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Paying Workers Not to Work





jmi256
I couldn't believe this when I read it. Now, I feel bad for the workers (I'm sure they worked hard when they did), but the United Auto Workers Union has destroyed GM from the inside out and now they want even more. The high cost of labor has been one of the issues GM has had in producing competitively priced cars, and now the UAW is making them pay up to $115,000 for some workers to not work? In addition, some of them are also keeping their full benefits, including pension, health benefits, etc., on top of that, and some are even being paid a monthly sum until they are able to retire and collect the full benefits. Crazy. Most people are lucky to receive a few weeks of severance if they are let go.

Pension owners and individual investors have had their savings wiped out due to GM's bankruptcy, and taxpayer money is going into the pockets of these people. Most people don't make this much in a year, but somehow the UAW says they need more? It's a shame that Obama is raising our taxes to pay off these people. It's one thing if a private business wants to spend its money on these types of things. As long as the shareholders are ok with it and it’s transparent, it's their call. But now that Obama has nationalized GM it's all of our money (at least those of us who pay taxes) that is paying for this.

Quote:
GM reveals incentive package as it tries to shed workers


It seemingly has become an annual (or semiannual) event, but area autoworkers are being given another chance to leave the troubled industry.
The latest incentive package from General Motors Corp. came as part of the concessions the United Auto Workers union accepted last week in the company’s ongoing restructuring.
GM is offering $20,000 cash and a $25,000 car voucher to production workers who decide to retire with their benefits.
For skilled-trades workers, the cash portion of the retirement package is $45,000 with the same car voucher.
For those not eligible to retire, GM also is offering more cash to walk away and sever all ties with the company, along with the $25,000 car voucher.
Employees with less than 10 years could get $45,000. Those with at least 10 years but less than 20 are being offered $80,000. For those with 20 years or more, it’s $115,000.
Those with 28 or 29 years at GM are being offered a bridge to retirement, with the company providing a monthly gross wage of $2,850 or $2,900 until qualifying for retirement.


Source = http://www.kansascity.com/business/story/1228379.html
deanhills
I still can't get over it that Obama can find 1.2-trillion to bail out banks, yet no effort to save the auto industry. I'm still waiting to hear how the 1.2-trillion benefits made its way through to the people who lost their properties and the man in the street not losing their jobs. Rules seem to be different for different industries, and banks being preferential. Evil or Very Mad
handfleisch
Food for thought






From the Center for Labor Market Studies at Northeastern University report "Wealth in America: Who Gets What and How Wealthy Were the Forbes 400 Richest Billionaires in 2008 Relative to America's Bottom Half?"

http://www.clms.neu.edu/publication/documents/Wealth_in_America.pdf
deanhills
I don't get it Handfleisch. The tables cover the period 1995 to 2004. I also can't understand what the point is relative to the subject of the thread?
handfleisch
deanhills wrote:
I don't get it Handfleisch. The tables cover the period 1995 to 2004. I also can't understand what the point is relative to the subject of the thread?


It's related to the mention of taxes. The OP complains
Quote:
It's a shame that Obama is raising our taxes to pay off these people


which is woefully incorrect, since taxes have been lowered across the board except for a slight increase in the upper income levels represented in these graphs. These graphs show how these upper income levels have accrued massive amounts of wealth since '95 (and since the Bush tax cuts for the rich, the trend has only increased through to today) and so these areas are the logical place for a tax increase, since a tiny one (3%) will add a ton of money at a time the system that really needs it (to pay for two ongoing wars, etc.)
handfleisch
Another view

Quote:
GM Bailout Makes Most of Bad Situation

Tuesday 02 June 2009

by: Dean Baker | Visit article original @ Politico

The Obama administration's plan for General Motors is a serious effort to try to make the best of a really awful situation.

In the current economic climate, sitting back and allowing GM to be liquidated was not a serious option. This would have wiped out a whole network of suppliers and ancillary businesses in Michigan, Ohio and Indiana, devastating the economies of these three states.

The federal government would have been forced to step in with large-scale aid, in this case, just to prevent mass destitution. The state and local governments would have lacked the resources just to maintain basic services like schools, hospitals and sanitation facilities. Of course, the plan is not perfect, and it can be argued that one or another of the parties got too much or too little.

The oft-told story that the United Auto Workers made out like bandits is nonsense. Workers are making substantial concessions, and many will be losing retiree health care benefits for which they already worked decades. The bondholders are great whiners, but none of them have said that they wanted the company liquidated. They know that they would get less if the federal government had not intervened. They whine because they know the media are always sympathetic to investors, so their whines will be presented to the public as serious arguments. This could create a political environment in which they could get more money, offering substantial returns to speculators who just bought GM debt at steep discounts.


http://www.politico.com/news/stories/0609/23198.html
jmi256
handfleisch wrote:
Another view

Quote:
GM Bailout Makes Most of Bad Situation

Tuesday 02 June 2009

by: Dean Baker | Visit article original @ Politico

The Obama administration's plan for General Motors is a serious effort to try to make the best of a really awful situation.

In the current economic climate, sitting back and allowing GM to be liquidated was not a serious option. This would have wiped out a whole network of suppliers and ancillary businesses in Michigan, Ohio and Indiana, devastating the economies of these three states.

The federal government would have been forced to step in with large-scale aid, in this case, just to prevent mass destitution. The state and local governments would have lacked the resources just to maintain basic services like schools, hospitals and sanitation facilities. Of course, the plan is not perfect, and it can be argued that one or another of the parties got too much or too little.

The oft-told story that the United Auto Workers made out like bandits is nonsense. Workers are making substantial concessions, and many will be losing retiree health care benefits for which they already worked decades. The bondholders are great whiners, but none of them have said that they wanted the company liquidated. They know that they would get less if the federal government had not intervened. They whine because they know the media are always sympathetic to investors, so their whines will be presented to the public as serious arguments. This could create a political environment in which they could get more money, offering substantial returns to speculators who just bought GM debt at steep discounts.


http://www.politico.com/news/stories/0609/23198.html


What concessions are the workers making? (I'm seriously asking because I'm unaware, not trying to argue) It seems to me that they are being handed taxpayer money to not work. I feel bad if people are losing benefits that were tied to employment, but I think that if these benefits were on condition of being employed, and the company is now bankrupt, it only follows that the rewards of employment should not still be enjoyed. It just seems "off" that people are being paid not to work. Like I said above, if a private company wants to do this and their shareholders are ok with it, it's one thing. But since the taxpayer is on the hook for this, it shouldn't be tolerated. Some, like the above, may have the opinion that the criticism of the union is "nonsense" without addressing the criticism, but that doesn't make the point invalid.
handfleisch
jmi256 wrote:


What concessions are the workers making? (I'm seriously asking because I'm unaware, not trying to argue)


The article says the retirees will be losing their health care benefits that they paid into for years. That's bad enough. Apparently also the workers are accepting no raises or bonuses for years, giving up their right to strike and even giving up paid holidays.

jmi256 wrote:

It just seems "off" that people are being paid not to work. Like I said above, if a private company wants to do this and their shareholders are ok with it, it's one thing. But since the taxpayer is on the hook for this, it shouldn't be tolerated. Some, like the above, may have the opinion that the criticism of the union is "nonsense" without addressing the criticism, but that doesn't make the point invalid.


First, what do you mean people are being paid not to work? They're not being paid not to work, they are going into retirement. Unless you consider all retirement benefits as being paid not to work, in which case I assume you'll refuse your own retirement monies and social security.

It might seem "off" on first glance, but rich industrialized capitalist societies do pay people not to work, all the time. Vacations, retirements, unemployment compensation, Social Security in the US, workplace injury compensation, welfare, maternity leave, etc. etc. It comes roughly under the label "civilization". There will always be grey areas and room for disagreement, but generally it is part of managing an economy so that it runs smoothly.
ocalhoun
handfleisch wrote:


It's related to the mention of taxes. The OP complains
Quote:
It's a shame that Obama is raising our taxes to pay off these people


which is woefully incorrect, since taxes have been lowered across the board except for a slight increase in the upper income levels represented in these graphs. These graphs show how these upper income levels have accrued massive amounts of wealth since '95 (and since the Bush tax cuts for the rich, the trend has only increased through to today) and so these areas are the logical place for a tax increase, since a tiny one (3%) will add a ton of money at a time the system that really needs it (to pay for two ongoing wars, etc.)

No, taxes are raised across the board, but lowered for low and medium incomes.
Taxes for the US will go up, partly because of this.
Need I remind you how distasteful I find the selfish politics of 'as long as my taxes go down, I don't care what other people pay'?
And you know I support a fair, flat percentage rate tax across the board: If the government needs more money, everybody's taxes should go up equally.

And of course I have a big problem with the government giving life support to a company mortally inflicted with the cancer of over-powered unions.
If this is going to be done despite the wrongness of it, it should be funded by taxes on imported cars, which will both fund the abomination while giving more incentive to buy American cars.

*edit*
I just had a great idea!

1: The main thing unions can threaten the company with is getting lots of workers to quit their jobs.
2: The company wants to get rid of a lot of workers.

Therefore,

Just ignore the unions, do what you have to in order to cut costs, and if a lot of people go on strike, fire them. If a lot of people quit (or get fired), hire replacements, which should be easy to do with the job market flooded with newly unemployed auto workers.
deanhills
handfleisch wrote:
deanhills wrote:
I don't get it Handfleisch. The tables cover the period 1995 to 2004. I also can't understand what the point is relative to the subject of the thread?


It's related to the mention of taxes. The OP complains
Quote:
It's a shame that Obama is raising our taxes to pay off these people


which is woefully incorrect, since taxes have been lowered across the board except for a slight increase in the upper income levels represented in these graphs. These graphs show how these upper income levels have accrued massive amounts of wealth since '95 (and since the Bush tax cuts for the rich, the trend has only increased through to today) and so these areas are the logical place for a tax increase, since a tiny one (3%) will add a ton of money at a time the system that really needs it (to pay for two ongoing wars, etc.)
Thanks Handfleisch. I now understand where you are coming from.

On the subject of the thread, when I first read the opening posting of jmi, I felt shocked for the workers who are losing their jobs and if you look at the sums of money that are paid to them "to get rid of them" how far do you think $20,000 is going to get them? For those with 20 years plus, who will obviously have great difficulty to be re-employed due to age, $115,000 can't be that much. Probably better than nothing, but wonder how much the corporate guys are getting especially when it is considered that they were paid huge salaries, bonuses and benefits to manage the company, which is now on the chopping block. In my view the corporate guys - i.e. on the Board of the Company should be paid nothing in severance and given a nice boot instead ... Twisted Evil
handfleisch
deanhills wrote:
]Thanks Handfleisch. I now understand where you are coming from.

On the subject of the thread, when I first read the opening posting of jmi, I felt shocked for the workers who are losing their jobs and if you look at the sums of money that are paid to them "to get rid of them" how far do you think $20,000 is going to get them? For those with 20 years plus, who will obviously have great difficulty to be re-employed due to age, $115,000 can't be that much. Probably better than nothing,


I agree. These little payoffs to workers forced into retirement are pretty small (spread out over a few years, a person couldn't live on them). And as the article says, the GM restructuring is the best move in a bad situation and might even be profitable for all in the long run.

deanhills wrote:
]but wonder how much the corporate guys are getting especially when it is considered that they were paid huge salaries, bonuses and benefits to manage the company, which is now on the chopping block. In my view the corporate guys - i.e. on the Board of the Company should be paid nothing in severance and given a nice boot instead ... Twisted Evil


Exactly. Or the other recent rip-offs of taxpayer money in the USA. Why don't the tea parties protest these? Because FOX News hasn't told them to?

Nearly $9 billion of money spent on Iraqi reconstruction is unaccounted for
http://afp.google.com/article/ALeqM5ieRhHYX-NosV0VEguc06fs15a4Jg

14 billion for one control tower in a field in Iraq for only two helicopters
http://www.c-spanarchives.org/congress/?q=node/77531&id=8969203

Another billion in equipment missing
www.cbsnews.com/stories/2007/12/06/iraq/main3584247.shtml

And why aren't the tea baggers celebrating a president trying to do something about it? It's because the protests are just political warfare, not about any real issue or making the US a better place

Obama signs new law to fight mililtary rip-offs and waste
http://www.google.com/hostednews/ap/article/ALeqM5hJD6viIkt5qOCARZZrRTxQ1u9ejQD98BBII02
ocalhoun
handfleisch wrote:

Exactly. Or the other recent rip-offs of taxpayer money in the USA. Why don't the tea parties protest these? Because FOX News hasn't told them to?

Nearly $9 billion of money spent on Iraqi reconstruction is unaccounted for
http://afp.google.com/article/ALeqM5ieRhHYX-NosV0VEguc06fs15a4Jg

14 billion for one control tower in a field in Iraq for only two helicopters
http://www.c-spanarchives.org/congress/?q=node/77531&id=8969203

Another billion in equipment missing
www.cbsnews.com/stories/2007/12/06/iraq/main3584247.shtml

And why aren't the tea baggers celebrating a president trying to do something about it? It's because the protests are just political warfare, not about any real issue or making the US a better place

Obama signs new law to fight mililtary rip-offs and waste
http://www.google.com/hostednews/ap/article/ALeqM5hJD6viIkt5qOCARZZrRTxQ1u9ejQD98BBII02

Actually, the tea parties protest all government waste, including these.

Defense secretary Gates is doing a good job so far of reducing military waste though, especially in the most expensive department, procurement and R&D. Now, if only the rest of the government could do the same thing...

Let's start with $1 trillion wasted on failing banks...
deanhills
handfleisch wrote:

deanhills wrote:
]but wonder how much the corporate guys are getting especially when it is considered that they were paid huge salaries, bonuses and benefits to manage the company, which is now on the chopping block. In my view the corporate guys - i.e. on the Board of the Company should be paid nothing in severance and given a nice boot instead ... Twisted Evil


Exactly. Or the other recent rip-offs of taxpayer money in the USA. Why don't the tea parties protest these? Because FOX News hasn't told them to?
I thought they did exactly that. It has also been featured long in advance of the TEAparties. The principle of Government bailing out companies with the same executives receiving huge salaries and bonuses. Those executives obviously had to have made bad management decisions for the Banks to have got to the stage where they needed to be bailed out. Better yet, the Banks should have been allowed to fail or at a minimum the executives running those banks should have been sacked.

I found a very good article on what the effects of the debt are going to be, as no doubt the Government will need to be bailed out in future with not millions but trillions of dollars. Wonder whether Obama calculated in the interest payable on his 1.2-trillion package:
Quote:
As governments worldwide try to spend their way out of recession, many countries are finding themselves in the same situation as embattled consumers: paying higher interest rates on their rapidly expanding debt.

Increased rates could translate into hundreds of billions of dollars more in government spending for countries like the United States, Britain and Germany.

Even a single percentage point increase could cost the Treasury an additional $50 billion annually over a few years — and, eventually, an additional $170 billion annually.

This could put unprecedented pressure on other government spending, including social programs and military spending, while also sapping economic growth by forcing up rates on debt held by companies, homeowners and consumers.

“It will be more expensive for everybody,” said Olivier J. Blanchard, chief economist of the International Monetary Fund in Washington. “As government borrowing in the world increases, interest rates will go up. We’re already starting to see it.”

Since the end of 2008, the yield on the benchmark 10-year Treasury note has increased by one and a half percentage points, rising to 3.54 percent from 2 percent, the sharpest upward move in 15 years. Over the same period, the yield on German 10-year bonds has risen to 3.57 percent, from 2.93 percent. And British bond yields have increased to 3.78 percent, from 3.41 percent.

Concern over the long-term effect of greater debt prompted Ben S. Bernanke, the Federal Reserve chairman, to say in testimony before Congress on Wednesday, “Even as we take steps to address the recession and threats to financial stability, maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance.”

For now, the cost of more debt is the price government is willing to pay to spend its way out of recession, hoping that a return to fiscal health will increase tax revenue and repay the debt.

But in the last three weeks, the pace of the increase in the 10-year Treasury note’s yield has quickened, spurred by a Congressional Budget Office estimate that net government debt will rise to 65 percent of the gross domestic product at the end of fiscal 2010, from 41 percent at the end of fiscal 2008.

In 2009 and 2010, Washington will sell more than $5 trillion in new debt, according to Citigroup. A decade from now, according to the Congressional Budget office, Washington’s outstanding debt could equal 82 percent of G.D.P., or just over $17 trillion.
http://www.nytimes.com/2009/06/04/business/economy/04rates.html?_r=2

This is a good picture of who the US is indebted to:

The Government and so called expert economists try to make everything looking complicated to hide the real truth. If any of us are in debt, it is very simple, we have to pay interest on our debt, and the more debt we have the more vulnerable we become. Eventually the Bank calls in its loans, and we have to be declared insolvent. The more the Government is propping up the economy the huger the crash is going to be. Currently the binge that was there before is being fuelled again. People may look back at this one day as a catastrophic decision where Banks should have been allowed to fail so people could buckle up the way they should have. Instead of resuming the party resulting in an even bigger catastrophy.
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