Exactly right Cheblammo From a 2012 Forbes article titled "The Story of Henry Ford's $5 a Day Wages: It's Not What You Think",
"The $5-a-day rate was about half pay and half bonus. The bonus came with character requirements and was enforced by the Socialization Organization. This was a committee that would visit the employees’ homes to ensure that they were doing things the “American way.” They were supposed to avoid social ills such as gambling and drinking. They were to learn English, and many (primarily the recent immigrants) had to attend classes to become “Americanized.” Women were not eligible for the bonus unless they were single and supporting the family. Also, men were not eligible if their wives worked outside the home."
Henry Ford was a lot of things which did NOT include he title of "benevolent employer".
"Wngr,everything in your post is correct. That is why I have pushed for Warrens solution to this issue . I think Warren hit the nail on the head with his piece he wrote for the WSJ in 2003 on import certificates."
Could you help me find that article...I would like to read it. It sounds like he is advocating the type of import restrictions that the Japanese, S. Koreans and others employ. But that's an assumption on my part until I can read the article.
"When Jobs told him the jobs were never coming back Obama should of told him to be prepared to deal with the IRS--on a regular basis. The next step will be to tell certain CEOs (walmart) that if you continue to pursue this policy at some point you will no longer be guaranteed the protection of the umbrella of the United States military."
I don't believe denying benefits and threatening American based companies to those that chose to do international business is a good policy. It sounds like a great way to chase business out of the US altogether. The logical outcome would be that the only businesses remaining would be restricted to working in the US with a limited customer and supply base. We would have to supply all of our own natural resources and forget base metals like aluminum because bauxite does not reside here.
Take GM for example. They would have to find an alternative for rubber moldings, tires, sealing materials, etc. Plus no more catalytic converters. The Palladium required comes mostly from Russia and South Africa. The Platinum (Ural Mountains and Columbia) and Rhodium (South Africa, Russia and Canada) are also found outside the country. There are many other examples of base metals that are predominately found outside our country. If we start erecting major barriers to imports, don't you think there will be retaliation from the countries we restrict?
In any case, I would like to read the article you referred to. If your could help me get there I would appreciate it.
"Second tier workers, at our plant at Ford, didn't just take the job and are happy as pie."
I'm hearing some talk from both sides that the solution to the 2 tier system might be a wage someplace between the two, and the Tier I people get a buy down of some sort. They didn't say this, but I assume the buy down would be paid annually in case the employee quits, dies, or is fired.
We'll all see together.
"Can you write something about what taxes GM has to pay in Mexico? "
Taxes were certainly not my specialty but I know we paid corporate taxes on profits (statutory rate of 30%, but like the US there were numerous deductions), capital gains taxes on divestitures, a VAT tax, and social security payments for employees. I don't recall exactly how much that all amounted to, but it was comparable to what US plants paid. Most of our plants were given some amount of tax abatement treatment just as they were in the US for new investment. Yes, there were also property taxes.
As far as job safety, we had not only safety auditors doing both US plants, but also Canadian and Mexican also. Ratings were given based on the same criteria. The European plants had their own audit team. These were not a rubber stamp either, they were pretty comprehensive. All global plants worked to the same safety policies and practices. In addition, all plants reported accidents and injuries based on the US OSHA 200 definitions. Accidents were classified either as recordable (usually minor injuries) and lost work day injuries (more serious injuries). Many Mexican plants had gone for several years without a lost work day injury, To be fair several US plants had the same experience.
Of the three plants I was responsible for, two were lead by Mexican nationals. Nearly all of the staff positions below the plant managers were Mexicans. That wasn't a coincidence. We wanted Mexican management in the plants for cultural reasons. We experimented with bringing some Mexican managers to US plants, but it wasn't altogether successful for two reasons. First, an American was more likely to speak up to his American plant manager if something was going on that he thought was wrong. Secondly, it was difficult for a Mexican manager to relate to the union and vice versa.
"Yes, you are correct, he didn't include the cost of his trips to Mexico."
Cheblammo, you are exactly right...it is totally immaterial to the point at hand, but just for the record, all headquarter expenses including my compensation, trip expense, etc. was prorated across all of my plants based on activity level. So as Mexico grew, so did their share of all headquarters SG&A.
The various tax collection agencies around the world (the IRS in our case) take a dim view of assigning costs in their country that aren't incurred in their country. That would constitute tax evasion. If my time and expenses in Mexico were charged in the US it would have the effect of reducing profit in the US. The IRS would not tolerate that because it would reduce the tax liability here. My salary, expenses, etc. would be considered trivial (tell me about it!), but when you begin to talk about engineering R&D, purchasing activity, etc. it gets to be a sizable number. So GM, as well as all multi national corporations that share services across the world, are careful to account for it properly.
"Does the above include the man hours for parts and assemblies bought from suppliers?"
Good question Bunkferd. No it doesn't. It includes labor from in-house assembly, power train, and metal fab.
To your point, there are probably at least double those hours when you include all suppliers.
“We already know we have a higher Corp Tax.”
We have a higher corporate tax statutory rate (35%), but with all the loopholes in the law, the average ACTUAL tax paid by American corporations is between 10-15%. So there is no advantage in Mexico for that.
“Less then 10% was GM labor cost,”
And this has been talked about many times before Jeye. There are about 35 man hours in every GM car made. In the US, labor costs are around $50 per hour including benefits. So 35 x $50 = $1750 per car.
In Mexico, it takes roughly the same 35 man hours, but hourly wages are about $6.50 including benefits. So, 35 X $6.50 = $227 per car, or a savings of $1522 per car. That times 2.5 million cars a year sold in the US would amount to over half a BILLION dollars savings per year to build all the cars in Mexico.
GM and the other carmakers don’t build cars in Mexico to be mean spirited or for revenge against the UAW, they build them there because they are better and cheaper. Again, believe me or not, I don’t care.
Like I said at the beginning of this long post, I think you’re a decent guy. But I’m afraid that you are like most of the UAW and can’t see the evidence right in front of you. One of the more progressive UAW Shop Chairmen asked me one time if he could go to Mexico with me so he could see it with his own eyes. He did ask that it be a secret that he was going. So I said sure. So I loaded him up on the company plane and we told everyone he was an engineer from the US that just wanted to see the Mexican plants. Even the management in Mexico didn’t know he was in the UAW. On the trip home he was really shaken. He said we’re (meaning the UAW) doomed aren’t we? I told him they didn’t have to be, but it didn’t look good. He did what he could for his plant, but I’m afraid the end is inevitable.
So Jeye, I truly do wish you well, but when I post this I am going to put you on ignore. I just don’t feel like arguing about the UAW anymore with you. Good luck.
2. The Mexican unions were more interested on how they could help rather than getting more and more from us. I met with them most of the time I went down there and their questions were always how can we become more competitive? On one occasion, I was down there on the weekend and I noticed the president of the local union running a machine. I was talking to him and asked him if he always ran the machine. He said most of the time during the week he did, but if his job was running on the weekend, he would come in and work for no pay. He didn’t want the people in the plant to get the idea he thought he was any better than them. By the way, they made straight time wages for the first 48 hours worked per week.
3. The Mexicans LOVED working at our plants. I can’t tell you how many told me that working for GM allowed them to move from corrugated sheet metal huts to their own apartments. They enjoyed being part of the team.
Believe me or not, I don’t care, up to you. But I swear this is all true.
“Do you think Mexico, India, China, Korea and Japan have as strict worker safety laws or smoke stack laws that we have?”
No, they don’t. But every one of the three plants I had in Mexico were built to the same environmental standards as my other plants. Health and safety standards in GM are corporate wide, they don’t depend on where in the world the plants are located. The same safety auditors went to the Mexican plants as the US plants. Same standards, better performance.
These were the same products being made by both countries.
I spent quite a bit of time in Mexico starting up new operations as well. The differences between starting up in the US and in Mexico were astounding. I insisted that Mexican team leaders be part of the project team because I trusted their knowledge and willingness to do the right thing. THEY did the manpower loading planning documents, with the engineer’s oversight. In the US, the UAW didn’t want any of their people engaged in this activity.
One of the main objectives in setting up the new operations was to do everything using lean manufacturing principles. All we had to do in Mexico was to train the hourly team leaders and get out of the way. In the US, it was arguing with the UAW every step of the way.
There are a few really basic differences in the Mexican work force and the UAW workforce:
1. The Mexicans didn’t feel a sense of entitlement. We paid them the equivalent of about $5 per hour. That was the best job in town. The only benefits were a subsidized lunch (about 2 pesos per day or about $0.15), and we ran 11 bus routes to pick up workers for work. Most workers owned a car, but they obviously preferred the free transportation. When we started up the San Luis Potosi plant, we had 24,000 applications for 2500 jobs. About 60% of the applicants were college graduates.
Let me start out by saying I think you were probably a good worker, husband and father. I think you probably provided for your family well and I am happy to see that you appear to be enjoying your retirement. Good for you. And I apologize in advance, I’m afraid this is going to be rather long.
But, having read through this thread (I read more than I post lately), I feel like I have to reply. I know you and I and others have been down this road before, but I have to say this one more time. During my 40+ years with GM, the only part of the job I really didn’t enjoy was arguing with the UAW. When I worked in plants, it was an everyday thing. After I moved to headquarters and was responsible for 12 plants (which were in the Us, Canada, Mexico and Europe), it was normally only at negotiations, but it was still a real chore for me. Most of the arguments boiled down to the UAW trying to get more and more from the company even after they were the best compensated workers in the country, maybe the world.
Now that I have left GM, I choose not to argue about it anymore so I’ll say my piece and put you on ignore. I wish you the best that life has to offer.
“Come on I spend 4 plus months in South Texas I see how productive Mexican labor is.”
Don’t judge Mexican labor by what you see in a 7-11 or in a road side taco stand. I made a trip to 3 Mexican plants every six weeks for 5+ years. Plus I received reports monthly comparing all 12 plants for cost, productivity, and quality (both in plant quality and warranty data). Without exception the 3 Mexican plants were in the top 5-6 plants for all three metrics except for productivity where they generally trailed the US plants by about 2%. The reason for that was we did not automate nearly as much in the Mexican plants because of their low labor cost. We saved 10’s of millions on automation. If you take out the automation effect, the Mexican plants beat the US plants by roughly 5-7%, consistently.
"Now who got these stories out to the media? "
Nobody had to, it's public information. The UAW can't wait to publish their "brag sheet" at the conclusion of every negotiation to try and get their contract ratified.
This is your attempt to show how GM blames everything on the union? You can't find anything can you? Don't blame GM management for something that someone else says. CBS and The Heritage Foundation do not speak for GM.
Unless you can show me and everyone else where someone speaking for the company blames the UAW for everything, please stop repeating that nonsense.
"My point is manaagement never points the finger at its self for making mistakes."
Furthermore, find me a quote from GM that EVER blamed the union for ANYTHING.
"My point is manaagement never points the finger at its self for making mistakes."
Are you joking?? Did you read Mary Barra's opening statement at the congressional hearings??
Find me a quote where the union has admitted mistakes.
"The Bryan-Morris Insurance Solutions, Inc. Team is committed to providing clients with the highest quality insurance plans available. .."
I can't do this anymore.
"Brain Morris posted a comment on this story in fact he did two."
LMAO. You quoted some moron that commented in some publication called The Detroit Bureau?? What are his credentials?? Is he just making this up?
Why not quote Sammy Calkins? He commented on the same article.
Or here's another one:
"I have told you this again and again but union idiots never remember anything. AT LEAST 5 MINUTES AFTER YOU TELL THEM. Thanks union boys!"
qqq2244, Nov 19, 2014 10:44 AM
As far as I know this guy is equally qualified as somebody named Bryan Morris.
"It sure effected the wages at the end of the year for taxes. ."
Of course it did. But it's not wages. The correct definition of wages, in this case, is the amount of money a worker receives for an hour of work. It can be by the hour, day, or week. It is similar to the base salary of a management person.
"Remember what I posted is what someone else wrote."
I get that. My question was what was your point in posting it. I assumed it was in connection to my earlier post talking about executive compensation. Yes or no?
"But I'm sure you know that over the years companies like GM have paid a lot in Health Care cost that had nothing to do with their employees."
Help me understand what you mean with this statement. What did GM pay in health care costs that had nothing to do with employees?
" You know the Gov can't do anything right or companies like GM that had health Care wouldn't be paying for the deadwood."
So why would you advocate for government paid health care in your original post. If that wasn't your point, what was?
"Union sources said the new agreements included the elimination of lump-sum, or productivity, bonuses that workers were supposed to receive in 2009 and 2010 instead of wage increases, and cost-of-living allowances, or COLA, increases have also been deleted."
Those are benefits, not wages. I said wages. Tell me whose hourly rate was cut. The correct answer is NO ONE.
No idea what your point is on all the rest of that stuff.
"Brain Morris is the person the wrote what I posted.."
Yea, I gathered that. But who is he? Who does he write for? Where can I see this article or whatever it is? Sounds like he's a talking head on MSNBC or Solidarity. Certainly not what a self respecting Republic would be quoting.
"If GM, Ford, and Chrysler don’t like the fact that they are having to pay both the legacy cost for retirees as well as health insurance benefits for current workers, they shouldn’t complain too much since they have no one to blame but their own corporate forbearers."
Legacy costs certainly includes pensions. Pensions are the biggest part of legacy costs. Maybe Bryan doesn't know that.
So you didn't answer my questions. Do you actually want the government administering your retirement benefits or not? If not, why in the world would you post something like that??