[Newsbot]

Title: Automotive bailout must not be free ride
Category: Business
Posted By: SigPig
Date: 2009-03-02 13:46:31
Canadian

[SigPig]

And then the Big Three wonder why they are in trouble. This outlines perfectly the waste that they take part in, contributed to by the CAW without really pulling any punches. Just straight facts about the death of three automakers who stagnated.

[SigPig]

These are some of my favourite bits:

Quote:

For such benevolence, the cuckolded union member can thank Buzz Hargrove, the former boss of the CAW, who noticed the Canadian automakers were saving $10-15 an hour, compared with their American parent companies, because of the public health system in Canada. He offered labour peace with the automakers if they ponied up goodies such as a legal defence fund and something called "SPA" days -- two weeks of special paid absence every year.

Are auto workers really that hard done by that they need Spa days? give me a break.

Quote:

The big domestics have been losing share to "new domestics" such as Toyota and Honda for 15 years. While the Detroit Three still dominate the fleet market, their share of consumer sales has dropped to just over 40% today, from more than 70% in the early 1990s.
Despite their loss of market share, management bought labour peace by granting concessions to its unions that left it with an uncompetitive cost structure and whopping legacy costs.

Falling sales, rising costs because of a Union. Blame it on people selling your sovereignty, blame it on lack of national pride it doesn't change what it is. Poor business decisions for a decade and a half.

Quote:

ony Clement, the Industry Minister, has said that no government money will be used to contribute toward any unfunded liabilities. But once the cheque is signed, his control over its use is limited. Billions of taxpayers' dollars may ultimately find themselves funding the folly of past bad management decisions at GM and Chrysler.

So we are giving them billions with no way of controlling the way it is spent. Sounds like a great plan. Basically my money is going to pay for the CAW's greed and buy a CEO a nice holiday bonus.

Quote:

The problem is the CAW remains in denial, continuing to benchmark its costs against those of the UAW, and claiming that the 80¢ dollar makes its members competitive with the American unions, which have been forced to take a cut to pay and conditions by the U. S. government.

But this is Jurassic Park stuff. The Big Three are currently obliged to pick up some legal costs whenever a CAW member divorces or buys a house. If these companies become wards of the state, there should be no more free rides. As Mr. Clement said, the industry must change or die.

Change or die. sounds like healthy capitalism to me. The onus is on them here. Not for the Government to fork over unlimited cash that they don't have.

[hurley_108]

SigPig wrote:

These are some of my favourite bits:

Quote:

For such benevolence, the cuckolded union member can thank Buzz Hargrove, the former boss of the CAW, who noticed the Canadian automakers were saving $10-15 an hour, compared with their American parent companies, because of the public health system in Canada. He offered labour peace with the automakers if they ponied up goodies such as a legal defence fund and something called "SPA" days -- two weeks of special paid absence every year.

Are auto workers really that hard done by that they need Spa days? give me a break.

Not spa, SPA (Special Paid Absence). But I do agree - they got themselves a bit too cushy of a deal.

[SigPig]

hurley_108 wrote:

Not spa, SPA (Special Paid Absence). But I do agree - they got themselves a bit too cushy of a deal.

I was basically pointing out that they can just choose two days and not show up because they don't feel like it. If they are given two days for emergencies such as death or family emergency fine. Those can be backed up with proof such as a death certificate etc. This was probably used 90% so that they could sit at home and sleep through a hangover because they went out drinking the night before.

[romanP]

I wonder what the world would look like if all of the car manufacturers got no relief loans and suffered instant death. The economies of the richest nations would probably take a huge nosedive, but that's an obvious effect.

Just imagine cities full of cars that can't be repaired because no one can make parts for them anymore. Everything would come to a near stand-still as people are eventually forced to either use bicycles or hoof it. Suburbs would become slums and people would have to start growing crops on their front lawns because there would be no way to transport massive amounts of food to grocery stores.

[mtbr]

romanP wrote:

I wonder what the world would look like if all of the car manufacturers got no relief loans and suffered instant death. The economies of the richest nations would probably take a huge nosedive, but that's an obvious effect.

Just imagine cities full of cars that can't be repaired because no one can make parts for them anymore. Everything would come to a near stand-still as people are eventually forced to either use bicycles or hoof it. Suburbs would become slums and people would have to start growing crops on their front lawns because there would be no way to transport massive amounts of food to grocery stores.

[romanP]

livefreeordi wrote:

romanP wrote:

there would be no way to transport massive amounts of food to grocery stores.

I'm not aware of GM or Chrysler making semi-trailers and I certainly
don't buy your "the sky is going to fall" rationale.
Nice fear mongering though.

GM and Chrysler are not the only auto manufacturers, and they are certainly not the only ones feeling the downward economic pull. Many truck manufacturers are subsidiaries of car manufacturers, so it would only be a matter of time before they fell too.

[Ripcat]

The unions aren't to blame.

The manufactures failed to stand up to them in the interest of sales and market share. They didn't want to take the losses that they would incurr if there were prolonged strikes and their vehicles were not available for sale.

[Proculation]

Ripcat wrote:

The unions aren't to blame.

The manufactures failed to stand up to them in the interest of sales and market share. They didn't want to take the losses that they would incurr if there were prolonged strikes and their vehicles were not available for sale.

You are right that the unions are not to blame. They demanded something and they got it.

The problem here is that now, the company has to come with solutions. They are tied with the contracts with the unions. If they want to keep their job, they need to negociate like the companies negociated.