FedUpUSA

Archive for the ‘Ford’ Category

Left Lane News reporting on the UAW and Ron Gettlefinger:

UAW Chief: Workers Can’t Afford Own Products

By Andrew Ganz

 

United Auto Workers union chief Ron Gettelfinger indicated yesterday that the $14 per hour base wage earned by an entry-level worker building Chrysler, Ford and General Motors products isn’t enough to buy a new car.

The argument comes nearly 90 years after Henry Ford began paying workers $5 per day in hopes that the workers would be able to afford one of their own products, a Ford Model T.

Gettelfinger said that it’s a “fair question” whether or not auto workers can afford the products they’re assembling. An economist for Comerica, Dana Johnson, confirmed Gettelfinger’s comments by saying that a single income UAW worker making $14 per hour probably can’t afford a new car.

But a dual income family? “Then they could clearly afford a new car,” Johnson told the Detroit News.

The UAW negotiated the $14 hourly rate in 2007 and, despite his concern that workers can’t live up to the standard promised by Henry Ford, Gettelfinger nonetheless defended the concessions. More tenured workers earn more than double the $14 hourly rate.

We did what we had to do to get to tomorrow,” Gettelfinger said.

Awwww…..I feel so sorry for them.  Well, guess what?  The REST of us can’t afford your products either and it isn’t OUR fault they’re so expensive.  Ironically, it is the UAW’s fault.  The $14.00/hour for an ENTRY-level position on the line is the SAME wage that my husband, a carpenter with 25-years of experience makes when working for one of the big national builders.  It is just slightly lower than the $17.00/hour he can make with some smaller companies or on his own right now.   Also, it is MORE than my husband is currently making employed in the IT department for Hewlett-Packard. 

That being said, it is the UAW themselves that have played no small part in the precipitous increase in the cost of automobiles that has far surpassed any increase in wages.  However, none of us non-union workers in the private sector can just hog-tie entire industries and force them to cave into our demands, nor can we go cry to Congress and mandate a bailout of our respective industries.

So, to Mr. Gettelfinger I say, it’s just too ironic that the UAW has priced themselves right out of being able to purchase the cars they manufacture.  Welcome to our world.  Those of us out here trying to earn a living without government subsidies and favors and without holding our employers hostage to our demands can’t afford your cars either.  Wonder what happens when the price of cars gets to be so out of whack with incomes that no one can afford them?  The UAW will probably demand more money.  That’s what.

For the first time since March, the stock market actually
showed a little reaction to reality based information. As it turns out, even removing any hint of
stimulus will cause the market to retreat.
We already expected the cash for clunkers program was largely a gimmick
with auto sales dropping like a stone in the last reading. Home sales are being artificially juiced by
the $8,000 tax credit and the Federal
Reserve keeping 30 year mortgages near historical lows. You can expect that if the Fed and the tax
credit were removed we would see a similar reaction as the cash for clunkers
program in the housing market. It is
amazing that so much energy and focus is being put on bailouts, gimmicks, and
transient market forces all the while ignoring one major component. Jobs.

The jobs report issued on Friday was another
disappointment. The problem with how the
jobs argument has been framed since the start of the year is any report is
going to look good compared to the 741,000 job losses in January. Did anyone really think we were going to stay
at an annualized job loss pace of nearly 9 million? Of course not. So every subsequent reading seemed like a
blessing to the media. The rate of
change on a month over month basis has been referred to as the second
derivative (or more specifically the rate of change OF the rate of change). Let us look at both job losses and the rate
of change:

It is rather obvious that we were not going to see 741,000
job cuts per month even if we were heading into another Great
Depression. So as you can see from
the chart above the second derivative from February to May of 2009 was
positive. Yet anyone can see how flawed
this argument really is. It is using the
ground shaking monthly loss of -741,000 as a backdrop for every subsequent
month. Nothing can compete with
that. In fact, the following months had
equally bad reports:

February 2009: -681,000

March 2009: -652,000

April 2009: -519,000

And then in June, we had the second derivative give out
again. Of course the market being guided
by easy money and unlimited stimulus kept moving on up. This minor hiccup was nothing to worry
about. That is until the last report
that shows the rate of change giving way again.
Even at our current pace, we are losing over 3 million jobs a year yet
somehow this is good.

Yet in this new economy apparently buying a car and buying a
home are more important than having a stable job. Even Henry Ford understood that you needed to
pay workers a wage to afford the product you were dishing out. In this new economy, apparently having a job
is an afterthought.

Let us set aside the job losses for the moment.
Who in the world is hiring?
Apparently very few:

Those hiring are still at the levels seen in the March
abyss. Virtually nothing has changed on
the jobs front since March of this year.
Instead of playing hide and seek with mortgages and creating a massive shadow
inventory why not at least focus
some energy on the employment situation?

There is this pervasive tunnel vision focus on everything
put job creation. It seems like very few
want to talk about this. They want to
obsess that the Case Shiller has stabilized or that home sales have increased
but fail to examine the employment front.
For the first time in our history did we have an economy largely built
on a housing and credit bubble. So why
are we to expect similar outcomes in this so-called recovery? In fact, many of these jobs losses are
permanent:

5.4 million people have been unemployed for 27 weeks or
more. In times like this simple
questions bring out the best answers.
This is like asking how a person with no income and no job is going to
pay a $500,000 mortgage in California? If you asked a question like that the outcome
would have been obvious. So with this
above chart, we ask who or what industry is going to employ these people? That is the question that has no answer even
as we pass 21 months of our deep recession.