GM Spirals the Drain (Part 2)

[Dinner]

Originally posted by Chemical Ollie
I heard someone say in a dinner discussion that the reason these companies are in the crapper is because American car workers get totally absurd salaries. But I forgot what the normal salary was, and I haven't found it anywhere else. Anyone knows?

In comparison, Swedish car workers get perhaps 50 k$ a year. German probably somewhat higher, I would guess 50 k€ a year. And those all belong to GM or Ford too.

They get about $30 per hour. The Japanese pay around $27. The UAW does get better health care benefits and more days off (41 days a year vs a lot less for the average US worker but a lot more for European workers) and as DanS has said it is unusual for nongovernment retirees in the US. Where as every other civilized government gives everyone universal health care but in the US companies are forced to carry those costs and it is a huge competitive disadvantage.

[Chemical Ollie]

30$ per hour isn't absurd at all, but still high.

[DanS]

The hourly wage is only part of the sweet deal they get, however. If UAW workers at the Detroit Three are laid off, they get paid 95% of their wages. It is difficult for the companies to institute productivity enhancements under these conditions. This and other factors make the hours worked per vehicle higher at a UAW plant.

Also, work rules push more overtime, which is paid at 1.5x or 2x. A modestly ambitious autoworker is pulling down $80k+ per annum.

[DanS]

It should be noted that UAW workers in non-Detroit Three plants get paid more in line with the Japanese transplants. My brother-in-law is UAW at a truck parts plant and doesn't get paid anywhere near $30 an hour.

[Darius871]

Who here is enough of an expert to tell me what elements (if any) of obligations to the UAW are technically dischargeable in Chapter 11? Would they be the last to go? It's just hard to imagine how they could even restructure while paying former workers partial wages for nothing.

[DanS]

I don't know of any bankruptcy attorneys, judges, or trustees who post on Poly. I'm working on the reasoned assumption that all of a bankrupt company's obligations are on the table.

[Darius871]

I was under the assumption that they're at least prioritized however, just as a private citizen's credit card debts, then car loans, and so on get torched before the home mortgage does. If the UAW obligations don't have some sort of last-resort priority (whether statutorily or contractually), it'd make it all the more shocking to me that their concessions have been so limited.

[BlackCat]

Originally posted by Chemical Ollie
30$ per hour isn't absurd at all, but still high.

I think they pay a bit less in taxes than say a swedish or german worker doing the same work

[Dinner]

Originally posted by DanS
The hourly wage is only part of the sweet deal they get, however. If UAW workers at the Detroit Three are laid off, they get paid 95% of their wages.

Stop lying. They did past tense but they gave up the Jobs Bank as an unilateral concession. It doesn't occur any more so stop pretending it does.

Also, work rules push more overtime, which is paid at 1.5x or 2x. A modestly ambitious autoworker is pulling down $80k+ per annum.

The over time rules are Federal law. Don't like Federal law then take it up with your Congressman.

[Dinner]

Originally posted by DanS
It should be noted that UAW workers in non-Detroit Three plants get paid more in line with the Japanese transplants. My brother-in-law is UAW at a truck parts plant and doesn't get paid anywhere near $30 an hour.

$30 is the average at big 3 plants just like $27 is the average at Japanese plants for hourly employees. Under the 2005 contract which set up a new wage scale for new hires the new hires only start out at $14 per hour which is actually less then a new hire gets at a Japanese, Korean, or German factory in the US.

[Whoha]

I'd rather the big three were bailed out than the financials.

[Naked Gents Rut]

I'd rather the big three were bailed out then the financials.

[Whoha]

good catch.

[Naked Gents Rut]

I wasn't commenting on your spelling.

[Dinner]

I agree that a financial bailout was necessary because deregulation royally screwed the pouch. It was necessary to take action to restore the lending power of the financial sector. That said it is far, far easier to create a new bank then it is to create a new automaker.