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.

Original Post by sybil878:

Original Post by yachtracer1977:

Original Post by sybil878:

Sure they are, just because they don't recieve that on their paychecks doesn't mean that they aren't getting that amount - it's all part of their total compensation package. They recieve the health care benefits. They recieve their pension in retirement. Those are real cost to the company that the employee gets. Just because it isnt' on their paycheck doesn't mean that they aren't recieving it.

 *forehead smack*

*head desk*

 Ah, so the employee should be entitled to these benefits just for showing up for work and the company should just pay them and not factor it into the cost of employment? We are talking about running a business here, not a government that just prints more money when they run out.

 Post #23, dear. 

Yes, it is the cost to the company.  But that cost COULD be a lot less.

Original Post by rachd:

Original Post by moonikins:

I'm not sure how to even approach pointing out the difference in costs of the salaries, perks and benefits of the top executives and upper level management between the big 3 automakers and the Japanese automakers. The playing field is so very different. There is not easy access to all of those figures, which is why so many people harp on the union wages as the cause. It is easy to see the difference.

 Actually, the salaries of top execs are public knowledge for publicly traded companies, you can find it on google.finance.  I'll look for the numbers...

However, another way to look at is....how many top execs are there in comparison to how many hourly workers? It would be interesting to compare total cost to total cost.

edited for clarity

 I found a few numbers....

GM's CEO made $14.4 million last year (yikes...) and Toyota's make under $1mil, big difference there for sure (another reason to clean house). However....

If an hourly employee costs GM $30/hr than Toyota and that employee works 35hrs a week for 48 wks a year (I'm being conservative....evil word, I know ;p) then that is 30*35*48 = $50,400/yr/employee. So $15million/$50,400 = ~298 employees. How many hourly emplyees does GM have?

Either way you 'slice' the pie, it's still a big piece. Although, it'd be better to get rid of one CEO than ~300 employees....the union contracts are still costing the big 3 a pretty penny. Rather you are conservative (evil word again) or not :)

Original Post by nomoreexcuses:

Everybody stand with the 'Conservatives'!
Lower wages! Less Healthcare! For everyone*!

Just wanted to say (off topic)....

I don't think that 'conservative' is a dirty word....especially when it comes to money. And to be fair...I don't think 'liberal' is a bad word, especially when it comes to social services.....

#42 Illustrates my point. The reason union workers at Toyota make less is because management makes less.

In union negotiations one of the best stats to use as leverage is the ratio of hourly pay to salary pay.

*scoffs at unions*

You're all fired.

Everyone crosses picket lines nowadays, so management has nothing to fear.

 Post #23, dear. 

Yes, it is the cost to the company.  But that cost COULD be a lot less.

 I agree with universal health care ... in Canada we pay for it out of our taxes which are way higher than in the US. Whether the employee was paid $70/hr and had to pay 20 of it themselves to health care (rather than the company paying on the employee's behalf) or if they had to pay that same $20 in taxes to fund universal health care, it still comes out of your pocket in some way shape or form.

I find it odd however though that when I've seen debates on heath care the general theme is that americans do not want the government involved because they don't trust government. Then I see discussions like this where one poster actually blamed the governement for NOT imposing stricter regulations forcing the car companies to produce more efficient cars ... which is it? Do you want the governement involved or don't you?

Original Post by nomoreexcuses:

But GM, which negotiated the four-year deal that serves as a template for UAW deals with Chrysler and Ford, says its total hourly labor costs dropped 6 percent this year from pre-contract levels, from $73.26 in 2006 to around $69 per hour. The new cost includes laborers' wages of $29.78 per hour, plus benefits, pensions and the cost of providing health care to more than 432,000 GM retirees, GM spokesman Tony Sapienza said.

The total cost will drop to $62 per hour in 2010 when the linchpin of the contract -- a UAW administered trust fund -- starts paying retiree health care costs.

But that's still $9 more than the $53 per hour that GM estimated Toyota now pays in the U.S., and the gap could be even wider. Toyota spokesman Mike Goss said the company's total labor costs at its older U.S. plants are around $48, with about $30 per hour in wages.

The remaining difference largely is due to "legacy" costs, the cost of a 100-year-old company paying its retiree pensions, Sapienza said.

 GM has about 74,000 hourly employees (as of Feb 08), so an extra $9hr/worker....

If every worker worked 30hrs a week for 45 wks, would it be 74K*30*45*9? That's $899 million dollars....wow is that right? My math could be wrong, it's happened frequently :)

Original Post by rachd:

Original Post by nomoreexcuses:

Everybody stand with the 'Conservatives'!
Lower wages! Less Healthcare! For everyone*!

Just wanted to say (off topic)....

I don't think that 'conservative' is a dirty word....especially when it comes to money. And to be fair...I don't think 'liberal' is a bad word, especially when it comes to social services.....

I also don't think that conservative or liberal are dirty words.

I just don't agree that advocating against working people is 'conservative' and I don't think that treating white collar industries differently from blue collar industries is 'conservative'

The current economic downturn was precipitated by a reduction in our GDP of .3%

What % of our GDP do the automakers represent?  Can we afford to lose that?

It's not as simple a problem as 'unions are costing the company too much!'

How much would it help the automakers if we had a national health system to take that burden out of the cost of producing cars? Especially when you consider the retirees who use more healthcare.

Original Post by sybil878:

 Post #23, dear. 

Yes, it is the cost to the company.  But that cost COULD be a lot less.

 I agree with universal health care ... in Canada we pay for it out of our taxes which are way higher than in the US. Whether the employee was paid $70/hr and had to pay 20 of it themselves to health care (rather than the company paying on the employee's behalf) or if they had to pay that same $20 in taxes to fund universal health care, it still comes out of your pocket in some way shape or form.

I find it odd however though that when I've seen debates on heath care the general theme is that americans do not want the government involved because they don't trust government. Then I see discussions like this where one poster actually blamed the governement for NOT imposing stricter regulations forcing the car companies to produce more efficient cars ... which is it? Do you want the governement involved or don't you?

Not all Americans agree on this.  If you react to us as if we are all one person with one opinion, you will find it difficult to understand us.

The Americans who want the government involved just won the 2008 elections.

Original Post by nomoreexcuses:

Original Post by rachd:

Original Post by nomoreexcuses:

Everybody stand with the 'Conservatives'!
Lower wages! Less Healthcare! For everyone*!

Just wanted to say (off topic)....

I don't think that 'conservative' is a dirty word....especially when it comes to money. And to be fair...I don't think 'liberal' is a bad word, especially when it comes to social services.....

I also don't think that conservative or liberal are dirty words. Sounded like it me...but maybe I'm just sensitive :)

I just don't agree that advocating against working people whose advocating against working people? is 'conservative' and I don't think that treating white collar industries differently from blue collar industries is 'conservative'

The current economic downturn was precipitated by a reduction in our GDP of .3% yep

What % of our GDP do the automakers represent?  Can we afford to lose that? nope, but it doesn't mean that we can't loose some of it aka bankruptcy then reorganize

It's not as simple a problem as 'unions are costing the company too much!' Never said it was. The OP said that it's not the worker's wage discrepencies that caused the problem, I argued that yes the cost of the hourly worker for the big3 in comparison to Toyota does contribute (not equate to the whole, but contributes) to the problem

How much would it help the automakers if we had a national health system to take that burden out of the cost of producing cars? Agreed, but that's not going to happen in the next year. Especially when you consider the retirees who use more healthcare. I wonder how many of the retirees are over 65 and get medicare?

 

I would prefer that tax money be spent on industries that actually produce durable goods than on industries that mostly bamboozle people and this time ended up bamboozling themselves.

And this isn't even a bail out.  It's a loan. That will be paid back on whatever terms we dictate.

Original Post by nomoreexcuses:

And this isn't even a bail out.  It's a loan. That will be paid back on whatever terms we dictate.

Granted it's a loan, but if they still end up going belly up there will be no repaying of the loan. Without major changes to the way they do business they will eat up the $25bn loan quickly and be in the same situation again in no time and requesting another $25bn next year.

Original Post by sybil878:

Original Post by nomoreexcuses:

And this isn't even a bail out.  It's a loan. That will be paid back on whatever terms we dictate.

Granted it's a loan, but if they still end up going belly up there will be no repaying of the loan. Without major changes to the way they do business they will eat up the $25bn loan quickly and be in the same situation again in no time and requesting another $25bn next year.

 

 Agreed.

It's just putting off the inevitable.

Original Post by rachd:

Original Post by moonikins:

I'm not sure how to even approach pointing out the difference in costs of the salaries, perks and benefits of the top executives and upper level management between the big 3 automakers and the Japanese automakers. The playing field is so very different. There is not easy access to all of those figures, which is why so many people harp on the union wages as the cause. It is easy to see the difference.

 Actually, the salaries of top execs are public knowledge for publicly traded companies, you can find it on google.finance.  I'll look for the numbers...

However, another way to look at is....how many top execs are there in comparison to how many hourly workers? It would be interesting to compare total cost to total cost.

edited for clarity

What you might find even more interesting is how many hourly workers does it take to equal the pay + benefits + perks for the top exec. I think it might shock you.

The retirees and the associated costs are not actually the problem, they are a symptom of previous management decisions.

A good management decision stemming from decades ago when these retirees were working would have estimated retirement costs and benefits and paid them into a separate fund for administration.  You will find that many companies such as the YMCA of the USA, and many government agencies pay retirement (or have employees pay - this is mandatory) into a seperate agency that invests and pays out funds to retirees or those who have seperated from service.  Similar to social security except that the federal government and the company in question does not have access to either the principal or the interest from those funds.

What I would expect is that current employees might be willing to negotiate a lower wage to keep the automakers in business.  Certainly the management can afford to do so (corporate jets can and should be sold and I'm extremely tired of hearing about golden parachutes for failed management...you failed, be happy that you're not having to pay back past compensaton).  In the event that a loan is made I certainly hope that there will be significant restrictions on what management compensation and bonuses can be.

WOW!  The anti-working class attitude of some of the people here is disgusting.

Comparing the workers' pay vs. just the CEO's salary is extremely unfair.  Try comparing the workers' pay vs. the pay of everyone in management (and make sure to include all the perks that management receive too!).

Then let's see how much cost of each car goes to management salaries, perks, healthcare, bonuses, pensions, etc.

Unions are a line of defense for workers against the companies.  To say that unions are absolete is just absurd.  Whether folks want to acknowledge it or not, there is a class war going on. 

It's not as simple a problem as 'unions are costing the company too much!' Never said it was. The OP said that it's not the worker's wage discrepencies that caused the problem, I argued that yes the cost of the hourly worker for the big3 in comparison to Toyota does contribute (not equate to the whole, but contributes) to the problem

Rachd, You did not argue that the cost of the hourly worker contributed to the problem. You were making a case in this thread and in previous threads that it was at least one of the main problems. It wasn't. It only contributes a small portion. The hourly workers wouldn't be making so much if the top execs weren't making an obscenely amount more than the Toyota execs.

Who made the decision to not invest in more fuel efficient cars? Not the hourly workers.

Who made the decision to not improve safety ratings? Not the hourly workers.

Who watched the market share of their company decline and do nothing about it? Not the hourly workers.

Who outsourced jobs while the company was making a profit, which caused loss of jobs in many sectors, thereby reducing the purchasing power of the public? Not the hourly workers.

Who flew for a government handout in private jets, costing at least $20,000 per airplane instead of $500 round trip airfare? Not the hourly workers.

Original Post by yachtracer1977:

Original Post by caverlady:

 Agreed!  American's working for Toyota for example received a little more than half that, still not bad for unskilled labor. 

 They aren't PAID $74/hour ... you do realize that, right? 

 Of course I realize that.  I would hope you'd give me a little more credit for brains then that.  The $74/hour takes into consideration pay, benefits, retiree, etc.  I still think people at Toyota are doing just fine.  Condescending much?

Original Post by moonikins:

Original Post by rachd:

Original Post by moonikins:

I'm not sure how to even approach pointing out the difference in costs of the salaries, perks and benefits of the top executives and upper level management between the big 3 automakers and the Japanese automakers. The playing field is so very different. There is not easy access to all of those figures, which is why so many people harp on the union wages as the cause. It is easy to see the difference.

 Actually, the salaries of top execs are public knowledge for publicly traded companies, you can find it on google.finance.  I'll look for the numbers...

However, another way to look at is....how many top execs are there in comparison to how many hourly workers? It would be interesting to compare total cost to total cost.

edited for clarity

What you might find even more interesting is how many hourly workers does it take to equal the pay + benefits + perks for the top exec. I think it might shock you.

 Please see post #42 and #47.

I was hoping to have an interesting debate with you and thought that you could convince me a little, but it seems you're not even reading my posts :/

Original Post by moonikins:

It's not as simple a problem as 'unions are costing the company too much!' Never said it was. The OP said that it's not the worker's wage discrepencies that caused the problem, I argued that yes the cost of the hourly worker for the big3 in comparison to Toyota does contribute (not equate to the whole, but contributes) to the problem

Rachd, You did not argue that the cost of the hourly worker contributed to the problem.  Ummm...yes I did, it's in direct quotes above. You were making a case in this thread and in previous threads that it was at least one of the main problems. Huh, what....and the difference is?

It wasn't. It only contributes a small portion. The math shown in post #47 (using nomo's numbers) shows at least $899 million a year...that's a small portion?

The CEO makes ~$15 million a year....lets assume there are 10 'CEO's' or top execs...that's $150 million a year in comparison to $899 mil.

The hourly workers wouldn't be making so much if the top execs weren't making an obscenely amount more than the Toyota execs. Very true...and proves that the wages are a direct root cause.

Who made the decision to not invest in more fuel efficient cars? Not the hourly workers.

Who made the decision to not improve safety ratings? Not the hourly workers.

Who watched the market share of their company decline and do nothing about it? Not the hourly workers.

Who outsourced jobs while the company was making a profit, which caused loss of jobs in many sectors, thereby reducing the purchasing power of the public? Not the hourly workers.

Who flew for a government handout in private jets, costing at least $20,000 per airplane instead of $500 round trip airfare? Not the hourly workers.

Of course all of the above are contributing factors to the meltdown, I never said they weren't.

I'm not making the hourly workers the villian....they're not.  It's just the facts as the numbers are showing them to be.

 You started this thread saying....

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.

The numbers show that the wages ARE a reason for the meltdown...how can you dispute them? Either way you slice that pie, the $899 million is a big piece....to say it's not is just illogical.

Either way, I've more than made my case and since you aren't providing me with any numbers and aren't even bothering to read my posts, I'm done with this 'debate'. I've never been very good at arguing logic against emotion...