[Rhodes22-list] Math Error

Ben Cittadino bcittadino at dcs-law.com
Thu Dec 18 15:30:09 EST 2008 

Bill;

I follow you, and you may have already covered this in earlier posts, but
your solution then is what?

 
Ben C.




Bill Effros wrote:
> 
> The average cost per car in the US today is $20,000.
> 
> The average benefits package per car for US auto companies is $1,500.
> 
> The average additional profit per car of foreign based car companies is 
> $2,400.
> 
> 10% is widely used as the labor cost per vehicle. (This number is said 
> to include health and retiree costs.)
> 
> $45 an hour is widely used as the average actual salary of all auto 
> workers whether they work on foreign or domestic based car companies.
> 
> Here's where the tap dancing starts:
> 
> If the average car is $20,000, and $2,000 (10%) is labor costs, and the 
> average benefits package for US based companies is $1,500, you are 
> saying that the average direct labor cost per car is $500 divided by $45 
> or just over 11. You are saying that the total amount of time it takes 
> to build the average car is slightly over 11 hours...seems unlikely to 
> me, even with the best robots in the world.
> 
> When you start trying to interpret these numbers differently, it just 
> gets worse.
> 
> This situation won't improve until people start to face the real 
> problems here. 
> 
> Bill Effros
> 
> 
> 
> Ben Cittadino wrote:
>> Robert;
>>
>> If by "shake the unions" you mean void their contracts with the unions
>> the
>> aswer is yes. This is the reason many people think bankruptcy is the
>> answer.
>> The Trustee in bankruptcy can, with the approval of the Court void any
>> contract the company would otherwise be required to honor; unions,
>> suppliers, dealers, etc.
>>
>> If you think the unions are the problem (labor casts are about 10% of the
>> cost of a car) then bankruptcy is your answer. I tend to think
>> incompetent
>> management is the problem, emphasizing short term quarterly profit
>> reports
>> for big bonus' over long term infrastructure planing and modernization of
>> plants with imaginative designs instead of more gas guzzling SUV's. The
>> unions didn't plan that garbage.
>>
>> Ben C.
>>
>>
>>
>> Robert Skinner wrote:
>>   
>>> Two questions:
>>>
>>> If they went into chapter 11, would the auto companies be able to "shake
>>> the 
>>> unions"?
>>>
>>> Can the auto companies function without the unions -- or have the
>>> managers 
>>> forgotten how to make a vehicle?
>>>
>>> /Robert O'Maine
>>>
>>> Brad Haslett wrote:
>>>     
>>>> David,
>>>>
>>>> It isn't fun watching the personal side of these events.  My oldest
>>>> son's roommate in Little Rock works at the family Jeep dealership
>>>> (Chrysler) that's been in the family for three generations. I doubt
>>>> they'll make it. On the other side of the equation, people in San
>>>> Antonio, Tupelo, Montgomery, Jackson, etc. are ready to hustle at $40
>>>> an hour. If we didn't allow for failure we'd still be driving Hudsons
>>>> and Packards.
>>>>
>>>> Brad
>>>>
>>>> On Wed, Dec 17, 2008 at 6:47 PM, David Bradley <dwbrad at gmail.com>
>>>> wrote:
>>>>       
>>>>> And too many dealerships holding too much finished inventory.  Now
>>>>> that the shock has worn off from the meltdown I'm remembering how
>>>>> perfectly awful the prospect of not being a leader in the steel
>>>>> industry seemed in the 70s.  Let 'em declare chapter 11 - no loan wi
>>>>> thout stiff terms.
>>>>>
>>>>> Bill Ford was being interviewed yesterday and still pandering to the
>>>>> UAW.  If Chrysler could shake the union and close a third of their
>>>>> dealerships they'd be well along the way.
>>>>>
>>>>>
>>>>> On Wed, Dec 17, 2008 at 4:34 PM, Brad Haslett <flybrad at gmail.com>
>>>>> wrote:
>>>>>         
>>>>>> David,
>>>>>>
>>>>>> Saw that earlier.  I flew the San Antonio trip all of October and
>>>>>> talked to the locals about the new Toyota Tundra truck factory there.
>>>>>> They've been doing mostly training and waiting for better times.  The
>>>>>> new Toyota factory in Tupelo, MS is slowing down opening.  Chrysler
>>>>>> usually shuts down for two weeks at Christmas for maintenance anyway
>>>>>> so this is only two more weeks of shutdown, but, the UAW workers draw
>>>>>> 95% pay during the shutdown. GM has some divisions that would do very
>>>>>> well on their own. The Corvette would be fine in its niche.  Shanghai
>>>>>> Buick is doing well.  Their trucks sell well.  I don't see how
>>>>>> loaning
>>>>>> them money will do anything but prolong the inevitable. They have the
>>>>>> same problem as the passenger airlines - too many seats chasing too
>>>>>> few asses.
>>>>>>
>>>>>> Brad
>>>>>>
>>>>>> On Wed, Dec 17, 2008 at 6:18 PM, David Bradley <dwbrad at gmail.com>
>>>>>> wrote:
>>>>>>           
>>>>>>> And so it begins.
>>>>>>>
>>>>>>> Time for Toyota and Ford to steal market share...
>>>>>>>
>>>>>>> Time for GM to fold up the rest and become Chevrolet Corporation...
>>>>>>>
>>>>>>>
>>>>>>>
>>>>>>>
>>>>>>> NEWS ALERT
>>>>>>> from The Wall Street Journal
>>>>>>>
>>>>>>> Dec. 17, 2008
>>>>>>>
>>>>>>> Chrysler said it will idle all manufacturing operations at the end
>>>>>>> of
>>>>>>> the day Friday for at least a month in an effort to align production
>>>>>>> and inventory with U.S. market demand.
>>>>>>>
>>>>>>> For more information, see:
>>>>>>> http://wsj.com?mod=djemalertNEWS
>>>>>>>
>>>>>>> For complete coverage of Detroit in Crisis, see:
>>>>>>> http://online.wsj.com/public/page/auto-industry.html?mod=djemalertNEWS
>>>>>>> __________________________________________________
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>>>>>>>             
>>>>>> __________________________________________________
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>>>>>>
>>>>>>           
>>>>> --
>>>>> David Bradley
>>>>> +1.206.234.3977
>>>>> dwbrad at gmail.com
>>>>> __________________________________________________
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>>>>> __________________________________________________
>>>>>
>>>>>         
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>>>>       
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>>>     
>>
>>   
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