We the people lose 10 billion on GM deal

Discussion in 'Too Hot for Swamp Gas' started by g8orbill, Dec 10, 2013.

  1. chemgator
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    chemgator Well-Known Member

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    I wouldn't say that unions are the only reason GM went under. But they are the primary reason they went under.

    I would compare it to the following:

    You go golfing with your drinking buddies and come home late and ask to see the taxes that your wife was supposed to be working on while she watched the three kids, who happened to be sick that day. You notice several mistakes in the forms, and ask her what happened. She gets a look in her eye, and tells you that three children have been screaming in her ear all day long, and that's why the taxes were not done right. Do you:

    a) explain to her that she is equally at fault with the children, and ask her to accept responsibility for her mistakes?

    b) tell her not to worry, the mistakes were trivial and you can easily fix them while she takes a rest away from the kids?

    It's very hard to focus on quality when you are faced with multiple and repeated episodes of childish behavior. And anyone with experience with unions will tell you that a lot of their griping and grievances are exactly that--childish behavior. Union workers are taught early on to extract power from management in any way that they can. Slow down the work--they'll hire more people! You want new tools? Break the old ones--they have to buy you more.
  2. asuragator
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    asuragator Well-Known Member

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    The principle is still the same. If management doesn't concede too much or doesn't agree to deals that puts the company at much greater risk than necessary--as GM did in ways that Ford did not, it is on management, not the unions. The higher labor costs prior to 2009 was also the result of decades earlier decisions about pensions and retirement time, and yes about that "idle workforce" which sat around playing cards getting full pay until GM had work for them to do. But that's not the really still on management first.
    Last edited: Dec 14, 2013
  3. chemgator
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    chemgator Well-Known Member

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    It is not the same. All an individual can do to a company is leave and take his skills with him. The factory doesn't shut down for even a minute without him there. The company will hire a new person to take his place and train him. Production does not stop. The company doesn't lose any income as a result of an individual leaving.

    When an entire workforce has the ability to leave as a group, and shut the factory down for a few months, it is much different scenario. The company will almost always choose to lose millions of dollars in a lopsided negotiation instead of losing billions of dollars in a factory shutdown. Management is negotiating with a gun to their head. And the unions know this. It's not hard to find out how much profit the company is making. If the company is making very little profit, the union does not cause any trouble because there is nothing to take, so they will insist on maintaining the status quo. As the company makes more profit, the union simply demands more at the bargaining table. If they don't get it, they'll shut the factory down. It is a bit of a Ponzi scheme, because everything works reasonably well as long as the company is always maintaining or increasing profits. When a company begins to backslide a bit (and every company does), the union does not give an inch, because they don't have to. The company has to cut costs elsewhere (like engineering) to continue to pay the unions their bloated salary and benefits. And then you have claims of "poorly designed products" and unresolved quality problems. Is that really the fault of management, for not negotiating well with a gun to their heads?

    It isn't a true negotiation unless all options are considered. In theory, the union could take more, they could take the same, or they could take less than what they are currently getting. In actuality, the only things they consider are taking more, or taking the same. Getting them to take less will usually bring a strike. Only a bankruptcy can force a union to take less.

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