Unions!

[lordmandeep]

Unions suck, look at GM.

THEY WILL NOT EVEN CONSIDER TAKEN A PAY CUT TO SAVE THIER JOBS!!

 

[gabe]

Unions suck, look at GM.

THEY WILL NOT EVEN CONSIDER TAKEN A PAY CUT TO SAVE THIER JOBS!!

What's a pay cut going to do? it would only work if they cut it down to third-world countries wages. Taking a pay cut wont save their ass. They did the right thing turn it down.

 

[nfitz]

What's a pay cut going to do? it would only work if they cut it down to third-world countries wages. Taking a pay cut wont save their ass's. They did the right thing turn it down.

Given that a bailout seeems to hinge on them taking a pay-cut, then a pay-cut could well save their asses (not sure about their ass's though).

What the 3 formerly known as big need is some kind of arrangement to relieve them of their legacy costs.

 

[ssk]

GM would still be in trouble even if the Union had agreed to work for free. The only reason the vote hinged on it because the Republican senator are ideologically anti-union. It makes more sense to blame Republican senators who place ideology over saving their country.

 

[Whoaccio]

GM would still be in trouble even if the Union had agreed to work for free. The only reason the vote hinged on it because the Republican senator are ideologically anti-union. It makes more sense to blame Republican senators who place ideology over saving their country.

I don't know how people can possibly say this, labor costs are the Detroit-3s single largest cost. If you take simple hourly wages, maybe. But including the benefits (jobs bank?), labor costs are clearly significant enough to impact GM's profitability. Today they are loosing about 900$ a car, while paying over 1,000$ in legacy costs alone. The Republican's decision wasn't driven by an idealogical anti-unionism (though i would agree it is present) but because it blatantly screws their districts. Most of these Senators are from Southern US states who have actually built quite a strong auto-industry with profitable manufacturers. To say to them that their workers, who earn 43% less than the Northern US states, will have to transfer x-billion in bailout funds to Detroit is unfair. No legislator in their right mind would tell their relatively poor constituents that they will be taxed to support people who earn 43% more than them.

 

[Whoaccio]

I will give the UAW some credit in that they have made significant concessions to the Big3 last year which have yet to really 'kick in.' I believe that over the length of their new contract, wages will drop on average by 25$ and they will now have 2-tier wage structures and some more efficient benefit systems. I can understand that for Gettelfinger it would be difficult to then go back with more concessions. The CAW though just seems out to lunch. They have basically told the Big3 to screw themselves and rejected anything approaching major concessions. So great, now CAW shops have a 27$ wage gap with the UAW. I don't understand how we expect any autojobs when you can cross from Windsor into Detroit and save 27$ an hour on wages. God only knows the gap between CAW shops and Mexican assemblers or US shops south of the Ohio River.

 

[lordmandeep]

First of all the Union is yelling at us for buying Foreign cars, which are mostly built in NA... lol Then they are saying that people should buy big trucks, so they can keep thier jobs.

Hello, people do not buy your product, thus you must make less, meaning less work or none!!!

First of all its not our fault, Chrysler's and Fords suck (THEY DO!) and that GM cars are gas guzzlers.


I will tell you the big difference between Honda/Toyota and the Big three.


It takes them almost claiming bankruptcy to finally really scale back production.

Honda which is doing way better, is drastically cutting production because they know they will not be able to sell their cars!!!


It is the simple mantra...

make what you sell
NOT sell what you make....

 

[nfitz]

Do the US big-3 even make any compacts or sub-compacts in Canada? When I've been buying cars, I've always had the criteria that it be locally made. And I've considered the Honda Civic, Toyota Matrix, Toyota Corolla, and Toyota Prius - which I thought was being built in Cambridge - though I'm not so sure about that now.

What small cars do Chrysler, GM, and Ford build in Ontario? Most of what I keep hearing about is minivans, SUVs, and pick-up trucks.

 

[Whoaccio]

What small cars do Chrysler, GM, and Ford build in Ontario? Most of what I keep hearing about is minivans, SUVs, and pick-up trucks.

GM Oshawa makes the Buick LaCrosse, Chevy Impalla & Chevy Camaro which are at least sedans. They make a few trucks too. Ford Oakville makes the Flex & Lincoln Cross Over which are at least small-ish SUVs (so called "cross over"). Chrysler's Windsor Assembly makes minivans (Grand Caravan, Town & Country, VW Routan). So, there are a few cars that aren't SUVs, but no compact cars.

Honda Alliston makes the Civic, which used to be a compact, but they also make the Acura MDX, Honda CR-V and the Ridgeline so the common perception that Jap cars are roundly 'compact' fuel efficient can be misleading. Toyota Canada makes the Corrola & Matrix as well as the Lexus RX. The Prius at the moment is built in Toyota City, but they are opening up a plant in Mississippi to handle N. America (no UAW/CAW, closer to L.A. & San Fran than Ontario).

You wont find many car companies building compact cars in high cost markets like the US or Western Europe. They are no where near as profitable as SUVs/luxury cars and pricing is much more competitive, so there is a strong push to offshore production in this category. In Europe, the Peguot 107, Citroen C1 & Toyota Aygo (which are the same car) are all built in the Czech Republic. The Ford Focus has plants in Russia, the Phillipines, Argentina, Spain while the VW Fox is built in Brazil and so forth. As far as I know, there are no plans to begin production of any new compact car in Ontario. It makes more sense to bring in cars from S. Korea and re badge them as Chevy's (see Daewoo Kalos).

 

[junctionist]

GM's midsize sedans built in Oshawa would be less affected by rising gas prices, because they're family cars with decent fuel economy and roominess.

The gap between the American-based manufacturers and the foreign makers has been most apparent in small cars. The foreign small cars have been more refined because in their home market, the elevated demand for smaller cars among different demographics isn't a recent development given their history of higher gas prices, compact urban real estate and taxes on car ownership.

 

[Brandon716]

Actually, GM/Ford/Chrysler's entire problem stems from legacy costs in the USA. I'm surprised the Canadian government is being so generous to an industry whose problem is an American problem.

Most people don't realize that GM/Ford/Chrysler isn't really paying their hourly worker much more than industry average in North America, but that they are footing the bill for every former employee's health care benefits and other unnecessary items due to agreements made decades ago. But they only pay these asinine bills to their former American employees and its in the hundreds of billions of dollars of agreements and guarantees.

Until the health system is changed in America, or they basically dump their former employees health benefits, the companies will be bankrupt forever.

I'm surprised the real problem hasn't been discussed, and that the problem is related to the American Government's failure to create a viable universal health plan for all of its citizens.

GM/Ford/Chrysler have nearly identical operating costs per employee in Canada vs the Toyota and other non-North American owned plants.

If anything they should be closing all the shops in America and expanding Canadian operations instead of asking the Canadian government for money. Its disgusting.

I think GM, Ford, and Chrysler should just dump all American operations and move their headquarters to Ontario if they want to save the company and can't work through the health care mess in Washington.

McGuinity should play cuthroat politics and offer the big 3 a plan to come to Ontario for a new HQ's and just let them dump all their American employees and let the Americans deal with the reason it failed in Detroit.

Its not Americans had the will to fix the real problem to begin with.

And the American media is a disgrace for not reporting the real problem and how to fix it. Only the CBC has thus far reported that the American health care legacy costs are over 90% of the reason the big 3 are failing. And even the CBC doesn't seem to be focusing on that point, it was just a footnote on the National the other evening.

 

[Whoaccio]

If anything they should be closing all the shops in America and expanding Canadian operations instead of asking the Canadian government for money. Its disgusting.

Really? I missed the MBA class where you move to the place where identical labor costs ~40% more, higher marginal tax rates, further from you're prime market over an increasingly paralyzed border. If GM really wanted to relocate, Mexico or China would be a better deal. (New Mexico if it had to be "domestic").

 

[ShonTron]

Actually, GM/Ford/Chrysler's entire problem stems from legacy costs in the USA. I'm surprised the Canadian government is being so generous to an industry whose problem is an American problem.

The reason is that the automakers would vacate Ontario first if Washington develops a rescue package and Canada doesn't. With the trashing of the Auto Pact, there's less incentive to continue building autos here. The lower dollar and the universal health care were also incentives, but the rise in the dollar helped negate the Canadian advantage. Also, even award-winning plants for quality and efficiency, like Oshawa Truck, are closing anyway.

Ontario is an interesting case. Honda has several plants in Alliston, and of course Toyota has plants in Cambridge and Woodstock, so we're a hybrid between Michigan/Ohio and the southern US states in terms of our auto presence. The Toyota Woodstock plant got lots of subsidies to open, much like the hypocritical southern Republicans who blocked the bridge loans.

 

[Brandon716]

The reason is that the automakers would vacate Ontario first if Washington develops a rescue package and Canada doesn't. With the trashing of the Auto Pact, there's less incentive to continue building autos here. The lower dollar and the universal health care were also incentives, but the rise in the dollar helped negate the Canadian advantage. Also, even award-winning plants for quality and efficiency, like Oshawa Truck, are closing anyway.

Ontario is an interesting case. Honda has several plants in Alliston, and of course Toyota has plants in Cambridge and Woodstock, so we're a hybrid between Michigan/Ohio and the southern US states in terms of our auto presence. The Toyota Woodstock plant got lots of subsidies to open, much like the hypocritical southern Republicans who blocked the bridge loans.

Well of course, its just the system at work, have to be fair afterall... If one government gives, the other one must give as well. Its whatever to serve the needs of GM and Ford and Chrysler.

Sick isn't it?

Heh, the health care memo hasn't really reached Whoaccio's door, but he has google and if he's interested he can research how health care legacy costs are what bankrupted Detroit.

 

[Whoaccio]

Heh, the health care memo hasn't really reached Whoaccio's door, but he has google and if he's interested he can research how health care legacy costs are what bankrupted Detroit.

I think I have mentioned in numerous posts before that health care costs are significant in the USA and a big contributor to the current situation. What you seem incapable of grasping though is that, once the UAW's current contract runs it's course, all in (including legacy costs, health care costs) costs will be 27$/hour lower in Ohio (let alone Mississippi) than Ontario. In case I am not clear; All in labor costs by 2011 (when the UAW's contract expires) will be 27$ an hour cheaper in the USA than in Canada. Just in case you still don't get this, Canadian labor (get this, even factoring for marginally higher legacy costs in the USA) will still be 40% higher than UAW labor.

And that is ignoring all the other strikes against auto manufacturing in Ontario; we are on the wrong side of a congested border, we have higher taxes, we have higher land values, we have stricter regulations, we are very far away from SW USA (the fastest growing region) we have anemic local car ownership and, just to reinforce the point, our labor costs (including legacy costs) are 40% higher.

EDIT: Our dollar is also very volatile, it is down atm but the past year has shown how volatile this can be. Even assuming that long term oil prices is flat (which most people on this board disagree with, hence the need for public transit right ?) it makes no sense for GM to invest billions in an auto plant, that exports 90% of it's products to the USA, to expose it's self to such currency instability. If 90% of their produce is going to end up in US showrooms, it would make more sense for them to assemble in US dollars rather than risk the CAD going back up to par and entire operation becoming unprofitable.

EDIT EDIT: Further, why would we try to out subsidize the USA? Fine, lets assume that it is economically imperative that we keep manufacturing jobs ect.. ect... Does anybody really think Canada can out subsidize the USA? Are we really going to play shot for shot with a country which routinely gives stimulus packages larger than our entire economy? Does anybody think this is a good idea? How can we possibly win this?