Brief profile of the charmed American autoworker
Producing and assembling cars in this country can be a very lucrative profession. Many insiders have blamed the union system for the fallout of the Domestic auto-industry. The economic fallout is beginning to hit autoworkers, but it won’t affect them like it hits those in other industries. The UAW has set up a golden platter of benefits and protections for the members of its union. I’m glad we have these men and women in the factories to make our cars. It’s a physical job…but these aren’t neurosurgeons.
Here are some tasty morsels to chomp on next time you hear another news story about the auto crisis:
1) Unionized members make an average of $24-30 an hour (you do the math). Not too shabby.
2) In GM’s case: The combined “legacy” benefits (pensions, insurance, retiree benefits, etc) equates to nearly $70 an hour. Not an actual rate, but an overall analyst driven calculation of what “total” labor and current retiree benefits is costing GM. Workers are not getting paid $70 an hour as some stories suggest.
3) In the early 1980’s, the UAW created a program called “job banking” which pays at least 90% of a laid off autoworkers salary until the union can find them a new position elsewhere. The job banking practice was implemented as a way for autoworkers to “absorb the punch” when automated, robotic technology was introduced on the assembly line. The terms and conditions vary by automaker, because each labor contract is different. GM factory workers who get laid off start out at “sub pay,” in which they receive unemployment benefits, and GM pays the difference, up to most of their salary, for 48 weeks. After that, laid-off employees go into the jobs bank, which averages almost $62,000 a year — plus benefits, without reporting to work. In the meantime, the company tries to find them jobs elsewhere. That sucks!
4) In 2005, nearly 12,000 autoworkers were drawing a full salary without ever setting foot in an auto plant. Most simply had to show up at a local union hall and hang out.
5) Over the last 15 years, nearly 83,000 autoworkers have lost their manufacturing job, however, 91,000 new positions were created in other states.
6) Delphi, the parts wing of GM, declared Chapter 11 bankruptcy in 1999 because UAW would not agree to a wage cut.
Interesting information and compelling reasons why these men and women so cherish their jobs. With the onset of the government bailout, many of these perks are changing or going away. Late last year, the GM job bank program was suspended (actually the UAW allowed it to be suspended, hmm) due in part to the auto crisis. The union provides a very secure blanket of protection over its workers and gives them tremendous incentive not to leave. In the same light, the UAW is doing a horrible disservice for this population of workers. This is all they have ever known considering most autoworkers never leave the industry and retire with healthy pensions. Sadly, this causes a career black hole that provides an illusion that every other American worker has these same benefits and freedom of labor expression. Autoworkers will become lost in a corporate world that does not look out for them. They have skills on the assembly line- but where will those skills be transferred? Many of them will find good work in certain trades or other manufacturing capacities, but nothing with the same “bling bling” of the auto assembly line. With the reality of the disappearing job bank system- this will be a shocker for many leaving the union. To a degree, the auto worker has become easy pickings for ridicule and scorn. The general public has become aware of how well they are paid and the security of employment they are offered – and to a degree – are jealous.
Despite a loss in members, the UAW is still a $2 billion dollar organization with approx. 550, 000 due paying members. They have some nice assets too.
The Black Lake Country Club and Reuther Center is a $33 million dollar golf course and retreat owned and operated by the UAW. The course itself is $6 million dollars. The UAW is losing money on this forested beauty every year as more members leave the union. I truly hope our bailout funds keep this course afloat, being a golfer, I’d love to play it someday… but not for $33 million bucks.
Pretty isn’t it? I heard they’re hiring part time caddies with benefits and life time pension.
I should have been an autoworker.
Auto makers are failing and the car business has always failed us!
I don’t think the failing automakers is totally a result of poor management, lack of innovation, or lack of faith in American made vehicles. I think the issue goes deeper than that. It starts at street level where the real dealing and car buying experience takes place. 
With the advent of an internet market place, the car lot mentality is losing its appeal and frankly- I think savvy consumers are f**** tired of dealing with an archaic and crooked method (and might I add one of the main ways) of purchasing a car. I do know people who have bought cars online through Ebay and Cars.com. The problem is that you rely entirely on the description and faith in the entity selling the vehicle, granted there are warranties involved, but you don’t get to see it, smell it, and sit in it. I personally would have a tough time buying a vehicle online for that fact alone – I need to feel the controls.
I know this is an old cliche, the slimy car salesman, that pushy odd feeling when you walk onto a car lot hunting for a new vehicle. It sucks, it really does. It’s almost a science to learn the correct way to barter and deal with salespeople. The cars are always marked up from their invoice price, if you didn’t know that you need to learn. Besides the invoice price always being this hidden top secret price, most car dealers will always act like they are one step up the ladder on you. What I mean is that no matter how much research you do, how much you learn about the car you are buying or trading, the dealer will somehow try to refute the information or pass off what they have to offer as being much better than anything you discovered yourself, it’s quite frustrating and makes you want to leave. Which by the way, is a great tactic since the last thing a dealer wants is for you to walk out the door, they outright lose you and the potential sale.
Car dealers are a breed many will not understand. There is a local example of a Kansas City family who has been in the car business for years- and most of that time it has been spent breaking the law, defrauding customer, and spending time in jail. The Franklin family has been screwing over KC car buyers for a long time and their methods are quite humorous – and in the same light sad and pathetic. To keep this short, the father’s name is Pete Franklin and he started this family legacy of filth. He was famous for airing these 60 minute infomercials, yeah, 60 minute infomercials on local KC stations to sell his cars. It apparently worked because he opened multiple locations throughout the city and raked in about $45 million in sales each year.
His legacy continues with his sons, Jeremy and Chad. Now this gets downright ugly and exemplifies all that is wrong with the business. They say the apple doesn’t fall far from the tree and this proves that saying. The sons of Pete Franklin continued on the business of selling Suzuki vehicles which makes me wonder if Suzuki’s are a perfect fit for sub-prime buyers. This is exactly the market that the Franklin family targets, they pimp low low monthly payments with nothing down, which is exactly the hook line that thousands of car dealers use to suck people in.
Quick lesson- you don’t buy a car based on how much it will save you monthly- you buy a car based on whether or not you can afford to have it paid off in 5 years ! That is the rule of thumb for financing.
Warning: a dirt cheap monthly payment = longer financing term (6-7yrs) = you are seriously upside down and paying on a depreciating car for years! Back to the story.
The biggest part of this story is Chad Franklin. His car dealerships were recently sued by the Kansas Attorney General for “unconscionable and deceptive business practices relating to an advertising campaign.” I feel partly sorry for the buyers in this video because they should have known better! That being said, they still got scammed.
You’ll notice the video mentioned that Chad Franklin changed the name of the dealership to Legend Susuki, which is the icing on the cake. The guy is so crooked that his own NAME can’t be associated with the dealership HE owns out of fear that they won’t sell cars! His brother Jeremy is somewhat more “legit” and has never been investigated but once had dealerships under the name Jeremy Franklin Suzuki and were recently changed to Showcase Suzuki to avoid association to his brother’s troubles. How sad is that?
Granted, there are larger more reputable dealerships out there. (reputable used lightly). The problem is that car dealers are completely independent brokers of cars. They buy cars from the automaker and turn the car right around to flip a profit on it and trust me- they always turn a profit! Even the business of fixing your car is a business and the guarantee that parts and service are honored everywhere is a myth as well.
When your car breaks down, not only does the dealer run tests to find what is wrong, but they also run tests, punch in your VIN, and check their “databases” to see what else on your car needs to be “repaired” or is “due for maintenance”. This is not a service, it’s a sales tactic. This also ties back to how poorly cars survive the test of time and how auto makers covers themselves when they sell it to you. If you actually followed the manufacture suggested maintenance schedule of your car – you would end up paying thousands and thousands of dollars to maintain your car over its lifetime. This is pathetic considering you just paid some people’s yearly income for that shiny new sports-car. Most people can only afford oil changes and occasional 30K maintenance which can still run you $400-500 bucks because of the labor costs. Sadly, service managers are often reprimanded in dealerships for not pushing replacement and maintenance of specific parts on your car EVEN if there is no reasonable explanation of why you need it replaced. In fact, the entire service bay is a sales arena in itself. I know this and if they tell you differently – they are lying.
A car dealer will not honor someone else’s work unless you outright force them to. What I mean is that if you have two different dealers look at your brakes, they could give you two different assessments of what is wrong – and if you told a third dealer about it, they would still run their own tests and give you their own view. They don’t act as a singular network representing the brand (Ford, Nissan, etc). This is the facts! A car dealership for the most part makes it’s own rules of engagement. The only thing that is shared between the dealers are the national offers or services put out by the manufacturer themselves. If you see a national Ford sale, or national “Toyotathon” event – then you’re going to see those details advertised at the dealers simply because they are the “face” of that car maker. For all other intents and purposes, a dealer is on their own until they get caught doing people wrong – which is often the case.
You don’t see this type of independent robbery techniques in a lot of other businesses. If I buy pants at an Old Navy store in California and have issues and take my receipt to a location in Alaska, the store will make every possible concession to help you. They will make some phone calls and might even allow you to exchange your items in that store. Not so with auto dealers. In fact, most don’t even talk to each other in the same metro area, seriously. If you’re transmission was tested, estimated and confirmed broken at a car dealership – you can’t take your car to another dealership and have them call the other location to verify the issue and fix the transmission for you. Wanna know why and you know the answer? Money !! The dealers love to check out your car, run tests, open the hood, move shit around, pull out cables, unscrew caps, hook up diagnostic laptops, and poke and prod. They are no different than the doctor’s office – everything they touch is charged to you! Sooo, that is why they don’t listen to what you tell them, if they did, they wouldn’t profit from your car !!! I do have a soft side and realize that many have no choice. The system has forced dealers to make money by employing these practices- they have to! Dealers have to make money to pay bills and their people and it does not translate to a positive experience for the consumers.
So what do you do? Be forceful because most car dealerships are staffed with push overs. They are push overs because the more you fight, the more they give in. You can make the car experience better by pursuing a second opinion, or questioning what they found, or simply saying ”I don’t need that fixed right now.” It’s a bad deal no matter how you look at- and it won’t change unless the basic platform of dealerships changes. CarMax is a step in the right direction but I have never been to one, so I don’t know that much about them – maybe time to research a little.
There is a positive side with a bad economy- they need the sales! Now could be a great time to wiggle and waggle your negotiating skills and land a cool car at a great discounted price because dealers are hurting big time. I know it’s tough for people to make big ticket purchases right now, but you can’t ask for a better time to do it. In fact, my wife and I are about to start because god knows nobody else is looking for cars right now ! I can’t wait to go bully some dealers.
Part 2 – Seriously are we just this stupid? Auto bailout on hold because of lawsuit that reduces emissions
Welcome to the jungle
The proof is in the pudding….
Here is the latest information about the auto industry bailout, and you will see the hurdle is still the California emissions. UNBELIEVABLE… Get over it already. We should not let the auto industry regulate air quality. If they need citizens money, then they should put citizens health and air quality higher on their list of priorities.
Here is a snippet of the current conversations on the hill.
—-Efforts by the Bush administration and congressional Democrats to fashion a government rescue of the foundering American auto industry hit other snags on Wednesday, including a dispute over the precise wording of the bill. That led the House and Senate to put forward competing versions of the legislation.
The last-minute disagreement centered on a SINGLE WORD — with the Senate bill requiring the automakers “to comply with all applicable FEDERAL fuel efficiency and emissions requirements” and the House bill referring to “all applicable fuel efficiency requirements,” which would include state emissions rules that the automakers oppose.
Nuff said, it is a scam and we are putting up with it. Way to go lobbyists, and Andy Card…..
Car and smoke
Seriously are we just this stupid? Auto bailout on hold because of lawsuit that reduces emissions
Welcome to the jungle
I will try to keep this post from becoming another rant, but it will be difficult. My frustration over the corruption and inbreeding in Washington is reaching an epic level. There is no way I can give this topic its due, but I will provide you with an overview, and then encourage you to do you own research on the specific topics.
Here we go. The auto bailout is a small amount of money, in fact, $15,000,000,000 looks like a large number, but in reality it is less than one months interest on the National Debt and it equates to 0.0008% of the nations GDP and less than 1 month worth of revenue for Toyota, so all-in-all it is a relatively small number from a national perspective. If, you further take into account that the U.S. government and tax payers have a better than 50/50 chance of getting their money back on this transaction it really becomes a no-brainer that we should keep the industry afloat.
Now I am not saying the current plan is good or bad, what I am saying is something needs to be done, and the U.S. has the resources to assist if it so chooses, and letting the automakers fail entirely is not a viable option.
Ok, now on to the real point of this piece. CORRUPTION, INBREEDING and SELF-INTEREST are running a muck in Washington this week, and in typical fashion the press is glossing over the real juice, because it will bore the average reader, so here is the boring juice for you to consume.
The primary stumbling block on the latest bailout proposal is not about the dollar amounts or really even a car czar, the real stumbling block at this point surrounds a little known lawsuit (little known to the average joe) between the auto manufactures and the State of California. The Auto industry wants California to overturn its agenda to force auto manufactures to produce zero emissions vehicles, if they want to sell vehicles in California. The auto industry sees this agenda as a direct threat to their industry, and to the ancillary businesses that service automobiles in the aftermarket.
Here is a little history for review – The California Air Resources Board (CARB) was founded in 1967, in response to California’s air being worse than that of the other 49 states combined [Shnayerson, p. 50]. After the federal government enacted the Clean Air Act in 1970, California was the only state allowed to regulate its own emissions. In 1990, impressed by the GM Impact, CARB ruled that each of the seven biggest carmakers — the largest of which was GM — would need to make 2% of its fleet emission-free by 1998, 5% by 2001, and 10% by 2003. In response to this rule GM produced the EV1, GM believed the EV1 would be a total failure, and therefore California would voluntarily remove this emissions free cap requirement. Unfortunately for GM and other manufactures the EV1 was a huge success and it scared the crap out of them.
Luckily though the auto manufactures had an ace up their sleeve in the name of Andrew Card. You see George W. Bush’s original Chief of Staff Andrew Card was the chief lobbyist for the auto industry in Washington, and his primary responsibility was to overturn the California initiative. So when Andy was appointed to man the right ear of the most powerful man on earth he convinced him to use his new muscle to push for a repeal of this mandate and it worked, sorda. You see California caved in on the emissions free mandate, but it then passed a law requiring a 25% reduction in emissions instead of emissions free. This seems like a cave-in and a rational person would think everyone would call this a win, but no. The auto industry was not happy, so they sued the State of California to overturn the law, and this lawsuit is the basis for the stumbling block we see today.
The Democrats have stipulated that in order to receive the $15 billion bailout the auto industry has to drop the lawsuit against California and any other states that are trying to curb emissions. One could take the point of view that forcing them to drop the lawsuit is fair, because none of the bailout money should be spent suing the citizens that provided them with the funds, but no, the Republicans do not see this as a reasonable request. In fact, one might say they see the lawsuit as a good thing, and several key members of the Republican party have stated flat-out that forcing an end to the lawsuits is a “deal killer”.
Now I ask you, do the Republicans who view this as a “deal killer” have your best interest at heart, or do they have the best interest of their lobbyist friends at heart?
Emissions control is a good thing. Forget the environmental effects and just think of it as a way to help people breath in the future. Whether you believe in global warming or not you must believe in an individuals right to breath clean air, and cars pollute the atmosphere, so making them pollute less is a good idea.
In closing, it does not matter to me whether you are for the bailout or against it, but please keep an eye on the corruption taking place in Washington, and please let your Senators and Congress Person know how you feel about them keeping a lawsuit moving forward with your money.
Car and smoke
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