truth about domestics

UAW’s newest President, Bob King, recently reiterated the ban on foreign vehicles in UAW parking lots. King’s comments were in response to a reporter who got kicked out of a UAW parking lot for driving a Toyota Camry. King’s reasoning is that “Foreign automakers accept U.S taxpayer’s dollars in incentives to build assembly plants in the United States, jeopardizing the future of middle-class workers in the domestic auto industry.”

Although I will be one of the first to preach the importance of protecting the domestic industries, I completely disagree with UAW’s policy. Unions came about for good reasons, such as improving working conditions, creating the 8 hour work day and 5 day work week, fair wages, etc. But, this policy goes opposite of what the UAW is “supposed” to stand for – pro-American. This is actually, quite un-American. Competition leads to better innovation and better products, not bullying.

So is this what UAW leadership is paid to accomplish – create stupid policies? I thought it was to stand up for their workers. Maybe it would be more beneficial to work on helping make the domestic companies more efficient and cost effective. Or, how about working on changing our trade policies with other nations and make it fair to sell our products overseas.

Oh, by the way, I’ve been reading article after article about this story, along with people’s comments, and I’ve noticed something interesting – many people state that this worsens their perception of the UAW (as if it’s not bad enough), and worsens their perception of UAW built cars. So how about that, people won’t buy domestic cars because of this! Thanks Bob.

Source: The Detroit News

Ford, GM and Chrysler have all decided to pay into a UAW run, VEBA healthcare fund.  Basically the fund will be…funded, by the Domestic 3 and the money will be invested for returns to help pay out for healthcare costs for the UAW’s members.  Well Ford Motor Company has completed paying its portion into VEBA and on top of that it has decided to pay another $500  million into the fund that isn’t due until later.  Well how about that!  The full press release is over at Autoblog.

(Image source: egmcartech.com)

Even though Ford is doing better than the other two domestic automakers, they are still looking to cut costs.  So, in an effort to help stem losses, Ford is offering buyouts and early retirement packages to all 41,000 of its UAW employees.  For more details, head on over to MSNBC.

(Image source: Motor Trend)

Word has come from Bloomberg that Ford Motor Company is looking at possibly producing the next generation Kuga in Kentucky!  This vehicle would be built for both the North American and European markets, meaning the UAW would have greater job security and Ford would have greater manufacturing flexibility.  The Kuga is based off the C-platform that also underpins the Focus.

(Image source: Ford)

NUMMI (New United Motor Manufacturing, Inc.) has been producing Toyota and GM vehicles in Fremont, California since 1984.  Now that General Motors has pulled out of the plant, Toyota is most likely going to be closing it down, leaving 4,500 union workers without jobs.  So the UAW has decided to write it’s members and ask them to contact Congress so that they can keep the plant going. 

This plant is the only Toyota facility in the U. S. where its workers are unionized, and it’s the only automobile plant in California.  For more details, head on over to Autoblog.

Bob Lutz and other GM executives sold some or all of what was left of their personal stake in GM…for good reason. Whichever way GM gets out of this mess, bankruptcy or not, the future does not look good for shareholders. If a bankruptcy ensues, shareholders will loose their entire stake. And if GM has its way, common shares of GM stock will be diluted 100 shares to one after stockholders are given only 1% of all outstanding shares; the rest would go to the UAW and the treasury.

I hate to post bad news, but tough decisions need to be made. The sooner the better…

Read the article at MarketWatch.

According to numerous news outlets, Chrysler is heading to bankruptcy. The reports say that negotiations between the treasury department and a small number of creditors broke down.

Take this with a grain of salt, since the media headlines seem to change every second. If this is true though, I hope almost everything has been figured out in terms of agreements between Chrysler, Fiat, the UAW, treasury department, bondholders, etc., allowing for a (relatively) quick chapter 11 filing.

Read more at CNBC.

I just came across a really cool website and event that will create support for the Detroit 3.  A local club in Ferndale, Michigan called AJ’s Music Cafe is putting on a 10 day long concert in order to raise awareness for what is going on with the local automobile manufacturers.  Part of this whole campaign is getting members to sign up on this website saying that they promise to buy a new car from Ford, GM, or Chrysler. Below the form, there is a place to donate to the concert and a portion of these benefits will be given to the laid off auto workers.

But why? “We’re all affected by the the auto industry here, all the way from the auto executive to cafe owners like me. I can’t do much, but I can draw attention to the situation,” said O’Neil, ” I can talk about the cars and get people to at least think about buying one.” He’s gotten a roundly positive response from the automakers too, with emails coming in from Ford and GM, dealers have dropped some of their cars in front of the cafe, UAW and CAW workers dropping in with banners and requests to play in the concert. Each band gets an hour to play, with no more than five minutes between sets, as sanctioned by Guinness. There are themed days where union workers play, politicians, local news anchors and others.

The event started out at 5:00 PM Friday night with Motown artist Martha Reeves and is intended to end in 240 hours on March 31st, to coincide with the feasibility hearings in Congress. It might go on longer though, as a United Way group in Statesville, North Carolina is making a run at the record at the same time, so it might end up going much longer than originally anticipated.

We asked AJ what the takeaway on this event should be, to which he responded: “This is an awareness campaign, people need to recognize what they purchase has an impact, and if they turn away from the big three, it puts us in Detroit in peril.” The event brought out a strange mix of locals and luminaries, we even spotted John McElroy there, sitting in for a listen, but at the core of it was a quiet desperation. Nobody seemed interested in mentioning the unmentionable, the possibility this was an early and raucous wake rather than a record attempt to rally for the home teams. [Live streaming and details available at Assembly Line Concert]

Ford UAW employee (Bill Pugliano/Getty)

Ford Motor Company and the United Auto Workers (UAW) have reached an agreement that will reduce wages to $55 an hour for it’s workers, bringing labor costs more in line with it’s Japanese rivals.  The estimated cost savings associated with the concessions is $500 million.  This brings wages down a total of $15 per hour since the last contract negotiations two years ago, where pay levels were more than $70 per hour.  This figure is supposed to drop even further to somewhere around $50 an hour by 2011.

While labor costs only account for 10% of new vehicle costs, this will help Ford become more competitive, not only with transplant automakers, but also GM and Chrysler, who have made similar concessions with their UAW members.  For more, head on over to Reuters.

While I understand that the UAW members have made very good wages for awhile, this is just another example of how foreign companies are destroying the standard of living here in America.  Why did the D3 have to cut it’s employee’s wages?  It’s simple, the transplant automakers (Toyota, Honda, Kia, etc.) all pay their workers less.  If this battle keeps up, there won’t be any high paying jobs left in the country.  What will we do then?  Not everyone is cut out to do work at $10 an hour…

GM - UAW (GM)

General Motors and the United Auto Workers union have reached a tentative agreement on contract changes for the 62,000 workers and are still negotiating on the retiree health-care fund.  Ford’s contract changes saved them a reported $500 million and GM is expecting to save double that, close to $1 billion dollars.  This is good news as GM tries to cut costs to convince President Obama’s auto task force to free up another $16.6 billion in government loans to keep the automaker out of bankruptcy.  For the full story, as well as Ford’s reaction to the news, head on over to Bloomberg.