Just read about Delphi's proposal to come out of B/K on Bloomberg. Bloomberg claims to have a copy of the letter from Delphi to UAW outlining their demands.
It's downright scary to me. A close nexus remains between Delphi and GM and I can't help but wonder if GM is watching this Delphi attempt to bust UAW as a model for GM doing the same.
Among Delphi's demands is lowering of wages to $9.50 and hour. That's about $1600 a month and that won't cut the Michigan standard of living. Delphi also wants to scrap health care for workers who've retired, eliminate cost-of-living adjustments that protect wages against inflation, drop coverage for dental and vision care, and reduce holidays and vacations, according to the letter.
The company also proposes to freeze accumulated years of service toward its pension plan. Delphi may terminate the pension plan entirely if the UAW fails to provide concessions in other areas, the letter said.
Bawanajim is at least partly right. This is the result of our concensus decision to pursue a "free market" economy. The basic idea is we can sell freely to people in other countries; those in other countries can sell freely to people in the US. Leaving aside any hiccups in this system -- that is barriers to sale of US goods in foreign markets -- this pretty much prevails today.
If you think a little about what this means, you will gain some understanding. Because of improvements in technology, there is very little cost benefit to locating manufacturing near the point of consumption. Maybe more precisely, the cost benefit of locating manufacturing near the point of consumption is exceeded by the cost savings of cheap labor abroad. Why have textile jobs left the SE United States and migrated to Asia? For the same reason the textile jobs left Massachusetts to migrate to the SE United States -- cheaper labor. Laborers in Detroit now compete with laborers in Korea and China. This isn't just true in factory assembly work, either. It happens in software engineering where US software engineers have to compete with Indian software engineers earning $5,000 to $15,000 salary per year.
The days of a US manufacturing labor union compelling management to raise wages and benefits (or even maintaining wages and benefits) by negotiation are coming to an end. The plain fact is that the work can be done elsewhere cheaper, and stock holders want their profits maximized. When there is less profit manufacturing on-shore versus off-shore due to labor differentials, either the labor differential will be eroded over time or the on-shore work will be relocated off-shore. If you are in a trade which can't be shipped off-shore -- such as medicine or some other "have to do it here" -- you may be safer.
I'm not saying this is good. I don't know if it is good or not. It is scary. I am saying that there is a national concensus on this kind of economy and that this comes with that kind of economy. We may disagree about whether we should be in Iraq or not, but there is almost zero public opposition to "free market" economy. Partly this is because often people benefit from this in less expensive goods or higher quality goods for the same price (of course, it was the "quality" issue that opened the marketing door for foreign cars. It isn't because a honda or toyota is cheaper that they established their US market share -- it was because Americans were bloody sick and tired of having shabby quality in their US made cars).
Ah yes standard procedure, due to years of management having thier heads where the sun does not shine management uses the workers as thier whipping boy for their mess ups!!![:'(]
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The Tazman aka Martin Price
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ORIGINAL: Alsatian
... but there is almost zero public opposition to "free market" economy.Â*
I disagree with that, Alsatian. IMO, the public majority has no clue of the implications of such an economy, or theory. The few folks that are senisble enough to see that there is no fair trade in a free market global economy would disagree as well.
As for unions, I couldn't agree more to slash and burn them all. Free legal council, "not my job" mentality, sluggish workers are but a few of the downfalls of unions. Do away with them - if union workers don't like it, tough. The guy in India certainly will.
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We were made by God and for God, and until you figure that out, life isn't going to make sense.
If a nation expects to be ignorant and free, in a civilization, it expects what never was and what never will be.
It sounds like you are agreeing with me, not disagreeing with me. I said "there is almost zero public opposition." I'll revise my remark to "there is no meaningful public opposition." I agree that the public does not understand these issues and don't see them. They only see specific details not the big picture and how these details are determined by the big picture.
I think we probably agree but our words are getting in the way. To me it is REMARKABLE that there is not public discussion of this, that this is not a hot topic and on the front burner of our politics. I don't know what is the correct position on this, but I see the logical tendency of this "free market" economy and it scares the hell out of me. The simple rendering of this logical tendency is that everyone of us has to compete with every other worker in the world based on what we bring to the table and the value of those skills. If a software engineer earning $15,000/year in India will writethe samequality and volume of code that I used to write for $92,000/year (which I used to do) he will have my job and I won't write software anymore (which I do not). I have migrated to a different discipline -- patents -- but I wonder if this skill may also move offshore. What skill cannot be offshored?
I like the old days when we enjoyed a higher standard of living in America than those poor buggers in those other countries (every other country?). Gee, aren't we lucky to live in America where we earn lots of money and can have nice things? Health care. Quality public education. Organized sports for our children. Good public infrastructure including telephones, roads, mail service, air transport. What happens when the average worker in the US cannot command a substantial wage advantage over his third world counterpart? Where is the US standard of living then? What happens to our infrastructure then? We are certainly not there yet. We still enjoy high average wages and incomes relative to the rest of the world, but what is the trend and why would the trend change?
This can't be addressed by individuals who choose to just buy American. That, in my opinion, is naive. I don't know what the solution is. I'm concerned for my kids's future. The best bet for them is to get the best education they can get. This is the strongest lever we as American's have for competing with the rest of the world. But even then, there are getting to be a lot of well educated people in India, China, Korea, ***an, Ireland, etc.
One way or another I believe that we'll all be faced with a choice of accepting a lower standard of living , which probably won't change things much if at all , or becoming self employed in some way . Basically we've priced ourselves out of the labor market . Ebay is beginning to look better and better every day . [&o]
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Kevin Haendiges
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I think Alsatian has made well reasoned and logical points on this. Our recent trade policies and laws have all seemed to benefit foreign countries far more than the U.S. Yes, a few industries benefitted but the majority of businesses and workers have not.
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ORIGINAL: Alsatian
It sounds like you are agreeing with me, not disagreeing with me.Â* I said "there is almost zero public opposition."Â* I'll revise my remark to "there is no meaningful public opposition."Â* I agree that the public does not understand these issues and don't see them.Â* They only see specific details not the big picture and how these details are determined by the big picture.
I think we probably agree but our words are getting in the way.Â* To me it is REMARKABLE that there is not public discussion of this, that this is not a hot topic and on the front burner of our politics.Â*
Yes. We do agree. A little slow today I guess, but yes - I see you share much of the same view on this as I.
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We were made by God and for God, and until you figure that out, life isn't going to make sense.
If a nation expects to be ignorant and free, in a civilization, it expects what never was and what never will be.
kevin1: One way or another I believe that we'll all be faced with a choice of accepting a lower standard of living , which probably won't change things much if at all , or becoming self employed in some way . Basically we've priced ourselves out of the labor market . Ebay is beginning to look better and better every day .
I believe you to be right, however it scares me to think about how that will come about. Think about it - nearly 70% of Americans are financed to 125% of their income, the cost of living is insane and wages have not grown to match - how are we going to reduce our standard of living without losing everything all the while seeing this country into recession or worse depression? I don't pretend to know, but my guess would be that the used car parts market is going to explode as is other resale type categories, which will only put more people in the unemployment line.
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We were made by God and for God, and until you figure that out, life isn't going to make sense.
If a nation expects to be ignorant and free, in a civilization, it expects what never was and what never will be.
Is Delphi GM's model to bust UAW
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