Crazy Idea for the Union Mess
06-03-2007, 10:35 PM
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Crazy Idea for the Union Mess
Now sure how this would be received, but I thought I would post it anyway. Currently our biggest problem is that our automakers sell less cars than they did years ago. This will never change because we are an open economy, and as long as any company can come in here, and start anew, American automakers will continue to suffer lower sales as the pie gets cut into more pieces.
The idea I had was that maybe it is time to have a corporation/fund set up that will manage the retirment accounts of all US automotive workers (no matter who they worked for- GM, Toyota, etc). It would have to be legislated into existance, but could generally operate freely as it's own entity. Participation would be mandatory if you want to sell cars in the US. The fund and it's investments would be managed by a board of directors who would be responsible for determining benifits, pay out levels, and investments. I say that there should be a 50/50 split between the retirees/unions and the manufacturers in terms of board seats. Also, the distribution of seats on each side would be determined proportionatly by how many retirees each manufacturer has in the system. So initially American automakers, and unions would have equal, and controlling representation in the company. As foriengn automakers put more workers in the pull, they would get more say over everything.
Each company upon entering the system would have to put their entire retirement portfolios into this company when it is set up. Going forward, every manufacturer would have to pay a per vehicle fee (say 2% the MSRP of each vehicle sold) into the fund. This fee would be the same for all manufacturers, regardless of how long you have been in the US, and how many retires you have. This fee would be set by the fund's board of directors, and reviewed by some kind of government oversight (to make sure everything is done right). Is see this as a way for every american auto retiree to know for sure that he will have a reasonable pension check for the rest of their lives. Plus imagine the economies of scale this fund would have with insurance companies. I am certain they would have enough leverage to drive down the current cost of insurance.
My opinion is that area's such as Michigan are suffereing through some pretty terrible times now....and sadly most of the country does not care or know. This is an area that was once home to one of America's greatest industries...and now it is in decay. We can say that GM will magically make great cars that can pay for all this...but that is simply impossible. With more players than ever, the pie just keeps getting cut into smaller peices, and it becomes very hard to grow unless you are a new player. GM could make the best, most profitable cars in the world, and at best keep their market share even...they will never have signifigant growth again under the current system.
I am all for a free market...but I also feel that foriegn companies that displace American production capacity have a obligation to pay for the legacy cost that displaced capacity created. It will also unburden GM, Ford, and DCX from liabilities that there is now way they can meet given their current size. That money can be put towards better, more fuel efficiance vehicles, and more competition in the industry.
Just an idea I thought I would post...I am pretty certain it could never happen. I do think the general idea would be a a great way to keep a free market, and put domestic automakers on equal footing with import automakers.
The idea I had was that maybe it is time to have a corporation/fund set up that will manage the retirment accounts of all US automotive workers (no matter who they worked for- GM, Toyota, etc). It would have to be legislated into existance, but could generally operate freely as it's own entity. Participation would be mandatory if you want to sell cars in the US. The fund and it's investments would be managed by a board of directors who would be responsible for determining benifits, pay out levels, and investments. I say that there should be a 50/50 split between the retirees/unions and the manufacturers in terms of board seats. Also, the distribution of seats on each side would be determined proportionatly by how many retirees each manufacturer has in the system. So initially American automakers, and unions would have equal, and controlling representation in the company. As foriengn automakers put more workers in the pull, they would get more say over everything.
Each company upon entering the system would have to put their entire retirement portfolios into this company when it is set up. Going forward, every manufacturer would have to pay a per vehicle fee (say 2% the MSRP of each vehicle sold) into the fund. This fee would be the same for all manufacturers, regardless of how long you have been in the US, and how many retires you have. This fee would be set by the fund's board of directors, and reviewed by some kind of government oversight (to make sure everything is done right). Is see this as a way for every american auto retiree to know for sure that he will have a reasonable pension check for the rest of their lives. Plus imagine the economies of scale this fund would have with insurance companies. I am certain they would have enough leverage to drive down the current cost of insurance.
My opinion is that area's such as Michigan are suffereing through some pretty terrible times now....and sadly most of the country does not care or know. This is an area that was once home to one of America's greatest industries...and now it is in decay. We can say that GM will magically make great cars that can pay for all this...but that is simply impossible. With more players than ever, the pie just keeps getting cut into smaller peices, and it becomes very hard to grow unless you are a new player. GM could make the best, most profitable cars in the world, and at best keep their market share even...they will never have signifigant growth again under the current system.
I am all for a free market...but I also feel that foriegn companies that displace American production capacity have a obligation to pay for the legacy cost that displaced capacity created. It will also unburden GM, Ford, and DCX from liabilities that there is now way they can meet given their current size. That money can be put towards better, more fuel efficiance vehicles, and more competition in the industry.
Just an idea I thought I would post...I am pretty certain it could never happen. I do think the general idea would be a a great way to keep a free market, and put domestic automakers on equal footing with import automakers.
Last edited by formula79; 06-03-2007 at 10:37 PM.
06-04-2007, 04:41 PM
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While that may be tough to admit...it is realistic given increasing competition.
06-04-2007, 05:05 PM
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Basically what it does is lets the big 2.5 off from paying retirement benifits that were gaurenteed during a time when they sold many more cars. Instead, it shifts some of the responsibility for paying those retirees to the forign companies who have came in and taken a peice of the big 2.5's pie. To accept this idea...you have to accept the idea that GM will never really gain a huge chunk of market share again...and at best will sustain.
While that may be tough to admit...it is realistic given increasing competition.
While that may be tough to admit...it is realistic given increasing competition.
06-04-2007, 05:09 PM
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06-04-2007, 06:12 PM
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Basically what it does is lets the big 2.5 off from paying retirement benifits that were gaurenteed during a time when they sold many more cars. Instead, it shifts some of the responsibility for paying those retirees to the forign companies who have came in and taken a peice of the big 2.5's pie. To accept this idea...you have to accept the idea that GM will never really gain a huge chunk of market share again...and at best will sustain.
While that may be tough to admit...it is realistic given increasing competition.
While that may be tough to admit...it is realistic given increasing competition.
A set percentage on every new vehicle sold in the US going toward the benefits of American auto workers.
This might disuade Toyota from wanting to be #1 in US sales. But it is a market that they financially cannot stay out of.
This is one idea that benefits American as a whole.
06-04-2007, 07:19 PM
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No, it's an idea that benefits UAW members as a whole. How does this idea in any way benefit the average american walking into a toyonda dealership who now has to pay more for their car to support legacy costs of a company they don't care about?
How many other displaced and disenfranchised workers should we have to bail out? In case you missed it, the auto industry is far from the only area in this country that's a big loser to offshore competition.
With that in mind, all you're really describing is increasing tariffs on foreign companies, or really, just increasing taxes in general in the name of boosting welfare, social security, medicare, etc.
Increasing taxes on people who have money to give money to people who don't is not necessarily a panacea, and can in fact have the opposite desired effect and stifle growth, reducing revenue, and thus the very tax money you wanted tro redistribute in the first place.
How many other displaced and disenfranchised workers should we have to bail out? In case you missed it, the auto industry is far from the only area in this country that's a big loser to offshore competition.
With that in mind, all you're really describing is increasing tariffs on foreign companies, or really, just increasing taxes in general in the name of boosting welfare, social security, medicare, etc.
Increasing taxes on people who have money to give money to people who don't is not necessarily a panacea, and can in fact have the opposite desired effect and stifle growth, reducing revenue, and thus the very tax money you wanted tro redistribute in the first place.
06-04-2007, 07:41 PM
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They should be responsible because of us allowing them in our market has made it so that our automakers are selling less cars, and making less profit do to increased competition. It is impossible for the current much smaller GM to pay for legacy costs when it was much larger. One reason Toyota has been able to lay the smack down on US automakers is that it has basically no legacy costs in the US. GM on the other hand has the legacy costs of a company with 50% of the market, but actual today sales that are half that. GM can right size to compete today, but they have no control over their past work force, and the commitments that were made then. We can say cut back beneifits.
Foriegn automakers have been able to compete here with the unfair advantage of no legacy costs for years. This simply level's the playing field and says "If your gonna take some of the US Automakers sales pie...you also gonna take some of that peices legacy costs with it to".
One thing we need to keep in mind is that there are millions of American's out there who have had their retirement benifits cut...or the threat of it because US automakers can keep paying for them. They get their benifits cut, there goes there way of life, and the local economy.
Foriegn automakers have been able to compete here with the unfair advantage of no legacy costs for years. This simply level's the playing field and says "If your gonna take some of the US Automakers sales pie...you also gonna take some of that peices legacy costs with it to".
One thing we need to keep in mind is that there are millions of American's out there who have had their retirement benifits cut...or the threat of it because US automakers can keep paying for them. They get their benifits cut, there goes there way of life, and the local economy.
06-04-2007, 08:02 PM
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Brilliant mr formula. And while we're at it, lets' just have every new successful company pay for the mistakes of those they displace.Why don't we just suck all motivation for any company to succeed right out the window. In fact, why stop there? Let's just have everybody who works take care of those who don't.
I think you should look in the mirror first. How about an internet tax mr. website founder. I think you should have to pay for the legacy costs of all the failed websites that have come before you.
I think you should look in the mirror first. How about an internet tax mr. website founder. I think you should have to pay for the legacy costs of all the failed websites that have come before you.
06-04-2007, 08:12 PM
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yes it woudl help, but it's not practical, and not going to happen.
the only way to "fix" it would be to lump all the union funds together then get the forgien companies to let unions into thier plants.
the only way to "fix" it would be to lump all the union funds together then get the forgien companies to let unions into thier plants.
06-04-2007, 09:47 PM
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Yes. It is a tarriff. Until foreign companies play fair, all of their goods (whether or not made here) should be subject to a tarriff. What would be better is to just kick their a$$es out of the country.
And I believe this plan would benefit ALL autoworkers. Not just ones from the big 2.5. All the foreign car workers would benefit from this plan, as well.
I think it's a great idea. If that makes me a socialist, then so be it. I happen to believe that we should help our fellow countrymen out. We'd certainly want some help if we fell on bad times.
And I believe this plan would benefit ALL autoworkers. Not just ones from the big 2.5. All the foreign car workers would benefit from this plan, as well.
I think it's a great idea. If that makes me a socialist, then so be it. I happen to believe that we should help our fellow countrymen out. We'd certainly want some help if we fell on bad times.
06-04-2007, 09:57 PM
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Basically what it does is lets the big 2.5 off from paying retirement benifits that were gaurenteed during a time when they sold many more cars. Instead, it shifts some of the responsibility for paying those retirees to the forign companies who have came in and taken a peice of the big 2.5's pie. To accept this idea...you have to accept the idea that GM will never really gain a huge chunk of market share again...and at best will sustain.
While that may be tough to admit...it is realistic given increasing competition.
While that may be tough to admit...it is realistic given increasing competition.
It's a brilliant idea, IMO.
If implemented, it would be a shame you'll get zero reward for the idea and the relevant board members will get millions in their pay packets for implementing the strategy.
06-04-2007, 10:01 PM
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The imports shouldn't have to pay a cent to help the big 2.5 get out from under the Unions. This isn't their mistake, and they shouldn't pay for it. Maybe the big 2.5 can get a better deal from the UAW this September (?)...