shut down

[kenmac]

When they ( dealers ) are having a sale . I have seen them advertise $10,000 off sticker. If they can take $10,000 off sticker & still make money . Then, they have priced their product too high to begin with. They need to lower their prices so, adverage people can afford a new vehicle. I don't price my products so high that a customer has to haggle with me to lower my prices. As far as I know, this way of doing business only applies the auto business

 

[Renze]

When they ( dealers ) are having a sale . I have seen them advertise $10,000 off sticker.

Because the North American market has collapsed for Volvo, they start dumping their wheeled loaders in the European market for crap prices, 10 to €15.000 off.... The problem is that a manufacturing chain is something that you cant just shut off... Parts are manufactured in large quantities, contracts are signed with subcontractors, and it takes a while before a wheel loader leaves the factory.

When the recession struck, Volvo still had lots of contracts. To stockpile all these materials and goods, would take up so much capital (interest) that its better to finish the products and sell them at or below cost price, to free this capital and make your monthly payments with the shareholders, banks, etcetera.

The loader factory i work, builds to order so we dont have this stockpile problem... however Volvo is ruining OUR market too with this...

 

[Gator6x4]

High gasoline and diesel fuel costs impacted negatively on a lot of the American economy. The auto industry was impacted severely, part of the problem was the auto industries management and part was the UAW Union.
I don’t think the American Auto Industry and the UAW saw the train coming even when they were standing on the tracks and felt the ground vibrating. High gas prices, and information on UAW contracts and how much was being added to the cost of a “Big Three” produced motor vehicle impacted the auto industry in a very negative way. I own two late model GM vehicles and according to who you listen too I paid a combined cost increase on the two vehicles of $5000 - $7000 dollars because of UAW contracts. In my opinion consumers stopped buying Big Three made vehicles because they could purchase a similarly equipped vehicle for less money from a different manufacture with a higher resale value at trade time.
One big problem, again in my opinion was JOB BANKS. That program, set up as part of a contract agreement reached between Detroit's Big Three and the union decades ago, pays auto workers 85% of their pay while furloughed. Some workers reported for years to meeting rooms where they would sit and wait for an assignment or be sent to clean public parks. ( If memory serves, one of the major TV Networks even did a segment on the “Jobs Banks” a couple of years ago). All the while, they would get paid most of their wages.
The JOBS bank was costly in more ways than one for General Motors (GM), Ford (F), and Chrysler. By making labor a fixed cost, it altered their manufacturing strategy. For most of the past 10 years, the car companies preferred to discount models with big rebates and 0% financing rather than cut production, because they had to pay workers no matter what. Other automobile manufactures’ were not hampered by such constraints and could reduce or increase their work force as sales demand dictated.
Getting rid of the Job Bank program will be painful for the union. The UAW will have to work out a way for laid-off workers to get buyouts or severance from their companies. Otherwise, they will simply be cut loose. Right now, laid-off workers still get most of their pay during the first 48 weeks of furlough from a combination of state unemployment benefits and company-funded supplemental unemployment benefits, or SUB pay. After those 48 weeks, they go to the JOBS bank and get most of their pay from the automakers.
Now, workers may still get SUB pay. But the JOBS bank is suspended. The union will have to deal with more than 3,500 workers who are now in the JOBS bank at Ford, GM, and Chrysler. That's about the same number of people who are employed at a large car plant. The UAW will most likely push for the 3500 workers who are not making vehicles or working on an assembly line and in all likelihood haven’t made a vehicle in years to receive buyouts. Will the buyout money comes from us, the good ole American tax payer? I am betting on the taxpayer.
All of the automakers have set aside cash to seed the UAW health-care fund, which pays unionized worker and retiree health-care benefits at all three companies. The fund is under funded and will require more cash. GM, for example, has to give the UAW $32 billion to start a fund that will be invested to cover a long-term health-care liability of $47 billion. The automaker has to put $7 billion in the fund by early 2010, a sum that company President and COO Frederick A. "Fritz" Henderson [Business Week, 11/20/08] said will be difficult to pay. "Ford" and "Chrysler" also owe future payments. The union has hired investment bank Lazard to figure out how much each has to, or will need to contribute.

 

[kenmac]

I own two late model GM vehicles and according to who you listen too I paid a combined cost increase on the two vehicles of $5000 - $7000 dollars because of UAW contracts.

Don't get me wrong . I'am not a big union person. But one has to wonder how much is added to the cost of a new vehicle because of Pension, Housing Allowance, Bonuses,Salaries, ETC ETC, of the past & present,CFO'S, CEO'S, Presidents, V. P.'s ETC, ETC, I have never heard & you will probably never hear what $ amount is added for their perks. Just like the financial instutions that took a bail out. The big guys still took their Bonuses. Then. it was reported that the bonuses didn't come out of the bail out money. If they had enough $ to hand out mega bonuses . They sould not have gotten a bail out. They should have use the bonus money to help keep them afloat

 

[2manyrocks]

The Wall St. guys have been pocketing the bucks for some years now, and you'd think they have enough stashed to ride things out. If the bank examiners had been doing their jobs, there wouldn't be a need to bail out the banks. They were supposed to be regulated for safety and soundness while all this nonsense was going on. So Congress is going to turn on the public money tap and make all this nonsense go away? We've been picking on the management of the Big 3, but what did the government do for energy independence over the last 30 years or do to make sure that the banks were watched carefully enough that they didn't have to be bailed out?

 

[Builder]

Don't get me wrong . I'am not a big union person. But one has to wonder how much is added to the cost of a new vehicle because of Pension, Housing Allowance, Bonuses,Salaries, ETC ETC, of the past & present,CFO'S, CEO'S, Presidents, V. P.'s ETC, ETC, I have never heard & you will probably never hear what $ amount is added for their perks. Just like the financial instutions that took a bail out. The big guys still took their Bonuses. Then. it was reported that the bonuses didn't come out of the bail out money. If they had enough $ to hand out mega bonuses . They sould not have gotten a bail out. They should have use the bonus money to help keep them afloat

And just think, the japanese automakers that have shown up on our shores in the last 10-15 years have virtually none of these legacy costs to deal with because they have almost no retirees and no union representation to get them these lopsided benefits packages even if there were retirees.

 

[Renze]

During this last 2 weeks of auto crisis, have learned a great deal of how things are done in America, things like social security, retirements and the such...

If i understand it right, the part of a workers salary which is kept for your own future retirement, is held within the company and the company has to pay way after the workers have stopped working there.
Real life is that this money isnt put apart for the future, but used to invest in the company itself, right here, right now. This gives new companies a benefit, because the money that is, in the European model, is invested in a state controlled fund, stays in the hands of the companies.

Major drawbacks i see, is the burden of companies that used to employ, lets say, 10.000 workers, but due to factory automation, shrinking markets, better efficiency, currently employ 5.000 Then these 5.000 have to pay up for the retirements of 10.000 older workers.
Next to that, when a company gets in bankruptcy, thousands of workers loose their retirement/pension.

Do i understand this right ???

If so, ***** might want to review this system, and cut pensions loose from the companies, either into a state controlled bank, or into a chain of commercial insurers.
A. to help companies to remove retirement debt burdens of companies that have shrunken their workforce
B. protect retired workers from the consequences of a bankruptcy of the company they used to work all their life ???

It would give an incredible increase in flexibility within the economy, and if one company goes belly up, the others, in new markets, that are growing fast, can help carry the weight of the retirements of companies in markets that have shrunken in half.
Spreading this out within the whole economy of the country would stabilise it a lot.

This situation might have been good for the competitive position of the foreign brands that started plants in the USA in the past years, because they can play bank with the retirement savings from their employees, but it severely endangers the old native companies and their retired workers....

Simple and pure market protection isnt accepted on a global basis, but i (as a European) dont see why Americans couldnt create a level playing field for old native vs. new foreign companies....

Correct me if i'm wrong... ?

 

[JGY]

You used to be able to buy the F-150 fairly stripped. I'd bet you still can, but you most likely have to order it. Crank windows, manual door locks, vinyl seat, etc...

Yep, you can. And the wonderful thing about it ... it costs MORE to order!

J

 

[JGY]

Oh, BTW, guess who gets a $4,700 pay raise this coming year -- on top of their $169,000 a year part-time job?? The "Boss Lady" makes $217,000 a year, and has a PRIVATE plane at her disposal at ANYTIME! Hypocrisy!!!

J

 

[JoelD]

In my humble opinion, when it comes to union employment, the big killer is "defined benefit plans", in other words pensions, combined with continued health coverage. I think it is that simple really.

Most every other employer in the US has gone to "defined contribution plans", in other words 401K.

For the most part defined benefit plans are essentially completely on the back of the employer, and the costs are astronomical, guaranteed pay till you die and in some cases until your spouse dies.

State and local governments must deal with the same issue.

Basically, you just can't afford to pay 1000's or 1000000's of people indefinately. The costs are just too much.

You can bash CFO's and CEO's and the like and sometimes it is well deserved.

But how do you determine the appropriate compensation for someone like IBM's former CEO Lou Gershner? A guy, who lead IBM through the implosion of their industry (mainframe computers and other hardware) and during which time, lead the company to not only survive but thrive and increase revenue to 85 billion or so. While preserving and creating jobs, maintaining a strong balance sheet, etc. etc. A couple hundred million seems like chump change to me, and a couple hundred million post retirement to ensure he's available to the new regime, again seems like chump change to me.

A last thought on this subject, I don't know of any CFO's or CEO's I've ever worked with or for who work less than 65-80 hrs. per week, 24/7. Vacation, that's funny, show me a CEO or CFO who's ever been unaccessible (to those who need them most, investors, Division Managers, Corporate Counsel, etc.) for more than 8 hours and I'll show you a former CEO or CFO.

The part I struggle with is the amount of pay versus knowledge, skills and abilities (KSA's). Why is it a fantastic first grade teacher does not make somewhere around a min. of $125,000, and participate in a 401K program with a 5%-10% match? Why is that an excellent EMT does not make a min of $125,000 with a 401K match of 5%-10%? And why is it a non-skilled laborer would be paid anything greater than market, say $35-45K, with a 3% 401K match? Can you imagine there are toll takers being paid more than $35K per year, more like double???? No offense to the toll taker, but I can't believe there's not a line of people, who for what ever reason have limited KSA's, lined up and willing to work for much less. Blows me away.

The part I don't get is, where did the capitalist economy go wrong? We'll be paying the price for some time to come.

Joel