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Like you, I blame Andrew Coyne


 

Chrysler shutting down all of its plants for a month; countless millions out of work.


 
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Like you, I blame Andrew Coyne

  1. They left a note though. “Thanks for the $3.5 billion eh? We were kinda worried about bonuses this year”

  2. Not to be insensitive to the workers involved, but auto plants typically shut down for a week or two around the holidays, if I’m not mistaken.

    Next thing you know, companies will be sending their workers home every Saturday and Sunday.

  3. This is another fine mess he’s gotten us into.

  4. Maybe it’s time we set up rotating twenty-week operations, scheduled to start up again as soon as the EI cheques dry up.

    Oh geez, I didn’t say that out loud, did I?

  5. They should just go bankrupt and get it over with, so whatever will replace Chrysler is started sooner.

  6. If these lazy slobs want real jobs, they can move to Fort Macmurray.

    Oh wait…. 39.56 a barrel? Shit were fuckzored!!

  7. Maybe it’s time we set up rotating twenty-week operations, scheduled to start up again as soon as the EI cheques dry up.

    Hey, it worked for Bricklin! oh..

  8. Getting a little cruel about the unemployed there Paul, a little joke about “millions”. No “countless millions”.

    You and Coyne are getting into “are there no poor houses?” territory. Not so good this time of year.

  9. “whatever will replace chrysler” (if they go bankrupt),

    actually, it will be……chrysler. they don’t “dissappear” they reorganize (meaning getting rid of the fat, bloated innefficient union contract, and a lot of over-paid managers).

    What will reapper is a better more efficient chrysler. (pssst, here’s a dirty little secret – downturns are actually healthy for an economy – they force efficiencies and get rid of waste, what isn’t healthy is delaying the inevitable).

    BTW, a survey just came out that confirmed most would be willing to by a car from the big three if they’re in bankruptcy reorg.

    Go figure.

  10. “They should just go bankrupt and get it over with, so whatever will replace Chrysler is started sooner.”

    What replaces Chrysler may just be you walking and carrying a sawed-off shotgun to fend off homeless cannibals. Jesus! The Finance Minister just said the economy was going to contract 0.4% next year. To get the real figure X10 and add in a plague of locusts.

  11. “What replaces Chrysler may just be you walking and carrying a sawed-off shotgun to fend off homeless cannibals”

    Sawed-off shotguns are illegal in Canada. You can get hand guns in Toronto though…. oh, but they are illegal too …. maybe let David Miller know that …

  12. “Sawed-off shotguns are illegal in Canada…”

    Uh, yeah, but methinks if we get to the point where we need to fend off hordes of homeless cannibals, perhaps the police won’t really have much time for enforcing fire arms laws. Seems to me that in BCL’s hypothetical it won’t really matter to the cops what you’re wandering the streets with unless it’s the freshly gnawed off appendage of a local citizen. Also, while sawed off shotguns may be illegal, since shotguns are legal, and saws are legal, I don’t think people will have much trouble figuring out how to get a sawed off shotgun for the Thunderdome.

    As for handguns, I’m sure you can get them in a bunch of places in Toronto. Just try getting your hands on one once the streets are overrun with wandering cannibals feasting on our flesh though.

    Oh, and I blame Coyne for the inevitable cannibalism.

  13. The homeless cannibals don’t scare me. The ones with kitchens do.

  14. MYL – you forgot to add: “Gnawed!”

  15. just to keep it in perspective (is that possible on these blogs?) Toyota has cancelled the second shift planned for next Spring at its new Woodstock plant, and extended the Christmas break from 1 to 3 weeks for the first shift. Over at Cambridge, they are doing a four day week now, rather than five. The effects of the recession are washing through the economy. Toyota and Honda are not immune either, just not in danger of insolvency.

  16. as for the cannibalism thread, glad to see the partisan hacks are lightening up and having some fun for a change. Maybe proroguing Parliament IS a good thing…

  17. Cannibal eating locust,

    now THAT’ll be scary.

  18. If the big 3 all go under, the foreign auto producers will have no reason to keep their North American plants operating. They will gradually move fabrication and, perhaps more easily, their parts manufacturing back to their home countries. Opening plants in North America was done to make consumers fell less guilty and more likely to buy so called imports. It worked. But not necessary if the big 3 go down. People are really pretty naive about these guys (Toyota, Honda, VW etc).

  19. A colleague of mine referred to this as Ontario’s version of the East Coast fisheries crisis, and there are indeed a lot of parallels. A way of life people thought would last forever is coming to a rapid end, and the hunt for villians is on. Looming ahead is the same thing many East Coast communities had to endure – a painful, difficult restructuring that saw many people leave, while those who wanted to stay had to take retraining. (One of the problems with retraining, as HR experts will tell you, is that those who need it the most are generally the ones most resistant to taking it.)

    The reality is that it is no longer economically viable to pay workers over $70 an hour in wages and benefits to build cars. You can dump all the bailout money you like into the industry, but when the bailout money is gone that basic fact will remain. Bankruptcy is the only thing that will save the North American auto industry, allowing it to reorganize and emerge as a more competitive entity. It’s called creative destruction, and it is actually a positive force for the economy. The bailouts are only going to act to delay it taking place.

  20. They wouldn’t be in this problem if they had better vehicles and not charged us 40% more for their vehicles. Ripped off at the dealership and now going to be ripped off by a bail out. If we are bailing them out they had better be giving us a lower price on the vehicles.
    Also if GM hadn’t crushed the EV1 it probably would be the leader in the electric automobile business. 20 years ago they had a electric car that would rival or at the very least equal what is made today. Mind you the Phoenix (made in California) is going to put the electric car/suv/truck on the map big time. 90+ mile per hour, 250 mile range, overnight and/or 10 minute charge. Reminds me of the EV1 which GM had and would now be a huge money maker.
    It seems that we had arrogant and ignorant CEO’s in bed with the big oil companies.
    I don’t want the employees to take the hit but I do want the idiots running the companies to put in their place. All the insane wages that they get paid has to come to an end. They just manipulate the companies to their own end so that they can get rich. And with us holding the bag.

  21. Oh, and I blame Coyne for the inevitable cannibalism.

    Might as well pile on . Damn that Coyne .

  22. Problem with electric cars, at this time, the grid cannot handle a large explosion of them. Speaking of explosions, what are we going to do with disposal of batteries.

    Electric cars might be a good idea at one level but there are losts of details. The internal combustion engine isnt going away anytime soon, there are still significant improvements that can be made, in both fuel use and emissions.

    This is a “S” curve problem, since it is at its core a technology issue. Equivalent to the debate of CISC chips vs RISC chips int eh 80’s or Cable Vs Telephone wire in the 90″s. The dying technologies (CISC and POTS) continue for longer than you think because a little more can be wrung out of them and the emerging technologies still need the big breakthrough to generate those significant gains vs old technology. Government policy, at the end of the day, doesnt help or accelerate either one, except at the margins.

    Electric cars, or non internal combustion cars, will happen in scale one day. All I can say is that, it will be slower than you want but faster than you expect……

    Re auto companies……sadly their structure is more in the way than the product. If they get saved then I look forward to the first strike by the CAW after this….I suspect the public scorn for them will be well outside of anything they suspect.

    The union is effectively dead and given a few more years of adjustment they will be allowed to shout at the wind to no effect or sympathy from anyone else.

    The best contract they could take right now would be whatever contract the Honda and Toyata plants offer in terms of work rules and wages. If they actually live up to the contract the CAW might actually continue as a entity and the workers might be fortuante enough to keep their jobs. I take no joy in that but refusing to accept it does nobody any good.

    Are the CAW going to bid down their wages to get the contract to build an electric car?

  23. The main difference between Big3 and foreign labour costs is the “legacy costs” which principally come from the fact that the Big3 have been around for long decades that the foreign makers haven’t.

    And if we’re pissing and moaning about subsidies can we at least acknowledge the hundreds of millions
    ( maybe billions – who knows ) that the southern right-to-work states have thrown at the foreign makers to make them come to the most ill-educated and ill-serviced part of the USA ?

    Enough with $70/hr bs.

  24. Does Canada need an automotive industry? The Auto Pact was dismantled in 1999 and the Canadian plants remained open because it would have been expensive to move that capacity and they have lower health care costs than the US plants.

    Now why should we be subsidizing (subsidising?) US firms to operate in Canada when it’s not clear they can even afford to operate in their own country. Clearly when they receive a bailout from the US Government there will be pressures for them to consolidate their operations and save jobs in the USA.

    If we need a “national champion”, why not direct subsidies to our own industries? After all France does it with impunity, the US does it with impunity, China does it with impunity, etc.. As much as I hate corporate welfare, if a government is going to engage in that sort of market abuse, shouldn’t it act in its own interests?

  25. I assume our pols are paying attention to what’s happening in US. White House today says they are considering managed bankruptcy for GM and Chrysler so I hope Ont and Fed govts aren’t rushing ahead with their bailout cash. There is also talk that GM/Chrysler merger might be back on but GM denying it so far.

    Steve W

    Please don’t give our pols any ‘bright’ ideas. Car companies have got to be one of the most cash dependent industries there is. It would cost tens of billions $$$ to build a car company from the ground up and I can just imagine there are lots of pols who would be happy to spend your cash doing it.

  26. Hmm. I wasn’t thinking about cars – maybe there’s something else that Canadians are good at…

    Sarcasm? Canadians are sarcastic. Maybe we should get some subsidies for that!

  27. Steve, Steve, Steve… one does not NEED subsidy for what one is good at. One does not DESERVE subsidy for what one sucks at.

  28. I get a kick out of people in the car industry demanding bailouts from the government (i.e., tax money from you and I), and yet the Autoworklers Union bosses in both countries adamantly refusing to consider that the new economic realities might require wage cuts to make the comapnies competitive and keep their workers jobs. It seems the Union bosses are more concerned about the wrath of their unions and keeping their own individual jobs, and are willing to put the future of all their employees’ jobs on the line rather than seek a compromise.

  29. Not to sound like too much of a lefty but why is there *so* much whining about workers’ salaries and unions when all the companies’ decisions are made by executives. And they ain’t exactly working for bread and water. Anywho, back to bashing auto workers.

  30. Fear not, John D, the CEOs have richly earned their bashing, too. But do try a little fun with numbers.

    Which makes a car more overpriced:
    (1) a CEO and some VPs each overpaid by hundreds of thousands of dollars;
    (2) tens of thousands of workers each overpaid by tens of thousands of dollars.

    And to say the executives make the decisions: I was unaware that the Big Three had abandoned collective bargaining with the UAW/CAW, who, the news tells me every few years, select the weakest prey to atta– uh, bargain with first, thereby setting the tone for the hunt– uh, negotiations with the other two.

  31. John D, I suspect all the whining about the workers has been because at last the auto execs (who have come under their own fair share of righteous scorn) have already agreed to salary reductions, giving up bonuses, etc… The unions, whose legacy benefits are largely responsible for the uncompetitive nature of the Big 3, refuse to make the same concession themselves, and are willing to bet the future of their members’ careers on us bailing them out. Not to mention that poor quality control, which is largely a worker issue, has bedeviled the big 3 for decades. I, for one, am disinclined to see my tax money go to prop up a class of workers that do not work any harder than my neighbours, and yet have inordinate pay and benefits because of an intransigent and manipulative union. I think madeyoulook’s comment that “one does not deserve a subsidy for what one sucks at” is bang on the mark, and I am tired of unions holding a gun to companies and taxpayers. If they are expecting everyone else to give, they should be willing to give a little. Had they done so at the start, I suspect they would be facing a much more sympathetic government and public today.

  32. madeyoulook is bang on.

  33. It has a lot less to do with the compensation for current workers. The benefits for retired workers are the real ‘burden’ for the Big 3. The actuarial(sp?) projections from the 1960s to 80s did not account for a) current life expectancy, and b) the exploding availability and cost of medical technology and prescription drugs. For every worker in a plant, there’s something like five retirees (and/or spouses) who are being supported – at great expense.

    This is why Toyota, for example, is able to provide almost the same level of compensation to their workers and still turn a profit. (Well, that and having a long record of not making sh*tty cars, but I digress…).

    So, while folks may hate the unions, it’s a bit misleading to point to compensation rates for current workers as the problem. Heck, we might want to consider directing a bailout toward the survivnig retirees to alleviate that expense for the Big 3, and let them march forward on a level playing field.

  34. Its about effective wage as much as it is about nominal wage. So the work rules are what drives up costs per car…..and yes legacy costs are also an issue.

    So if legacy costs are the issue then the clearly the promises extorted in the past can’t be kept, so pension and drug benefits have to be cut.

    70 per hour wages….well at GM the apprentices earn 28.40 an hour to…thats nominal wage, before overtime, before bennies and before time off. the contract is 2 feet tall so I have been having some difficulty finding the wages paid to journeymen of different classifications. The $70 number has been reported as being a figure pretty close to what any of the companies seem to have. My suspicion is that it includes legacy workers….but it isnt that clear that it doesnt.

    It definitely isnt the nominal wage, but it may very well be the effective wage the car companies pay. Anyway, a starting job as an apprentice on the line is 53,000 a year….(50 week pay) Not bad.

    Has anyone on this board ever been able to find what a toyota or honda worker gets paid in one of the transplants in Canada or the US. The mexicans earn $3 an hour or 5,600 a year in USD. Probably not too bad for their cost of living.

    Point is, reality is….if you cannot justify the premium for the labour, whether it is compared to Mexicans or farm boys in Southern Ontario or crackers in Alabama then an adjustment is probably required.

    It isnt all about labour, but any discussion about the future of auto manufacturoing in Ontario or Michigan or Ohio has to include labour, it also has to include company overhead (mgt salaries) and it must include debt and financing costs and legacy costs of pensions and health bennies.

    My family went through this int he early 80’s when Massey Ferguson blew up….bad investments, bad capital structure, sudden collapse of demand due to falling commodity prices and bad cost structure. The unions fought hard and the jobs disappeared, pension and health bennies (like my dads) were cut.

    We survived, so will eveyone else. The illusion that defined befit plans provided by companies is a illusion and a joke. The unions arent in it for the long haul, and at the end of the day they end up being part of the problem by traficking the myth and illusion that things can be made better if only……and that contracts based on unreality will actually be enforced. They arent and they cannot be.

    If there is to be an auto industry and some jobs that pay above average then the labour better take a real cold shower and get real, because if they dont their members will be out of jobs, their uneducated, unskilled (working on a line doesnt count as a skill) workers. ANd coming from a union shop will not be a good reference. The car parts industry and transplants avoided setting up in Brantford, home of Massey, White and Cockshutt farm equipment. (there is a story for you Macleans, look at a place that should be a parable to what happens) You would have thought tthe auto industry would go there for the “skilled” labour force. They avoided it like the plague because they didnt want to be infected with a union, one that reduces flexibility, teamwork and raises the “effective” wage.

    Ken Lewanza and Chris Buckley can do their members and the communities they live in a huge favour by ensuring a speedy and quick transition to keeping the jobs in place….and if that means a wage rollback and elimination of 1/2 the workrules then this needs to be done. When those jobs go nobody is coming back, for at least a generation…..because the workforce will be seen as toxic…..you may not like it but thats reality.

    • Stephen, I think that is best argued and most personal piece that has appeared in this discussion.

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