Exactly! By continuing to hurt GM they just continue to hurt themselves

 

GM basically spent $1.5 billion to close the plants they wanted to close and reduce their UAW workforce. All part of the strategic plan,

\I disagree. The UAW absolutely knows and recognizes ^^^ this UAW will always be like this. The only thing that could ever go in the UAW favor would be massive tariffs on imported cars and a complete shutdown of Mexico/Canada/US trade...but will never happen

 

GM has not grown any market share in perhaps 30 years. While still #1 in the US, each and every year a small number of their share decreases. Consumers truly do not care that there was a strike, it is not like they could not buy a GM car in the last 5 weeks.

 

Yes and no. Saturn was extremely successful in the 1990s, until, in typical GM fashion, it was ruined in the 2000s.

GM actually lost most of its market share in the 1980s, when they did some of the most poorly-built products in tour history.

Again, yes and no. It goes beyond the strike....the strike was only a partial-manifestation. GM has ticked off customers for a number of reasons.

 

.............and then lost another $2B+ on top of that due to the strike. They might as well have left the plants open.

 

BMW, Mercedes in Germany are unionized, as is much of the German manufacturing sector. The relationship between workers and employers there is much better. Japanese corporate culture is also focused on collaborative work culture and avoiding layoffs... the exact opposite of how the domestic Detroit car manufacturing sector sees its workers.

The issue here is that GM doesn't want highly paid permenant workers. It wants temps and it wants off shore non-union workers. Yet this is a company that is profitable. It is not going broke. There's a saying: a company deserves the union it gets. GM wants disposable human robots to be discarded the minute a low cost outsourced labor force can be found elsewhere.

Yes the two sides have an adverserial relationship and they should be working closer together. The UAW is pushing back because it sees giving concessions as the start of a slippery slope. Look at the who's who of GM shareholder blocks and you see Wall Street money men and investment firms, whose main focus is on money not on anything else.

That's a very naive view of what GM's intentions were and that of the union. The UAW already knew it was going to lose jobs and plants - its members went on strike to save what's left of the workforce and fight for wages and health care etc.

The bulk of a UAW worker's salary is hourly + benefits. You make it sound like the profit share is more than the pay. If older workers want to take the retirement incentive cash and leave, good for them and good for GM if shaves salary costs. It's obvious what the long term goal is: get rid of as many UAW jobs as possible, especially at the senior levels. But it should be noted again: GM is not in financial trouble and it is not going bankrupt.

 

When I refer to $1.5 billion spent, I mean the loss.

 

Good point, I read an article, I think it was Kiplinger, that dealers increased their inventories in anticipation of the strike and probably lost little in the way of sales of profitable trucks and SUV's.

 

Yes. Something like 80 day supply, up from 50 or whatever they usually have. It also allowed GM to pretty much kill off their big sedan inventory as well as GM was not making anything

 

I keep hearing how great it is, yet bmw chose to build ALL of their suv’s in south carolina, usa. Wonder why?

and yet... japanese car companies now probably make more cars OUTSIDE of japan than in japan.

wrong. It doesn’t want labor that costs significantly higher than non-uaw auto plants leaving gm at a competitive disadvantage even if they’re profitable.

That will never happen. The uaw is bloated, corrupt, and lazy and has saddled gm with vast pension obligations that a former gm ceo made clear will only go away when enough retired uaw workers die.

They only have themselves to blame and gm management was stupid to having agreed to so much in the past, but the uaw was also a lot more powerful then and could point a metaphorical gun to gm management’s head. Now uaw wants to not only preserve the undeserved and bloated pay and benefits, they want to extend it to temporary workers who are probably only temporary and lesser paid because gm has few options given it’s already vast obligations to current and former uaw workers.

so? That’s what wall st. does.

on that we agree.

Just because they’re profitable recently, it doesn’t mean a market downturn or recession plus turmoil in the auto industry generally won’t put gm in a world of hurt. to quote Intel’s former ceo andy grove’s book title: only the paranoid survive. You can’t revel in the profitable times, you must always be on the lookout for trouble and always be striving for more.

 

Simple. Cheaper labor....the plant has not unionized. It costs more, in some ways, to build BMW products in Germany than in the U.S., even at UAW plants.

Makes sense if they are going to sell them in the U.S....saves on the long shipping costs across the ocean and loading/unloading them at the docks.



The idea that higher labor costs (within reason) means a competitive disadvantage has been debunked numerous times. It depends on many different factors, although extremely high costs (as in Germany) can have at least some effect.



One cannot call any assembly-plant job "lazy" if done correctly. Plus, I see nothing wrong with pensions. People who give 30 years or more of their lives to an organization deserve more than just a "Thank You" card at their retirement. Plus, the more pensions you have in the work force, the less need for Social Security, as SS benefits are limited or cut back if one is getting other income. At the rate we are going, Social Security will be bankrupt before long....its spending increases have been tremendous (and sometimes fraudulent).



Nope. Can't blame it on the union. Mary Barra triggered the strike by her actions.

 

GM still got most of what they wanted. 3 out of the 4 US plants will close, and now they snuck in a part warehouse. The workforce does not dramatically increase. UAW, on the other hand, did well if you are a rank and file employee for GM. The wages are up and the bonus is better. Plus their costs for health care did not increase. Rumors are that GM offered a better package at the beginning of the strike compared to what they settled for, but that is the way life goes.

I don't know if I would say they have themselves to blame. Intense competition from the manufacturers in the South, NAFTA and less restrictive trade policies all have helped diminish the UAW strength and importance.

No labor organization is going to voluntarily agree to give up wages, benefits etc.

 

I'm talking about their US plants. Their US plants are not unionized, and somehow their workers are happy and don't strike.

Unfortunately the changing economy has an impact on how businesses employ workers. The UAW is trying to keep a stranglehold on the past. Technology and outsourcing have caused dramatic labor shifts all over the country in nearly every industry. The bottom line is those jobs are just no longer worth what those workers are being paid. They just aren't. So the UAW forces GM to pay a dramatically higher than market labor rate which continues to put them at a disadvantage against their competitors which in turn makes them want to tighten strings even more, its a vicious cycle.

Guess why foreign nonunion plants have lower average labor rates? Because they employ more temps and short term workers because thats what the market has determined these positions are worth.

I can list dozens of other industries where this has happened and entire swaths of jobs have been wiped out or pay dramatically less than they used to. My own company, if this were 10 years ago even we would need twice the staff we have to run a business of our size. I'm not out employing twice as many people as I need out of the goodness of my heart. You can't prop it up and force a company to pay like the old days when their competitors dont.

 

I guess the 11k every worker gets if they approve the deal covers the loss of wages while they were out.

 

An article and an editorial in the WSJ yesterday looked into the proposed GM deal.

(1) The deal needs to be ratified by the 46K UAW workers to go into effect. That will happen over the next week. I'm guessing the workers will ratify, even though many workers were hoping for much better results.

(2) GM gives a bonus of $11K to each worker. The workers have lost about $6K while on strike.

(3) Three assembly plants will proceed with closing, and GM has not promised to bring work back to the USA from Mexico.

(4) Newer workers will make $32/hr in a four-year ramp-up rather than eight years.

(5) The average labor cost for GM is $63/hr versus about $50/hr for non-union foreign auto plants in the South.

(6) The union will have more control over hiring and firing even if there is a sales slowdown.

(7) GM is betting that labor peace is worth the risks, but brings it closer to the edge if the economy slows.

(8) Buyouts and retirement incentives for high-paid workers.

(9) Wall Street said that the terms won't "significantly" damage GM's outlook. They take a $500M hit now (bonuses) and their labor costs will be $100M higher annually. Over the four years and at current sales rates, the labor cost increase will be a bit less than $100 a car. Not a huge deal, but a trend in the wrong direction and there is more risk during a downturn. One could say the UAW hasn't yet "killed" the goose that lays the golden eggs, but it's fitted the goose with a tight collar.