day? Chris, we understand what's going on. We also are not biased on the situation as you are since we aren't receiving a paycheck from these companies. Unfortunately people like you want the rest of us to support you and the time you spend here in WF.
Here, here. Personally if I was Congress I'd be telling the UAW sorry its a no go. The gravy train is over tell your folks to get moving in finding other jobs because we aren't going to have the taxpayers support them.
And everyone's suffering, the one's who are suffering the most - GM, Ford and Chrysler - need to a damn good look at why they are. I mean, it's hardly the first time the alarm bells have rang at GM and Chrysler is it? When you've had to spend a while with the union to remove $50 billion off the books, and you've shown a complete lack of foresight or Plan B, then if it wasn't the credit crunch/recession it was going to be something.
You have to love the gall of both the unions and the CEO's when they say nothing is on the bargaining table, just give us some money.
This didn't register in my brain until late last night. 1) Assuming Chris' claim is accurate and that Saturn's initial business model didn't work--despite being unique and targeted at a specific market--I'd be curious to know if the reason Saturn couldn't turn a profit was because of labor costs, and 2) If Chris claim is accurate, this is proof that whoever was in charge of running the Saturn brand should not be sent as a plaything to a Turkish prison, he should be sent to work at a gay horse bestiality website. Because who on earth comes up with a business model, designs cars, develops a production line, and brings a product to market if they haven't figured out how to sell it at a profit? I mean, yeah, the numbers could be off. You could somehow have made an assumption that meant the brand couldn't be profitable, but that's a pretty big fuckup. And at that point the smart thing to do would be to just quietly fold the brand like they did Geo, rather than just add another undifferentiated brand to the lineup--especially one that you've already taken the time to build and differentiate a brand for--"Saturn: A different kind of car c...never mind. Here. Have a [-]Pontiac Solstice[/-] Saturn Vue. It may not have good fuel mileage, low cost of ownership, or dent-resistant doors but what the hell. "
False comparison. The vast majority of the money spent by the big three on health care is spent on retirees, not current workers, and that $1500 includes retiree spending. Toyota, meanwhile, doesn't have many American retirees, having only made cars in this country wince the 1980s, and it's retirees elsewhere are covered by national health plans. Under the terms of the 2007 union deal, those retiree costs were already slated to come off the books of the big three--the big three were going to set up a trust fund for retiree health care to be administered by the UAW, making future increases in retiree health care costs not the big three's problem.
Toyota also doesn't have the stupidity to allow an organization like the UAW into their shop. But, you probably like the idea of the taxpayers being stuck with saving the big 3's collective butts.
You mean a good plan where they owned the public safety and taxi cab market and decided, "Hey, we know you love our product and we've sold millions of units to you. We know you're guaranteed to need millions more, but we're just not gonna make 'em." That kind of good plan? So now we're stuck with a slightly cheaper but far substandard vehicle.
