On Feb 27, 2011, at 12:21 PM, mike wilson wrote: > On 27/02/2011 17:51, Paul Stenquist wrote: >> >> On Feb 27, 2011, at 10:37 AM, mike wilson wrote: >> >>> On 27/02/2011 17:28, frank theriault wrote: >>>> On Sun, Feb 27, 2011 at 11:20 AM, Bob Sullivan<rf.sulli...@gmail.com> >>>> wrote: >>>>> And Frank, >>>>> I want to tell you something that will make you happy. >>>>> We visited rich friends in a gated community in Naples Florida. >>>>> 4 people on their block were early retirees from General Motors. >>>>> Their pension benefits were capped at $72K. >>>>> (I know that's a lot, but it's a lot less than they were getting.) >>>>> And the highest ranked among them has already sold and move back to >>>>> Michigan. >>>>> They were all drawing money from 'defered compensation plans', >>>>> where GM held back some salary to pay them later at a lower tax rate. >>>>> Guess what. In bankruptcy, all those funds go to the creditors. >>>>> It puts a 6 figure crimp in their lifestyles... >>>>> Regards, Bob S. >>>> >>>> That doesn't make me particularly happy, Bob. First of all, I'm sure >>>> these people worked hard for their money, often working long hours, >>>> weekends, with many business trips and lots of pressure. I may not >>>> agree that the work they did was for the betterment of all, but they >>>> had every right to rely on agreements made with their company and to >>>> pattern their life accordingly. >>>> >>>> The fact that due to GM making bad decisions they lost their pensions >>>> or a portion thereof only means that creditors got that money - and >>>> I'm sure that banks reaped most of that benefit. I'd rather see the >>>> money in the hands of an individual than a huge faceless corporation. >>>> >>>> I don't think there's anything happy about your story. >>> >>> Agreed. If they had been in a union, it would hopefully not have allowed >>> those funds to be kept in a place available to creditors. Did GM actually >>> go bankrupt? >>> >>> -- >> GM declared bankruptcy and was reorganized as two companies: one held the >> bad assets, and the new GM held the good assets. It was a necessary step due >> to way too many dealerships that had become non performers but had franchise >> agreements that compelled GM to continue to keep them in business. It was >> also necessary due to onerous obligations to the union. Many of those >> agreements were made at a time when the Detroit automakers monopolized the >> U.S. car market. The union would strike, and the automakers would give them >> whatever they wanted and roll it into the price of the cars. That usually >> meant taking quality out. > > So bad management practice, at least as much as greedy unions.
Bad management? Some of those strikes went on for months. The unions held a gun to the head of the auto industry. > >> >> Now, many of GM's union obligations have been brought more in line with >> reality, although they are still more of a burden than other automakers have >> to contend with. Toyota, Honda and most other foreign automakers build cars >> in non-union U.S. factories, located in right-to-work states (states with >> laws barring compulsory union membership). The lack of union commitments on >> the part of other auto manufacturers made the Detroit automakers union >> contracts untenable if they were to compete. > > This is what I find hard to understand. Workers organise themselves to > improve their conditions. Weekends off, paid holidays, health benefits, > living wages. Management did its best to minimise those improvements and > continues to do so. Yet in the USA the very people who would benefit from > the organised effort are often, it seems, the ones who oppose it - the > working class. They seem to have a classic death wish in their urge to > participate in a race to the bottom and the people who are orchestrating the > race are held up as bastions of industry, opposing some kind of socialist > takeover of the American dream. Utterly bizarre to the outside, > dispassionate viewer. > > There also seems to be a more noticable corruption problem in US unions than > many other places, although the people that I talk to about it are equally > vehement about corruption in politics, media, police forces and business. Unions literally became management in the auto industry because they held all the cards. GM's reorganization gave the union a stake in the company. If the company is not profitable and competitive, the union workers lose. That has helped change things. Now some of the newly reorganized plants allow a second level of workers who earn salaries comparable to what Toyota and Honda workers make. The older workers are still grandfathered into much larger salaries and benefits, but there is some balance and hope for the future. The small GM car that will replace Aveo is being built at the Lake Orion, Michigan plant under such an agreement. Some tax breaks from the state and township will help make it work as well. It will be a competitive small car built in a Michigan plant. > >> >> GM has already paid back a substantial amount of its government loans, and >> the government has been selling off its GM stock at a profit. The same is >> happening at Chrysler, although at a slower pace. The industry bailout was >> well planned and well executed. It saved a major U.S. industry and an entire >> region, and in the end, it will cost the taxpayers nothing. >> Paul > > It will be interesting to see how things work out for the big three over the > next decade or so. They've made remarkable progress in just a year. I expect to see very good things down the road. > > -- > PDML Pentax-Discuss Mail List > PDML@pdml.net > http://pdml.net/mailman/listinfo/pdml_pdml.net > to UNSUBSCRIBE from the PDML, please visit the link directly above and follow > the directions. -- PDML Pentax-Discuss Mail List PDML@pdml.net http://pdml.net/mailman/listinfo/pdml_pdml.net to UNSUBSCRIBE from the PDML, please visit the link directly above and follow the directions.
