Friday, December 12, 2008

GM out of options

The UAW's refusal to agree to wage concessions by a specific date in 2009 killed the senate version of H.R. 7321. [1] According to GM's annual report, it paid the UAW workers $73.26 per hour in wages and benefits. [2]  The Senate Majority leader Harry Reid of Nevada spoke shortly after Republicans left a closed-door meeting.  He said that Republicans balked at giving the automakers federal aid unless their powerful union agreed to slash wages next year to bring them into line with those of Japanese carmakers. [3]   

GM has sought to reduce production costs to about $48 per hour, about the average hourly cost incurred by Toyota, Honda and Nissan Motor Co., company officials have said.[4] If wages were reduced the vehicle assembly cost would have saved GM about $1,000 per vehicle.  General Motors had offered buyouts to all of its 74,000 U.S. hourly employees. [5]  Those workers could have elected to take a lump-sum payment of $45,000 or $62,500, depending on their job description, and retire with full benefits. [6]

Republican Sen. George V. Voinovich of Ohio, a strong bailout supporter, said the UAW was willing to make the cuts - but not until 2011.  GM built 9,286,000 vehicles last year [7] , if it could have brought wages down to that which the Japanese auto makers pay their hourly workers it would have saved GM $9,286,000,000 last year.  In stead GM's share holders lost $68,450,000 last year.

For now my question on my post, “Who killed GM? Will it rise again?”, looks like it was true when I stated that if anything has killed GM it is its managements lack of vision and the UAW's not looking out for the best interest of its members. 

1 comment:

MDSF said...

Are wages really the problem here? I thought pensions required some $2000/car.