Chrysler learns the effects of union labor the hard way

Today it was announced that 13,000 jobs were to be cut from Chrysler's assembly lines. This is yet another harsh reality for industries such as the automotive sector that for years blocked foreign entrance to the US market.



To blame outsourcing is a wrong but common conclusion that many look to when they are laid off. The US labor market has changed greatly from the outsourcing of the 1980's. Rather than ship jobs overseas, like the clothing industry, the automotive sector is too costly to import good from offshore.

The reality of this latest lay off in a superior good in the market stealing market share from the big three, but that superior good is made inside the US. This is not outsourcing but workers and consumers finding that non-union goods are at many times better than their organized labor counterparts.

ATS Minimum Wage Thread

[edit on 14-2-2007 by CAConrad0825]

I live in Warren Michigan a block away from the Chrysler plant. Almost every single person I know depends on the auto industry. My grandparents retiered from Chrysler, my dad and best friend work at Ford. I work for a wholey owned subsiderary of Ford.

What do you know about outsoursing?

I've seen many tool and die shops closing in my area because the work is being oursoursed to China. Is it better made? NO its pure garbage being made at 1/20th the cost. But it costs less to have it made there, then shipped here, and fixed up. I've seen it first hand.

The unions are there to make sure the employees don't get taken advantage of.

I geuss the world would be a better place if we all worked at Walmart.

Back in the 1970's, I worked in a factory that manufactured car parts. This was during the time that Chrysler was having it's big problems and the government had to bale them out. At that time I saw on TV that the average pay of a Chrysler employee was $27/hour including their benefits, I was making $2.89/hour including my benefits yet I still had to pay the same price for a new car. I think that unions drive the price of goods way too high. Face it, the price of an automobile has got way out of hand and is getting out of reach of more people every year. I understand that there is a time and place that unions are needed, but if they are not needed they can price their products out of a market.

Originally posted by wantsome

I geuss the world would be a better place if we all worked at Walmart.

We'll probably all be working for Wal-Mart before it's over. They'll just be loading us up on planes and shipping us to China so they won't have to pay us more than a dollar a day.

I work for an OEM supplier to the auto industry. Even though we've put ALL our nationwide competitors out of business the company is still building plants in Mexico. What they produce is crap and it's shipped to our in country plants to fix before it's sent to the purchasers.

I'm seriously going to start looking for another job.

Once again let's blame the unions. It's can't be poorly designed and engineered vehicles, can it? It can't be that, once again, the big three are guilty of failing to look ahead and introduce cars that are fuel efficient and attractive. No, everyone knows that the entire American consumer market wants huge trucks and SUV's that get 15 mpg and takes a hundred dollars to fill up. Sarcasm aside, there's plenty of blame to go around.

I worked as a contractor in the engineering department at one of the big three for a few years, and I feel that the unions are much to blame for the poor quality of the cars, and their cost to produce. When everyone working the assembly line is making at least $80K a year down to the guys that sweep the floor, that is a bit much, and when there is a union for each major group of people in the company (electricians, assembly line workers, engineers, maintenance, etc). The only guys that seemed to have a salary in line with their performance were the contract guys like myself and the non-union personnel.

I could tell horror stories about the things I saw many of the union personnel do without regard to the harm that it might have on the company as a whole. The same thing applied to many of the airlines unions that I was exposed too. The airlines finally wised up and most of the ones with the strong embedded unions are now bankrupt. Unions were a fine thing back in the day when companies treated their employees unfairly, but those days are long gone now, and the unions now only create a rift between the companies and the employees, they promote laziness and a general lack of care of what’s in the best interest of the company as a whole, plus they drive up the bottom line making our products unable to compete in the world economy.

I mean really, these guys need a serious reality check when they have guys with a high school education working in building maintenance making as much as a nurse with a four year degree that saves lives for a living…

Also a lot of these guys are second or third generation in these positions, and they feel very entitled to these jobs and that level of pay. Pretty soon though, foreign cars with their better mileage, better maintenance, and their lifespan into the 500K mile area will put the US companies out of business. The union reps will laugh all the way back to their homes on some tropical island, and these guys that have milked these jobs are going to be in for a rude awakening…

It happened to Eastern Airlines.
It happened to Pan Am.
I predict it will happen with one of the big three next.


[edit on 2/14/2007 by defcon5]

defcon
Good post, and I agree with much of what you said.

I could tell horror stories about the things I saw many of the union personnel do without regard to the harm that it might have on the company as a whole.

Indeed, maybe one solution could be profit sharing? Where I work, this concept has really paid dividends in terms of worker participation in thinking about what's good for the company as a whole, because doing so has a visible (more like spendable) payoff at the end of the year.

At least once a week, I hear someone mention profit-sharing in passing, in relation to reducing waste or suffering hardships or going that extra mile to get a job done. Obviously this program has increased the level of consciousness in my workplace, and that's money in the bank for the company. Employees who are actively engaged in finding ways to make a company profitable are worth their weight in gold (and worth twice their weight in consultants ), as far as I'm concerned.

The way I see it, people should have a greater capability to look into the future and predict the consequences of their actions, but most can't. They just can't.

Everyday there are people who rob liquor stores and banks, and for what? Sixty percent of those guys wind up in prison jumpsuits, and the end result is that they traded 5-10 years of their lives for a few measely dollars. It's a stupid gamble, but people make it every day.

Similarly, Vegas is still making money, year after year, because the average person SUCKS at understanding the concept of odds and ROI/RVR (return on investment/risk versus reward).

It needs to be made real simple for these people, because many of them fail to understand anything that requires serious contemplation. Not a slight against Americans, or union employees - just talking about people in general here...

Unions were a fine thing back in the day when companies treated their employees unfairly, but those days are long gone now, and the unions now only create a rift between the companies and the employees, they promote laziness and a general lack of care of what’s in the best interest of the company as a whole, plus they drive up the bottom line making our products unable to compete in the world economy.

That's fine, and mostly true, but what happens when those days come back? We unionize again, I guess.

It just seems a shame to get rid of unions when all we really need is to foster a common understanding of the consequences of stubborness and greed on the part of the unions.

I think that if we do away with worker unions entirely, we'll be right back where we started in no time at all. Things are only different right now because a lot of people fought very hard, and suffered, to push through the necessary changes.

We ought to cherish that contribution, without giving a free pass to people are in danger of hurting not just themselves, but entire companies and, indeed, entire nations as a result of their nearsightedness.

I mean really, these guys need a serious reality check when they have guys with a high school education working in building maintenance making as much as a nurse with a four year degree that saves lives for a living…

Yeah, that is nonsense.

But everyone does deserve a living wage, and the majority of new jobs in this country, the jobs being created and touted all over the news as evidence of our 'strong, resilient economy' are just crap service jobs that don't pay enough to cover basic necessities.

We need to find a middle ground, between exhorbitant wages and the pittance most uneducated people have to find a way to live on in this country.

I'm less bothered by 20-30 dollar union wages, than I am by the multi-million dollar salaries enjoyed by do-nothing executives. At least the janitor sweeps the floor fer chrisakes...

Anyway, I enjoyed your post. Thanks for contributing.

[edit on 14-2-2007 by WyrdeOne]

Originally posted by WyrdeOne
Indeed, maybe one solution could be profit sharing? Where I work, this concept has really paid dividends in terms of worker participation in thinking about what's good for the company as a whole, because doing so has a visible (more like spendable) payoff at the end of the year.

I am pretty sure that they had profit sharing at the company I was at, hint it started with “F”…
Let me give you an example of a situation:

We had a big event we had to set up for that had to be done by a specific time and we needed to move computers around to get the job done. This meant that we had to call in a Union electrician rather then just move the equipment ourselves as the union would grieve your department if we did the work. So we had to waste literally hours of effort and manpower sitting there waiting for a Union electrician to finally get there and get the job done. I don’t even want to know what that cost the company in man-hours, but it had to be a fortune.

This is only one example I can give thousands more just as bad or worse.
Is profit sharing going to stop an event like this from happening, I doubt it because the attitude seems to be that if they perform their jobs efficiently that they will be less of them needed, and rapid response will be expected of them from that point onward.

Originally posted by WyrdeOne
It needs to be made real simple for these people, because many of them fail to understand anything that requires serious contemplation. Not a slight against Americans, or union employees - just talking about people in general here...

I think that it will be hard to fix because the union mindset is too embedded in many of these folks, and being lazy is human nature. You are basically going to be fighting human nature to change the work ethic in a group where poor work ethic has been promoted for so long its all they know.

Originally posted by WyrdeOne
That's fine, and mostly true, but what happens when those days come back? We unionize again, I guess.

States like Florida that don’t support unions don’t seem to have a problem with this. The state and the federal government have enough laws I place now that companies can never go back to the old “Coal Police and Company Store” type abuses that started the unions in the beginning.

Originally posted by WyrdeOne
It just seems a shame to get rid of unions when all we really need is to foster a common understanding of the consequences of stubborness and greed on the part of the unions.

But that is their main selling point, they sell the fact that an employee can give up a part of their wages, and not have to work as hard as the next guy that is not a member. I have heard of employees with a good work ethic being told to stop being a good employee because they were in a closed shop factory and making the other union folks have to work harder.

Originally posted by WyrdeOne
Yeah, that is nonsense.

It is not non-sense, a nurse makes roughly $50 to $80K a year. A friend of mines father retired from a big three company as a union person in building maintenance he was pulling in $150K a year.

The ramp agents at Eastern Airlines were making around $80K a year, and they would have would have 8 ramp agents and 2 tuggers per flight. Right next door they had a contract company ramping the same type of aircraft with only 4 ramp agents 1 tugger, and those guys were making about $12/hour.

Guess which company is still in business?

Originally posted by WyrdeOne
Anyway, I enjoyed your post. Thanks for contributing.

Even if I don’t agree 100% with your post, good post, and thanks…

Oh... btw, I spent a year as a union shop steward myself before I saw what BS the union was at the airport and quit. So I have been on both sides of this debate.

Originally posted by defcon5

Originally posted by WyrdeOne
Yeah, that is nonsense.

It is not non-sense, a nurse makes roughly $50 to $80K a year. A friend of mines father retired from a big three company as a union person in building maintenance he was pulling in $150K a year.

The ramp agents at Eastern Airlines were making around $80K a year, and they would have would have 8 ramp agents and 2 tuggers per flight. Right next door they had a contract company ramping the same type of aircraft with only 4 ramp agents 1 tugger, and those guys were making about $12/hour.

Guess which company is still in business?

Oh, sorry I think I misunderstood you…
Re-reading it maybe you were agreeing that it was non-sense not disagreeing with it.
Misunderstanding on my part.

Yeah, I was just agreeing with what you said.



I wasn't trying to say that your comment was nonsense, just that the situation is nonsense.

A major problem for the US car industry is that domestically produced goods are too costly to compete with cheaply made foreign goods, this is down to higher material costs and also the higher wages demanded by local workers to meet the cost of living, which is only natural.

This however might not be so fatal for the domestic car industry if the cars themselves were better than the cheaper alternatives as a sizeable number of buyers would still choose quality first. This is not the case however as the majority of US produced cars are complete crap, poorly put together and trimmed with some of the nastiest plastics and most dreary looking interiors around. The barge-like handling qualities and excessively bouncy suspensions of American cars are a well established joke on this side of the Atlantic and the miserable state of the latest products from Chrysler and Cadillac were mercilessly exposed on the last series of Top Gear when they were compared with their rivals. I myself evaluated the Chrysler Neon when I last changed my car as I was beguiled by its smart appearance but as soon as I began to drive it I just wantwed to stop and get out. I ended up buying a French Citoen C5 because it was spacious, comfortable, nice handling and very cheap, NONE of which applied to the Chrysler.

This is the issue that the US car industry needs to address if it trul;y wants to be competitive and flourish.

For an example of what not addressing these issues can bring about look no further than the UK car industry. From a position of massive strength in 1970, in which you could choose your family car from the well established traditional makers like Ford, Vauxhall, Hillman, Triumph, Humber, Singer, Austin, Morris, Riley, Wolseley, Sunbeam, Rover, Jaguar or MG, not including the prestige marques, here we are, in 2007 following the closure of Rover, without one solitary UK owned family car manufacturer remaining.

America, be warned.

Engineering aside one of the reasons I will not buy another new car is the inflated cost. A buddy of mine just bought a Tahoe with lots of options for $42K! Good lord that is crazy for a glorified truck. My last vehicle was a minivan in 2001 for $27K. It's used vehicles from here on out for me. I have the ability to rebuild them and maintain the cars so that is my choice.

I work for a union in the telecomm field and let me tell you the attitudes and actions (actually lack of action) of fellow employees drives me nuts. There is no incentive to do better or go above and beyond. Management doesn't have the stones to go toe to toe with the union so many members do absolutely nothing all day. I came from a military background and I have a high work ethic. It's a serious moral suppressor when you can bust your arse all day and some shlub can sit on his duff and do nothing, get the same paycheck, and there will be no consequences. I have been doing this for 8 years and I've only seen one person fired out of thousands I have worked around. An even harder truth is if you are female and a minority you can get away with practically anything becuase this company wishes to maintain it's compliance with EEOC standards.

I stay because of the high hourly wage and medical benefits. My pay and benefits are better than my supervisor! Management and non-management are bass ackward in this company. I just wish there was something in union enviroments that provided an incentive to do better.

Also, how did unions ever become entrenched in our public schools? Shouldn't the best of the best be teaching our children not some tenured individual who is only there for a paycheck? NEA is a joke!

Unions may be part of the problem but management structure, research and develpoment, and product quality are most likely to blame. I remember watching a program that said it cost Ford $2 billion dollars to develop the freaking Taurus! Why that much money for a crappy family sedan????

Toyota is taking the lead for a reason, and that reason is they are one step ahead of their American competitors in nearly every field.

As another poster stated up above, unions were a good thing at one time, but they're no longer needed. I have seen several comments above about how we need these higher paying union jobs...bleh bleh bleh. The fact is that part of the reason the cost of living is the way it is currently is because the unions are driving up the costs.

I have had one union job in my career. I was a member of the United Auto Workers, although I didn't work directly in an auto plant. I worked in a welding/assembly factory that turned out the steel racks that the car parts are shipped in. My time at this location ruined my opinion of unions forever. I saw the same things others have mentioned. Lazy people, taking advantage of the situation...and I was one of them.

We actually had quotas that the union had determined was a fair hours work depending on what you were doing. Most of these quotas were so low that we could complete a full 8 hour day's quota in around 2 hours. The other 6 hours were spent sitting around, eating, playing cards, and smoking cigarettes. Of course, the management couldn't do anything about it because they were scared of what the union could/would do. On one occasion, we had all met our quotas and the management needed to push a shipment out...so they actually agreed to buy pizza for my entire crew just to get an extra hour of work out of us. The other striking thing, although I don't know if this is in all union shops... drugs were out of control in this place. Anything one wanted was easily available...and most of the employees were on something all day, every day. I guess that's where most of the extra union pay was really going.

I admit, I worked in it, I did it. I'm sure as hell not proud of it looking back though.

Im not going to go into detail about this,but 30 year's ago the big 3 auto maker's were for the most part the only option for people in America to buy car's from.The big 3 never projected a plan to deal with the incoming fluctuation of foreign car companies.The big 3 figured they were so superiour that nobody could compete with them.

Nowaday's there must be like 10 companie's that are competing with the old big 3.They build more reliable longer lasting and better looking car's then there American made competition .

The big 3 failed due to there mentality that there product's would alway's be superiour so they failed to adjust there employee's wages and benefit packages and now they are screwed.It's as simple as that.

[edit on 15-2-2007 by Samblack]