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.

maybe you'll listen to a 'conservative'

As GM goes, so goes the GOP - Pat Buchanan

Understandably, Republicans are seething.

When Hank Paulson demanded $700 billion to haul away the trash in the dumpsters of JPMorgan Chase and Goldman Sachs -- assuring us we could hold a garage sale of the junk -- they rebelled. They acted as the nation, by 100 to one, demanded. They killed the Wall Street bailout.

The Dow quickly sank another 1,000 points, and, charged with criminal irresponsibility by the elites, the GOP buckled, reversed itself, rescued the bailout -- and was wiped out on Nov. 4.

Now we hear from Paulson that the $700 billion Congress [passed] will not, after all, be used to buy up all that rotten paper on the books of the big banks. Some banks are using the cash to buy other banks.

So Republicans are right to be enraged. They are victims of the biggest bait-and-switch in political history. But they are now about to do something terminally stupid. With GM, Ford and Chrysler teetering on the brink, they are turning a cold stone face to Detroit and are about to follow the counsel of that quintessential **** Dick Darman, who said of our computer chip industry, "If our guys can't hack it, let 'em go."

America responded -- by letting George H.W. Bush and Darman go.

Are Republicans aware of what they are about to do?

When workers, execs, engineers, dealers, salesmen and suppliers are all factored in, the Big Three employ 3 million people who contribute $21 billion a year to Social Security and Medicare, and $25 billion in federal income taxes. Add in all the businesses that depend on the auto industry, and we are talking about one-tenth of the U.S. labor force.

As columnist Tom Piatak of Chronicles and Takimag.com writes, 850,000 retirees, and their families, depend for pensions and health care on the Big Three. If they go under, the burden falls on us.

And to let the auto industry die is to write America out of much of the economic future of the planet.

In a good year, like 2005, Americans buy more than 17 million new cars, and West Europeans as many. Tens of millions in Eastern Europe, Russia, China, India and Southeast Asia are now moving into the middle class each year. These folks will all need or want one or two family cars. If we let the U.S. auto industry die, that immense and burgeoning market will be lost forever to America, and ceded to Asia.

"Who cares?" comes the free-traders' reply. Japanese and Koreans are setting up factories here. They can pick up the slack.

But that means Americans will work for and depend on foreign companies for a necessity of our national life as vital as the imported oil and gas on which our cars and trucks operate. All the profits of the mighty automobile industry in America will be sent abroad.

Before Republicans follow this free-trade fanaticism to their final interment, they might study the results of a poll by Peter Hart:

-- Seventy-eight percent of Americans believe the U.S. auto industry is highly or extremely important. Three percent think we can do without it.

-- Ninety percent of Americans believe the death of the U.S. auto industry would do great damage to our economic future.

-- By 55 percent to 30 percent, Americans favor federal loans to save it. And by 64 percent to 25 percent Americans back President-elect Obama's resolve not to let the U.S. auto industry go under.

If the GOP blocks these loans, and the industry dies, the party can forget about Ohio, Michigan and the industrial Midwest. For the Reagan Democrats will never come home again. Nor should they.

more

The auto companies are on the hook for the social services of their employees...health benefits, retirement benefits, disability insurance, etc which several posters have correctly pointed out is part of the "cost" of the union worker.

Who pays that cost in other countries, eh? By not having some sort of nationalized  social benefits program we ourselves with our big fat fear of socialism have crippled our own industries. Having our citizens have NO social benefits isn't an option, someone has to pick up the tab. That someone is the corporations who then have to pass the cost ot the consumer, thus making their product more expensive than imports.

If you are going to cripple your own industries that badly you have to level the playing field with much more aggressive import tariffs and whatnot.

Also I agree that the big three failed miserably in terms of leading the pack in technology, fuel efficiency, and the absurd pay & perks to execs who clearly aren't doing all that good of a job anyway.

I don't pretend to know what the answer to all this is, I don't know enough about economics. I do think it could've been prevented but that's not too helpful now.

I'm not an expert on the auto industry either, but I know enough about our economy and our country to know that both for economic reasons and for national security reasons, we can't allow it to fail.

Save our auto industry = 2.5 months in Iraq

Bail out wall street = 5 years, 7 months in Iraq

And again, we can issue the loans with whatever stipulations and requirements we want to ensure that we get paid back. 

Unlike with Wall Street, we are in the driver's seat on this one.

I agree that we shouldn't let the auto makers fail, but we can't just write a blank check either.  For once I agree with Pelosi.  They have to explain what they'll do with the money.  When you want a business loan, you don't just go to the bank and pick up a check.  You have to submit a business plan to show where the money will go and what kind of return you can expect.  I agree that's what they need to show Congress...not just that they need money but what the'll do with it.

Saw an interesting segment on the news last night about Toyota. Evidently the company fosters a very strong commitment to its employees. Job security for the workers seems like the number one priority for management. They are the last to be laid off.

In the factory the story featured, they recently had a plant hiatus of two months because sales were down. They continued to pay their employees full pay, but organized community beautification teams to paint and clean up parks in the city.

Original Post by caverlady:

I agree that we shouldn't let the auto makers fail, but we can't just write a blank check either.  For once I agree with Pelosi.  They have to explain what they'll do with the money.  When you want a business loan, you don't just go to the bank and pick up a check.  You have to submit a business plan to show where the money will go and what kind of return you can expect.  I agree that's what they need to show Congress...not just that they need money but what the'll do with it.

I can understand why people would be concerned about just issuing out the loan without any stipulations, since that's what they just did for wall street, but that has never been a possibility in this scenario. 

And I'm beginning to think that the reason Congress didn't demand more stipulations on the $700 Billion for banking is that they don't understand that industry and didn't know what to demand

Original Post by kathygator:

Saw an interesting segment on the news last night about Toyota. Evidently the company fosters a very strong commitment to its employees. Job security for the workers seems like the number one priority for management. They are the last to be laid off.

In the factory the story featured, they recently had a plant hiatus of two months because sales were down. They continued to pay their employees full pay, but organized community beautification teams to paint and clean up parks in the city.

impressive!

unheard of in america

our culture says greed is good, me first, and o well, sucks to be you

and we're the "christian nation"

and worse American business focuses solely on the quarterly bottom line. Profit now - forget 'more for later' and 'long term viability'. And using the share-holders as the excuse doesn't wash because Toyota is publicly traded and has share holders, as well.

Time for us to get a new paradigm.

Original Post by kathygator:

Saw an interesting segment on the news last night about Toyota. Evidently the company fosters a very strong commitment to its employees. Job security for the workers seems like the number one priority for management. They are the last to be laid off.

In the factory the story featured, they recently had a plant hiatus of two months because sales were down. They continued to pay their employees full pay, but organized community beautification teams to paint and clean up parks in the city.

 They are very good to their employees.

Another perk is if an employee comes up with a way to lower the cycle time, to save money, or reduce cost...that employee receives a check for a percentage of the cost saved.

Example: When I was at the Toyota plant in Georgetown, there was an employee that came up with a different way of assembling a bolt (or something like that) saving like 5 seconds for each car, this equated to a yearly savings of ~$250,000...so that employee received a onetime check for ~$25,000.

Original Post by nomoreexcuses:

Original Post by kathygator:

Saw an interesting segment on the news last night about Toyota. Evidently the company fosters a very strong commitment to its employees. Job security for the workers seems like the number one priority for management. They are the last to be laid off.

In the factory the story featured, they recently had a plant hiatus of two months because sales were down. They continued to pay their employees full pay, but organized community beautification teams to paint and clean up parks in the city.

impressive!

unheard of in america

our culture says greed is good, me first, and o well, sucks to be you

and we're the "christian nation"

 I saw something similar about a Hyundai factory somewhere in the south...the exact location escapes me now.  Anyway the lady they talked to said she likes working for Hyundai and would never want to work for any other company.  It sounded to me like the foreign car companies take very good care of their US employees.  Maybe the Big 3 should be taking notes.

EDITED TO ADD:

At one time I was interested in a postion at Toyota Financial.  I didn't take it because the commute would have been horrendous, but get this.  The health insurance was free for the employee and would cover and entire family for $40 to $50 every two weeks.  Dental and vision was company paid.  There were a lot of other benefits too.  I don't know if Toyota Financial has different benefits than the rest of the company, but those were darn good and if it weren't for the awful commute I would probably have taken the job.

I just found this article that debunks the myth of UAW workers getting $70/hr.  As it states in the article "the average union autoworker makes around $28 an hour as of 2007 and the new contract signed in early 2008 will limit the top wage of many non-core new hires to roughly $14 an hour with a lower degree of benefit costs also."

It also addresses where the myth of $70/hr came from.

You can read the article at:

http://anti-union.blogspot.com/2008/11/greedy -american-union-auto-workers-and.html