Posted on 11/23/2015 5:20:38 AM PST by markomalley
New union contracts negotiated at American auto manufacturers will lead to a spike in labor costs after years of belt tightening.
The United Auto Workers approved significant contract adjustments at Ford and General Motors on Friday after months of tense negotiations. Those decisions—one by membership vote, the other by union leadership—come soon after Fiat Chrysler approved a new deal with dramatic pay boosts. Each of the contracts could reverse “much of the savings achieved by the companies over the last eight years,” according to a study first published in the Wall Street Journal.
The new GM deal would raise labor costs from $55 to $60 an hour, a 9 percent hike, according to a study of the deals from Kristin Dziczek of the Center for Automotive Research and Art Schwartz, a former GM labor executive and president of Labor and Economic Associates. The union contract at Ford also reached the $60 hourly rate over the next four years, a 5 percent increase from its current rate of $57. Those hike pales in comparison with Chrysler, where average hourly wages will spike nearly 20 percent from $47 to $56.
The Detroit automakers were forced to impose labor cuts in the wake of the 2008 recession that led to a multi-billion dollar taxpayer bailout of GM, which entered bankruptcy, and Chrysler, which was sold to Fiat. Ford turned down bailout assistance.
The new contracts would reverse many of the pay freezes adopted to control costs, as well as offset the tiered payment systems that allowed the automakers to hire new employees at lower pay and benefits than previous generations of union members.
Edward Niedermeyer, an auto epert who has closely followed UAW negotiations, told the Washington Free Beacon that the talks have ended up splintering workers, while driving up labor expenses at a fragile time. American-owned companies can afford short-term hikes because of high demand and large profitability of SUVs and trucks—classes of vehicles that are vulnerable to global fuel prices, which have been steadily falling.
“Workers better make smart investments with their new wage and bonus increases, because they come at the cost of their long-term position. They’ve weakened their long-term job security and they’ve failed to bandage the festering wound that is two-tier wages,” Niedermeyer said.
The union ran into snags getting the deal approved by its membership at GM and Ford plants. At GM overall membership approved the new contract 55-45, but skilled workers voted down the deal by a significant margin.
“Following receipt of these ratification results, meetings were held with the UAW skilled trades membership at each GM worksite in order to determine the issues for their rejection of the tentative agreement. Based on this feedback from the skilled trades membership, I have determined that further discussion with the company was needed,” Dennis Williams, the union’s president, said in a Nov. 13 press release.
After meeting with the company and skilled workers, the UAW executive council announced that it would ratify the new contract on Friday. Hours later, UAW membership at Ford narrowly voted to approve its deal.
“The voice of the majority has secured a strong future that will provide job security and economic stability for themselves and their families,” Williams said in a release.
Niedermeyer said that economic stability is largely dependent on gas prices and lending rates remaining low—something that may not be true in the future. Spiking labor costs only a few years into economic recovery could bring about the same conditions that led to the collapse of American auto manufacturing in the first place.
“This is a cyclical business, and the UAW has prioritized maximizing its position now at the risk of losing out big in the next downturn,” Niedermeyer said.
Whatever. It's called advertising. I understand if people don't want to give money to the unions. That's their thing. I get it. But I also understand that almost EVERY corporation gives money to both parties. Even the democrats. Even conservative companies. Even oil and gas companies. EVERYONE gives money to the DNC.
I want my money to go to American workers and American companies. Plain and simple.
Ford didn't take a dime of public money.
I’m not interested in funding some union that will turn right around and donate to Democrats..
So you're sure that the executives at Toyota, Nissan, Honda, and Daimler don't donate to Dems?
If you had bought Japanese cars, you'd have owned far fewer vehicles over that period of time. In fact by Japanese car standards, a car you drive for less than 10 years is a lemon. The Imperial Japanese Army killed 100K GI's. The UAW helped destroy the America you know by backing the Democratic Party in its quest to remake the nation into a combination of Sweden and some African hellhole. Are today's Japanese really the enemy?
American Brand or American assembled? What percent of the vehicle must be American sourced?
“I buy Toyotas—Eff ‘em.”
You are “Eff ‘em” your grandchildrens’ future, not unions or GM.
For every $100 you purchase in foreign made product, you are sending almost $1,000 in economic benefit overseas. This includes those hondas and toyotas “made in the US”, although the transfer is more like 750 to 800 instead of a grand.
Thats ok, future generations aren’t important, this is the “ME” generation, and we want it all now.
My wife likes to drive cars for ever. She had a Buick Ranier for 10 years before I made her trade it for a Cadillac SRX. In 10 years I put a battery in it. Air filter, oil and gas. That’s it. Me... I like new cars. I like to trade about every 3 years. I trade everything I own about every 3 years except my Martin d-41 guitar and my wife. Love the guitar.... the wife is to expensive to trade :)
Yep...
My 2004 Corolla has over 100K miles on it and hasn't needed any of that, nor any mechanical parts replaced. Transmission is fine, original clutch is fine.
Why should I pay lazy US union workers big bucks for American named crap cars? Toyoda's are assembled in the South right to work states.
And no taxpayer bailouts for them.
Stop funding the left.
That is labor cost, not employee pay. That is the thinking of most of Americans. That $15 min wage for a burger flipper cost the employer about $30-$40 an hour after payroll taxes, workers comp, uniforms, insurance and other benefits.
A lower income person can find a very serviceable car for $4,000.
Every company you do business with gives money to the left through lobbyists. Stop funding the left yourself.
>>60 bucks an hour to make sure a robotic arm isn’t putting the cup holder in the wrong place?? Sounds ridiculous to me. Also, it’s hard for me to think of them as private companies when tax
It said “costs” and not “wages”. There is a difference. It’s amazing what a corporate employee “costs” even if their actual wages aren’t that spectacular. All those “employer paid” perks such as benefits, wellness centers, EAP, etc all all to those costs of having a worker install cup holders.
But if you buy a car and the cup holder is in the wrong place, what would you do? Would you just accept it or would you demand that it be fixed? That costs money too. An hour of warranty work costs the manufacturer more than an hour of factory labor.
It is often a good business decision to pay a premium to get it done right the first time because rework and the bad feelings that a shoddy product cause are extremely expensive.
You think Toyota doesn’t give money to the DNC? Grow up.
I have never owned a foreign one. 4 Ford trucks, 2 GM trucks, and an old Jeep.
I don't see Obama bailing out Toyoda with borrowed tax money.
Your car's manufacturer should have gone through normal bankruptcy. They gave $$$ to Dems and get it back 1000 to 1.
And people won’t be able afford them. It is ubsurd how much a car costs.
Really???
No need to guess. The UAW is #21 with $44m to Dems and $200K to the GOP. Toyota, Nissan, Honda and Daimler don't make the top 100:
Totals on this page reflect donations from employees of the organization, its PAC and in some cases its own treasury. These totals include all campaign contributions to federal candidates, parties, political action committees (including super PACs), federal 527 organizations, and Carey committees. The totals do not include contributions to 501(c) organizations, whose political spending has increased markedly in recent cycles. Unlike other political organizations, they are not required to disclose the corporate and individual donors that make their spending possible. Only contributions to Democrats and Republicans or liberal and conservative outside groups are included in calculating the percentages the donor has given to either party.
NOTE: Federal law prohibits the use of contributor information for the purpose of soliciting contributions or for any commercial purpose.
Election cycle:
|
Rank |
Organization |
Total Contributions |
To Dems & Liberals |
To Repubs & Conservs |
Pct to Dems & Liberals |
Pct to Repubs & Conservs |
|
1 |
Service Employees International Union |
$224,273,550 |
$222,520,804 |
$1,294,169 |
99% |
1% |
|
2 |
ActBlue |
$194,439,211 |
$193,985,073 |
$59,727 |
100% |
0% |
|
3 |
American Fedn of St/Cnty/Munic Employees |
$94,708,977 |
$93,739,9 |
Ditto that. And I only wish the very WORST for GM.
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