US workers' wages are not causing the economic failures of big companies
I'm sick of seeing everyone blame the US workers' wages as a reason for failing companies.
It's the MISMANAGEMENT of the top excutives and the continued mismanagement by on down the line that is causing these failures.
Michael Moore's 1989 film, Roger & Me, looked at this in detail. He makes a good point that the big three auto companies failed to listen to consumer needs and continued making obsolete cars. They didn't even seem to notice that people were asking for lower mileage and more safety features. Then they began moving operations to Mexico and elsewhere and laying off American workers, using high wages as an excuse. I know he was on TV talking about it but can't find the video or news report. Will edit to add if I can.
Geez...what bug crawled in your bonnet?
I don't think anyone is blaming only the wages for the ENTIRE downfall....But I do think the wages and benefits have contributed.
When the big3 went to DC to ask for the $25 billion loan it was said that this much would carry them until the new, lower union contracts take affect in 2010.
Poor management is definitely a big portion of their problem, but it's not the only one.
Since consumers are buying other cars. shouldn't we just blame them?
New lower union contracts that also prohibit the further outsourcing of jobs.
Upper management has spent the last 10 years raking in dough at rates, in proportion to workers, not seen since the turn of the last century.
They out earn workers hundreds to one, when 10 to 1 would suffice.
The failing is in management. The only protection the American worker has in the culture of outsourcing that has poisoned the manufacturing industries in this country is unionization.
I do believe that German auto workers have a better wage and benefits package than American workers. edited to add: although American workers are more productive.
The auto makers moved jobs offshore at a time when they were making record profits. Now they blame unions for their problems. Since they were paying Mexican workers poorly when their business took a downturn, it doesn't make sense.
Their downfall is their own fault - they failed to keep up with the real world.
I blame Molly ;)
No particular reason why. I'm just sure it's her fault ;)
I went back to find some numbers for you....
in 2006, widely available industry and Labor Department statistics placed the average labor cost for UAW-represented workers at the former DaimlerChrysler at $75.86 per hour. For Ford it was $70.51, he said, and for General Motors it was $73.26.
“That includes the hourly pay, plus the benefits they’re receiving and all the other costs to General Motors, Ford and Chrysler, including legacy costs – retirement costs, pensions, and so on – so it’s looking at the total labor costs per hour worked for workers,” Perry said.
For U.S. workers at Toyota, however, the per hour labor cost is around $47.60, around $43 for Honda and around $42 for Nissan, Perry added, for an average of around $44.
A gap in per worker cost of ~$30/hr has to have some impact, does it not? Like I said, I don't think it's the total blame, but it is a contributing factor.
Original Post by clairelaine:
Their downfall is their own fault - they failed to keep up with the real world.
That, I agree with 100%.
Original Post by hkellick:
I blame Molly ;)
No particular reason why. I'm just sure it's her fault ;)
Points out that both she and her husband own American cars. Thinks HK is really the culprit.
It's not the wages of the autoworkers that is the problem it is the wages of the rest of us. You can't refinance your house everytime you need to buy something. Sooner or later you need to earn a better wage. I blame Walmart for our current financial crisis because they promoted the minimum wage, no benefits model. If you work at Walmart you can't afford to shop anywhere else.
The Walmartization of the supply chain. Absolutely.
It should be noted that the above referenced 75.00 (or so) an hour in pay, pension and benefits could not have been negotiated if the companies' upper management personal were not making 10-20 times more than that. Unions are obligated to negotiate in good faith, just like management is.
*wants to point a finger of blame somewhere too*
Original Post by mollymouser:
Since consumers are buying other cars. shouldn't we just blame them?
Buying American no longer means providing jobs for American manufacturers - it means providing lots of jobs for offshore workers. Certainly for the last 15 years or so.
Original Post by nomoreexcuses:
*wants to point a finger of blame somewhere too*
I blame corn syrup, Alan Thicke and communism. And twinkies.
What about the markets in other countries. We allow countries to bring in their products but American made products have a hard time finding their way into foreign markets.
Original Post by r4eboxer:
What about the markets in other countries. We allow countries to bring in their products but American made products have a hard time finding their way into foreign markets.
DINGDINGDING!
we have a winner, folks
Twinkies???
I worked at Wal-Mart for 3 years as a second job and I learned a few things about the company. I learned that while some people work at Wal-Mart as their only source of income, most are either students or work as a supplement to the families income. Most don't need the health insurance because they've got another source. Wal-Mart did, however, offer me health insurance after I worked there 2 years even though I was part-time. I didn't need it because I had it through my full-time job. Wal-Mart gives each associate a bonus check each year. The amount is based on how well the store did and how much you work. As a part-time employee, I got $300. Wal-Mart promotes from within so if you have any ambition at all you don't have to stay in the low paying jobs. Our store manager who makes 6 figures now started out as a stockman when he was in school. Wal-Mart is not as bad as it's made out to me. I know because I worked there. Target and K-Mart aren't paying any better. If you want to know about no benefits, I know a young man who works as Burger King for $7.00 an hour with absolutely no benefits.
Original Post by nomoreexcuses:
Original Post by r4eboxer:
What about the markets in other countries. We allow countries to bring in their products but American made products have a hard time finding their way into foreign markets.
DINGDINGDING!
we have a winner, folks
Uhhh might that be because American products are over priced? I'd rather by a ___ made in Japan for half the price ... it's not just the auto industry.
If you want to make the same wage as the upper management in these companies, go get your MBA and go get an upper management job. The fact is that a labourer is costing these companies $73/hr - this is an employee with no required education except maybe a high school diploma.
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