Discuss Detroit Archives - January 2008 CAW warns Chinese automakers may flood market Previous Next
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Jimaz
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Username: Jimaz

Post Number: 4320
Registered: 12-2005
Posted on Friday, January 18, 2008 - 11:54 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Please say it ain't so.

From CAW warns Chinese automakers may flood market:
quote:

OTTAWA -- North America's Big Three automakers would be pummelled "like boxers with one arm tied behind their backs'' if Chinese companies flood the market with low-priced cars and trucks, says the head of the Canadian Auto Workers union.

CAW president Buzz Hargrove said General Motors, Ford and Chrysler will have a tough go against Chinese automakers since Beijing places strict trade restrictions on foreign companies selling cars in China.

That puts the Big Three at a disadvantage, he said, since Canadian and American trade rules are more lax than China's.

"We're getting beat up,'' Hargrove said.

"GM, Ford and Chrysler are just like boxers with one arm tied behind their backs, where these countries that are protecting their market and shipping in here, it's just so unfair and so one-sided.''

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Iheartthed
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Username: Iheartthed

Post Number: 2544
Registered: 04-2006
Posted on Friday, January 18, 2008 - 11:59 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Right on the heels of Governor G encouraging them to build in Michigan whenever they come into the American market.

quote:

Later in the day, Granholm met with three Chinese manufacturers. At each exhibit, she inspected their vehicles and asked how much the cars cost in U.S. dollars. Prices ranged from $15,000 to $20,000.

Granholm said Chinese carmakers have "come a long way" since she visited with Geely International Corp. at the auto show two years ago. And, she hopes changes to U.S. trade policy will bring their manufacturing plants to this country -- and she invited them to Michigan.

"You have a big market to fill in China," Granholm told Zhang Huaping of Chengfeng Motor R&D Co. "But when you're ready to come here, we want you to manufacture in Michigan."



http://detnews.com/apps/pbcs.d ll/article?AID=/20080118/AUTO0 4/801180336/1364
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Johnlodge
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Username: Johnlodge

Post Number: 4667
Registered: 10-2003
Posted on Friday, January 18, 2008 - 12:00 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

quote:

CAW president Buzz Hargrove said General Motors, Ford and Chrysler will have a tough go against Chinese automakers since Beijing places strict trade restrictions on foreign companies selling cars in China.



Where's the "free trade" crowd? Free for people selling their cheap crap here, not free for us there. What a deal.

Why don't we demand that cars sold here be made here like China does? Oh right, because China would say no, and we can't have that.
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Mcp001
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Username: Mcp001

Post Number: 3206
Registered: 11-2003
Posted on Friday, January 18, 2008 - 12:48 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I love this gem:

quote:

"You have a big market to fill in China," Granholm told Zhang Huaping of Chengfeng Motor R&D Co. "But when you're ready to come here, we want you to manufacture in Michigan."



And just what incentive could they ever have to build here?

The guv displays her incompetence yet again!
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7051
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Username: 7051

Post Number: 63
Registered: 02-2006
Posted on Friday, January 18, 2008 - 12:55 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Unfortunately, China owns a lot of our debt (bonds). If they decided to stop buying tomorrow it would shut our country down the same day. This is the mess we have gotten ourselves into.
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Detroitplanner
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Username: Detroitplanner

Post Number: 1522
Registered: 04-2006
Posted on Friday, January 18, 2008 - 1:04 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

7051: "Unfortunately, China owns a lot of our debt (bonds). If they decided to stop buying tomorrow it would shut our country down the same day. This is the mess we have gotten ourselves into."

Lets have Michigan become part of Canada!
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Bob
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Username: Bob

Post Number: 1651
Registered: 11-2003
Posted on Friday, January 18, 2008 - 1:09 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

And the other half of our debt is owned by the Middle East. Bank of Dubai just bought up a bunch of Bear Stearns, and another Middle East bank helped provide Citibank with an infusion of cash.
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D_mcc
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Username: D_mcc

Post Number: 136
Registered: 12-2007
Posted on Friday, January 18, 2008 - 1:20 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Not to mention Merrill Lynch just sold off a large chunk of itself to foreign investors. How do we allow this crap to happen?

Lets look at the brightside, we have a lot of empty factories with idle assembly lines.
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Bob
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Username: Bob

Post Number: 1652
Registered: 11-2003
Posted on Friday, January 18, 2008 - 1:23 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

On a side note, these countries also rely on our country and its citizens spending our hard earned cash on goods and oil from these countries. In a lot of these countries, their citizens could never afford half of what we purchase, so they have a vested interest in our country continuing to prosper and spend. It's that wonderful global economy at work.
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Goat
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Username: Goat

Post Number: 10026
Registered: 10-2003
Posted on Friday, January 18, 2008 - 1:36 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Until China overtakes the USA economy.

When Nixon went to China it opened Pandora's box. When Clinton went to invest there it destroyed us as a competative region. Bush in his "wisdom" has allowed the pillaging to escalate at an accelerated rate.

I don't like Buzz much but I do agree with him on China.
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D_mcc
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Username: D_mcc

Post Number: 138
Registered: 12-2007
Posted on Friday, January 18, 2008 - 1:53 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Learn Mandarin...its the next global Language
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Iheartthed
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Username: Iheartthed

Post Number: 2545
Registered: 04-2006
Posted on Friday, January 18, 2008 - 2:08 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

quote:

And just what incentive could they ever have to build here?



I guess the same incentive that Honda does?
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Terryh
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Username: Terryh

Post Number: 653
Registered: 11-2006
Posted on Friday, January 18, 2008 - 8:55 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Or Cantonese......This is what happens when you have an adolescent, apathetic political body that wallows in American Idol, video games and celebrity gossip. If I could go back and do it over I would do what I am doing now: buy low; live frugally; sell high; purchase cds, in short-care about and look after #numero uno. I read somewhere the Chinese auto designers and manufacturers are still not up to par as far as safety and quality is concerned, for the cars to be sold in the U.S. Invest in China.
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Sludgedaddy
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Username: Sludgedaddy

Post Number: 4
Registered: 01-2008
Posted on Friday, January 18, 2008 - 11:01 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I wonder if the Chinese will open up a showroom at Wal-mart?
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Professorscott
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Username: Professorscott

Post Number: 1058
Registered: 12-2006
Posted on Saturday, January 19, 2008 - 1:30 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

What is so new about the idea of Chinese-made (insert noun) flooding the US market and driving American manufacturers to ruin? This is exactly what Japan, and then Taiwan, and now mainland China, have been doing since not too many years after the end of World War II.

Remember when radios and televisions were made in the United States? Go to the store now and try to find one. Go ahead; I'll wait. Things like towels used to be made in places like North Carolina, but if you've bought the towels for your home in the past five years, odds are they were made in a pacific rim country.

Our trade "policies" and tax policies have encouraged this for the past fifteen years at least, adding to the fact that basic economics encourage it. Our federal government wants us to buy everything from other countries and not have any manufacturing industry at all. They won't say that; it would be idiotic to say it, but look at tax policy, trade policy, health care policy here versus the nations which are manufacturing.

We have chosen this path. Cars are next, and just about last. Good luck.

"In general, the people get the government they deserve" - Will Rogers
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Livernoisyard
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Username: Livernoisyard

Post Number: 4878
Registered: 10-2004
Posted on Saturday, January 19, 2008 - 2:55 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

PS: McCain was going to be the Savior of the left when he campaigned about solving all such problems relating to the textile, furniture, and US auto industries. He didn't really use the "T" word, but anybody with a grade-school education (at least anywhere but in Detroit) would know that he was thinking tariffs. Now that would really go over big--forcing Americans to buy more-expensive US-made products so that some greedy, overpaid unionized employees could afford the plasma TVs, second homes, along with their multiple SUVs in every pot.

And his promising to reeducate laid-off workers too is a hoot. Especially in a state where so many of its residents are the poorest educated in the Upper Midwest. And the Detroit Three were providing reeducation opportunities the entire time those employees were there anyway.

If they didn't utilize any of those benefits, tough. They had thirteen years of K-12 education (if they choose to complete it). And plenty of their own money when they had jobs.
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Tigers2005
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Username: Tigers2005

Post Number: 180
Registered: 02-2005
Posted on Saturday, January 19, 2008 - 12:59 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Why do people who do physical work for a living not deserve to live well?
LY, what do you do for a living? Are your wages, benefits and purchases justified by the work that you do? Unions appear to be greedy because they have to constantly fight to keep the wages and benefits that their corporation would gladly take away from them. Our automakers would be in a lot better shape if they could get workers to work for $10/hour for 30 hours per week with no benefits, but would our society be in better shape?
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Jjaba
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Username: Jjaba

Post Number: 5995
Registered: 11-2003
Posted on Saturday, January 19, 2008 - 1:28 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Wait till the Indian cars hit the market for $2,500 a unit. Now we are talkin' deals.

Drive a Chevy Equinox, powered by a Chinese engine.

Buick is a very popular car in China, made at 3 plants in country. Globalization cuts both ways.
Last jjaba looked, that's a GM product.

Our Southern states seem to be very attractive to foreign car producers, although it's hard to beat the fine work coming out of Marysville, Ohio Honda Works. That Accord is some seller.

jjaba, sociology of cars.
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Jjaba
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Username: Jjaba

Post Number: 5996
Registered: 11-2003
Posted on Saturday, January 19, 2008 - 1:29 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

The onliest thing good about Canadian cars is their heaters. Damn, it's cold up there.

jjaba.
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Elviswithteeth
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Username: Elviswithteeth

Post Number: 63
Registered: 03-2007
Posted on Saturday, January 19, 2008 - 1:39 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

The Big Three are in a world of hurt already! So hang on to something!
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Livernoisyard
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Username: Livernoisyard

Post Number: 4881
Registered: 10-2004
Posted on Saturday, January 19, 2008 - 2:29 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Some uninformed posters believe that the US consumers are better off by continually overpaying unskilled labor that produces the goods or services that they purchase. Unskilled labor have been paid more than most engineers in the auto industry. What's the logic in that???

Why not instead pay a price of those goods and services that are more in line with reality? US-made Toyotas come to mind, for instance. There are lots of others.
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Jjaba
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Username: Jjaba

Post Number: 5997
Registered: 11-2003
Posted on Saturday, January 19, 2008 - 3:08 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Livernoisyard, semi-skilled UAW auto workers now make about $72,000 annually, wages and benefits combined. First confirm this, then tell us what Toyota workers make for similar occupations. Relate value-added to what is produced for the company.

It does appear shocking that a highly trained engineer should make less than the semiskilled line worker, unless the line worker is really worth more value to the company.

Thanks Livernoisyard. Or does Livernoisyard think workers at GM and Fords should be compared to these Wal-Martizated ave. wages of $10.21/hr. shop floor. Or the wages earned by immigrants on the line in Manchester, Mich. assembling door panels for a supplier. Explain.

jjaba.
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Jmarx
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Username: Jmarx

Post Number: 59
Registered: 01-2005
Posted on Saturday, January 19, 2008 - 4:04 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Not to take away from the points being made in the discussion here, but I have a feeling that the original comments made by the CAW president in that article has more to do with posturing to his workers than anything else. After all, the automakers are going to be renegotiating the CAW contract soon and he knows that the CAW will need to become aligned with what the UAW offered.

(Not to say he is inaccurate in his statement)
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Livernoisyard
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Username: Livernoisyard

Post Number: 4882
Registered: 10-2004
Posted on Saturday, January 19, 2008 - 4:13 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

quote:

...semi-skilled UAW auto workers now make about $72,000 annually, wages and benefits combined.

Is it possible that some social-work profs cannot handle grade-school arithmetic well?

How come the automakers put out something like $72 or $75 per hour for upper-tier UAW labor (unskilled jobs, regardless if some of those workers are unnecessarily semi-skilled). On a typical 2000 hour work year for most folk, that comes closer to $140,000 to $150,000 wages, benefits, and pensions (including the 1/2 of the relatively small FICA payments paid by employers).

The current UAW labor accord has savings for the automakers primarily if they fire (buy out) the older, costlier employees and replace them with those making substantially less. That is happening on a piecemeal basis until the oldsters are all gone--soon. Still, the pensioners have to be provided for and the funds for that must be fully funded for that.

UAW, U.S. carmakers must close labor cost gap to survive -- It's make-or-break time -- July 22, 2007-- BY TOM WALSH -- FREE PRESS COLUMNIST
quote:

Crunch time is here for saving what remains of Detroit's automobile industry.

UAW President Ron Gettelfinger and the three wobbly U.S. auto companies -- General Motors Corp., Ford Motor Co. and the Chrysler Group -- must bargain a radically new labor deal in order to compete effectively against fierce rivals from Japan, Korea, Europe and eventually China.

That's a tall order, to expect a new contract by September that will save the companies lots of money and also be ratified by UAW members. Labor talks opened with ritual handshakes Friday at Chrysler and continue Monday with more of the same at GM and Ford.

If they fail to make giant strides toward shrinking the huge cost advantages now enjoyed by Toyota, Honda and other competitors, Ford and Chrysler may not survive long enough to negotiate another UAW contract.

The reality is that stark.

"It's got to be big," said David Cole, chairman of the Center for Automotive Research, of the change needed in the 2007 UAW contracts with the Detroit Three. "If it's incremental, and only saves them $2 or $3 per hour, I think Ford is dead."

Most industry estimates peg the so-called all-in labor cost of an hourly worker for the Detroit automakers at nearly $75 per hour, including wages and benefits. That's about $25 per hour more than at Japanese-owned assembly plants in the United States.

Cole said Detroit must aim to close $20 of that gap in the upcoming contract, because it will be more and more difficult to do as time goes on. Here's why:

Ford lost a whopping $12.6 billion last year, Chrysler lost $1.5 billion and GM lost $2 billion. And for the first time in history, the three Michigan-based automakers are expected to sell less than 50% of the cars and trucks in the United States this year.

One scenario for dealing with the Detroit Three's most vexing cost-gap issue, an obligation of nearly $100 billion for future retiree health care for hourly workers, is to create a union-run Voluntary Employee Benefits Association fund to manage this benefit and take it off the company books. But that likely would require an up-front payment of $50 billion to $70 billion from the automakers. GM and Ford both have cash reserves in excess of $20 billion and can raise more cash by selling units such as Ford's Jaguar, Land Rover or Volvo brands.

But it may be more difficult to fund a VEBA in the future if the cash drain continues. Each of the Detroit Three is burning cash faster in North America than it's coming in. And with even strong competitors Toyota and Honda boosting rebates and other incentives to sell vehicles in a soft market, cash flow isn't likely to improve markedly for the Detroit Three anytime soon.

Benefits promised to retirees make up about half the $25 per hour cost gap between Detroit and foreign rivals. Other factors include greater use of contract workers at lower pay rates by the foreign-owned plants, higher absenteeism at the U.S. companies and income security provisions for laid-off UAW workers in programs such as the jobs bank.

UAW leaders are quick to point out that labor is less than 10% of the total cost of an automobile today, and that the Detroit Three have plenty of other cost issues beyond the scope of the UAW contract.

But aside from that, and the occasional obligatory gripe about high salaries and bonus packages for the auto company CEOs, Gettelfinger and his top officers are taking a very businesslike, nonconfrontational approach to contract talks.

"We have been very creative between contracts," Gettelfinger said Friday, referring to deals in 2005 and 2006 to cut retiree health care costs and accelerate head-count reduction with massive buyouts at GM, Ford and Delphi Corp.

Quietly and methodically, the UAW also has been striking local contract deals on work-rule changes at GM, Ford and Chrysler plants around the country, helping the companies boost efficiency and quality ratings.

Also encouraging, as the union and companies tackle the daunting task of trying to slash costs while still framing a contract that workers will approve, is that the UAW has few sacred cows left to protect.

Years ago, the union stood fast against two-tier wage structures that would preserve wages for existing workers while allowing lower rates for new hires. But now two-tier deals are fairly common in the auto-parts sector.

Pattern bargaining has always been a bedrock principle of UAW negotiating -- except when it's not. The union departed from pattern in not doing a mid-contract deal with DaimlerChrysler on retiree health care cuts.

Gettelfinger signaled Friday that a return to pattern on that issue will be among the key points discussed at Chrysler, but the union has been flexible in the past on pattern -- remember the wage cuts during the Chrysler bailout period in the early 1980s? -- and may be again, if necessary.

Make no mistake, Gettelfinger and his UAW bargainers will scrap and claw right up until the Sept. 14 contract expiration to preserve every job and every penny they can for hourly workers and retirees. But know, too, that they understand how serious the current threat is to the viability of Detroit's auto companies and thus to the future of the UAW and its members.

Will the union leaders bend in the spirit of preserving and renewing the strength of GM, Ford and Chrysler?

Yes, count on it.

Will they bend far enough and fast enough, or will the companies die slowly because the help was too little too late?

Aye, that's a key question, along with this one: Will they be creative enough to frame a deal that gives the companies a major competitive boost without looking too much like a sellout to the workers who must ratify it?

I thought about how tough those challenges are as I listened Friday to Gettelfinger say the mid-contract health care changes at GM and Ford "were the most painful decisions I've made, having to look retirees in the eyes" when their benefits were cut.

Inevitably, there will be more pain and sacrifice along the way to getting these companies fixed and battle-ready for the future.

Let's hope everyone has the stomach for it.

Contact TOM WALSH at 313-223-4430 or twalsh@freepress.com.



(Message edited by Livernoisyard on January 19, 2008)
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Alan55
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Username: Alan55

Post Number: 1089
Registered: 09-2005
Posted on Saturday, January 19, 2008 - 7:04 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Some uninformed posters believe that the US consumers are better off by continually overpaying corporate executives in the industries that produces the goods or services that they purchase. Executives have been paid 20 to 1,000 times more than most engineers in the auto industry. What's the logic in that???

Why not instead pay a price of those goods and services that are more in line with reality? US-made Toyotas come to mind, for instance. There are lots of others.
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Livernoisyard
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Username: Livernoisyard

Post Number: 4883
Registered: 10-2004
Posted on Saturday, January 19, 2008 - 7:30 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

And those even more uninformed comrades among the DY posters seem to make everything management vs. proletariat issues.

Observation: The Detroit Three made, messed, and slept in their own beds decades ago. And they also had the UAW, as willing whores, with them in those very same beds, while the US consumers were expected to keep overpaying for their vehicles. Unfulfilled expectations did in the US auto industry.
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Alan55
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Username: Alan55

Post Number: 1090
Registered: 09-2005
Posted on Saturday, January 19, 2008 - 7:55 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

And other, even more uninformed corporate stooges seem to think it's fine for executives to get 50 million, 100 million, 200 million in year bonuses while at the same time the employees get their pensions, medical coverage, dental coverage, and decent wages stripped from them. All at the same time as these stooges are berating the employees for being greedy and unworthy. Even worse, all while the stooges are concurrently bewailing the ills of government health care and praising private health care that is evaporating.

"posters seem to make everything management vs. proletariat issues."

(Your alzheimers is showing, Liver. Read your posts above if you want to see "Us vs. Them" shrieking.)
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Sstashmoo
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Username: Sstashmoo

Post Number: 938
Registered: 02-2007
Posted on Saturday, January 19, 2008 - 9:14 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Alan, you get what you pay for. A $100k per year CEO?

It's the same reason some consultants and specialized physicians get exorbitant amounts of money for advice. What's it worth?

Pay someone a Million, he saves your company and makes a billion for you. Thats a good investment. Remember, these folks at the top of their game are in demand.

They are superstars in their circles. When they take a corporation from the brink of bankruptcy, put it in the black and put some cash in the bank. Call em up and offer them 100k and a gas card. Get ready for the laughter.
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Mcp001
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Username: Mcp001

Post Number: 3207
Registered: 11-2003
Posted on Sunday, January 20, 2008 - 8:28 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

quote:

I guess the same incentive that Honda does?



Do you really think that the Chinese will open a plant here? They call all the shots over there (i.e. wages, working conditions, etc), what possible reason would they have to chuck that?

RE: CEO's.

My take is to pay them just like we should pay politicians: Their pay/bennies comes from the surplus (or in the company's case, net profit).

That'll give them all the incentive they need to run a company correctly.
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Sstashmoo
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Username: Sstashmoo

Post Number: 940
Registered: 02-2007
Posted on Sunday, January 20, 2008 - 9:05 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

^ I agree, unfortunately it doesn't work that way. What would you rather have, a paycheck or a "we'll pay you when it's fixed" arrangement?
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Mcp001
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Username: Mcp001

Post Number: 3209
Registered: 11-2003
Posted on Sunday, January 20, 2008 - 10:10 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Depends on how hungry the CEO is for the job, or if they would rather burn through their savings/investments looking for that "dream job"?
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Amiller
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Username: Amiller

Post Number: 15
Registered: 09-2007
Posted on Sunday, January 20, 2008 - 11:29 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

If you think that folks should be rewarded based on their value, or market demand, then I suppose that CEOs could be paid even more than they are now. If, on the other hand, you think that folks should be rewarded based on effort and sacrifice, then I hope you'd agree that the average effort a CEO sacrifices for their job is not hundreds of times greater than that of a coal miner. This is just a choice our society will have to make.

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