UAW Strike

[Castanza]

Not happy with base pay of 82k/yr with best in class benefits and a pension proposal. Unions want 94k/yr with pension and benefits all in a 32hr work week. Sounds like they UAW wants to drag this out for months….could be conjecture and grandstanding.

 

Could these companies even afford to pay this?  
 

https://www.wsj.com/business/autos/uaw-poised-to-expand-strike-to-more-auto-factories-98f0a9af?st=06mohmzo2ibvx6e&reflink=article_copyURL_share

[james22]

Auto CEOs Struggling With Whether To Replace Striking Workers With Robots Or Mexicans

 

https://babylonbee.com/news/auto-ceos-struggling-with-whether-to-replace-striking-workers-with-robots-or-mexicans

 

Spoiler: At publishing time, automaker leadership elected to compromise and go with the robots but hire Mexicans to build them.

[Malmqky]

$82k with a pension and good benes is a dream for most “common folk”.
 

I wish they’d get a 32hr work week, but doubtful. Pay raise is probably more likely, but certainly not $12k.

 

Seems to be a lot of grandstanding to me as well.

[CassiusKing1]

Are we witnessing the last breaths of the Big 3 Auto manufacturers?

This seems to me like horse and buggy unions striking as Ford is rolling out his first Model T.

[Castanza]

Imagine paying assembly line workers the same as your engineering staff… 

 

https://www.glassdoor.com/Salary/General-Motors-GM-Engineer-Salaries-E279_D_KO18,26.htm 

 

@CassiusKing1 I think it’s highly probable. Union is simply out of touch…I’m all for wage growth and better working conditions. But when your arguing for unskilled labor wages higher than most starting engineering positions, nurses, teachers, etc. you’re simple asking too much. Private company do what you want! But I don’t see how it’s sustainable long term. You’re simply pricing yourself out of jobs by asking for top 5% pay for what exactly in return? 
 

Welcome to the global economy…US should move on from these bottom barrel manufacturing jobs and get with the times. You want manufacturing here? We’ll move to the skilled market (cough cough TSMC AZ plant)… Different environments call for different solutions. 

Edited September 22, 2023 by Castanza

[HubbadaPow]

Compare to these for reference...

 

https://www.glassdoor.com/Salary/BYD-Assembly-Line-Worker-Salaries-E41020_D_KO4,24.htm

[Value_Added]

The Union asking for a 32 hour work week with 40 hours of pay is disgraceful.  The unions all across the board are venturing far away from the foundation they were built on.  Now they exist solely to gain membership and protect the p.o.s worker who would’ve been fired without the union behind them.  Sure, they negotiate contracts and fight for more benefits and wages, but that’s no longer at their core.

 

Does anyone know how often their contract is negotiated and what previous negotiates entailed as far as yearly raise increases?  Have they been locked at their current rate for a while?

 

 

[Guest]

If CEO gets a 30% raise, all average and above employees should too. Only fair, after all. 

[Spekulatius]

4 hours ago, Castanza said:

Imagine paying assembly line workers the same as your engineering staff… 

 

https://www.glassdoor.com/Salary/General-Motors-GM-Engineer-Salaries-E279_D_KO18,26.htm 

 

@CassiusKing1 I think it’s highly probable. Union is simply out of touch…I’m all for wage growth and better working conditions. But when your arguing for unskilled labor wages higher than most starting engineering positions, nurses, teachers, etc. you’re simple asking too much. Private company do what you want! But I don’t see how it’s sustainable long term. You’re simply pricing yourself out of jobs by asking for top 5% pay for what exactly in return? 
 

Welcome to the global economy…US should move on from these bottom barrel manufacturing jobs and get with the times. You want manufacturing here? We’ll move to the skilled market (cough cough TSMC AZ plant)… Different environments call for different solutions. 

I don't know if that's still the case, but at automobile companies, Engineers got overtime pay, just like hourly employees. That was about 20 years ago and probably rank dependent.

[Spekulatius]

Just now, stahleyp said:

If CEO gets a 30% raise, all average and above employees should too. Only fair, after all. 

I actually agree with this. Should be done via profit sharing, same indexing for everyone.

[Santayana]

5 hours ago, Castanza said:

But when your arguing for unskilled labor wages higher than most starting engineering positions, nurses, teachers, etc. you’re simple asking too much.

I think it's fair to question whether they're asking for to much, but I really wouldn't call them unskilled labor.   You don't want your car assembled by guys that jumped in the back of your truck in front of Home Depot.

[Spekulatius]

29 minutes ago, Spekulatius said:

I actually agree with this. Should be done via profit sharing, same indexing for everyone.

Since we are comparing workers pay with BYD, why not compare CEO and top management pay. this is 2 years old, but it looks like the highest pay in BYD is 8M RMB which is a bit more than 1M USD. GM CEO Barro pulls ~$29M annually. So if workers only ask for 3x more than comparable workers at BYD, management is getting a bargain, relatively speaking. By that measure, Barra should be getting no more than $3M or about 1/10 of what she is paid currently.

 

One could say Barra and co are only a few people, but I think these salaries are pulling up all the salaries for the people underneath, so they are contributing to the bloated cost structure. In addition, they are arguable doing a lousy job as far as creating shareholder value too.

[Castanza]

1 hour ago, Value_Added said:

The Union asking for a 32 hour work week with 40 hours of pay is disgraceful.  The unions all across the board are venturing far away from the foundation they were built on.  Now they exist solely to gain membership and protect the p.o.s worker who would’ve been fired without the union behind them.  Sure, they negotiate contracts and fight for more benefits and wages, but that’s no longer at their core.

 

Does anyone know how often their contract is negotiated and what previous negotiates entailed as far as yearly raise increases?  Have they been locked at their current rate for a while?

 

 

Typically contracts are every 5 years. This whole current strike is because in 2018 the union agreed to tiered wages where one group earns about half of the other. Likely to avoid losing their jobs. Agree with what Unions have become. At the end of the day idc all that much. It’s a private company. But I’m going to laugh my ass off when these same UAW workers bitch and loan about their now 75k mini vans rolling off lines due to increased capex. Or frankly when the big 3 ship the rest of the jobs abroad. There is never enough in the pot for unions and it’s usually a top down problem. 
 

@Spekulatius @stahleyp I like the CEO thing and frankly I think most CEOs should have wages tied to performance. I also think it’s a strawman to say Walmart CEO makes 20m or whatever so we should be making blah blah blah. 
 

@Santayana Idk is it skilled labor? Maybe somewhere in between skilled and unskilled. Go watch some videos and most people stand in place for 8 hours screwing together the same door panel one after the other. It’s pattern following at best. 
 

Also I don’t believe the engineers are union. They are likely in a separate class similar to management. Typically only the bottom tier are Union. So it’s likely they don’t get the same benefits. But I’m not 100% on this. 
 

Also should be noted that many of these local union reps make well north of 150k a year. Bump up the level of representation (regional, national etc.) and you’re talking hundreds of thousands. Curry was making almost 300k….Incentives are bad all around….and this doesn’t account for all the under the table criminal stuff that goes on. I always remember a driver at UPS who ran and win for our local. Well it came with a LOT of perks and the guy changed completely. All of a sudden he was wearing Rolex watches and driving brand new Escalades…expensing lunches and gas etc. these guys are just proxy politicians at the end of the day. Unions are simply about plundering companies nowadays. 

Edited September 22, 2023 by Castanza

[Value_Added]

1 minute ago, Castanza said:

Typically contracts are every 5 years. This whole current strike is because in 2018 the union agreed to tiered wages where one group earns about half of the other. Likely to avoid losing their jobs. Agree with what Unions have become. At the end of the day idc all that much. It’s a private company. But I’m going to laugh my ass off when these same UAW workers bitch and loan about their now 75k mini vans rolling off lines due to increased capex. Or frankly when the big 3 ship the rest of the jobs abroad. There is never enough in the pot for unions and it’s usually a top down problem. 

If in 2018 they waived raises to tier the pay, they may well deserve 40%.  Remember that raises are compounded.  Assuming $60k per year 5 years ago, a 40% increase would’ve been 6.5% per year which is basically a cost of living increase plus a little bump on top of that each year.  2.5 of those years were during a period of higher inflation as well.  Again, I don’t have all of the facts and am making assumptions.  Traditional pensions are being phased out nationwide and isn’t surprising to see here.  By the way, they will still get a pension but it will be a cash balance type.  Granted, this isn’t nearly as good but if you’re making $85k base with a 401k plus matching, and a cash balance style pension, you should be able to plan for retirement pretty easily.

 

But f*** them in regards to 40 hours of pay for 32 hours of work.  How could anything else be taken seriously.

[Santayana]

10 minutes ago, Castanza said:

Idk is it skilled labor? Maybe somewhere in between skilled and unskilled. Go watch some videos and most people stand in place for 8 hours screwing together the same door panel one after the other. It’s pattern following at best. 

Good point.   Though honestly you'd have to pay me more to do that kind of work than engineering work!

[Castanza]

6 minutes ago, Value_Added said:

If in 2018 they waived raises to tier the pay, they may well deserve 40%.  Remember that raises are compounded.  Assuming $60k per year 5 years ago, a 40% increase would’ve been 6.5% per year which is basically a cost of living increase plus a little bump on top of that each year.  2.5 of those years were during a period of higher inflation as well.  Again, I don’t have all of the facts and am making assumptions.  Traditional pensions are being phased out nationwide and isn’t surprising to see here.  By the way, they will still get a pension but it will be a cash balance type.  Granted, this isn’t nearly as good but if you’re making $85k base with a 401k plus matching, and a cash balance style pension, you should be able to plan for retirement pretty easily.

 

But f*** them in regards to 40 hours of pay for 32 hours of work.  How could anything else be taken seriously.

Like I said idc so much about the wages. If Ford and GM can afford to pay it and come to an agreement great! Earn as much as you can!  It’s more so the tactics (“let’s drag this out for months”)and approach/being out of touch with reality or the broader market of jobs. 82k is what 20k above the National average? Throw in the benefits and pension and who tf are you to demand this? Let’s hold all these other companies hostage or hurt their bottom lines because you have unreasonable demands. Plus most of these jobs are in the Midwest where 70k a year is very good pay to support a family. I just get more upset that people are generally unreasonable. It’s always extremes on both ends.  
 

Now public pensions…they really boil my blood but that’s a discussion for a different forum as it’s political in nature. 

[Castanza]

 

[james22]

1 hour ago, stahleyp said:

If CEO gets a 30% raise, all average and above employees should too. Only fair, after all. 

 

Nah, different dynamic.

 

Another interesting argument for high executive pay is called tournament theory. See Milgrom and Roberts (1992).

This applies to large enterprises with a sizeable team of executives, with a highly paid chief executive officer (CEO), along with several other vice presidents who are in line for consideration to become a future CEO.

By paying the CEO generously and well beyond what is economically justifiable on the basis of the CEO’s contributions per se, there is a strong incentive for the other executives to put in extra effort so they will become that chief executive, with all the high pay and perquisites, in the future.

From the perspective of the shareholders, the gain from those collective extra efforts is worth the high salary to the last winner of the CEO “tournament.”

 

https://saylordotorg.github.io/text_principles-of-managerial-economics/s05-11-manager-motivation-and-executi.html

[jks327]

As value investors now is the time to look more closely at automakers, will say more about this at the beginning of next year

[Guest]

1 hour ago, james22 said:

 

Nah, different dynamic.

 

Another interesting argument for high executive pay is called tournament theory. See Milgrom and Roberts (1992).

This applies to large enterprises with a sizeable team of executives, with a highly paid chief executive officer (CEO), along with several other vice presidents who are in line for consideration to become a future CEO.

By paying the CEO generously and well beyond what is economically justifiable on the basis of the CEO’s contributions per se, there is a strong incentive for the other executives to put in extra effort so they will become that chief executive, with all the high pay and perquisites, in the future.

From the perspective of the shareholders, the gain from those collective extra efforts is worth the high salary to the last winner of the CEO “tournament.”

 

https://saylordotorg.github.io/text_principles-of-managerial-economics/s05-11-manager-motivation-and-executi.html

 

 

Such BS. You could use that same argument for literally any job. The "theory" is probably championed by scammer CEO pay consultants.

 

The crazy high CEO pay actually hurts performance.

 

?Companies that awarded their Chief Executive Officers (CEOs) higher equity incentives had below-median returns based on a sample of 429 large-cap U.S. companies observed from 2006 to 2015. On a 10-year cumulative basis, total shareholder returns of those companies whose total summary pay (the level that must be disclosed in the summary tables of proxy statements) was below their sector median outperformed those companies where pay exceeded the sector median by as much as 39%."

 

https://www.msci.com/documents/10199/91a7f92b-d4ba-4d29-ae5f-8022f9bb944d

Edited September 22, 2023 by stahleyp

[Guest]

GMs returns have been 1.37% annually. Perhaps if shareholders pay Barra even more they'll get better results? 

[james22]

1 hour ago, stahleyp said:

Such BS.

 

It's not higher equity incentives they are talking about.

 

It's that overpaying CEOs allows you to underpay those vying for the job.

 

Shareholders come out ahead.

 

And sure, you could make the same argument for any other job that has the same ratio of contenders.

 

Can you name any?

[Guest]

35 minutes ago, james22 said:

 

It's not higher equity incentives they are talking about.

 

It's that overpaying CEOs allows you to underpay those vying for the job.

 

Shareholders come out ahead.

 

And sure, you could make the same argument for any other job that has the same ratio of contenders.

 

Can you name any?

 

Think about this dude. If the CEO of Apple made $3 million, is he really going to work harder at $50 million? Can you actually work any harder at that level? It is all a huge scam fleecing shareholders. 

 

Do you have any evidence that shareholders "come out ahead" by super sized executive packages? 

 

I can name a job like that easily. Fast food worker. If you paid them $5 million a year, you would have some very talented people vying for those jobs. 

Edited September 22, 2023 by stahleyp

[james22]

12 minutes ago, stahleyp said:

 

Think about this dude. If the CEO of Apple made $3 million, is he really going to work harder at $50 million? Can you actually work any harder at that level? It is all a huge scam fleecing shareholders. 

 

It's not the CEO working harder, it's all those competing for the job.

 

12 minutes ago, stahleyp said:

Do you have any evidence that shareholders "come out ahead" by super sized executive packages? 

 

"Tournament Theory"

 

12 minutes ago, stahleyp said:

 

I can name a job like that easily. Fast food worker. If you paid them $5 million a year, you would have some very talented people vying for those jobs. 

 

How would that benefit shareholders?

You only come out ahead overpaying one or a few if you can underpay more.

[Guest]

17 minutes ago, james22 said:

 

It's not the CEO working harder, it's all those competing for the job.

 

 

"Tournament Theory"

 

 

How would that benefit shareholders?

You only come out ahead overpaying one or a few if you can underpay more.

 

 

So...no evidence, I take it?

 

You could still pay the CEO far less and the other executives would make less still. Were there no CEOs when executive pay was 20x the average employee? Did they work less hard?