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Motrcytman's spouse
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Talks with UAW over retiree health care costs crucial for survival of GM, Ford, Chrysler.
By Chris Isidore, CNNMoney.com senior writer

In part:
NEW YORK (CNNMoney.com) -- The survival of brands like Chevrolet, Ford and Chrysler could very well depend on whether the United Auto Workers union is willing to assume a $100 billion headache.

As crucial labor talks get underway between the union and the three major U.S. automakers, there is a widespread assumption among industry experts that the automakers will need to cut their labor costs by nearly a third, or roughly $20 an hour, if they're going to be able to stem huge losses in their core North American auto operations and compete with nonunion rivals like Toyota Motor and Honda Motor.


Pay cuts aren't likely to be the answer, especially since pay of about $28 an hour for UAW members is not much out of line with what the Asian automakers are paying hourly workers at their U.S. plants. Rather, it's the promises of health care to retirees and their dependents that's seen as the crux of the problem.


For example, GM has 432,000 retirees but only about 80,000 active UAW members at the end of last year - less than a third of the hourly U.S. work force it had in 1994. Union ranks at GM have fallen further this year due to buyouts. Between them the three U.S. automakers have less than 160,000 UAW members on staff heading into these talks

Guess we'll see what happens in the next couple months....
 

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Chris Kangas 5/4/02
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The jobs bank is a bigger issue than healthcare.

I have heard that the jobs bank is not as much of an issue due to the buy outs. :confused:

Big Problems

Productivity- 33.4 hrs for domestic vs 30.4 for transplants= $1,002.00 per vehicle.

Health & Benefits- $73 per hr domestic vs $48 transplants= $8.6 billion annually.

Add loss of market share due to globalization= oh shiat.

I hope they can work out a deal vs no deal= me going "oh shiat I have no job" :(
 

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overcapacity is a big issue for domestics that cannot be solved while the jobs bank still exists. with the bank also comes healthcare issues for those in the bank because of a status situation. The uaw has already stated at several points that they'd work out issues on healthcare but were adamant about keeping the jobs bank in place. It should never have been implemented in the first place and will the hardest thing to negotiate out of.
 

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The jobs bank is a pretty small reason for overcapacity. The biggest reason for the overcapacity is lack of flexibility. Due to the dedicated nature of the domestic plants, when a product does not sell, the plant is ran at less than ideal numbers, while other plants work 24/7. GM has a capacity range of (numbers are not exact...I have them at my desk) 55% - 125% while Toyota has a capacity range of 97%-103%.
 

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Your Message Here
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The Big 3's benefit plan is structured for them splitting up 80%+ of market share.

With them running at about 50%, the numbers just don't work any more. Look at GM: ~80K UAW hourlies working to build / sell products to support ~432K retirees. That's over a 5:1 ratio.

Not sustainable.
 

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Chris Kangas 5/4/02
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So how is this going to play out? Will the OEM's get what they want, or will the UAW strike, or will they half a$$ it and hope their not in chapter before the next contract?
 

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So how is this going to play out? Will the OEM's get what they want, or will the UAW strike, or will they half a$$ it and hope their not in chapter before the next contract?
The US 3 have to go for it. Wall street has put a lot of faith in the UAW concessions.

This will be a looooong summer
 
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