Posted by JML755 on December 08, 2008 at 06:30:47 from (66.184.63.110):
ben brown,
I work for a supplier, I too feel that the Big 3 need a good dose of reality, especially the UAW. BUT.... a couple of points:
The current crisis was caused by things outside the control of the Big 3. mainly the huge spike in gas prices, housing crash, credit crunch. All of the above resulted in a dramatic drop in sales (50% in some cases) that were unprecedented and unpredictable. Gas prices were caused by speculators (i.e. Wall St.), housing crash was caused by speculators in overheated markets due in part to CRA and sub-prime mess (Wall St. AND Congress), credit crunch caused by greed and mismanagement and govt mandated CRA (i.e. Wall St. AND Congress)
The above are facts and notice the common causes: Wall St AND Congress. You don't hear any of that coming out in the press or hearings. Congress throws billions at the Wall St guys with little fanfare and rakes the CEOs of the Big 3 over the coals for problems that Congress helped create. Chris Dodd said yesterday that CEO of GM must go. I would say the same conditions should apply to him and the rest of Congress for creating this mess, starting years ago with the CRA.
It is also a fact that if one of the Big 3 declare bankruptcy, the dominoes will begin to fall within hours/days and there will not be enough bankruptcy lawyers and judges in the country to handle the thousand of cases that will be filed because suppliers payments will be cancelled/delayed and their payments to their suppliers will be cancelled/delayed, etc., etc on down the line.
It is not just the Big 3. Toyota, Honda, etc are also slowing production, laying off people as their sales plummet. However, the transplants are subsidized by the governments in their home countries to an extent that the Big 3 are not.
The Big 3 are asking for a BRIDGE LOAN, to be paid back with interest. The $ 700 billion Wall St. bailout included the govt buying non-performing assets which basically bailed out the banks/brokerages that were overloaded with sub-prime mortgages that they made huge fees on and subsequently paid their execs hundreds of millions in bonuses.
Yeah, I see a lot of problemes at the Big 3 and there is a world of difference between the transplant labor and UAW workforce, and management at both as well. And, if it wasn't for the competition from the transplants, there would be no incentive for the UAW to get real and scale back pay/benefits to market rates for unskilled labor. Big part of the problem is that the business model that says if you want to cut costs, you have to give "buyouts" and huge incentives ($$$$) to employees to lay them off. In a lot of cases these people are walking away with well over six figures in cash with retirement checks while they may be as young as 50 yrs old. "buyouts" are a relatively new phenomenon that lets management make the tough choice to lay people off and reduce the guilt feelings doing it. Heck, its not management's money thats being paid out, it's the stockholders. Which is part of the problem: no accoutability to the owners of the company. Boards of directors are just rubber-stamp, gutless, good-ole-boy clubs.
Anyway, your parable about the race has a lot of truth in it.
True story:
One of the Big 3 that recently offered buyouts to salaried people said if you take the buyout, no need to give notice, just don't show up on Monday. Well, Monday came and there were not enough salaried supervisors to run the line. The plant had to shut down for 2 weeks. They pulled salaried people from all over the plant, IT guys, personnel people, etc. and said "you're now a line supervisor". Talk about poor management and lack of planning.
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