What happens when the big 3 are gone?

[Lars]

“As far as the failure of last night, it solely lies on UAW,” Coburn told CNSNews.com. “All we asked was, ‘Just give us a date at which you will have competitive wage rates. We will put it in and that’s what you will have to meet.’ They would not move. They would not renegotiate their contract with GM as far as wage rates.”

In short, they demand to continue to be overpaid.

Seems they'd rather take a chance with the unemployment line. Not very smart, if you ask me. Heck, by the time that date came around, the UAW (and the economy) could probably have been in a better position to demand concessions.

[volfrahm]

Aren't the big 3 hourly wages the same as the "transplants"(Honda, Toyota, BMW), which is around 25-28 dollars per hour? So the difference then is the pension and health care benefits, right? If so, then obviously the big three are going to have problems because of the the big 3 having a larger pool of retirees.

Some questions:

In regards to the pension, does the big three belong to a multi-employer plan like the Teamsters central and western states? Isn't relying on one company dangerous? And recent news just confirmed that 401Ks are a failed experiment. Is the multi-employer plan the only way to go?

How is the corporate pension(detroit's) plan different from the multi-employer plan?

[Lars]

Er, 401k's are not a "failed experiment"

It's just that Congress wants the money.

http://online.wsj.com/article/SB122662401729126813.html

[Stalins Organ]

In short, they demand to continue to be overpaid.

Seems they'd rather take a chance with the unemployment line. Not very smart, if you ask me. Heck, by the time that date came around, the UAW (and the economy) could probably have been in a better position to demand concessions.

Isn't that the capitalist system tho - you're entitled to make be as thick as you like about the options you chose? Look at the banks recently....it's not like it's limited to blue collars.....

Or is someone (not necessarily Lars....) suggesting that the Govt should regulate conditions of employment??

[Lars]

Not at all. The last thing we need is the government getting involved.

In a capitalist system, you're free to make as much as you can. But you are also supposed to be free to fail.

Currently, we're not letting the free market be free.

Fun response letter from one of the Big 3's suppliers to the President of GM currently making the rounds. Tell me which part of it you disagree with.

Dear Employee,

Next week, Congress and the current Administration will determine whether

to provide immediate support to the domestic auto industry to help it

through one of the most difficult economic times in our nation's history.

Your elected officials must hear from all of us now on why this support is

critical to our continuing the progress we began prior to the global

financial crisis......................As an employee, you have a lot at

stake and continue to be one of our most effective and passionate voices.

I know GM can count on you to have your voice heard.

Thank you for your urgent action and ongoing support.

Troy Clarke

President

General Motors North America

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

From Gregory Knox,

In response to your request to call legislators and ask for a bailout for

the United States automakers please consider the following, and please

also pass this onto Troy Clark, the president of General Motors North

America for me.

You are both infected with the same entitlement mentality that has bred

like cancerous germs in UAW halls for the last countless decades, and

whose plague is now sweeping the nation, awaiting our new "messiah" to

wave his magical wand and make all our problems go away, while at the same

time allowing our once great nation to keep "living the dream".

The dream is over!

The dream that we can ignore the consumer for years while management

myopically focuses on its personal rewards packages at the same time that

our factories have been filled with the worlds most overpaid, arrogant,

ignorant and laziest entitlement minded "laborers" without paying the

price for these atrocities, and that still the masses will line up to buy

our products

Don't tell me I'm wrong. Don't accuse me of not knowing of what I speak.

I have called on Ford,GM ,Chrysler,TRW,Delphi,Kelsey Hayes, American Axle

and countless other automotive OEM's and Tier ones for 3 decades now

throughout the Midwest and what I've seen over the years in these union

shops can only be described as disgusting.

Mr Clark, the president of General Motors, states:

There is widespread sentiment in this country, our government and

especially in the media that the current crisis is completely the result

of bad management. It is not.

You're right, it's not JUST management, ¦how about the electricians who

walk around the plants like lords in feudal times, making people wait on

them for countless hours while they drag ass ¦so they can come in on the

weekend and make double and triple time for a job they easily could have

done within their normal 40 hour week.

How about the line workers who threaten newbies with all kinds of scare

tactics for putting out too many parts on a shift and for being too

productive (mustn't expose the lazy bums who have been getting overpaid

for decades for their horrific underproduction, must we?!?) Do you really

not know about this stuff?!?

How about this great sentiment abridged from Mr. Clarke's sad plea:

over the last few years we have closed the quality and efficiency gaps

with our competitors.

What the hell has Detroit been doing for the last 40 years?!?

Did we really JUST wake up to the gaps in quality and efficiency between

us and them?

The K car vs. the Accord?

The Pinto vs. the Civic?!?

Do I need to go on?

We are living through the inevitable outcome of the actions of the United

States auto industry for decades.

Time to pay for your sins, Detroit.

I attended an economic summit last week where a brilliant economist, Alan

Beaulieu surprised the crowd when he said he would not have given the

banks a penny of "bailout money". Yes, he said, this would cause short

term problems, but despite what people like George Bush and Troy Clark

would have us believe, the sun would in fact rise the next day and

something else would happen where there had been greedy and sloppy banks,

new efficient ones would pop up. That is how a free market system works.

It does work if we would let it work.

But for some reason we are now deciding that the rest of the world is

right and that capitalism doesn't work that we need the government to step

in and "save us". Save us, hell! We're nationalizing and unfortunately too

many of this once fine nations citizens don't even have a clue that this

is what's really happening but they sure can tell you the stats on their

favorite sports teams. Yeah, THAT'S important!

Does it occur to ANYONE that the "competition" has been producing

vehicles, EXTREMELY PROFITABLY, for decades now in this country?...

How can that be???

Let's see:

Fuel efficient...

Listening to customers...

Investing in the proper tooling and automation for the long haul...

Not being too complacent or arrogant to listen to Dr W Edwards Deming 4

decades ago...

Ever increased productivity through quality, lean and six sigma plans...

Treating vendors like strategic partners, rather than like "the enemy"...

Efficient front and back offices....

Non union environment!

Again, I could go on and on, but I really wouldn't be telling anyone

anything they really don't already know in their hearts.

I have six children, so I am not unfamiliar with the concept of wanting

someone to bail you out of a mess that you have gotten yourself into. My

children do this on a weekly, if not daily basis, as I did at their age. I

do for them what my parents did for me (one of their greatest gifts, by

the way), I make them stand on their own two feet and accept the

consequences of their actions and work them through.

Radical concept, huh?

Am I there for them in the wings? Of course, but only until such time as

they need to be fully on their own as adults.

I don't want to oversimplify a complex situation, but there certainly are

unmistakable parallels here between the proper role of parenting and

government.

Detroit and the United States need to pay for their sins.

Bad news people, it's coming whether we like it or not.

The newly elected Messiah really doesn't have a magic wand big enough to

"make it all go away" I laughed as I heard Obama "reeling it back in"

almost immediately after the vote count was tallied. We might not do it in

a year or in four. Where was that kind of talk when he was RUNNING for the

office?

Stop trying to put off the inevitable.

That house in Florida really isn't worth $750,000.

People who jump across a border really don't deserve free health care

benefits.

That job driving that forklift for the big 3 really isn't worth $85,000 a

year.

We really shouldn't allow Wal-Mart to stock their shelves with products

acquired from a country that unfairly manipulates their currency and has

the most atrocious human rights infractions on the face of the globe.

That couple whose combined income is less than $50,000 really shouldn't

be living in that $485,000 home!

Let the market correct itself people. It will. Yes it will be painful,

but it's gonna be painful either way, and the bright side of my proposal

is that on the other side of it is a nation that appreciates what is has

and doesn't live beyond its means. Gets back to basics, and redevelops the

work ethic that made it the greatest nation in the history of the world

and probably turns back to God.

Sorry don't cut my head off, I'm just the messenger sharing with you the

"bad news".

Gregory J Knox

President

Knox Machinery, Inc.

Franklin, Ohio 45005

[Tero]

By Lars

Not at all. The last thing we need is the government getting involved.

Funny you should say that. I vaguely remember reading something about some Founding Fathers who started their bid to form a government of their own with the words "We, the people". Or something to that effect.

That brings me to another point: isn't it a drag when real live people screw up perfectly sound and working economic and governing systems.

In a capitalist system, you're free to make as much as you can. But you are also supposed to be free to fail.

Only if you are below a certain income level it seems. It seems to be perfectly OK to thousands of lower income people to fall destitude during a depression but when that same fate hits the "upper echelons" of society immediate actions needs to be taken to correct and/or alleviate the situation.

Currently, we're not letting the free market be free.

Who are these "we" and are they really in favour of the free market being so free to the point of driving the economy down to keep the profit margins up ?

Fun response letter from one of the Big 3's suppliers to the President of GM currently making the rounds. Tell me which part of it you disagree with.

I at least think his piece about a 50k yearly income couple not being fit to live in a 400k house was way out of line.

His whole response is befitting a rich mans views on harsh times creeping up on his mansions gates.

[Lars]

Umm, a $485,000 house.

Which a quick jog over to Bankrate's little calculator shows your payment (30 yr mortgage at 6%) would be $2907.82 a month, not including property taxes and insurance, which, around here, would run you about another $800 a month.

I really don't think a couple making less than $50,000 a year can afford to be blowing $45,000 on housing. They might want to do something else too. Like eat, for instance.

Oh hell, I forgot to add PMI. Been so long since I had to pay it..they're bottom up!

[costard]

Er, 401k's are not a "failed experiment"

It's just that Congress wants the money.

http://online.wsj.com/article/SB122662401729126813.html

Bloody hell that's scary - don't you guys have ANY competent pollies? Loved the line about "..better to let the government do it."

Free market capitalism is ok - if you're prepared to rebuild from scratch every so often. The idea of the state existing to protect the populace, though, has at its fundament the capital value of the state, the sum wealth of the populace represented as the Nation, able to be managed as a resource to counter threats to the populace. If you let this wealth deteriorate to zero, you no longer have a state. And yes, it does happen, history is littered with the carcasses of empires that failed.

So the Democratic nong quoted in the above article wants to provide for the current retiree - the one who has just lost 60% of their capital worth (if they've been sensible and worked and saved that is) and has a very, very limited opportunity to rebuild.

The market vs the individual - the market goes on, it will recover and live again. The individual won't. How to balance that equation is the onus and opus of the National leadership.

[Lars]

So the Democratic nong quoted in the above article wants to provide for the current retiree - the one who has just lost 60% of their capital worth (if they've been sensible and worked and saved that is) and has a very, very limited opportunity to rebuild.

Er, -40% of their worth. If they put it all in something like a S&P 500 Index. And if they had it all in stocks as retirees, they're retards.

If they put it all in a Bond Index like they should have, they're up 4.76%.

[Tero]

Umm, a $485,000 house.

Which a quick jog over to Bankrate's little calculator shows your payment (30 yr mortgage at 6%) would be $2907.82 a month, not including property taxes and insurance, which, around here, would run you about another $800 a month.

I really don't think a couple making less than $50,000 a year can afford to be blowing $45,000 on housing. They might want to do something else too. Like eat, for instance.

Oh hell, I forgot to add PMI. Been so long since I had to pay it..they're bottom up!

What was that 485k house worth, say, 5 years ago ? Over here a house bought 13 years ago for ~330k is now worth up to and over 2 million (depending on location and condition of course).

[Stalins Organ]

Tell me which part of it you disagree with.

The bit where you think I have some pathological need to disagree with some of it.

[Lars]

What was that 485k house worth, say, 5 years ago ? Over here a house bought 13 years ago for ~330k is now worth up to and over 2 million (depending on location and condition of course).

Depends on where you bought it.

This is about the best I could do around here. Found a nice one on the lake that went for $375,000 five years ago, sold in 2006 for $792,000, and is now in foreclosure for $499,000.

You should snap it up, it's only losing $6,500 a month on the asking price.

[costard]

Er, -40% of their worth. If they put it all in something like a S&P 500 Index. And if they had it all in stocks as retirees, they're retards.

If they put it all in a Bond Index like they should have, they're up 4.76%.

My bad, that ought to have been writ as "nearly retirees" rather than "current retirees".

So, are you saying that we shouldn't invest in shares? Or just that the risk/return equation is such that 5% return on guaranteed capital is a great way to go, whatever the state of the market?

If the US doesn't get a handle on its financial woes, the value of the dollars the Treasury is paying isn't necessarily going to be worth the same as the value of the dollars paid for the bonds.

[Lars]

The old rule was own your age in bonds. It's not complicated.

But of course, you don't make much money as a financial adviser going with that, no fees.

[costard]

How is it that I can live this long in a world where money is so important and not know these things? Oh, that's right, I decided money wasn't important to me.

No wonder I don't have any.