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November 19, 2008

Flashback: Billions Paid to Keep 12,000 Downsized UAW Workers Paid, But Not Working, Unless You Consider Doing a Crossword Puzzle all Day "Working"

Warden sends this with a not very nice reorganization plan:

Step One: Eat Shit UAW

Step Two: Die

A bit harsh. But what on earth do these people -- the union, and management which bowed to the union -- expect when they're doing insane things like this?

And any "bailout" (really a permanent taxpayer subsidy of far too high UAW wages) simply goes to keeping nonsense like this in place.

And don't say their wages are "far too high" as some sort of judgment about the value of their work. I say they're far too high based on the objective fact that they cannot produce a competitive product at those rates. And add in that non-union plants in the South and other areas of the country pay their workers $43.00 per hour in total benefits -- a pretty decent wage for manufacturing work requiring little previous skill -- while the UAW insists on $73.00 per hour.

You get almost double what other workers are willing to work for why, exactly? I can't imagine any moral claim to such rates.

As a reader pointed out, we can buy good American-made cars -- but they come from Japanese or Korean companies operating plants in non-UAW shops.

From a 2005 article:

Ken Pool is making good money. On weekdays, he shows up at 7 a.m. at Ford Motor Co.'s Michigan Truck Plant in Wayne, signs in, and then starts working -- on a crossword puzzle. Pool hates the monotony, but the pay is good: more than $31 an hour, plus benefits.

"We just go in and play crossword puzzles, watch videos that someone brings in or read the newspaper," he says. "Otherwise, I've just sat."

Pool is one of more than 12,000 American autoworkers who, instead of installing windshields or bending sheet metal, spend their days counting the hours in a jobs bank set up by Detroit automakers and Delphi Corp. as part of an extraordinary job security agreement with the United Auto Workers union.

The jobs bank programs were the price the industry paid in the 1980s to win UAW support for controversial efforts to boost productivity through increased automation and more flexible manufacturing.

As part of its restructuring under bankruptcy, Delphi is actively pressing the union to give up the program.

With Wall Street wondering how automakers can afford to pay thousands of workers to do nothing as their market share withers, the union is likely to hear a similar message from the Big Three when their contracts with the UAW expire in 2007 -- if not sooner.

"It's an albatross around their necks," said Steven Szakaly, an economist with the Center for Automotive Research in Ann Arbor. "It's a huge number of workers doing nothing. That has a very large effect on their future earnings outlook."

General Motors Corp. has roughly 5,000 workers in its jobs bank. Delphi has about 4,000 in its version of the same program. Some 2,100 workers are in DaimlerChrysler AG's Chrysler Group's job security program. Ford had 1,275 in its jobs bank as of Sept. 25. The pending closure of Ford's assembly plant in Loraine, Ohio, could add significantly to that total. Those numbers could swell in coming years as GM and Ford prepare to close more plants.

Detroit automakers declined to discuss the programs in detail or say exactly how much they are spending, but the four-year labor contracts they signed with the UAW in 2003 established contribution caps that give a good idea of the size of the expense.

According to those documents, GM agreed to contribute up to $2.1 billion over four years. DaimlerChrysler set aside $451 million for its program, along with another $50 million for salaried employees covered under the contract. Ford, which also maintained responsibility for Visteon Corp.'s UAW employees, agreed to contribute $944 million.

Of course, if you're paying these guys that much anyway, you could require them to, say, put finished cars through more rigorous quality control checks, a zero-defects program, and fix all those cars that come short, at least getting some degree of bang back on your dollar.

But that's not what the union demanded. The union demanded, I guess, either the same work at the same pay or no work at reduced pay.

They extracted this in exchange for "more flexibility in manufacturing" -- which I take to mean reassigning, say, a welder no longer needed to window installation, where he was needed. The unions famously make all sorts of nonsensical demands like this -- who really cares what they do on the floor if they're getting paid? -- but then they only relent on the idiotic demand when extracting more concessions and demanding more money.

These are not bona-fide "demands" and should not be treated as such. It shouldn't take "management concessions" to move a guy from engine installation, where he's not needed, to transmission installation, where he is.

The goose that laid the golden egg went out of business, too, after it increased its labor costs to $300 per golden egg, each of which could be sold for only $250.

But geese don't understand math. At least they have an excuse.

This is like the once-a-decade baseball strike. You start by siding with the players... yeah, management really is making a lot of money... but then you realize the average starting player is making something like $700,000 per year and the average salary for a veteran is in the millions and you quickly decide you don't care who wins and who loses, but both should just shut up and stop with the PR statements and attempting to elicit your support.

These people are being paid good money. With a 15% pay cut and say a 10% reduction in health care and pension benefits, they would still be among the highest paid workers in the country.

Yes, I support blue-collar workers getting as much out of management as is economically feasible-- but no more than that. Past that point and I'm expected to begin paying a fraction of their salaries, aren't I?, because management simply can't afford it.

You guys work it out yourselves. Don't whine to me about an average salary of $100,000. I don't make anywhere near $100,000. Maybe you guys should consider subsidizing those who make less.

Detroit cannot be saved. Move Detroit to South Carolina, Tennessee, Arkansas, etc., and the American auto industry might have a chance.

It's Old: Article dates from 2005. I assume nothing has changed. Nothing ever does.

Thanks to a reader for pointing that out.


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posted by Ace at 05:22 PM

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