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The U.S. Auto industry, or should I say the "Top Three" automakers, are in trouble. Both GM and Ford are reporting massives loses and doubt that they will be able to continue operations if they do not receive additional "bail-out" money from the Federal government (Taxpayers)...
Democratic Speaker of the House Nancy Pelosi is doing her best to bring more of this taxpayer aid to save the Big-3 automakers and the jobs they represent. Possibly her actions are to secure additional “bail-out” money so to prevent the Big-3 auto manufacturers from having to go into bankruptcy courts where many of the negotiated Union Auto-workers would be subject to cancellation or change. Unions are a very large voting bloc for the Democratic Party and this may be a significant reason for Pelosi’s actions… Do you Think!!!…
As analyzed by Harbour-Felax, labor costs the Detroit Three substantially more per vehicle than it does the Japanese
Health care is the biggest chunk. GM (Charts), for instance spends $1,635 per vehicle on health care for active and retired workers in the U.S. Toyota (Charts) pays nothing for retired workers - it has very few - and only $215 for active ones
Other labor costs add to the bill. Contract issues like work rules, line relief and holiday pay amount to $630 per vehicle - costs that the Japanese don’t have. And paying UAW members for not working when plants are shut costs another $350 per vehicle.
For those of you keeping score at home, that’s approximately $2,615 in costs per vehicle manufactured which GM has to pay (and thus pass on to its customers) that foreign automakers don’t. But that’s just the beginning. Labor work requirements, which state that workers can’t be laid off even when the auto company has no work for them, cost the auto industry even more:
"If an assembly plant with 3,000 workers has no dealer orders, it has two options. One is to close the plant for a week and not build any cars. Then the company still has to give the idled workers 95 percent of their take-home pay plus all benefits for not working. So a one-week shutdown costs $7.7 million or $1,545 for each vehicle it didn’t make"
"If the company decides to go ahead and run the plant for a week without any dealer orders, it will have distressed merchandise on its hands. Then it has to sell the vehicles to daily rental companies like Hertz or Avis at discounts of $3,000 to $5,000 per vehicle, which creates a flood of used cars in three to six months and damages resale value. Or it can put the vehicles into storage and pay dealers up to $1,250 apiece to take them off its hands"
Management for the auto manufacturers are also very much responsible for the state and condition of the American owned industry for they have negotiated and signed off on the contracts that have led to where they are now… But should the Federal government once again “bail-out” an industry that has gotten itself into trouble by their own “greed” (both Mgmt and Unions) and actions?
In the past I have bought American made vehicles such as Chrysler, Chevrolet, and General Motors products, to support the American worker. I do not wish to see harm to those retired workers who put their time in and are looking to get their promised benefits. But with these bad deals that were made by BOTH sides resulting in an additional $2,615 tacked onto a GM price tag, should the government bail these guys out with our tax money? And with Honda and other auto manufacturers operating plants in Texas, the Carolina’s, and other states, should I not buy a auto that was made by American workers in these plants?…
