America's auto industry has nothing to lose by being competitive.

[Uncle Emanuel Watkins]

Slash wages by 2/3rds so each car can be sold at 1/2 the price. Would you work building cars at $24.00 an hour? Would you find American cars more attractive if they were sold for half the price they are now?

[Andrew-Austin]

Not if they fall apart.

[Uncle Emanuel Watkins]

Not if they fall apart.

You've listened to too much negative nonsense by foriegn naysayers about the United States. We have the necessary engineers, machinists, and the workers to be competitive in the world market. We also have the best system in the world to not only make a come back but to revolutionize the industry.

[Uriel999]

You've listened to too much negative nonsense by foriegn naysayers about the United States. We have the necessary engineers, machinists, and the workers to be competitive in the world market. We also have the best system in the world to not only make a come back but to revolutionize the industry.

Yeah we do...too bad we don't use them. Right now my Dad's 6 year old Chevy Avalanche which hasn't even gotten to 90k miles has a transmission that sometimes won't go into gear. Also Every time he gets out of the car he has to disconnect the battery or else it will drain. He knows the problem after hours of looking on the net but GM employees have no effing clue on how to fix it even after he told them. My mom's 2000 caddy is also having serious problems despite also being under 100k miles. The gm we had before that a chevy astro which my family bought new in 94 and later became my car during high school also had serious problems such as needing to get the rear end replaced well before 100k miles. In short, I will be furious if my parents buy any more GM products in the future. They have seriously declined in quality over the past few decades riding off namesake alone.

[Uncle Emanuel Watkins]

Yeah we do...too bad we don't use them. Right now my Dad's 6 year old Chevy Avalanche which hasn't even gotten to 90k miles has a transmission that sometimes won't go into gear. Also Every time he gets out of the car he has to disconnect the battery or else it will drain. He knows the problem after hours of looking on the net but GM employees have no effing clue on how to fix it even after he told them. My mom's 2000 caddy is also having serious problems despite also being under 100k miles. The gm we had before that a chevy astro which my family bought new in 94 and later became my car during high school also had serious problems such as needing to get the rear end replaced well before 100k miles. In short, I will be furious if my parents buy any more GM products in the future. They have seriously declined in quality over the past few decades riding off namesake alone.

The auto industry doesn't try to build a car that will last like a Harley Davidson any more. A lot of customers buy a car for a few years and then trade them in for new ones. 100 K might sound like a few miles, but engines at one time needed to be overhauled with new rings and a valve job when the odometer reached that total. Cars nowadays are built very well. I just think the American auto makers make too many models.

Also, America needs to come to terms with her disillusionment with it always being either this or that way. It is always either this way that the workers make too much money or it is that way that the executives make too much when it is actually both that make too much money. So, cut the pay of both while paying both the engineers and the machinists in between about the same amount of money. Why have the engineers design products if the machinists can't make it? In Germany, a golden balance between the two is better established. The machinists there who make the product are almost held in the same esteem as the engineers who design it.

[satchelmcqueen]

Slash wages by 2/3rds so each car can be sold at 1/2 the price. Would you work building cars at $24.00 an hour? Would you find American cars more attractive if they were sold for half the price they are now?

i would build cars for $24 an hour while wearing a pink dress for that kind of money. bring it!

[Zippyjuan]

Not including benefits, the average union auto worker gets $28 an hour. That was in 2007. The contract they signed that year brought pay for new hires to be the same as those for Toyota and Honda. http://www.cbsnews.com/stories/2008/11/24/opinion/main4630103.shtml

Notice how, in this article, I've constantly referred to 2007 figures? There's a good reason. In 2007, the Big Three signed a breakthrough contract with the United Auto Workers (UAW) designed, once and for all, to eliminate the compensation gap between domestic and foreign automakers in the U.S.

The agreement sought to do so, first, by creating a private trust for financing future retiree benefits--effectively removing that burden from the companies' books. The auto companies agreed to deposit start-up money in the fund; after that, however, it would be up to the unions to manage the money. And it was widely understood that, given the realities of investment returns and health care economics, over time retiree health benefits would likely become less generous.

In addition, management and labor agreed to change health benefits for all workers, active or retired, so that the coverage looked more like the policies most people have today, complete with co-payments and deductibles. The new UAW agreement also changed the salary structure, by creating a two-tiered wage system. Under this new arrangement, the salary scale for newly hired workers would be lower than the salary scale for existing workers.

One can debate the propriety and wisdom of these steps; two-tiered wage structures, in particular, raise various ethical concerns. But one thing is certain: It was a radical change that promised to make Detroit far more competitive. If carried out as planned, by 2010--the final year of this existing contract--total compensation for the average UAW worker would actually be less than total compensation for the average non-unionized worker at a transplant factory. The only problem is that it will be several years before these gains show up on the bottom line--years the industry probably won't have if it doesn't get financial assistance from the government.

Make no mistake: The argument over a proposed rescue package is complicated, in no small part because over the years both management and labor made some truly awful decisions while postponing the inevitable reckoning with economic reality. And even if the government does provide money, it's a tough call whether restructuring should proceed with or without a formal bankruptcy filing. Either way, yet more downsizing is inevitable.

But the next time you hear somebody say the unions have to make serious salary and benefit concessions, keep in mind that they already have--enough to keep the companies competitive, if only they can survive this crisis.

[heavenlyboy34]

i would build cars for $24 an hour while wearing a pink dress for that kind of money. bring it!

Sign me up for that! I know how to weld and cut steel, too! :D

[nickcoons]

In Brazil, they use more machines and fewer people to build cars. I haven't studied this in-depth, but automating a process that can be automated seems that it'd always be more efficient, churning out less expensive and more consistent products.

[M House]

Yeah I heard about it they had some sorta robotic plant that made tri-valve engines for Dodge Neons and the Mini Coop for a short while. Was a decent design, I'm pretty sure we outsourced it to them. I have no idea if that's still in operation, I kinda doubt it cuz the Mini switched engines and the Dodge Neon is long dead.

[M House]

Just wikied what happened to them http://en.wikipedia.org/wiki/Tritec_engine. Kinda makes you mad and ask why we can't be making powerful 4 cyclinder engines in the US?

[Uncle Emanuel Watkins]

Not including benefits, the average union auto worker gets $28 an hour. That was in 2007. The contract they signed that year brought pay for new hires to be the same as those for Toyota and Honda. http://www.cbsnews.com/stories/2008/11/24/opinion/main4630103.shtml

Okay. But the point is the average wage per worker is still over $70.00 while the average wage for foreign workers is $40.00. Since few new hires will be needed in an industry going out of business, the split level wage scale that will pay the new worker $28.00 and $52,000 a year is useless.

[Dr.3D]

Slash wages by 2/3rds so each car can be sold at 1/2 the price. Would you work building cars at $24.00 an hour? Would you find American cars more attractive if they were sold for half the price they are now?

How would cutting the workers pay by 2/3rds make a car cost half the price if the cost of the worker is only 10% the cost of the car now?

[Uncle Emanuel Watkins]

How would cutting the workers pay by 2/3rds make a car cost half the price if the cost of the worker is only 10% the cost of the car now?

The auto industry in the United States has eroded away from that of machining and engineering to that of management and marketing. As machining has been contracted out, it has made engineering a useless endeavor. Once again, why design a car if the machinists can't make it? We aren't talking about assembling a car. We're talking about building it.

Become more competitive by slashing worker pay, elimating all benefits and all corporate bonuses. Meanwhile, put the focus back on the engineers and the machinists who design and build the cars. Establish quality by reestablishing the art and science of machining.

[Dr.3D]

Our nation is junk because we have marketed ourselves into an empty box.

The auto industry in the United States has eroded away from that of machining and engineering to that of management and marketing. As machining has been contracted out, it has made engineering a useless endeavor. Once again, why design a car if the machinists can't make it? We aren't talking about assembling a car. We're talking about building it.

Become more competitive by slashing worker pay, elimating all benefits and all corporate bonuses. Meanwhile, put the focus back on the engineers and the machinists who design and build the cars. Establish quality by reestablishing the art and science of machining.


The high cost of manufacturing in this country has little to do with wages, but rather the regulations imposed upon the manufacturer by our government. We have such things as the EPA and OSHA that cause the manufacturers to spend extra money, manufacturers in other countries don't have to spend. It isn't so much the wages of the employees but rather the high cost of doing business in the U.S.A..

[Uncle Emanuel Watkins]

The high cost of manufacturing in this country has little to do with wages, but rather the regulations imposed upon the manufacturer by our government. We have such things as the EPA and OSHA that cause the manufacturers to spend extra money, manufacturers in other countries don't have to spend. It isn't so much the wages of the employees but rather the high cost of doing business in the U.S.A..

Okay. So, like everything else, just move the auto industry to the south where it can made to work.

[TheEngineer]

Dr. Paul appeared on Your World w/Neil Cavuto to discuss the bail-out of the auto industry. This marks Dr. Paul's 25th appearance on Your World w/Neil Cavuto.

Please digg the video at http://digg.com/political_opinion/Ron_Paul_Discusses_the_Proposed_Auto_Bailout_with_ N_Cavuto . Thanks!

[Dr.3D]

Okay. So, like everything else, just move the auto industry to the south where it can made to work.

Yeah, south of the border.

[Pauls' Revere]

why should the government be deciding which industrial sectors are to survive and which are to fail? What about the 1/2 million jobs in retail that have already been lost? and in construction? etc... WTF makes the auto industry so god dam rightous as to survive for producing a crap product? The japanese stole the economy car market back in the 1970's when we where on the oil embargo and what did our auto makers do? Build big gas guzzlers to keep the public addicted to oil. They are a day late and 35 BILLION dollars short. The government in essence is gonna pick the best loser! to save! and that LOSER is the auto industry.

[libertarian4321]

My 7 year Chevy runs fine.

I don't have a problem with the "quality" of American cars- it may be a bit below that of Japanese cars, but American cars are cheaper, too, for similar features.

The problem is, they tend to miss trends in the TYPE of car Americans want (bad management) and they cost too much to produce (overpaid union workers).

Cut the wages of management and workers, install leaders with a clue, and they might have a chance, but keep things the way they are, and the "bail out" just keeps a bad company running for a few more months.

[Zippyjuan]

Okay. But the point is the average wage per worker is still over $70.00 while the average wage for foreign workers is $40.00. Since few new hires will be needed in an industry going out of business, the split level wage scale that will pay the new worker $28.00 and $52,000 a year is useless.

The average wage per worker is NOT $70 an hour. Please read the article. Current workers get $28 an hour in pay while foreign auto workers get $24 an hour in pay. New hires in the US industry will be paid less than the $28 an hour or LESS than the foreign workers.

You can only get to the $70 an hour figure if you include their benefits PLUS the money that retirees are being paid. This money is not going to currernt workers so should not be included in estimates of their pay.


But then what's the source of that $70 hourly figure? It didn't come out of thin air. Analysts came up with it by including the cost of all employer-provided benefits--namely, health insurance and pensions--and then dividing by the number of workers. The result, they found, was that benefits for Big Three cost about $42 per hour, per employee. Add that to the wages--again, $28 per hour--and you get the $70 figure. Voila.

Except ... notice something weird about this calculation? It's not as if each active worker is getting health benefits and pensions worth $42 per hour. That would come to nearly twice his or her wages. (Talk about gold-plated coverage!) Instead, each active worker is getting benefits equal only to a fraction of that--probably around $10 per hour, according to estimates from the International Motor Vehicle Program. The number only gets to $70 an hour if you include the cost of benefits for retirees--in other words, the cost of benefits for other people. One of the few people to grasp this was Portfolio.com's Felix Salmon. As he noted friday, the claim that workers are getting $70 an hour in compensation is just "not true."


And under the 2007 labor contract agreement the Union will become totally responsible for those retirement benefits. The companies agreed to contribute a lump sum to start the fund but after that the companies will no longer be responsible for retiree benefits. That will be off their books.