CADsortaGUY
Lifer
Originally posted by: BarneyFife
Originally posted by: Ktulu
There is seriously so much idiocy in this thread. Please read this damn article and tell me that it wasn't the contracts with the UAW that was killing GM.
http://www.autoblog.com/2008/1...log-with-john-mcelroy/
Most people seem to miss the fact that they are on the verge of a massive turnaround. I'm not trying to be a rah-rah cheerleader here. I'm persuaded simply by the facts.
Last year's UAW contract was truly historic in that it will completely remove the health care cost burden off the Big Three. Though they have to give the union the money to assume this burden, they're paying 40% less than it would otherwise cost them. After 2010 they stop paying billions in health care every year and start dropping that money to the bottom line.
Moreover, there will no longer be any pensions for new hires. They'll get 401k's instead. Again, massive cost savings going forward.
On top of that the UAW workforce takes big pay cuts, and new hires come in at a wage rate that is roughly the same that Toyota, Honda, Nissan, et al, are paying their American workers. In other words, the Big Three can finally compete with the transplants from a labor cost standpoint. That means they can now make small cars in America without losing money on every one they make.
Another benefit of that new labor contract is that the Big Three are no longer pressured to keep building cars and trucks in the face of weak demand. Under the old labor contract it was cheaper to build cars and slap big incentives on them than it was to not build them in the first place. Now, they can build to actual demand, and they're running on much tighter inventory.
I agree. Its obvious 95% of the people in car threads have a political agenda and have no idea about the facts.
So you agree that the union contracts were killing GM? Great! Glad to have you aboard.... finally...