UAW On Strike

[Silverback51]

Some of these companies will not be happy until we are a 3rd world country.

Also what I find amazing, is if they continue to cut the wages of their workers, who do they think will be able to afford to buy their products.

[Joe Wicked]

Originally Posted by Silverback51

Some of these companies will not be happy until we are a 3rd world country.

Also what I find amazing, is if they continue to cut the wages of their workers, who do they think will be able to afford to buy their products.

Yea, but at $70/hour, they could still afford the products with a $14/hour cut. Come on, $70/hour is $145,000/year to build axles. It is not rocket science.

[Ron61]

And since their main consumer is GM which is losing money as fast as the Govt., what good is it going to do to keep demanding more when they may not even have a market soon. That $70 dollars an hour was just out of reason I think. This is going to have a bad effect on all. If they get more per hour, then they will have to raise the price of their axles which means GM will have to raise the price of their vehicles again and soon no one will be able to afford to buy them. So what happens then. And if they can't live on that pay, maybe they had better consider adjusting their living style to fit their means.

Edit: The way I read it is the $70 per hour is labor costs and doesn't mention benefits which I interpet to mean their pay. The colored sections below would seem to indicate their benefits are not included in the $70 dollar figure.

Elimination of future retiree health care and defined benefit pensions were also issues, the UAW said. The union also said American Axle failed to provide the UAW with information it needed to evaluate the proposed cuts.

In a statement, the Detroit-based company said the union had "singled out" the supplier by refusing to allow it to cut hourly labor costs that are three times higher than its rivals at over $70 per hour.


Ron

[Wes Tausend]

Originally Posted by Ron61

And since ...

Edit: The way I read it is the $70 per hour is labor costs and doesn't mention benefits which I interpet to mean their pay. The colored sections below would seem to indicate their benefits are not included in the $70 dollar figure.

Elimination of future retiree health care and defined benefit pensions were also issues, the UAW said. The union also said American Axle failed to provide the UAW with information it needed to evaluate the proposed cuts.

In a statement, the Detroit-based company said the union had "singled out" the supplier by refusing to allow it to cut hourly labor costs that are three times higher than its rivals at over $70 per hour.


Ron

On the other hand, if the $70/hour figure was released by the American Axle company, you can pretty well figure they tacked on everything they could think of to inflate the appearance of high "labor costs".

It probably includes all the Social Security matching, Workmans Compensation and the entire salaries of all the Payroll Department, Human Resources, company nurse etc. And anybody doing something unrelated they can pack into these depts. Also figure a substancial amount of overtime being averaged in because the company is trying to get by with as few as employees as possible (and mandatory OT is norm now). Then not to forget any pension, 401k matching and other little bennies. And then the biggy, health care... which makes $70 hour charge for just about anything look like peanuts, seemingly extorting us all for more like $700/hr if we want to live.

All these above are labor costs; I would, and did, sure count them in my own company. These represent real costs per hour per employee, though hidden from our daily "Joe Six-pack" view. Anybody out there making a mere $30/hour? Well it is a lot more than that. Enough that your company could make your job look overpaid in their press release. The working class apparently needs to be divided and conquered.

Now with a little Enron accounting, I think a corporate board could reason that the only reason that a company would need management ...would be to oversee hourly employees. So the financial burden of management would also be the employees fault, jacking up labor costs yet again. And really unruly employees would require really good management, drawn from other corporate boards of course (with huge bonuses and all). The employees, them dirty bums, further gouging stockholders like that.

Three times higher labor costs than its rivals alright. In China. In Mexico. In new Delhi. I think Rick Lake nailed it.

My guess is that they are probably actually making about $28-32 hour straight time, not too bad really.


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[Joe Wicked]

I read it the same way Ron did. That the hourly rate was $70 and they wanted to cut it back, and cut benefits, so I did not think that the pay rate was including benefits. If they are rolling the cost of company nurse, etc... in then I can see where a $14 cut can be more of a cut than before.

Please also keep in mind that even if your competitors are in a foreign country, they are still your competitors. If you charge more for the same product, your product really has to be superior in every way, and there is still a limit. I work in the telecommunications industry (cell phones), and our competitors are all either completely foreign or (as we are) a foreign company with a US company as a subsidiary to handle US operations, with the exception of Motorola. Motorola now is for sale. They are folding. Qualcomm did the same when I worked for them, they sold to Kyocera. The reality is the US company has to compete with the foreign company. In our case, they use top quality materials, but the manufacturing (based in Korea) costs are very low due to very low labor costs. This keeps the Top Tier phones priced in the same range as Motorola's Mid Tier phones. Hard to compete with that, when your labor costs are 3 times your competitor.

[Wes Tausend]

Originally Posted by Joe Wicked

I read it the same way Ron did. That the hourly rate was $70 and they wanted to cut it back, and cut benefits, so I did not think that the pay rate was including benefits. If they are rolling the cost of company nurse, etc... in then I can see where a $14 cut can be more of a cut than before.

Please also keep in mind that even if your competitors are in a foreign country, they are still your competitors. If you charge more for the same product, your product really has to be superior in every way, and there is still a limit. I work in the telecommunications industry (cell phones), and our competitors are all either completely foreign or (as we are) a foreign company with a US company as a subsidiary to handle US operations, with the exception of Motorola. Motorola now is for sale. They are folding. Qualcomm did the same when I worked for them, they sold to Kyocera. The reality is the US company has to compete with the foreign company. In our case, they use top quality materials, but the manufacturing (based in Korea) costs are very low due to very low labor costs. This keeps the Top Tier phones priced in the same range as Motorola's Mid Tier phones. Hard to compete with that, when your labor costs are 3 times your competitor.

Joe,

I understand what you're saying. I just think there is another side of the coin here. I think it was vague on purpose.

The $70 figure was released by the company:
"In a statement, the Detroit-based company said the union had "singled out" the supplier by refusing to allow it to cut hourly labor costs that are three times higher than its rivals at over $70 per hour."

So my saying "On the other hand, if the $70/hour figure was released by the American Axle company, you can pretty well figure they tacked on everything they could think of to inflate the appearance of high "labor costs"...." refers this "$70 of what" may be purposely vague to mislead. It just makes sense they would spin it best they could, so I'm assuming, perhaps incorrectly, they did.

Then:
Whereas the cut-in-half scenario was from an employee:
"Carl Jackson, a 13-year American Axle veteran, said union negotiators told rank-and-file members the company had been unbudging in demands for pay cuts that would cut compensation in half for many workers."

And the stated $14 cut from the union:
"The United Auto Workers said the strike had begun at 12:01 ET on Tuesday. Talks broke off Monday with major issues unresolved, including demands for wage cuts of up to $14 per hour, the union said".

The two preceding paragraphs lead me to believe the paid wages are lower than $70/hr.

I surely admit it doen't look too good for the UAW. We can already see that some rivals are at least UAW (implied American?):
"American Axle said the union was in effect singling the company out for demanding wages and benefits about equal to those that rivals now have under their own UAW agreements."

I have to say it seems the end result may be a lockout and the next thing across the picket line could be flatbed trailers large enough to transport Mazak equipment. UAW has a lot of b@lls. It's better to strike over something that can't easily be moved, like a railroad.
'Course that's illegal. Probably cause it can't be moved.

I wouldn't mind government restrictions and protective tariffs on some things. Like Motorola not being allowed to die over imports. Motorola was a great company. Where will we get our military electronics during the next war? Walmart?


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[Silverback51]

Originally Posted by Joe Wicked

Yea, but at $70/hour, they could still afford the products with a $14/hour cut. Come on, $70/hour is $145,000/year to build axles. It is not rocket science.

I'm in a hurry, but I did not read that their wages was $70.00/hour. Where was that?

Did that $70.00/hour include all of their benefits? I can believe that, but I find it hard to believe that their take home wages is $70.00/hour.

And if it is, I have to agree, that is on the high side for what is required of the job.