U.S. Big 3 Automakers
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Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?
The chart above shows average hourly compensation for the Big Three ($73.20) and Toyota (TM) ($48.00), compared to average hourly compensation for Management and Professional Workers ($47.57), Manufacturing/Goods Producing ($31.59) and all workers ($28.48), data available here.
Should U.S. taxpayers really be providing billions of dollars to bailout companies (GM (GM), Ford (F) and Chrysler) that compensate their workers 52.5% more than the market (assuming Toyota wages and benefits are market), 54% more than management and professional workers, 132% more than the average manufacturing wage, and 157% more than the average compensation of all American workers?
Maybe the country would be better off in the long run if we let the Big Three fail, and in the process break the UAW labor monopoly, and then let Toyota, Honda (HMC) and Volkswagen (VLKAY.PK) take over the U.S. auto industry, and restore realistic, competitive, market wages to the industry. It might be the best long-run solution.
extracted from seeking alpha
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i thought chrysler from germans?
nv knew it was from US
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i thought chrysler from germans?
nv knew it was from US
maybe daimler chrysler mislead u. Luckily the german got pray to deity, that they spin off from Chrysler in 2007 holding on less than 20% stake and change it name to Chrysler. by the way, daimler has write off all this investment to chrysler to Zero. meaning they give up of gaining anything from this company!
In my opinion, the only bailout condition is the 3 must merge into 1 company. restructure wages, more small cars, and start to focus more on oversea market beyond USA.
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this is definitely mis management strategy on the part of Big 3.
Eg. Ford can already see it coming when the sales of their Ford focus was gaining popularity in EU and china. they could have divert mroe of their resources to building smaller cars and fuel efficient car to target EU and Asia market.
The model in which asia can choose from the big 3 auto are pathetic few. this is already the mistake of the big 3.
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CNN) -- Some lawmakers lashed out at the CEOs of the Big Three auto companies Wednesday for flying private jets to Washington to request taxpayer bailout money.
Chrysler CEO Robert Nardelli, left, and Ford CEO Alan Mulally testify on Capitol Hill on Wednesday.
"There is a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hand, saying that they're going to be trimming down and streamlining their businesses," Rep. Gary Ackerman, D-New York, told the chief executive officers of Ford, Chrysler and General Motors at a hearing of the House Financial Services Committee."It's almost like seeing a guy show up at the soup kitchen in high hat and tuxedo. It kind of makes you a little bit suspicious."
He added, "couldn't you all have downgraded to first class or jet-pooled or something to get here? It would have at least sent a message that you do get it."
The executives -- Alan Mulally of Ford, Robert Nardelli of Chrysler and Richard Wagoner of GM -- were seeking support for a $25 billion loan package. Later Wednesday, Senate Majority Leader Harry Reid reversed plans to hold a test vote on the measure.
An aide told CNN that Reid decided to cancel the test vote when it became clear the measure would fall well short of the 60 votes needed. Reid did, however, make a procedural move that could allow a vote on a compromise, which several senators from auto-producing states were feverishly trying to craft.
At Wednesday's hearing, Rep. Brad Sherman, D-California, pressed the private-jet issue, asking the three CEOs to "raise their hand if they flew here commercial."
"Let the record show, no hands went up," Sherman said. "Second, I'm going to ask you to raise your hand if you are planning to sell your jet in place now and fly back commercial. Let the record show, no hands went up.
"The executives did not specifically respond to those remarks. In their testimony, they said they are streamlining business operations in general.
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its amazing how these management people think.
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senile management people are divorced from reality...
we see it every day..
besides, where do you think a huge chunk of the 1st payouts to banks will go to if the banks are not reined in?
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the top people of coz....
think will go to help salvage situation first meh? Must fill up the pockets of the top b4 they can think of how to salvage (if it is possible). If not then must ask for 2nd payout to continue their thinking process and this process continues....
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DETROIT - GENERAL Motors will return two of its leased corporate jets, and Ford could sell some of its jets after intense criticism in Washington this week over the travel arrangements of their CEOs, who went there to plead for a US government bailout.
GM CEO Rick Wagoner was in the capital to testify on the company's dire financial situation, but his testimony was overshadowed by irate lawmakers who blasted him for flying on a private jet to ask for public funds and failing to make personal sacrifices in exchange for federal assistance.
Chief executives from Ford Motor, and Chrysler, who were also there to plead for US$25 billion (S$38 billion) in federal aid, came under fire, too, for flying to Washington in private jets.
GM spokesman Tom Wilkinson said on Friday that GM decided to return the aircraft because of a 'really aggressive cutback in travel'. The company, which is in cost-cutting mode, is scrutinising every trip, he said, but declined to disclose the name of the company from which it leases the planes.
Mr Wilkinson said the decision to return the leased corporate jets was made before this week's hearings and that the company in September returned two other of the seven jets it had at the beginning of the year.
'There is a perception issue,' Mr Wilkinson said of Mr Wagoner's travel to Washington on a private jet. 'We need to be very sensitive to that going forward.' He, however, said the company has not decided on what mode of transportation Mr Wagoner would take if had to travel to Washington again.
Mr Wagoner and Ford CEO Alan Mulally are required by their companies to fly by private aircraft for security reasons, according to documents filed with the US Securities and Exchange Commission.
According to Ford's proxy, Mr Mulally was required to use Ford aircraft for all business and personal air travel in 2007 for security reasons and his family and guests were allowed to accompany him.
The arrangement also covers travel by Mr Mulally's wife, children and guests on company aircraft for personal reasons without him at company expense upon his request to 'ease the burden' of moving to Michigan and away from family in Seattle, according to the proxy.
Ford's proxy said the only other person allowed to use corporate aircraft for personal reasons is Executive Chairman Bill Ford Jr.
The policy for Chrysler CEO Robert Nardelli is not required to be disclosed because the company is private.
Sceptical lawmakers took to task the three CEOs for their luxurious travel arrangements at congressional committee hearings.
'Couldn't you have downgraded to first class or something, or jet-pooled or something to get here?' Representative Gary Ackerman, a New York Democrat, asked the executives at a hearing held by the US House Financial Services Committee.
Even Democrats who said they were sympathetic to the automakers' plight expressed frustration that the executives used private jets while professing ruthless cost-cutting measures.
A Chrysler spokesman said the automaker also leases or charters jets. He, however, declined to comment on whether the company was rethinking the use of private jets for executive travel, saying it was a 'private matter'.
Late on Friday, Ford said it was exploring options for saving money on its corporate air travel, including selling the jets it owns. Ford, which has sold four airplanes and reduced its use of corporate aircraft by about half since 2005, owns five planes. Three are used for executive travel and two primarily for marketing teams.
When asked whether the review was a response to the criticism on Capitol Hill earlier this week, Ford spokesman Mark Truby said Ford's 'top priority is to continue to make progress in our plan'.
'We don't want anything to distract us, but we have been looking at all of our operations to reduce costs and operate more efficiently,' Mr Truby said.
According to Ford's proxy, CEO Mulally's compensation included US$752,203 in 2007 for personal use of company aircraft.
About two years ago, the head of Ford's North American operations, Mr Mark Fields, gave up use of a corporate jet for personal travel to his home in Florida after the arrangement came under criticism at a time when the automaker was losing billions and slashing jobs.
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Let them fail! Let thousands lose their jobs and let the economy collapse. Can't wait to see the fat cats die :) Workers will die too but that's just collateral damage. Those with cash is king now....can't wait for the mortgagee sales and fire sales to begin.
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Originally posted by oxford mushroom:
Let them fail! Let thousands lose their jobs and let the economy collapse. Can't wait to see the fat cats die :) Workers will die too but that's just collateral damage. Those with cash is king now....can't wait for the mortgagee sales and fire sales to begin.
Workers got nothing much to loose, work or no work also die, they knew it,..so they take life more easier, give and take. Unlike the rich ones, today financial woes and crisis is different from previous few, this one is hitting the rich to their kneels,...just imagine,..workers die or not die also eat one rice and one veg, for the rich to go back and eat like this...i think they will miss their wines, glamours, oysters, abalone, top resturants, top services...etc etc. So, let live and die. -
USA should have realized long ago that they cannot hope to beat the Japanese and the koreans. If they had really wanted to save their auto industry, they would have adopted measures that would ensure competitiveness.
Despite thousands of layoffs over the years, they remain the same - a failure of their management and should be allowed to fall.
2 million employees would be laid off, but what Detroit had lost, Boeing and many other industries that are competitive will gain.
America is not solely dependant on the auto makers to survive. They are an ingenious people and over the years, had blossom many competitive industries that remain unchallenged in our world. Their technologies are out of this world, their military industrial complex is a large force to be contend with.
These 2 million employees from auto industry would be better off working in those competitive industries, and would have better stability.
Like a toothache, it hurts, but only if one lets the bad tooth stays. Pull it out once and for all, and the pain will be gone. The american public funds would be better served in other industries of at least 190 million working adults.