Do auto workers make too much? -

Do auto workers make too much?

Are labour costs to blame for the Detroit Three’s collapse?


Do auto workers make too much?

Late last week, Ontario and Ottawa agreed to extend a lifeline to the country’s struggling auto industry. The provincial and federal governments pegged their bailout package at “about 20 per cent” of the amount the U.S. will commit to the beleaguered trio of Chrysler, GM, and Ford. The Bush administration announced on Friday that it would sign over US$17.4-billion to the Detroit Three, meaning Canada’s contribution figures to be in the $4.3-billion range. But rescuing car makers with taxpayer money hasn’t proven to be a universally popular idea on either side of the border, with auto workers’ wages attracting much of the scorn. On average, Canadian auto-sector workers make about $35 an hour—$72,000 a year—plus benefits. The average wage of a Canadian manufacturing-sector employee, by comparison, is $20.75 an hour, or $41,500 a year. Could the auto workers comparatively high wages be to blame for the Detroit Three’s collapse?

Earlier this year, Magna International CEO Frank Stronach warned that high wages at Canadian auto manufacturing plants threatened the industry’s long-term prospects and insisted that both the companies and the unions “have to change.” Industry analyst Tony Faria has also cautioned that Canadian auto workers could soon price themselves out of the market if they resist clawbacks to benefits and wages. And in an editorial on Monday, the National Post blamed the economic quagmire facing the domestic auto industry squarely on labour relations at the Detroit Three: “It’s not their design and development that lags behind the rest of the world, it’s their human resources management […] The unions are going to have to make concessions—big concessions—if they want the companies they work for to survive.” The Canadian Auto Workers, however, have already said “no way.”

Though wages may be part of the problem, a reduction won’t suddenly make the Detroit Three profitable again. After all, the gap in take-home pay between unionized employees at Detroit Three plants and those non-union workers toiling for Japanese builders like Toyota, Honda and Nissan works out to only $2.50 an hour, or about $5,000 a year. And yet, Japanese car makers—known as ‘transplants’ in manufacturing parlance—aren’t in nearly as dire a situation as their North American rivals. The total amount, however, spent on unionized employees by the Detroit Three is considerably higher than what transplant builders spend on their workers. According to CAW data, workers at GM, Ford and Chrysler cost their respective employers about $77 an hour. This figure includes employer-paid benefits like health and dental insurance, the company’s contribution to a pension fund, and the payroll taxes it assumes when it hires workers. By contrast, assuming an 80-cent loonie, their counterparts at transplant car mills in the U.S. come in at a much cheaper $61.25 an hour. The biggest contributor to the disparity is legacy costs, i.e. payments and benefits doled out to former workers. These add $10 an hour to the overall labour costs at unionized plants, while better vacation and other wage-related benefits at union shops makes up the rest of the difference.

Arguably, that’s not the main issue. The Detroit Three’s business model looks to be on increasingly shaky ground: their long-time cash cow, the light truck and SUV market, has crumbled; overall vehicle sales are down across the board, but they’ve been especially bad for North American auto makers; and the ongoing credit crunch has left all three with next to no cash on hand.

Broken down, the governments’ payout amounts to a $2,300 subsidy for every car produced by the Detroit Three in Canada in a year. It’s enough to make North American cars profitable once again in the short term, but the Detroit Three’s dwindling market share and stockpiles of unsold cars make for a murky future once the money runs out. The gap in profitability between the Detroit Three and their foreign competitors is currently huge. Through the first quarter of 2008, on average, Nissan and Honda pocketed $2,051 per vehicle. Toyota collected a smaller but still respectable $1,152 profit per vehicle. The Detroit Three, by contrast, not only failed to turn a profit, they lost money on their vehicles. Chrysler came closest to breaking even, losing $515 per vehicle, while GM and Ford trailed far behind with per vehicle losses of $911 and $1,833, respectively. So while keeping the Detroit Three alive might be possible, turning them around may very well prove too expensive a proposition. Pinning all of the blame on salaries, however, is a tad rich.


Do auto workers make too much?

  1. The Big Three just plainly do not know how to compete in a GLOBAL economy.

    First is the product quality

    Clearly the Japanese, Volvo (points for Ford here), BMW (notice I dont generalize German … because VW and Mercedes have back-slid on their quality, relying on their prestige name sake to lure buyers) and recently Hyundai make the quality STANDARD.

    The Big Three, although they have made break-throughs in quality, they have not overcome their sub STANDARD quality, unlike the lessons learned by Hyundai from their Pony days. In tough economic times, you just dont want to pay for poor reliability and poor fit-to-finish, nor do you want to be reminded that your vehicle has that legacy. You want something that meets the current STANDARD or better.

    Second is Product Differentiation Plus

    I will get to the ‘plus’ part next. Seriously, the Big Three have a problem here due to dilution of product names (they just have too many and they change all the time). This dilution effect has resulted in product differentiation not by Ford, Chyrsler or GM but by vehicle class. I see minivan (I dont see Caravan or Venture). I see sedan (I dont see Ford Fusion or Chyrsler 300). I see truck (I dont see F100 or Silverado). I do see Mustang, Viper (not anymore though) and Impala – only because of their history. I certainly do not see the difference in Oldsmobile and Buick except for the fact that it’s mostly people in their 50s and 60s driving them. Clearly, I see no brand building … just alot of soup.

    Now the plus part – The Big Three’s other product differentiation problem. Their marketing strategies have appeared to have blended so well that for the most part I have trouble distinguishing them (I exaggerate…only a bit though!). I now see a Big Three car, subclass minivan, sedan, American muscle or truck .. and of course their poor quality and poor fit-to-finish past that have stamped all of them in the same class through a ‘guilt by association’ affect. Poor quality, by association of being part of the Big Three is the ‘Plus’ – have you not noticed the resale value of Volvo post-Ford take-over? It has gone down by association.

    Third is Maximizing Value for the Dollar

    Hyundai has it, but it’s still sadly carries the Pony effects on its back. The Pony is slowly withering but this sort of thing takes time and consistent delivery of Quality and Value for the dollar year-after-year until the Pony turns to dust.

    The Big Three may be able to deliver maximum value for dollar, but has a long way to go to shake off its tumble weeds.

    Fourth is Building the Low Cost Vehicle for the Market Segment

    This is where wages fit in. But we all know its more than wages. It’s the currency-exchange-accounted total dollars or yens or euros or wons that goes into making a vehicle. This includes wages (blue and white collar), health care, pension obligations, raw materials, manufacturing, logistics, etc. etc. All this talk about unions and wages has become boooorrrring! Sure if the Canadian dollar goes from $0.8 to $1 US dollars, the net effect from the US CEO’s eyes is that all the Canadian just received a 20% increase. But what is the all-in-cost? The Big Three need to focus on that. Union bashing is costly and a big waste of time. If you call the Union greedy, you will reap what you sow and have Unions that will demand higher wages because the name bashing will transend economic decisions and become emotional decisions. I remember a proverb from my old economics class – wages are sticky upward and so are names.

    Lastly, minimize cashflow cycle time and working capital

    In otherwords, make your dollars tied up in dealer lots and materials more productive by not having so much tied up in the first place. Increase the speed at which one dollar earns another.

    Focus on making in the lowest cost STANDARD vehicle. Make it year-over-year. Make them quickly and smartly. Get rid of that recent legacy name of ‘Big Three’ and start calling yourselves Ford, GM or Chrysler.

    The unions can help here too. Ask first, can my employer afford to the union payroll and still make a decent return on the dollar that support reinvestment? How can I work with my employer to make the company more healthy and robust? Am I getting a fair wage for what I do to add value?

  2. It’s very simple……the workers don’t make to much, the unions do. Get rid of the needless unions and have the employees worry about putting quality product on the market.

    • You have my support to encourage quality in the product for the market, but simply blanketing union workers as irresponsible in this area is truly disengenuous. For crying out loud, non-union kids working at our local Dairy Queen put out shit for hamburgers, yet management did nothing. Currently that DQ has closed it doors.

      Do not get rid of unions….get rid of a North American teaching in the work place, and it exists in both union or non-union worksites….which says, “that is good enough.” The reality is in market competition, it isn’t good enough. It should be better. That is how I approached my union job for the past 35 years. And even fighting with other union members to instill this idea, “a job worth doing, is a job worth doing well!”

  3. We need a new paradigm arrangement between workers and management in all industries. Both should be owners of the means of production, have a say in product development and do their utmost to ensure the best quality possible goes out the door. Workers should understand that their wage demands must be contingent upon profitability – build a better product, sell more, turn more profits, and you get a concomitant raise. Workers should be obsessing not about making insignificant wages, but flaws in the product, no different from management.

  4. For me I put the blame squarly on the leaders of the automakers – Managment.
    They are the guides, stewards of the businesses and they have not planed for change.
    Now change will be forced upon them.
    I hope thier 55% raises serve them well ( yes the CFO’s, CIO’s, CEO’s….)

  5. If one compares the compensation of auto-workers with that of workers of similar skill and effort, one will see that the auto-workers are grossly over-paid. The unions are a major contributor to giving workers an unrealistic expectation of their relative value. Overall, unions have hamstrung the already incompetent Big Three management’s sinking the business.

  6. Since everyone will be forced to make concessions, so should the Auto workers!! They dug the hole they are in and the hand that is extended to them is only so long. Cut the Bull.. and join the rest of the work-force by getting your wages in line with the remaining worker accross the board. Enough is enough, be happy you HAVE a job, unlike many who have been laid-off and are desparate!

  7. For as long as I have been a Registered Nurse (30+ years) I have said that the automotive workers have made far too much given their education/experience and consistent lack of a quality product. Now that a Bachelor’s Degree is entry to practice to make a mere starting salary of less than $30.00 a hour – I reaffirm my belief that the automotive workers make FAR too much. Furthermore, as someone who was many years ago stripped of the right to strike….they have continued to do so and for what to dig their own graves. The CAW has missed an opportunity to step up to the plate and offer what they can do for the automotive industry….their window of opportunity is fast closing and if they don’t act they will all be responsible for digging their own graves! While yes, management has had a role to play…it is the sheer GREED of the CAW and its members that have deepened the crisis!

    CNN got it right a few weeks back…to have provided the bail out, life line – whatever you wish to call it…it is the BIGGEST gov’t subsided work program in the history of Canada…and they are still producing an unwanted product…I thought this type of practice ceased with the fall of the Berlin wall.

    • If you spent one day trying to keep up on an auto assembly line you would soon understand the wage. You sacrifice your whole body for that pay!!

  8. MOst of the blame is squarely on wages etc.–UNIONS—they have priced themselves out of jobs—the manufacturers would not have gotten to this state–if people could work out their wages with their employers-not with the unions.Unions don’t seem to understand-that the bigger the hue & cry for benifits -wages etc.-they make– the more we-all- have to pay for the product being made!!! Still they are considering –strikes!!!! Who is suppose to put their bread & butter on the table– the tax payer??? this has gone far enough–it’s a free enterprize system we live in – in Canada–anyone can start a business– but if you go under— you declare bankruptsy–& start again from beginning– not ask the goverment to foot the bill— not fair to any other business –that can;’t make. To the manufacturer-I say- you saw this coming at least 5 years ago– why did you not start building smaller cars-trucks etc.–then? YOu don’t always follow the demand– you look into the future! As long as management has to cater to unions– the country will just go down hill–from here. With everything -going in the tank– one would think-the average person would just be happy to have a job–to be able to make their payments– hang on to their houses etc.– oh no!–they would rather blame the work place. The whole thing in a nut shell is– people have to learn to live within their income. Enough said!!!

  9. Everyone is talking about reducing the wages of the men & women on the line but nothing is said of the CEO’s pay packet and stock options. At least the money earned by CAW members is returned right back into the local community, not sent off shore as the CEOs have done or hidden in tax shelters.
    In the past when concessions have been made by unions to try and protect their members jobs the companies just took the money and opened plants in Mexico then Asia. They never invested the savings in maintaining good paying jobs in Canada. So all the best to the CAW and the other Unions in fighting for your members jobs and resisting the demand for wage roll backs.

    • Actually Neil, executive compensation has been talked about in almost every discussion on this topic.

  10. I read the above with great interest. I understand that the inefficiencies of the big three and their union relatively high wages are big parts of the problems.However ,there is no mention of the unbelievabvly high costs of the CEOs and executives.I read in a book some time ago called “In Search of Excess” that CEOs were able to gouge super earnings through stock options ,etc. while there companies where making little profit,or actually losing money. I think that is a big factor that has not been considered at all,just blaming labor unions….Don Bater.

    • Yes, Don, CEOs are generally overpriced everywhere, especially when you look at value delivered (often negative!).

      But, let’s look at the math.

      I have read that millions work in the auto industry. Let’s say there are only a million of ’em. Let’s say they are overpaid by only $10K per year. Both of these are woefully lowballed, especially if you saddle the worker pool with the retiree legacy costs. So, what then is the annual wealth drain from this industry? TEN BILLION DOLLARS. Per Year.

      Gather up all the Presidents, CEOs, and other execs, each siphoning off a few million, or a million, or hundreds of thousands over their true annual contribution to the industry. What do you get? A bunch of millions, but nowhere near the drain provided by the worker pool.

      Sure, management signed the contracts. But when a cancer devours more and more of its host, no matter how enabling the host was of its tumor, they all die.

  11. Not sure where to start, except to say that myself, along with thousands of other forest industry workers have limited employment or even no jobs at all. I doubt any of us will be buying a new car anytime soon without money to pay for the car, regardless of how low workers in the auto industry put their wages.

    We, as unionized forest industry workers, were asked to take a wage cut also. WE SAID NO. Our annunal salaries have been decimated enough by the substantial lay-offs and total mill closures. Since our lumber is not leaving our millsites, it is totally irrelevant as to what wage they pay us. There as so few USA housing starts on which we rely for our income, that selling our lumber for peanuts doesn’t make sure that people purchase our lumber.

    I think most people who look at union wages as too high better get an understanding that low wages will never create a demand for the product anybody produces. The lumber market has proven that time and time again.

    Low wages only make sure that workers will never sustain an economy where bike shops thrive, or gymns are a good business, or Canadian art work can be sold to ordinary Canadians. Then, those things will only survive on the whim of the rich. Then, those things will be for low wage earners always the extras we can never afford. What kind of economy will we have then? And what kind of Canada will we have then?

    • High wages make a company uncompetitive. High wages mean higher prices. HIgher prices mean lower demand – you will buy less of something that costs more. Simple as that.

      If wages go too low, workers are free to work elsewhere. But auto workers know that there is no chance they could find anything approaching the same salaries elsewhere (with their levels of skill and education). That means they are overpaid.

      • You have missed the point of high productivity. Again, I refer the the troubled forest industry in which I am employed. The forest industry has over the years reduced manpower by more than half. In my own mill, what at one time in the past employed over 200 workers for two shifts, currently employes less than 100 workers for three shifts, thus now producing more lumber with less workers. Isn’t that a lower price per unit? It certainly hasn’t been about paying everyone lower wages that kept a smart forest industry successful during the good times. Now we are on bad times, guaranteed that lower the wages for forest industry workers will never make anybody buy a stick of lumber, or especially enough sticks of lumber to keep this large forest industry running at historic successful levels.

        To be sure some forest industry workers are working elsewhere, some for more wages, as in the mines, and some for less wages, as in the service industry. But that was months ago. Word is out that hiring of workers who are “free to work elsewhere” is drying up. Hmmmm…..go figure. Maybe even these jobs don’t have low enough wages?

        • Certainly, high productivity is a good thing. There are many ingredients to successful companies, and in my opinion ingenuity and innovation is the most valuable.

          With regards to your example, I think that it’s likely the big 3 has improved productivity, but have failed to match the productivity of the foreign auto companies. This is due to substantially higher legacy costs such as pensions and excessive dealerships, higher wages, inferior quality and reliability.

          They have simply failed to compete.

          The forestry industry, which is shrinking, has not failed to compete.

          So I don’t see these two things as the same.

      • It’s time to put all the cards on the table from both labor and management.Let the negotiations begin.Who wants to keep the Auto Industry alive.Not a cent of public money until they come up with a agreement on what both sides are prepared to do to keep these plants open.If they can’t then the Auto industry has to start realigning their manufacturing and start closing plants down.

    • Yr right Ron, what Ford said is still true; if you pay yr workers adequately, they may even be able to buy some of yr products. Not to mention pay taxes that

  12. I must agree with the author that it is not all salaries, there are many issues involved. The big 3 is facing a level of competition they have never encountered before and they are not responding well, and management is to blame. Also to blame are the numerous inefficiencies surrounding the big 3 that have accumulated over the years (the large number of dealerships is emblematic). The culture within these companies is outdated and ineffective.

  13. Sure, the auto workers make too much – they make too much of products that few people want. The market for large, gas-guzzling vehicles is on the decline but the North American auto makers refuse to change their ways. This is the real reason why they cannot compete with Japanese companies who produce cars for which there is a growing market.

    Simply reducing wages is not enough; the auto companies must change the way they think.

    As I said on the web-site “We Canadians”, why bail out the auto makers unless they switch to energy -efficient cars that we really need? Otherwise, they will just be back for another hand-out very soon.

    • Maybe someone should ask Lee Iacocca to come out of retirement to teach these idiots how to make an inexpensive automoblie that actually sells and doesn’t carry the stigma of FORD F(fix) O(or) R(repair)

  14. Labor costs are an issue but that likely won’t solve the problem.

    Ever noticed how similar a Toyota Camry looks to an ES class Lexus?

    Or that a BMW 3-series in London, England is identical to a BMW 3-series in Toronto other than the side of the car the steering wheel is on?

    Or how if you go to buy a new Acura it basically has 2 or 3 packages available, that’s it? Not an unlimited set of individual options.

    One of the big problems with the Big 3 is the amount of complexity they have. They have way more manufacturing platforms than Japanese automakers, and a much higher number of unique SKUs.

    All of this adds major costs in terms of manufacturing and quality.

    But it’s a lot harder to assess than workers wages.

    It is not well covered in the press.

    • You are right, the Big 3 have too many manufacturing platforms, yet they dont make what people really need.

      Personally, I need an electric car for my daily commute. This will take me around the city with the least possible environmental damage.

      However, this is one product I cannot buy in Canada. I believe there is a manufacturer in Canada but he cannot sell it in his own country.

      If the auto companies can make this type of product, then its worthwhile bailing them out. Otherwise, it is a waste of money

      • For technological reasons, fully electric cars have not yet reached the market. So I don’t think you can blame them for that. In fact, the Chevy Volt is possibly the most promising electric car of the future, although it remains to be seen if it survives this crisis.

        • sf
          Not quite true – there is no technological reason holding back the electric car. The auto companies, and the oil companies never wanted an electric car as it would destroy the market for gasoline-based cars.

          There is also a movie out there – “who killed the electric car?” It gives plenty of info about how the auto makers decided to kill the electric car even after it was developed. Ford once made the electric car and there was a two-year backlog of orders. then, it suddenly stopped production and withdrew the product from the market.

          Sure, there are limitations to electric cars. But even within those limitations, there is a good market for daily commuting etc. I’m suggesting the car companies should exploit this market and stop making gas-guzzlers.

          • I don’t agree with your conspiracy theories.

            The primary technological reasons holding back the electric car is the size and weight of batteries large enough for the car to travel a significant distance. That is why all electric cars also have gasoline engines.

            Even the Chevy Volt will fall back to a gasoline motor.

            Have you not noticed this obvious fact? Once the battery is depleted, you cannot just pop into a service station and fill it up on a matter of minutes! So if you like getting stuck halfway to where you are going, then go ahead and find yourself an electric car.

            And, to top it off, where do you think the electicity is coming from? In many places, the electricity in your electric car is coming from fossil fuels, including coal and natural gas! In a hybrid, the electricity is coming from the gasoline in the tank!

            So, unless the car can run on electricity efficiently (which they cannot), you are consuming more fossil fuels than you would be consuming from a gasoline car.

        • There are electric cars available. Check out the web sites for Zenn Motors (Don MIlls, Ontario) and
          Tesla Motors in Califronia.

          The problem with fully electric cars is that they might have zero emissions from the tailpipe, but what about the emissions from generating the electricity that charges the batteries?

          Even with electric vehicles widely used, to address climate disruption we will still need to reduce the use of fossil fuels for electrical generation and we will still need to reduce sinlge occupancy vehicle use by walking, cycling, carpooling or taking public transit.

  15. Why should the Canadian taxpayers, most of whom earn significantly less then the Auto Workers, bail out the Auto Industry? Why doesn’t the Auto Workers Union, which by the way is obscenly wealthy, step in and bail out the Auto Industry? The golden goose can only lay so many golden eggs and the Auto Workers Union has them all !!!!!!

    • Too true.

    • Because, apparently, it is bad to let “good jobs” go. Never mind that inherent in the phrase “good job” is the implication that the reward for this career exceeds the personal input. If someone has lucked in to a “good job,” it is therefore a necessity for the rest of us shmoes without the “good jobs” to support that someone.

      Or something like that.

      • Why is it you guys only seem to be upset about overpaid unions? What’s wrong with pouring a little scorn on the incompetent, over-compensatd managment. I don’t think the guys and gals on the lines had too much say in crappy management decisions. As to being over-paid, why shouldn’t everyone share in the fruits of technological progress and productivity gains, it happens in other industries. Could some of this animosity towards labour unions in particular spring from a little old fashioned class snobbery?

        • OK, kc, you keep harping on this, obviously deaf to the well-deserved choruses of scorn that HAVE been heaped on incompetent management. But, I’ll bite…

          Kill off every CEO, Vice President, and regional and local manager of every department. Go ahead, do it. Let the UAW and CAW run GM, Ford & Chrysler. Keep the fat undeserved pension and health care packages, don’t surrender a penny in hourly wages, and for heaven’s sake don’t lay off a single worker without paying them full price for staying in some pool of idle workers playing Sudoku on their Nintendo DS.

          Just don’t come crying to the taxpayer to bail out this mess, ‘cuz the taxpayer is only too happy to buy Hondas and Toyotas built in North America and elsewhere, and will be forgiven for not looking too kindly on keeping the UAW Impala, Neon and Taurus in the showrooms. OK?

          • MyL – ok, you don’t like unions, that’s yr perogative. I never meant to impl that unions shouldn’y share the pain, obvoiusly they will. But what bugs me is this implication, said or unsaid, that unions never take a hit. Ron Fisher [ above] makes a much better arguement than me, that unions already have made sacrifices. Take a look at the number of people employed today as opposed to say 20yrs ago. It’s more than obvious that unions [ and others] have made major trade offs for a share in the resulting increase in productivity. This is what bugs me in particular the blanket assertion that unions always take and never contribute or sacrifice. Too many people hold on to the outdated belief that if only labour would be happy with, say $10/hr every would be dandy. Maybe i’m missing the pt about lavash benefits, if everthing reported on them is true then they are too generous.
            As to getting rid of mamagement , well the people who atually build the cars could hardly do any worse. Lastly try and remember that most of those union folks pay taxes too.

          • kc, if you want me to believe that “the union has made sacrifices,” you will have to hide from view the issue of new hires working under conditions nowhere near what the existing overpaid union members voted to keep for themselves. If that’s what counts for sharing the pain, you can keep it.

        • “class snobbery?”

          Frankly, the only reason I care about what goes on inside these companies is because they are taking taxpayer money, even though their employees are paid far beyond what others are paid. Why on earth should the rest of Canada be paying these employees’ inflated salaries? The unions think this is perfectly fine.

          Management salaries should be cut as well.

          And I agree with myl, unions almost always seek to improve the benefits of existing workers at the expense of newly arriving workers, so if there is any snobbery involved you should be talking to the unions themselves.

          • “unions almost always seek to improve the benefits of existing workers at the expense of newly arriving workers”

            The UAW allows retirees to vote as well as current workers and there are 4.6 retirees for each worker now employed (at GM at least). It is why it can be accurately claimed that GM is now basically a health care provider that also happens to produce vehicles.

        • Yes it does spring from class snobbery…….The Auto worker has grown into our upper middle class. They got these jobs and bought to many houses they couldnt afford, too many big trucks they didnt need. While they did this they looked down on the rest of the people makeing under 20 dollars an hour. They got to to many credit cards, got to many Tv’s and DVD players on credit. The Baby Boomers have let us down again. I hope we can learn from their mistakes.

        • hey kc, you have a good point. Does making money only stem from the elite of our society? Who shares in the fruits of technological gains? What about union workers making lots of money like their bosses. Afterall, don’t our bosses set the example on how to be greedy. I have never met one boss yet who agreed to work for nothing.

          To refresh my belief in humanity, it is no wonder i donate free work for charities. At least they respect the right to human existance beyond their dollar value. I love to donate my time to charities. I only hope people on this blog can understand giving is better than getting. It is not a business model, but it is most certainly a human model. Thanks from Ron.

  16. I don’t know that auto workers are overpaid, but clearly teachers and nurses are underpaid. In my province, it takes fifteen years for a teacher to make thirty dollars an hour, and that’s with a university degree. Kind of hard to tell kids that an good education pays off.

    • No kidding. I’m working my towards a teaching degree at the moment- and there is no way I’ll make anywhere near this much money before I’m in my forties. Turns out I shouldn’t have bothered with going thousands of dollars into debt for my schooling and looked for a job in the auto industry instead.

      • teachers are probably underpaid. But don’t blame car unions. Presumably they’re well paid for the same reasn that oil-field workers are. They both produce something that is in demand ; even if you banned unions from car plants, market forces would still create a demand for well paid skilled people, unless we give up our addiction to cars, in which case the demand and rewards would dry up.
        Personally i would set teachers needs ahead of both the other parties, but then i don’t set the market.

        • I don’t blame car unions. It’s simply hard to empathize when you compare these salaries with those of teachers, nurses, social workers, etc. Obviously I feel sorry for those out of work and their families. However, one would hope that someone making this kind of money woul dhave a significant chunk socked away, so I feel that their plight is less immediate than that of, say, coal miners in Cape Breton.

          • I think you may be mis-informed re: union [auto] saleries. I may be wrong on this but i think you’ll find that take home saleries for all unions, domestic and import is in the $25 – 28 range. The problem is much more the differences in benefit packages, dental etc. You see how all this has been framed – unions making $ 70/hr or more. Completely dishonest. If the benefits are the issue then lets talk about that. Personally i don’t blame the unions for going after such luxuries as dental, and so on. Particularly when the Big Boys spend so much time at the trough themselves. What’s that old saying about leadeship starting at the top. Anyway it looks like the parties over for everyone now, and the public is certainly not obliged to underwrite programmes that many others outside of unions don’t enjoy themselves.

        • No one is blaming the car unions you moron, their saying pay Nurses and Teachers more, quit making a product that doesn’t sell, go back to school and get educated, and quit crying because you “Autoworkers” have made way too much money doing something that doesn’t sell. Lumber, Oil, Farming, are currently less fortunate then Autoworkers. Cars are not in demand and layoffs are needed. Get a real job last time i check everyone still drives the car that doesn’t have a car payment.

    • While McGuinty takes on teacher federation after teacher federation, one by one, working arduously by negotiation to retain the status quo of low-paid women’s work, it is quite noticeably sexist when he pitches in and sides with Harper to subsidize companies who make cars no-one wants. Teachers Federations should take a page from the Auto Workers and unite. The bellweather of any society is the degree to which it protects and preserves the teaching profession as an honored and well-paid workforce.

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  18. MYL – not sure what you mean about ‘new hires’. I should fess up that i’m not as aware of the car union stuff as i probably should be. It sounds to me yr talking about a seniority issue, which is contentious in itself. I live on the w/coast, so my focus is more on the forestry unions and unions generally.
    I see you don’t care to address R Fishers pt earlier, that unions have made major concssions in return for better paid and more productive jobs. You may not like taxpayers bailing out the Detroit 3, fair enough, i don’t particularly like proftable oil conpanies getting tax breaks at a time of record oil profits. I’m sure a case can be made for both. People should stop pretending that there is anything remotely like ‘ free enterprise’ out there. It;s all just a bunch of self-interested parties jockeying for position and advantage.
    As an aside, personally i think public money should usd to retool for a presumably greener future.

    • kc, without having much focus on R Fisher (is he the guy who wants us to believe that demand for his output would suffer if he and his buddies accepted a pay cut? I confess my reality-based brain lost him there), I can assert that in fact I have responded to it as I chat with you. To help you out on the Big Three “union stuff,” at this or the last (or both?) contract renewals, the union recognized the insanity of their weight on the good ship Big Three that they allowed that incoming NEW union members (who, go figure, did not yet have a vote because they were not yet hired to become members) would be subjected to different working conditions than the gold-plated standard of living to which the existing comrades had become accustomed. I have not heard whether or not the lyrics have been changed from “Solidarity Forever” to “Solidarity Up Until This Point in Time.” If ever you see Buzz in retirement, ask him if he’s got it on his Ipod.

      You are absolutely correct that I am no fan of unions at the best of times, so feel free to view any of my bloviating through that filter. But when even the unions want to eat their young in favour of protecting the ill-gotten gains of existing members (yes, yes, collective agreement, management didn’t have to sign, etc.), trust me, I’ve had it with ’em. Now they show up, cap in hand to the taxpayer to protect this insanity from a well-deserved death? Please do not expect me to be quiet, or polite. Let management, the unions, and the shareholders suffer for this stupidity. The taxpayer will be on the hook enough in the social safety net we’ve built. The taxpayers of the future should not be forced to build bad cars nobody wants.

      • Thanks for the info on the car unions – i can’t say i’m that sold on their case as you describe it. if you want to extrapolate from this that all unions are inherantly bad then you’re entitled to be as wrong as the next guy. Iv’ve seen the hits that forest unions have taken on this coast and the often blatant dis-regard for community and enviromental issues that companies have shown. Not to mention their [ conpany] oh so cozy relationship with folks who are elected to represent us all. One day unions wil be no longer necessary ; one day we’ll see fairness and justice for all ; one day… Enough ranting for one day.

      • Ron Fisher is the guy, me, who has spent a 35 year career in a good paying job in the forest industry. The forest industry is now suffering not because of high wages, it is suffering because of lack of demand. Don’t you read the news? The housing market has collapsed in the USA, and we sell 90% of our product there. But not much being sold there these days.

        Our management IS NOT demanding lower wages. Instead they are struggling with a concept of how to make our Company survive when there is no need for the product we produce. Lord have mercy if you can’t understand the drying up of the American housing market is the root of the employment problem in the Canadian forest industry. It is time you all relegated yourselves to solving economic issues rather than picking on unions. I seem to recall all the highly educated economic thinkers are non-union, yet they still have no idea how to get us out of this mess…..Go Figure! Maybe lower wages on their part would help them off their keisters to provide a real solution?

        • We, as unionized forest industry workers, were asked to take a wage cut also. WE SAID NO.
          –Ron Fisher, Dec 30, 2008.

          And another goodie:
          Since our lumber is not leaving our millsites, it is totally irrelevant as to what wage they pay us. Dude, if your product is not moving, stop making product!

          • Then I invite you to show me a job that today is producing a product that really sells. Do u make something in your line of employment that everybody is snapping up these days? Unfortunately i don’t see alot of any products moving, nor a lot of work being created. In fact the economy is getting poorer by the day.

            Why just today the Conference Board of Canada put out its economic warning for Canada….prepare for a 9-month recession. And to prove it, a nearby coal mine, where lumber workers went to get new jobs in our region, is now laying off, with another virtually closing down. Even the Alberta oil industry has put its hand out for some bail-out package from government.

            I suspect that this economic situation is bigger and more complex than most people on here might want to realize. And probably more complex than I can understand. Debating union versus non-union will not solve our economic woes.

  19. What really needs to happen is that UAW needs to reduce their absurd work place, and other fiddly, rules. Have you seen that photo of the last contract signed by Detroit 3 and UAW? The contract is massive, weighs 22 pounds. The last numbers I recall reading said it takes about 1.2 days for foreign automaker to produce one vehicle in US while the Detroit 3 took around 1.9 days, which adds up over time. Detroit 3 lose money on every small car they sell and a big reason for that is that it takes so long, at a higher wage, to produce.

    American Honda workers in Ohio are not that much faster than their counterparts at GM in Michigan. It all comes down to the workplace rules and regs the unions love to impose on company/workers.

    • jwl, I suspect there may be something about the Japanese design that helps efficient production, as well, otherwise I am with you.

  20. Get rid of the unions and you’ll see change in the country. Business will then flourish.
    The idea of having unions is so outdated, it ain’t even funny.
    The industrial revolution has not only come and gone, it has now by-passed us for better pastures in the Far East, thus leaving the average North American debt ridden to the gills and mortgaged to his/her grave.

    • Your suggestion to get rid of unions is in itself ridiculous. It’s like saying get rid of defence lawyers. Who would defend the workers? YOU? Or selfless employers who recognize the need for workers to earn a decent wage. I know there are some very good employers around. But there are more greedy ones.

      The only businesses that I know of who do really well without unions, are those in China. I only hope the terrible working conditions those workers must endure will change as their employers profit. But there is nothing to guarantee that. Why don’t you investigate what kind of awful conditions many Chinese workers have in their workplaces. Get back to us on that please, and thank you.

      • I think you would have to go to China and tell a worker he shouldnt have his job. The people of China want jobs. Union’s are only good for protecting workers from un-safe work places. They should stay on of course, but as years go by, market condtions change, wages have to change with them.
        a “decent wage” is just that.

      • “Your suggestion to get rid of unions is in itself ridiculous. It’s like saying get rid of defence lawyers. Who would defend the workers?”

        Our laws would defend the workers. The only thing unions do now is agitate for more money and benefits in exchange for working fewer hours.

        • Maybe you are very sheltered in your life. Thank goodness for some Jehovah’s Witnesses who worked at my local ski hill. Their employer refused to pay overtime. It was their adherance to law, as a belief, that compelled the employer to pay. Other workers were afraid to seek lawyers to defend them in law. The end result was the overtime was paid, only once, then the employer hired enough workers to ensure nobody got full time (40 hours) per week, so no ovetime was ever paid again. Lovely laws, and great lawyers on this case. Go keep your secret little concept that justice works as it should. Bullshit. Most laws are never automatically enforced. Lawyers in offices don’t run out to work places to defend workers. Wake up and smell the stench of reality. Get rid of unions to see a change in the country says one gentleman earlier in this post. He must have one terrific (and expensive) lawyer to defend him. As for the rest of us poor working class….get a union to defend you now!!!

  21. I think there’s a lot more at play here than simple wage disparity between the automotive and other manufacturing sectors.

    As a general rule, companies rot from the top down.

    It’s been widespread mismanagement, lack of planning and irresponsible business practices that have been the major contributors to the threatened collapse of the big three. Unions play a role, certainly, but it’s the wrong focus in this case.

    Simply saying ‘the workers make too much’ creates a scapegoat… conveniently at the bottom of the pile.

  22. As Canadians every Union Autoworker should be ashamed of themselves. Everyone who walks into that plant and does nothing for $77 per hour day in day out, should be the ones that go sit on the street for a year to try and grasp how bad a large percentage of Canadians really have it. Give me a break people I would along with many others commend Harper for driving a hard line and avoiding the panic button. You Ontario Liberals just cry until you get a hand out. Laugh it’s okay, while Western Canada struggles with no bailouts, since there are no jobs since everyone in Ontario and Newfoundland now live in Alberta things are worse then what the papers publish. Handouts are something that Oil and Gas industry, Forestry industry, nor the Medical profession have ever heard about. When Ontario’s autoworkers can’t handle their EI check vs. their $77 per hour there sure is a lot of votes that can make things happen in Ontario isn’t there. You build cars and you make more than someone who puts their life on the line in the Oil patch, or our Medical staff. Our government should have ignored the cries for greed and went on with business. Harper you were right Dion and Iggy are just using “Bailout” as a tool to gain votes and power and you are the one the is seen as the bad guy. Wow Canadians be ashamed!

    • hello, hello, are you there? Union bashing will never solve our economic problems. Do believe it will? Well….then you will never get an educational degree in economics. Bashing other people with whom you diagree with will never solve the world problems. “currently, if you think otherwise, please move immediately to Gaza, where the Isrealis will help you and your thinking out, LOL.”

  23. The economic survival of the Ford, GM, and Chrysler squarely in the hands of the Auto Unions; the reality is that without wage and benefit concessions all automakers will eventually fold.

    Total unionized worker compensation (wages, pension, severance, paid leave, health care, etc) is at least 1/3 more than that given to non-union autoworkers.

    The union’s position to simply blame management (and government) for the Big Three’s financial difficulties is absurd.

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