What amazed me from this post is that a guy from Chrysler during their rough period can get a job at Delphi and have them head for bankruptcy as well. And they say the factory workers are overpaid.
Yup and i read somewhere that GM is opening a factory in mexico.? What the problem here is GM missed the SS-CORPORATEJUMPSHIPINAMERICA boats The repubs told them get out whaile you can, and well GM stayed. But in reality The product they provided sucks anyway.. so see ya GM thanks for the 3 year 36000 mile bumper to bumper warrenty. 36001 miles new brakes..funny huh!
I worked for Ford Motor Company for a short while. I toured the factories, though I worked in marketing. ("white collar" job)
I can say from experience that the factory workers are some of the hardest workers around. And most of the "white collar" workers in fact were LITERALLY sleeping on the job. As in...I actually spoke to people who would take four hour naps during the day.
Who do you think gets laid off? Marketing? Naaaah. It's the factory workers, who actually are producing something.
I think this speaks volumes about the American economy.
Tuesday, April 04, 2006
Anonymous said...
Miss R, check out the column Go, NO Go in futureoftheunion.com. A factory worker brags at length about how he successfully avoids work and even sabotages his employer. Miller is right, close the plants and bust the UAW, or the Big 3 will be DEAD.
The UAW monopoly on the US car industry is over. Excessive wages to unskilled workers won't survive.
anon 4:06;38pm, please, include a link. I agree that unprincipled action against employers is not helpful. But, workers have every right to take principled, unified action against the constant encroachment by employers against workers' economic welfare.
The general sentiment among rank and file workers, unless I'm mistaken, is that UAW leadership is failing them. And as far as monopoly is concerned, the UAW's monopoly on workers - if it can even be called that - pales by comparison to the Federal Reserve's absolute monopoly on the nation's money supply.
The latter is by far the monopoly that threatens national interests the most. "National" interests in this context meaning 'public' not 'corporate' interests.
The United States, btw, is a nation of individual states comprised of individual PERSONS, of the human-kind - not the corporate kind.
With all due respect, anon, I have to ask you if you actually toured auto factories (as I did), and also worked in a white collar job for a "Big 3" auto company. (as I did) I also have a degree in industrial and labor relations, so while I won't say I am an expert in this field, I certainly do not speak from ignorance.
The problem is not that unionized auto workers are overpaid. The problem are the extensive work rules - we are talking about massive volumes of work rules - that impedes flexibility and growth. The solution is not to get rid of auto workers or antagonize them. The solution is to construct flexible work rules that empower factory workers and lead to a better work product. If you look at foreign car companies, they follow this model. They use unionized employees, but because they have this "just in time" model down to science, they wipe the floor with American car manufacturers.
Other solutions?
Foreign auto makers are based out of countries with universal health care. Health care and pensions are the biggest costs to auto manufacturers in the U.S. - national healthcare and guaranteed social security would go a long way to lowering the costs for auto manufacturers.
Another absolute necessity is to invest in R&D of alternative fuel technologies. The Prius is a foreign car, and it wipes the floor with any domestic equivalent. It is the wave of the future, and the Big 3 need to get on board.
The bottom line is that I have seen this all on the front lines. I had a supervisor, while working at Ford, who spent hours talking about all you can eat establishments. I spoke to a lady who bragged about her daily four hour nap. It was one of the least productive places you can imagine. And yet...the white collar employees, as nonunionized workers, have job security because there is no union to break up. This job security is only temporary.
America is quickly becoming a nation that produces nothing but illusions.
Forget what the folks at GM are telling you about declining market share and foreign competition. That's only half the story.
GM's financial arm, GMAC, and the bankers behind it, are the primary reason for the downfall of GM's production arm.
From its inception, GMAC has been bleeding GM dry AND facilitating its abysmal business decisions, and in turn its downfall.
Now, GMAC's principal benefactors are protecting their assets by bailing out before the ship sinks. The finance unit is by far the most profitable operation at General Motors, producing net income of $2.8 billion in 2005, while GM as a whole reported a loss.
GMAC's mortgage business became its primary profit driver last year, producing $1.4 billion in earnings compared with $1.1 billion from auto finance.Could it be because the Fed raised interest rates 15 times in the last 21 months? And this doesn't include the money GMAC sucks out of GM in interest on operational loans. Still, GMAC's operations have been hampered since GM's debt got cut to "junk bond" status by the major debt-rating agencies, a move that raised GM's cost of raising capital.
A sale of a majority stake in GMAC is seen as the surest way to restore its investment grade rating, while at the same time providing a cash infusion for GM's embattled auto operations.That's a LIE. In the short term, sure the sale of GMAC will bring in a few dollars. But in no time, the auto division will be reeling from increased interest payments, with no possible way to recover. "Although the sale [of GMAC] raises liquidity, it is the last valuable non-auto asset in GM's portfolio, increasing the risk of investment in GM's equity," Merrill Lynch analyst John Murphy wrote in a research note.
"The sale of GMAC is a tremendous drain on GM's earnings power," he added.In the long run, auto sales at GM will continue to drop, and eventually it will have to close down.
What this sale does accomplish, however, is it legally separates the profitable GMAC assets from the failing GM operations such that the former CANNOT be reached in bankruptcy. And THAT, my friends, is the primary motivator behind this transaction. Everything else is smoke and mirrors.
It's the master plan for both GM and Ford. Ford Credit Canada Ltd., a subsidiary of Ford Motor Co., says it has sold a number of its auto loans for $1.2 billion Cdn.
Parent firm Ford Motor Credit is one of the largest auto finance companies, with about 14,000 employees and $150 billion US in receivables. Thursday's sale is part of a streamlining of Ford Motor to focus on its core automaking business. [LIE - part of the MO - freeing it from bankruptcy liability] Indeed, this has been the modus operandi for creditors as far back as the 80's, during the Chrysler crisis. The following excerpt, from Moritz and Seaman's Going Broke: The Chrysler Story, illustrates. For the most part, banks had not been all that interested in Chrysler while it continued to pay its interest and principal on time . . .
[Then, Chrysler's Senior financial officer,] Greenwald dropped the final bomb when he asked Steve Miller [then Chrysler's assistant treasurer (now, CEO at Delphi)] and a Los Angeles bankruptcy expert . . . to explain the details of a ten page "Memo for Liquidation."
The tersely worded memo [dealt] a blow to . . . the company [folklore] that the assets of Chrysler Corporation and Chrysler Financial were seperable in a bankruptcy.
The bankers were told that the situation was so complex that both the parent company and the subsidiary would tumble into the same barrel.
* * *
That, together with the expectation of a payoff as low as ten cents on the dollar for loans extended to Chrysler Corporation, shattered the bankers' decorum. The banks desperately wanted to seperate Chrysler from CFC so that the former can be pushed into bankruptcy without jeopordizing loans to the latter.And history repeats itself. Analysts said they welcomed the distance being created between GM and its financing arm.
[A] credit analyst . . . said the deal appears "to radically reduce bankruptcy risk for GMAC by removing it from the controlled group of GM ..."
"This is exactly what they needed to be delinked from GM. Their borrowing costs have got to be better -- they've got to be."
* * *
"For GMAC bondholders, they can wipe their brows -- for the most part they're out of the woods," said Gimme Credit's Lombard.
Lombard said even if GMAC does not get investment grade status, "this is still a great thing for GMAC bondholders."But, it didn't do much for GM. GM shares fell $1.13 to $20.14 on the New York Stock Exchange. So, who are these lucky GMAC bondholders?[A] consortium led by hedge fund Cerberus Capital Management LP . . .
Cerberus made its name as a distressed asset buyer and has grown to become one of the largest hedge fund traders and buyout firms in the world.Sound familiar? Fittingly, it took its name from the three-headed watchdog in Greek mythology that guards the gates of hell.Very fitting, indeed.
7 Comments
Close this window Jump to comment formWhat amazed me from this post is that a guy from Chrysler during their rough period can get a job at Delphi and have them head for bankruptcy as well. And they say the factory workers are overpaid.
Tuesday, April 04, 2006
Yup and i read somewhere that GM is opening a factory in mexico.? What the problem here is GM missed the SS-CORPORATEJUMPSHIPINAMERICA boats The repubs told them get out whaile you can, and well GM stayed. But in reality The product they provided sucks anyway.. so see ya GM thanks for the 3 year 36000 mile bumper to bumper warrenty. 36001 miles new brakes..funny huh!
Tuesday, April 04, 2006
I worked for Ford Motor Company for a short while. I toured the factories, though I worked in marketing. ("white collar" job)
I can say from experience that the factory workers are some of the hardest workers around. And most of the "white collar" workers in fact were LITERALLY sleeping on the job. As in...I actually spoke to people who would take four hour naps during the day.
Who do you think gets laid off? Marketing? Naaaah. It's the factory workers, who actually are producing something.
I think this speaks volumes about the American economy.
Tuesday, April 04, 2006
Miss R, check out the column Go, NO Go in futureoftheunion.com. A factory worker brags at length about how he successfully avoids work and even sabotages his employer. Miller is right, close the plants and bust the UAW, or the Big 3 will be DEAD.
The UAW monopoly on the US car industry is over. Excessive wages to unskilled workers won't survive.
Tuesday, April 04, 2006
anon 4:06;38pm, please, include a link. I agree that unprincipled action against employers is not helpful. But, workers have every right to take principled, unified action against the constant encroachment by employers against workers' economic welfare.
The general sentiment among rank and file workers, unless I'm mistaken, is that UAW leadership is failing them. And as far as monopoly is concerned, the UAW's monopoly on workers - if it can even be called that - pales by comparison to the Federal Reserve's absolute monopoly on the nation's money supply.
The latter is by far the monopoly that threatens national interests the most. "National" interests in this context meaning 'public' not 'corporate' interests.
The United States, btw, is a nation of individual states comprised of individual PERSONS, of the human-kind - not the corporate kind.
Tuesday, April 04, 2006
With all due respect, anon, I have to ask you if you actually toured auto factories (as I did), and also worked in a white collar job for a "Big 3" auto company. (as I did) I also have a degree in industrial and labor relations, so while I won't say I am an expert in this field, I certainly do not speak from ignorance.
The problem is not that unionized auto workers are overpaid. The problem are the extensive work rules - we are talking about massive volumes of work rules - that impedes flexibility and growth. The solution is not to get rid of auto workers or antagonize them. The solution is to construct flexible work rules that empower factory workers and lead to a better work product. If you look at foreign car companies, they follow this model. They use unionized employees, but because they have this "just in time" model down to science, they wipe the floor with American car manufacturers.
Other solutions?
Foreign auto makers are based out of countries with universal health care. Health care and pensions are the biggest costs to auto manufacturers in the U.S. - national healthcare and guaranteed social security would go a long way to lowering the costs for auto manufacturers.
Another absolute necessity is to invest in R&D of alternative fuel technologies. The Prius is a foreign car, and it wipes the floor with any domestic equivalent. It is the wave of the future, and the Big 3 need to get on board.
The bottom line is that I have seen this all on the front lines. I had a supervisor, while working at Ford, who spent hours talking about all you can eat establishments. I spoke to a lady who bragged about her daily four hour nap. It was one of the least productive places you can imagine. And yet...the white collar employees, as nonunionized workers, have job security because there is no union to break up. This job security is only temporary.
America is quickly becoming a nation that produces nothing but illusions.
Tuesday, April 04, 2006
Wow, great article, I really appreciate your thought process and having it explained properly, thank you!
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