> Collectively, the Big Three automakers have seen their profits soar
This is why you need unions. Most businesses will happily screw over workers whenever they can to maximize profits and the workers are lucky if they get peanuts back when they're swimming in cash. Ford makes the hyperbolic claim that agreeing to UAW demands would bankrupt them as it would cost $15 billion. Their profit in the last 12 months is $25 billion. The maths is more complex than simply 25-15 but shows how companies will obviously lie to protect their shareholder profits.
Their profit in the last 12 months is $25 billion.
You might have googled 'gross profit' which isn't the same thing, as it doesn't account for the many costs of running a capital-intensive business, like machines and stuff.
The table below the chart makes it abundantly clear that they are reporting quarterly numbers.
The funny thing is, they might behave this way even if the management of all the car companies actually agreed with the unions and wanted to give them a 40% increase.
Suppose, hypothetically, that most of the management are actually good people who want to share their profits, but don't know what the management of the other companies think. Here are their options:
1. Raise worker wages in line with profits. 1a. The other companies do the same. Everyone's happy, no strike. 1b. The other companies don't do the same. Your company now makes significantly less profit; it's punished by the market -- stock price goes down, meaning you're at a risk of either a hostile takeover, or the board of directors firing you and getting someone else who's more ruthless (and will punish workers even more).
2. Talk with the management at other companies and convince them to raise wages. Actually, this is illegal, and you could face really steep legal fees or consequences.
3. Keep wages the same, and hope the unions do their job and call a strike.
Basically, #3 is the least risky option.
What happens if the unions succeed in draining the profits, corporate has less money to invest in R&D, and a foreign efficient automaker comes in and takes all the market share away from the union-led automakers?
What happens then?
Most union workers don't want their employment to end. Why would they want to destroy the company this way?
Most large company CEOs can retire on the wealth they've already accumulated. Why should we assume they have higher long-term interest in the success of the company?
What is an example of union-led automaker? Perhaps some small cooperatively-owned car company somewhere? Or do you mean worker representation on the board, like at BMW in Germany, or how there was once a union seat on Chrysler's board?
What happens if a global investment company buys another company, stops all R&D to focus on short-term gain, runs the company into the ground, sells what's left, and makes an overall profit?
What happens then?
Oh, right, what happens is the investment company owners make a lot of money and the ex-employees get screwed. "Vulture capital" doesn't get that name out of love, and my life was negatively affected when KKR did a leveraged buyout of the non-union company where my father worked.
Under-investment is how Detroit got the way it is already.
The banks and financial system are long overdue a gigantic kick in the head. But thats not happening cuz people are so distracted and scatter focused on the wrong stuff.
US wants to onshore/friend shore production, so there is a demand for US workers at any cost. Barring automation replacements.
The auto industry in the US is just about as automated as possible, given current tech, economics, etc.
You basically have three major hold backs:
* Parts requiring manual assembly. My first summer job was at an auto supplier. It involved running 3 wires though a piece of conduit and wrapping it with electrical tape. It was a connector for some sedan brake light. Family friend. They still run the business the same way. Parts change too frequently and are too hard to automate.
* automation still requires maintenance. This isn’t just replacing parts on machines. This is also the entire supply of parts that go into fixing machines. Lines going down is incredibly expensive. Parts aren’t always readily available. There’s a whole industry of small “tool and die” shops that have the capability to build a part from specs next day.
* plants are huge and expensive., you don’t retool unless you have good justification. Typically, this happens with a model refresh.
Pointing out the endless flaws in Tesla cars that have rolled off the line (joints that don't quite align, slight blemishes etc) are a running joke for many of its detractors
Not to mention the absolute clown fiesta of Elmo's "Cybertruck"
> Hope they can find some synergies between Dodge and Citroen
They probably will, the CEO is very good, and as mentioned earlier, PSA (he was CEO there before FCA lost their own hero CEO and decided to merge with PSA) managed to turn around Opel quite quickly.
1: https://knowledge.wharton.upenn.edu/podcast/knowledge-at-wha...
Why are we keeping them on life support?
The profit was about 4b which, okay let's give everyone in UAW a share of that and... Oh it's so small that it doesn't fix anything?
## HYPOTHETICAL EXAMPLE ##
+ Prior to contract CEO made 10,000,000 per year. Since then they (currently) make 14,000,000 per year.
+ Union is asking for 40% increase to match CEO's increase.
? Would the union accept CEO's total compensation package, including retroactive to cover the same period, decrease to E.G. 20% (CEO now makes 12,000,000 per year in this hypothetical) with a union member INCREASE of 20% or greater (possibly including a one time contract signing bonus to cover the back period)?
The article points out how union members are still affected by concessions they made in 2008 to help auto companies then. It would therefore be inappropriate to use "relative to the last contract period" as the baseline.
If it were about simple disparity, that disparity has grown for far longer than the most recent contract period. Back in the 1960s the average ratio between CEO pay and average worker pay was 20x, and now it's close to 400x.
Extending your argument to the longer baseline, if the CEO's pay were reduced by 20x and the worker pay increased to 20x, retroactive to 1970, then I'm pretty sure they would agree.
But the point isn't simply that the CEO made X% more since the last contract so union workers should get X% more too. If it were, then consider GM CEO Mary Barra, who made nearly $29 million in 2022. She could cut her income by 30% and still make good money - Ford CEO Jim Farley "only" makes $21 million.
Cutting her compensation wouldn't justify cutting the salary for everyone at GM by 30% for the next contract period.
BTW, this sort of question works better with actual numbers. From https://www.npr.org/2023/09/13/1198938942/high-ceo-pay-inequ... :
> "The Big Three CEOs saw their pay increase by 40% over the last four years, while our pay only went up by 6%," UAW President Shawn Fain said at a news conference last week.
> As of Tuesday, the UAW is proposing an approximately 40% compounded wage increase over the course of a four-year contract, a tad lower than its opening bid of 46%.
Also, as an indication of how looking only relative to the recent contract period isn't enough:
> The average hourly wage for workers manufacturing motor vehicles and parts, adjusted for inflation, has dropped by more than 20% in the past two decades, according to data from the U.S. Bureau of Labor Statistics.
0.8 * (1 + 0.4) = 1.12 so what the union wants would be about a 10% gain since 2000.
UAW were a huge reason Detroit was in such bad shape in 2008. I wouldn’t call those concessions.
I imagine the workers are asking for more than a few hundred dollar in annual salary raise. A 20% pay raise of 10,000 people making $50,000 a year would cost 100 million dollars.
The point is, if company has enough to give thr CEO a raise, they have enough to give the average employees raises.
Further than that, they should prioritize the average employee. Meaning, if they have extra money, give it to the average employees first, then if there is leftover, give it to the management.
A rising tide raises all ships.
these steps minimise human or eliminate human use, and encourage either robotization, or task simplification to such an extent that labour can easily be replaced with another with minimal training.
example from autoline channel, showing how simplified the assembly system can become with the casting base:
https://www.youtube.com/watch?v=lawGMl8sHzc
And Tesla is just going further with the casting
https://www.reuters.com/technology/gigacasting-20-tesla-rein...
https://youtu.be/0Ukp4tm0JkM?t=196
this means that ICE vehicle skills are becoming exceedingly irrelevant. Obviously not everything is gone, but imagine how simple it is to train or replace fast food workers; or how easy it is to assemble furniture ikea-style. A lot of ICE- skills are now not required in EVs, and these workers will have to find alternatives.
Striking just delays the inevitable.
Seriously though, yes... Support The Unions! Stay strong!