Have the workers drained the auto industry in this country?

[JohnnyRingo]

Let's look at my personal employment history with Delphi (the company formerly known as Packard Electric Division Of General Motors).

When I started in 1972 I was earning about $6.50/hr and a new Camaro could be had for about $3,000. Anyone there could get a three year loan (the maximum length for a a car loan then), and own one. The payments were tough, but with careful household budgeting it could be done. I was also able to start a family on that $9,000 per year. Times were good.

When I retired in 2003, I was making about $26/hr, or around four times as much as when I started 30 years before. The window sticker on that new Camaro had increased by ten times over that time period however.

Clearly, the auto workers aren't the winners in the battle against inflation, it's been the stockholders and management.

My union brothers and sisters didn't complain that our wages weren't keeping up with inflation because so many Americans made do in leakier boats, but I have a favorite economic perspective:

When I tell people that I started for GM way back then at $6.50 an hour, they usually point out that "that was a lot of money back then", to which I reply that "unfortunately, 35 years later, Republicans still think it's a lot of money".

Instead of this class warfare over how "some workers" are earning too much and need to take a cut in pay, the focus should be on why the rest of the country isn't earning more.

[Idealism]

1. Statistically proven: Since the 70s real wages for workers has yielded little gains

While CEO compensation has gone up exponentially, same with food and energy prices. Oil traded at $2.50 per barrel in the 70s too. Ahh the good old days

[sandnsea]

2. I wish I could hug you

I say this over and over around here. It isn't just cars either. The cost of housing has gone up at least ten fold. Doctors visits. Health insurance premiums. Power, phone, cable. Just about everything has gone up way way more than wages. Minimum wage is barely $6.50 hr now, and it was $2.00 when you were making $6.50. What workers have lost has absolutely gone to the shareholders who are only paying 15% on their "earnings". It was only a matter of time before it became unsustainable.

[bobd0]

3. In the early 70's I sold PREMIUM gasoline for 34.9 per gallon.

Blaming the workers for the auto industry catastrophe is like blaming mortgage holders for the economic meltdown. It's typical Republican class warfare. After fucking up the entire nation and world in innumerable ways for the past eight years these despicable class warfare waging scum seek to lay blame on the working class and the poor.

[liberal N proud]

4. Mere pittance compared to the Executives salaries

Why do the people doing all the labor get blamed for the obscene pay for those who sit behind their mahogany desk and sip the martinis.

[Montauk6]

5. The absolute smoking gun was the Big 3 CEO's each flying their own

private luxury (otherwise, what's the point) jets to go the Hill to beg for dough.

[TheCowsCameHome]

9. THAT will be a lasting example of pure arrogance and greed.

A tipping point, for sure.

[Greyhound]

10. I think it has to multiplied 1000 times to make a comparative pittance. n/t

[bluecollarcharlie]

6. Good point . Very good point.

That's why whenever i get on here and see these points that some people bring up using either old information or wild guesses or just outright damned lies that they picked up from the main stream press and the ill informed, i just blow a gasket.

You know, i always wonder what if this happened before the election. Before they started courting our votes and saying our concerns were their concerns. Would they have told us we should just accept our fate then? Would they still take money from our PACs or beg up to help down in Ohio and Northwest Indiana like they had? I now wish we could go back to before November the 4th knowing what we know now.

If you're going to go all hypocrite after you get what you want and then throw out union votes after we did what we did and have been doing for years for the democratic party, thhen i think we should get our money back. Every. Last. dime.

[TheCowsCameHome]

7. The workers on the assembly lines build what their employer dictates.

They have no say in manufacturing policy decisions.

The CEO's and upper crust make those calls.

[msongs]

8. your cartoon shows a solution to its own problem - >

jumper cables won't reach? roll the "auto makers" battery/car closer to the stars and stripes car. bring the parties together and the problem will be solved. The guy holding the jumper cables doesn't seem to have a clue though.

Msongs

[readmoreoften]

15. Oh yeah, that's the solution, bring the Democrats closer to the Republicans.

:eyes:

[DemReadingDU]

11. Not the workers, but the CEOs and hedge fund managers

8/29/07

The average CEO of a large U.S. company made roughly $10.8 million last year, or 364 times that of U.S. full-time and part-time workers, who made an average of $29,544

CEO pay can look like chump change next to private equity and hedge fund managers' pay. Those managers made an average of $657.5 million in 2006 - more than 16,000 times what the average full-time worker makes, and roughly 61 times that of the average CEO.

more...
http://money.cnn.com/2007/08/28/news/economy/ceo_pay_workers/index.htm?postversion=2007082907

[boomerbust]

12. 1969

16 yrs.old. Working at the local canning factory in summer for a buck an hour. Every Friday pick up my $40 paycheck and go purchuse 2 gallons of gas and a pack of Marlboros and get a few cents back in change for a buck. You could cruise and smoke all night for less than a buck. Fun days.

[safeinOhio]

13. I agree with you, but check an old pay stub

In 1972 I was only making $3.18/hr at Ford.

[JohnnyRingo]

23. Wow... I didn't know Ford was making so little then

Perhaps the key was demand for workers in a rapidly expanding job market here in NE Ohio back then.

When I started, Packard was hiring 100 people a day until there were 15,000 of us. They were processing us so fast, they would take the Poloroid pic for our files with two of us in frame, then cut the picture in half.

If they weren't paying $6.50, I don't know if I would have left my steel mill job to go work an assembly line.

While it appeared we were doing better than my dad when he started there, his money still went a long way in buying a house and raising a family of five:



Of course, that new Chevy cost about $1,000 then.

[Greyhound]

14. The subtle creep of the "financial industry" into every aspect of our lives accounts

for almost all of this.

Historically, the average price of a house stayed very consistent, a little less than 3 times the average annual wage, this began to change with the advent of the misnamed Federal Reserve. If the model remained consistent the average house price in the US would be about $110K, yet even with the collapse the current average is a slightly less than $200K, if you look at the price 2 years ago it was heading toward $300K. This is almost entirely the result of the subtle effect of interest, a slow creep that puts more and more wealth in the books of the banks. Houses are a little better in some respects, but worse in others and technology has lowered the actual costs of construction.

I wrote this as a confirmation of what you noticed about the price of a car.

Another gage used by Napoleon Hill back in the 20s (IIRC) was the price of a man's high quality suit, it is roughly the price of an ounce of gold and remained the same going back more than a century. Today the price of an ounce is about $800 but a good suit (not the shoddy Chinese crap we're inundated with today) is at least twice that.

I'm hoping that TimeForChange writes this up in detail someday, he seems to live for super-documented, exhaustive dissertations like that, I don't have the patience or time.

In gathering the rough numbers I ran across an interesting tidbit, up through the early 20th century you could buy a house from Sears.

[mdmc]

16. no

SUV's ruined Detroit...

[JohnnyRingo]

22. And yet...

I have friends who say they'll never own anything other than an SUV.
I ask why, and the replies vary from "sitting up higher" to "safety on icy roads". I roll my eyes and debate their rationalizations, but they seem convinced.

Clearly there's a strong market for these vehicles (when it's economically feasible to drive one), and whether it's been superimposed on consumers through advertising image or not, Detroit would be remiss to ignore the demand.

As I mention, that demand may have been created artificially by the auto makers to sell high profit vehicles, but even Japanese and German companies offer high-end SUVs worldwide and would be happy for a bigger piece of the market. In a utopian world, we'd all drive homogenized economy cars and recycle our newspapers, unfortunately no one will produce a car unless there's a profit.

I think what wounded Detroit (they aren't dead yet) is the greed that caused the price of a car to escalate beyond the average wage, to the point of creative financing via six year loans and leasing to move them off the lot. It would have happened even if they had been producing all electric cars for the last 15 years.

It's easy to say that they build cars no one wants, but all one has to do is watch traffic to see what sells. No one holds a gun to the consumers heads to make them buy SUVs.

I'm sorry I went on so long, but your 3 word oversimplization of a terminal problem falls short in identifying cause and finding a workable solution.

[mdmc]

31. well said

du moves so fast that nothing is ever really discussed anymore.
and now I can't further the discussion at this time..
:kick: to check in later... for a proper reply....peace

[bluecollarcharlie]

32. Really???

Ruined how? You mean like when they made $5000 clear profit on each one sold?
Didn't seem to do Toyota, Honda, Nissan and Kia any harm (They make them, by the way. I just wanted to get that in case you ignored that).

[eilen]

17. Hear hear!

I was just having this discussion with my mother. If you know anything about the history of the UAW and how the auto workers gave their lives in the thirties --entire families engaged in activism to bring rights to workers, safety standards, mere human dignity.... Unions gave us the Fair Labor Act. If people are jealous because they don't get the pay and benefits that union workers do, maybe they should organize, show solidarity with other workers and support them. There is nothing outrageous with the expectation of heathcare, pension, safe working conditions, and a fair wage--no matter what job you work.

In the late sixties my mother bought her first car, a VW Bug for $1,899. She wanted the Mustang but that cost over $2400. Middle class people traded in their cars every two years and the car loans were set up so you had most of it paid off (not interest first)--it wasn't like taking out a mortgage. Wages have not kept pace with the higher costs of cars, college, healthcare, home prices and energy. Now food is still going higher yet oil is dropping --what gives?

[JohnnyRingo]

24. I understand

The unions worked hand in hand with the auto makers for fifty years to the mutual benefit of all concerned. It wasn't until the late '70s when the companies began eying cheap foreign job markets that the unions were suddenly "choking the manufacturers" with our "demands".

What a coincidence.

[OnionPatch]

18. I never blame a worker for making a decent living.

I agree with you 100% that the question should be, why isn't the rest of the country earning more? If a worker in any particular industry isn't making a decent, respectable living, there is something wrong going on somewhere. It amazes me that Americans have been manipulated into an economic system that relies on cheap labor.

[JohnnyRingo]

25. Pitting one worker against another is a class warfare tactic as old as labor itself.

It's usually employed to subvert attention from those who are taking the real money home.

It's sad that we have those who still fall for the argument that workers should complain that others of their class should earn lower wages instead of demanding parity for themselves.

[threadkillaz]

19. Stop the Inflation Tax - Abolish the Federal Reserve

Get on it. YouTube Peter Schiff or Jim Rogers.

[NNN0LHI]

20. 1973 Ford Chicago Stamping Plant - UAW Local 588

I was recruited out of high school to work there. I was still in my senior year of high school when I hired in. I asked my supervisor at the time if I could have two nights off for my senior prom and my graduation night. Couldn't be AWOL for ANY days during our 90 day probationary employee or that terminated your employment. He told me to pick one which he didn't have to do and I thought was pretty darn fair of him. I picked my graduation.

Local 588 had a reputation as one of the "maverick" locals, (this was before McCain) and we were known to have wildcat strikes over Health and Safety issues even without the International Unions permission which was a big no, no. The company fired our entire bargaining unit over it once. Took almost a year to get them their jobs back.

Your numbers just about mirror mine.

Don

[customerserviceguy]

21. I appreciate your story, but there's one thing that sort of intrigued me

and that was the Camaro that you used as the example of how the prices went up faster than the wages being paid to workers.

As I recall, the mid-1960's "pony cars" were deliberately made to be an inexpensive alternative to pricier European sporty cars. The Mustang led the way, with the Camaro soon at its heels. If I remember correctly, they were not massively profitable for Ford or GM, but they did bring some pizzaz to the showroom. They were made out of less-durable components (I spent a fair amount of money trying to keep my 69 Mustang in running order) and were a far cry from the top-end sports car that the Camaro morphed into by 2002 (the last year of production) after a few generations of redesign.

Like I said, I appreciate your perspective, but I prefer apples-to-apples comparisons. When I started out after college in the title insurance business in 1976, I was only making $500 a month, and when I lost my last job in that industry in 2005, I was making $3,000 a month. You could buy a decent house in Seattle for $35K back in '76, but in 2005, that same house cost $500K. Now, that's apples to apples.

[Mike 03]

26. The workers are getting caught in the middle of this thing through no fault of their

own. Both sides are trying to make an "issue" of them. It's unfortunate and it damages the debate by making it look like people opposed to the bail out are taking it out on the workers instead of simply not wanting to throw good money after bad.

[Fire1]

27. Great post!

[DemoTex]

28. Yep. Just like the airline workers killed the airlines. Especially the RICH pilots!

:sarcasm:

[HughBeaumont]

29. It's even worse when you consider 6.50 in 1972 = 28.60 in 2003 dollars.

So really . . . you made less in real dollars in 2003 than you did in 1972 while the CEOs during that same time period made exponentially more while running their companies in the ground. Your dollar had far more buying power back then than it does now. FAR more.

Want more proof? Go to Borders or a Card shop. Usually they'll have these "flashback" booklets with all kinds of snippets. One of them is household income and prices. Back in 1969, the average household income (in 1969 dollars) was 8,000 per year and the average cost of a home was 16 thousand and some change; about a 2:1 ratio. Think you can find a 2:1 disparity in homes today (well, you probably can now; what with all the foreclosures and real estate crash)?

Don't worry. You're not alone.

Perfectly Legal & The Big Squeeze are books ALL working Americans should read, lest anyone think the CEOs are "just looking out for them".

[2Design]

30. kick