Wednesday, November 26, 2008

Blame the auto worker. It makes sense, right?

According to the New York Yimes it does make sense to blame the auto worker.

I was talking about the auto company's big three with my brother-in-law the other day. I was talking about the fat cats at the top being overpaid for their failures. He brought up the auto workers being paid $70/hour. I thought "wow, that is pretty damn good for a manufacturing job."

I couldn't believe that was true and agreed that if it was true then that needs to be looked at as well and contracts re-negotiated to help the company survive. Afterward, I went and researched this little factoid. Well, I was surprised to find that this is in fact a misrepresentation and it came from the New York Times of all places by Andrew Ross Sorkin!!!!

Felix Salmon at Portfolio did the best job of explaining the misinformation:

"The average GM assembly-line worker makes about $28 per hour in wages, and I can assure you that GM is not paying $42 an hour in health insurance and pension plan contributions. Rather, the $70 per hour figure (or $73 an hour, or whatever) is a ridiculous number obtained by adding up GM's total labor, health, and pension costs, and then dividing by the total number of hours worked. In other words, it includes all the healthcare and retirement costs of retired workers. [emphasis in original]"

Let's just say it plainly. NYT Mergers & Acquisition reporter, Andrew Ross Sorkin is a douche bag. At least Stephen Glass was just screwed up and trying to gain noteriety when he made up his fictional characters and stories. This guy's reporting is actually going to cause a lot of real working class people a lot of heartache. (Check out his alumni profile . Is that a BS degree or a degree in BS?)

Andrew Ross "Babyface" Sorkin (I've given him a criminal nickname, since he is now in my opinion a thug) is a little slow sometimes and does not know how to discern data or numbers correctly or make correct correlations. This is always a good trait for someone covering financial news. This misinterpretation has now spread like wildfire through all the news media. A lack of attention to detail and bad comparisons could cause millions their jobs and already average wages. I hope he feels ok about it.

I've got an idea, everyone affected by Sorkin's statements in the coming months should show up to his place in Manhattan after they get laid off and ask to borrow money from this little shit. Even better, maybe the UAW should actually gather up their members and show up at the New York Times office to express their outrage.

"Babyface" Sorkin is a prime example of the "failing upward" philosophy that is rampant and engrained in business today. This philosophy means that if you aren't doing the job, you still get rewarded as long as you are an Executive or a VP. As a reporter, Sorkin completely misinterpreted the data and still he has his job with the Times. A nice well-paid job I might add that with all his appearances on media outlets and book deals affords him a Manhattan lifestyle.

Maybe he can donate the huge kickback he must be receiving from the big three's management to help heat the homes of the millions of auto workers who might lose their jobs or have their actual $28/hour wage (per the Center For Automotive Research) cut by unneeded contract revisions. Meanwhile, the company executives and even "Babyface" Sorkin can rest comfortably and guilt-free on their large estates, fucking their young mistresses, surgically enhancing their wives and spoiling their socially retarted offspring (see Paris Hilton).

The leaders of the giant auto companies in trying to match their friends in the financial industry have taken large salaries & bonuses, golden parachutes and garnered company extras like private jets as rewards for making bad decisions over and over. It seems that these fat cats feel that bad decisions that have made them uncompetitive and their lack of knowledge of recent history are deserving of reward (remember the fallout in the 70's, due to the same uncompetitive behavior?).

If I was a shareholder, I would be looking to them for answers and demand that they come clean as to why they recalled the EV or why they didn't follow Toyota's lead in fuel efficiency/hybrid technology or actually stop following the trends in the auto industry and actually lead the advancements. These companies have a history of innovation and leadership. One of them invented the Assembly Line that not only affected the auto industry, but sparked an industrial revolution. What happened to that inventiveness? Why aren't the shareholders up in arms? How come the UAW is so quiet? Why aren't these guys at the top not being voted out or fired? So, I looked into it further.

Basically, the exec's at the big three lost site of what their companies are by being too involved and blinded by their financing operations like Ford Credit & GMAC and ignoring their responsibilities of staying competitive as a manufacturer. In other words, their greed and their competitiveness with their friends on Wall Street who had all the perks they envied and not their true manufacturing competitors caused them to want to cash in on the banking/lending business at the cost of losing their own market share in what should have been their first priority... manufacturing and selling cars and parts for those cars.

As I looked into this, in regards to labor costs I found a much better and fair comparison between the big three and there major competitors. The big three need to bring their total labor costs, which average $70 an hour, closer to the Honda or Toyota level of about $45 an hour. Notice I said TOTAL, not the take home wages of individual workers.

I also noticed that Toyota's top executive earns a $1,000,000/year salary plus bonuses based on company performance unlike the $14,000,000/year to $20,000,000/year salary plus bonuses matter what... plus dividends matter what... plus whatever kickbacks they like so much that the big three top executives earn every year. Actually, they don't earn it and that is the problem.

In the time it took the big three to watch their oil futures rise and drop, Toyota not only scooped up the hybird and fuel efficient passenger car business around the world, but also edged in and took the lead in commercial applications with its line of fuel efficient full-size trucks like the Tundra. Toyota is a manufacturing and marketing success that stays ahead of the trends. This companies' top exec makes a base salary almost 14-20 times less than the dinosaur behemoths GM, Chrysler and Ford. Toyota's top exec takes it upon himself to deliver success to his shareholders, employees and in the end himself through bonuses. The big three takes private jets to Washington, DC and begs for handouts.

Check out this article from Media Matters also:

Now, take a few minutes and look up more and let me know what you find and whether you agree or not.

UPDATE: While researching further I found that a lot of the "pension" underfunding is due to the executives at the top who require vastly larger pensions than their laborer counterparts. Again this was included in Sorkin's total and shouldn't be if you are discussing a person at the factory level. A lot of times, layoffs are mad at the factory level to save one or two executive pensions as well. Food for thought.

© 2008 David La Cava. All Rights Reserved.

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