[Rhodes22-list] UAW

Thu Dec 18 19:37:44 EST 2008

Rik,

Pension funding and the abuses associated with it is the "other shoe
to drop" in this economy.  In the interest of full disclosure, I have
a defined benefit retirement program but one of the first things we
did with our first contract is get it separated from the company with
our own oversight. The second thing we negotiated for was a "B" fund,
retirement funds in our own name that we control.  On top of that, we
have the ability to contribute to 401Ks.  I've seen my B fund and 401K
fund drop 40% in value in the last few months but no one is to blame
for that but Bradley - no one put a gun to my head and told me where
to invest.  What happened to the defined benefit plans at the airlines
in the 80's and the auto plants more recently is that they made bad
loans, bad investments, and used waaaaay too optimistic multipliers.
Where is this problem the worst?  Municipalities.  Most cities,
counties, and States would be technically insolvent if they tallied-up
the current pension obligations versus their current revenue streams
and balance sheets.  Social Security is facing the same problem but
that is another issue for another day.  There's a reason you live on
Mac & Cheese when you pay your own way through college.  America, it's
Mac & Cheese time! My employer just announced today that all salaried
employees across the board will take a 5% pay cut, 401K contributions
will cease until further notice, and bonuses won't be paid throughout
2009.  Fan got the notice today.  I'm affected but in a different way
- my pay hours are being reduced. Looks like we "went John Galt" just
in time.  On the bright side of things, I've been buying S-K tools at
25% of retail on eBay.  Life is good!

Brad

Brad

On Thu, Dec 18, 2008 at 5:48 PM, Rik Sandberg <sanderico1 at gmail.com> wrote:
> Brad,
>
> One more thing I found a bit dumbfounding: I was down in Kentucky at the
> lake for a while this fall. Sandy and I met some folks who have a small
> but very nice retirement home near a piece of property we own down
> there. This fellow retired with a pension from Ford after thirty years,
> I guess, at the age of 52. The dumbfounding part is, when you look out
> in front of the house, there's a PT Cruiser sitting out there.
>
> Jeez ... these people aren't even bright enough to support their own
> pension for God's sake.
>
> Rik
>
> Will Rogers often said, "There's nothing quite like money in the bank." He went on to say, "I'm not so concerned about the return on my money as I am about the return of my money."
>
>
>
> Brad Haslett wrote:
>> Rik,
>>
>> Ask PATCO members about holding a gun to your employer's head (1981).
>> And remember this, the guy who called their bluff was the former
>> President of a labor union (Screen Actors Guild).
>>
>> We'll see soon enough if Barry is made of the same stuff as Ronnie.
>> George sure doesn't seem to be.
>>
>> Brad
>>
>> On Thu, Dec 18, 2008 at 5:15 PM, Rik Sandberg <sanderico1 at gmail.com> wrote:
>>
>>> Herb, Ben, Bill, et al
>>>
>>> Somebody needs to figure out just what is considered a labor cost in
>>> these conversations.
>>>
>>> GM's labor cost is between 73 and 74 dollar per hour. This is not just
>>> wages, but wages plus all the benefits (health care, pension, job bank
>>> etc, etc.) that must be included as part of the cost of having a union
>>> employee in one of their plants.
>>>
>>> Honda, Toyota, etc, in other words, the nonunion plants in this country
>>> using American labor have a cost per hour of about 48 dollars including
>>> all their labor related expenses.
>>>
>>> Somebody needs to figure out when they have made a deal that is just a
>>> little too good and is about to end in a smoking pile of rubble.
>>>
>>> Chapter 11 would make these negotiations possible. Just throwing more
>>> money at the big three is just going to encourage more of the same poor
>>> behavior from both sides.
>>>
>>> Rik
>>>
>>> Will Rogers often said, "There's nothing quite like money in the bank." He went on to say, "I'm not so concerned about the return on my money as I am about the return of my money."
>>>
>>>
>>>
>>> Herb Parsons wrote:
>>>
>>>> Ben,
>>>>
>>>> Does that 10% represent ALL labor costs? In other words, are retirement
>>>> funds part of that calculation? If a man goes to work at the auto plant
>>>> at 25, works till he's 55 (30 years) and then retires, and then collects
>>>> full benefits for the next 30 years, that would add substantially to the
>>>> "labor costs."
>>>>
>>>>
>>>> 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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