Comments on: Fall of GM http://www.ritholtz.com/blog/2009/01/fall-of-gm/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Sat, 21 Nov 2009 10:32:28 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: The_Ox http://www.ritholtz.com/blog/2009/01/fall-of-gm/comment-page-1/#comment-137655 The_Ox Tue, 06 Jan 2009 17:33:11 +0000 http://www.ritholtz.com/blog/?p=15205#comment-137655 Very cool? Maybe. Also wrong, at least in parts. The base pay of GM plant workers is NOT 28 dollars/hour. Under the various concessions made by the UAW over the years, GM (and Ford and Chrysler) workers are on a tiered system with new (relatively speaking, as this has been in effect for some time) hires starting on a lower wage scale (around 14 bucks/hour) while "senior" workers remain on the old scale. Regardless of what scale workers are on, base pay is not 28 dollars/hour. I also take exception to the health care costs ("generous coverage") being laid on the UAW. To be clear, unions are what got us all employer sponsored health care (and for that they deserve our thanks) but we may well have been able to get to a single payer system long ago (which would have unburdened GM and others from these costs) if the automakers and other large corporations had not fought so hard against it. Obviously, they preferred (for reasons that mystify me) the system that they are now stuck funding. Finally, I'm not sure how the "too many dealers" argument holds any water at all. GM doesn't pay for dealerships. Dealerships pay GM. Where are the costs? Very cool? Maybe. Also wrong, at least in parts. The base pay of GM plant workers is NOT 28 dollars/hour. Under the various concessions made by the UAW over the years, GM (and Ford and Chrysler) workers are on a tiered system with new (relatively speaking, as this has been in effect for some time) hires starting on a lower wage scale (around 14 bucks/hour) while “senior” workers remain on the old scale. Regardless of what scale workers are on, base pay is not 28 dollars/hour.

I also take exception to the health care costs (”generous coverage”) being laid on the UAW. To be clear, unions are what got us all employer sponsored health care (and for that they deserve our thanks) but we may well have been able to get to a single payer system long ago (which would have unburdened GM and others from these costs) if the automakers and other large corporations had not fought so hard against it. Obviously, they preferred (for reasons that mystify me) the system that they are now stuck funding.

Finally, I’m not sure how the “too many dealers” argument holds any water at all. GM doesn’t pay for dealerships. Dealerships pay GM. Where are the costs?

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