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Auto dealers: Government loan is crucial
Published Saturday, November 22, 2008
Local auto dealers say a government loan to the auto industry is crucial to the health of the national economy.
Steve Brimhall is the owner of Minnesota Motor Company and a member of the board of directors for the Minnesota Automobile Dealers Association. He calls the auto industry one of the last important industries in the country, and says Minnesota could lose about 30,000 jobs if legislators can’t agree on a loan package.
“I’m in favor of the loan if they can do it because it’s so important,” Brimhall said.
That loan is $25 billion in government-backed aid to the industry’s Big Three: General Motors Corp., Ford Motor Co. and Chrysler LLC. Senate Democrats had proposed a bill taking those dollars from the $700 billion Wall Street rescue fund, an idea rejected by the Bush administration and congressional Republicans. Majority Leader Harry Reid (D-Nev.) and Speaker Nancy Pelosi (D-Calif.) said Thursday there was no plan in circulation that could pass both houses of Congress and meet the president’s approval.
“I think for our national economy it’s important to keep (the industry) going,” said Paul Tysver of Quality Toyota.
But if the government’s going to lend automakers billions of dollars, he said, companies need to show they’re making a major effort to turn things around.
“I think they need to have a viable plan,” Tysver said, saying he isn’t convinced yet that they do.
Lawmakers want to see a plan, too. On Thursday Reid and Pelosi demanded the Big Three develop a strategy detailing how the federal loan money would be used and how automakers would keep the industry competitive.
That plan must be submitted to key lawmakers by Dec. 2, with possible hearings the first week in December and consideration by Congress the following week.
Laurel Nelson of Nelson Dodge GMC said this week she’s optimistic the industry will pull through. Nelson says Ford has already instituted a number of changes, such as laying off some white collar workers and producing more fuel-efficient cars.
“We’ll continue to build those trucks, but there are a lot of green vehicles in the pipeline,” she said, and getting them to the public doesn’t happen overnight.
Nelson said she’s concerned bankruptcy could choke up automakers and distance consumers.
“We just need to have this loan to stabilize (the industry) in this weak financial economy,” she said.
According to General Motors, the company in July took steps to generate and preserve $15 billion through 2009, including cutting inventories and eliminating executive bonuses. More recently, the company announced plans to preserve an additional $5 billion by delaying certain vehicle launches, taking out more North America structural cost and further reducing salaried headcount.
The Associated Press contributed to this report.
Comments
The Daily Journal is happy to host community conversations about news and life in Fergus Falls and the surrounding area. As hosts, we expect guests will show respect for each other. That means we don't threaten or defame each other, and we keep conversations free of personal attacks. Witty is great. Abusive is not. If you think a post violates these standards, don't escalate the situation. Instead, flag the comment to alert us. We'll take action if necessary. It's not hard. This should be a place where people want to read and contribute -- a place for spirited exchanges of opinion. So those who persist with racist, defamatory or abusive postings risk losing the privilege to post at all.Posted by lgb0620 (anonymous) on November 22, 2008 at 10:01 a.m. (Suggest removal)
I wonder if the car dealers in Fergus Falls pay their help like GM, and the others do? Maybe if they did they too would be looking for a government handout.
Is it possible that the unions have killed the car industry in this country?
Hey, let the big three learn how to run a business before we, the taxpayers, give them a handout!!!
Posted by BloopTriple (anonymous) on November 22, 2008 at 11:16 a.m. (Suggest removal)
Wait a minute.
"He calls the auto industry one of the last important industries in the country"
Well, some pigs are more equal than other pigs, aren't they?
Posted by mgdbottled (anonymous) on November 22, 2008 at 11:37 a.m. (Suggest removal)
I say bail them out this time with conditions. The industry is too important to what's left of our manufacturing sector. I also say, tell the Union to get lost as a condition of the bailout. Auto workers should belong to the lower middle class and not the upper middle class. The workers should be paid what any other high school grad with no skills is paid. Paying a worker $71 dollars an hour to screw a nut on a bolt is the reason the industry has failed. Also, tell the CEOs their pay is limited and their business plan must be changed. Cars that average 45mpg must be produced. If GM and Ford can make 45mpg cars in Europe, they can make them here.
Posted by dino43_99 (anonymous) on November 22, 2008 at 11:49 a.m. (Suggest removal)
Its easy to pass the blame, but how about these people that buy all these cars made in Asia just to save a few bucks. Thats were the problem has been the last 30 years. Now everyone is going to have to pay! If you don't support American companies they will go under!!
Posted by Mr_Lincoln (anonymous) on November 22, 2008 at 1:34 p.m. (Suggest removal)
China will work for less and longer.America is lazy we have walmart we dont need the big three.
Posted by Mr_Lincoln (anonymous) on November 22, 2008 at 3:31 p.m. (Suggest removal)
Toyota and Honda here we come. Who will you find to work when the big three go down.Maybe the big three workers.China will work for much less money and longer go china way to show america what happens when you are lazy.
Posted by dino43_99 (anonymous) on November 22, 2008 at 5:37 p.m. (Suggest removal)
BUY AMERICAN MADE PRODUCTS OR YOU WILL LOSE YOUR JOB!!!!
Posted by votedem (anonymous) on November 22, 2008 at 5:55 p.m. (Suggest removal)
I think we should let them fail. I don't want to have to pay for a bailout that could have been avoided if they had made a quality product. It's time we realize that American isn't the powerhouse we think we are. Not even close.
Posted by theweasel (anonymous) on November 22, 2008 at 7:07 p.m. (Suggest removal)
Hey mgdbottled, as I recall you are an attorney. What do you say we tell the American Bar Association (the lawyers union) to get lost and we allow Chinese attorneys to represent us in court or for that matter anyone we want to represent us. I bet that would cut down on the outrageous fees charged by attorneys who’s union has written a “closed shop” rule into law.
Posted by Redcloud (anonymous) on November 22, 2008 at 7:16 p.m. (Suggest removal)
You got that right weasel, no matter how incompetent an attorney is he still gets paid even when he looses.
When I screw up on my job I don’t get paid . But then I don’t have the ABA to represent me as a landscaper so a citizen can do their own landscaping. If I had a union like the lawyers do we could have the law say only landscapers could do landscaping and not just regular home owners. Then I could sit back and whine about somebody else’s union and their high wages.
Posted by theweasel (anonymous) on November 22, 2008 at 7:23 p.m.
(This comment was removed by the site staff.)
Posted by USA1 (anonymous) on November 22, 2008 at 8:48 p.m. (Suggest removal)
The good news is GM said they will release a NEW HUMMER for the new model year!! Source: FOX News, Nov 11, Interview with Larry Winget.
Posted by USA1 (anonymous) on November 22, 2008 at 8:56 p.m. (Suggest removal)
Nothing like building the cars (and trucks) that America wants!! (and needs)
Posted by mgdbottled (anonymous) on November 23, 2008 at 8:55 a.m. (Suggest removal)
""BUY AMERICAN MADE PRODUCTS OR YOU WILL LOSE YOUR JOB!!!!""
That would be Toyota. The most American made Company in the United States. Engines and transmission built in the United States and entire vehicle assembled in the United States by Americans. Ford, GM, no way. Parts built overseas and vehicles assembled in Mexico, Canada, and elsewhere. Very little of GM, Ford made by Americans. GM and Ford are no longer American companies, except in name only. So, if you want to be patriotic, buy Toyota. My next vehicle will likely be a Toyota. Cause I too, want to support American workers.
Posted by theweasel (anonymous) on November 23, 2008 at 9:21 a.m. (Suggest removal)
Mgdbottled, you only want to support American workers as long as they have a weak union, low wages and most of all, if they know their place. Which is anywhere below you. Shame on you.
Posted by Mr_Lincoln (anonymous) on November 23, 2008 at 4:48 p.m. (Suggest removal)
union is when workers got lazy.
Posted by mgdbottled (anonymous) on November 23, 2008 at 6:53 p.m. (Suggest removal)
The days of a strong union ended with free trade. Blame your free trade advocates, not me. Why do you suppose all the jobs are going overseas. Cheap labor. Fact of life. You strong union supports won't be happy till all your jobs are gone. Won't be long now. I don't particularly like the idea of my taxes having to go to an auto company so some uneducated unskilled worker can live high off the hog. Seems like the American companies are the only ones left with over paid union workers. The only way to make our auto companies competitive is to quit paying the outrageous wages. All these legacy costs have to go too. Unfortunate for all the retirees, but that's also a fact of life. Enacting universal health care will go a long way to making our companies competitive too with other countries that already have government paid health care. Otherwise, good money is just being thrown away cause they'll never survive in a world economy with real competition. Maybe next election, we can get rid of the rest of those last century thinking republicans and finally make this country competitive with the rest of the world. The new era has arrived. Like it or not, it's here.
Posted by theweasel (anonymous) on November 23, 2008 at 7:47 p.m. (Suggest removal)
The only difference between Mr. Lincoln and mgdbottled is that Mr. Lincoln uses fewer words. Both view themselves as superior to people who work for an hourly wage and actually make something with their hands. And both resent the wages unions secured for their members through collective bargaining. Both view workers as the great unwashed who have risen above their station and thus diminished the portion of the collective pie that both view as reserved for those who refuse to get their hands dirty, or who still secretly believe in a caste system. Inbred is the outstanding arrogance implied in the statement “ I don't particularly like the idea of my taxes having to go to an auto company so some uneducated unskilled worker can live high off the hog.” Who but an arrogant aristocrat would assume that factory workers are all uneducated and unskilled? The answer is someone who knows absolutely nothing about factory work or workers, or maybe someone who was denied a factory job as a youth and carries that resent to this day.
Mgdbottled, you may represent yourself here as some clear thinking Democrat, but your stated comments reveal you to be just another “last century thinking republican”
Posted by Redcloud (anonymous) on November 23, 2008 at 8:08 p.m. (Suggest removal)
I don’t particularly like the idea of house buying “closing costs” being inflated by having to buy a title search by some uneducated, unskilled, coupon clipping lawyer. Who then covers his own ass and possible errors with a zipper clause stating “based on the evidence before me”. Which automatically shields the attorney from a lawsuit based on sloppy research.
Posted by mgdbottled (anonymous) on November 23, 2008 at 8:24 p.m. (Suggest removal)
We use title companies out here in Michigan. Have for thirty years now. I've never searched a title on a real estate transaction. No need. The seller buys a title insurance policy which insures good title. Any problems, it's covered by insurance. Title company representatives (non-lawyers) search the title for liens or potential problems before they issue the policy. They do the search on the internet. All the Register of Deed offices are online now. Anyone who buys real estate without a title policy paid for by the seller is a fool. No need for a lawyer on a real estate transaction. Unless, your state is backward. Also, no need for real estate agents/brokers. A title company will also handle any necessary buy/sell/disclosure documents. Sounds like Minnesota? You're state needs to get with the progam.
Posted by doctipster (anonymous) on November 24, 2008 at 11:10 a.m. (Suggest removal)
Lets just get a gut reality check here. The AAW (American AutoWorkers union is killing the big three.
I have to agree. There is no reason to pay a worker that much money to do a job that you need no formal education for.
So my belief is in order to get my support on a government handout they should do the following.
1) Limit the pay for top executives. (No reason the CEO fo Ford should be making 25 million a year and be asking for a government handout.
2) Get rid of the Union. Re structure everyones pay scale from the bottom up.
3) Make affordable cars that get good gas mileage.
4) Bring back the Electric Car. The EV-1 was a great model that they used for a few years and then crushed.
Anyone want to see a great movie. Go rent Who Killed the Electric Car.... Its an eye opener...
Posted by BeaverFan (anonymous) on November 24, 2008 at 1:06 p.m. (Suggest removal)
mgdbottled is right. Get rid of the Union...all Unions...lawyers, auto workers, teachers..
Competition is good. Buy Toyota. They aren't asking for a handout.
Posted by theweasel (anonymous) on November 24, 2008 at 1:11 p.m. (Suggest removal)
First of all doc. There is no such union as the AAW. The union at issue here is the United Auto Workers (UAW) but I would not expect you to know that. Just as I would not expect you to know what skill level or training is required to build a car, that however does not keep you from shooting your mouth off about subjects you know little about. But lets talk about your perception that no formal education is required.
The formal education for a tool and die makers is four years to receive your journeyman license. The time required for a die sinker is the same, likewise mold makers, erection machinists, electricians, die casters and so on and so forth. That formal training or education is gained by class work and on the job training as an apprentice, for a period of at least four years. With periodic testing by state and federal apprentice boards. Not everyone who builds a car has the same job likewise different skill levels get different pay rates.
Lastly, not one single workers at any auto assembly plant gets paid $71.00 per hour to screw a nut on a bolt like mgdbottled thinks. Just because some talking head on TV says it is true does not make it true.
Base wages average about $28 an hour. GM officials say the average reaches $39.68 an hour, including base pay, cost-of-living adjustments, night-shift premiums, overtime, holiday and vacation pay.
Posted by mgdbottled (anonymous) on November 24, 2008 at 3:22 p.m. (Suggest removal)
That $71/hour figure includes their legacy costs. The actual pay with benefits without their retirement costs is about $52/hour. Toyota and Nissan, which are non-union, pay about $28/hour. No way companies held hostage by the UAW can compete.
BTW; since Toyota went with American workers, the quality of their vehicles has decreased. They might want to rethink their "built in america" policies.
As far as training auto workers, take a look at all the auto plants in Mexico. Takes no time at all to hire and train the Mexican workers to put together decent cars. Ask Ford Motor Company. Any worker from any country can screw a nut on a bolt regardless of education. The difference is Mexicans want to work. No skill necessary.
Posted by theweasel (anonymous) on November 24, 2008 at 4:01 p.m. (Suggest removal)
More gobblyguok from an attorney. The wages are exactly like I said above. You do not know what their legacy costs are unless you are clairvoyant. The health insurance is run by the union and you can not know what the pension costs are unless you know what funding level the auto manufacturers have attained. But on second thought I suppose you have access to this confidential information. It must be wonderful to be the only person other than corporate insiders to have knowledge of this secret information.
All Toyota and Nissan plants are not non-union. But all auto manufacturing plants in Mexico are merely assembly plants. You might want to look up the difference between an assembly plant and a full service plant. As far as quality in any product is concerned, that factor is determined by management and the practices they have in place for quality assurance and inspection, and not by the workers.
Posted by Redcloud (anonymous) on November 24, 2008 at 4:05 p.m. (Suggest removal)
Hey mogandavid why don’t you just admit it. You are anti union, anti worker, and anti American.
Posted by theweasel (anonymous) on November 24, 2008 at 4:35 p.m. (Suggest removal)
It never ceases to amaze me how some people who have never worked in certain areas of commerce, nor held a job in a specific industry can know all about every aspect of that job. What they should be paid, their working conditions and the requirements of that job. All that is necessary to gain that knowledge is to have spent your entire life in Fergus Falls Minnesota working at some minimum wage entry level position flipping burgers or sweeping floors. Or in the opposite extreme to view others as less valuable, less intelligent, less worthy because of your lofty “Profession” which clouds your perception of those not on the same social wrung as yourself. In either case both view others as having surpassed them or catching up to them, which instills jealousy and envy, and is evident in your pronouncements.
Posted by watermelon (anonymous) on November 24, 2008 at 4:48 p.m. (Suggest removal)
It's rather hard to say anything against organized labor unions and _not_ be called anti-american by the doofuses on this board, or anywhere that is highly unionized. It's a lame excuse to try to scare people off with patriotic overtones. Either you're for it all, or you're anti-american. Unions had a time and a place. What's that? You're responsible for the 40 hour work week? Thank you. You're responsible for a minimum wage? Thank you. It's 2008-Now you're nothing but a greedy bunch of leeches who get phenomenal healthcare, retirement benefits and wages for labor-intensive blue collar jobs that would normally merit much less. Unions are killing this country. What? You've decided you want even more pay and better benefits? You'll just refuse to work and strike until you get your way. It's organized blackmail.
American made cars have always been of sub par build and reliability compared to everything else out there. The big three don't care. They don't have to. There is no incentive to do so. That is why they NEED to file for bankruptcy. That way they can re-organize, get rid of the riff raff and finally wake up.
Posted by mgdbottled (anonymous) on November 24, 2008 at 5:03 p.m. (Suggest removal)
They don't want to listen to reality. With free trade, unions are history. Doesn't matter what I think. Just stating a fact. You can't compete, your jobs go elsewhere, where workers are willing to do the same work for less money. Can't blame the companies. GM, Ford, Chrysler all recognize they can't compete with American workers wanting union protection. I'm surprised at Toyota and Nissan building cars in America. Why would they? Can't blame anyone who doesn't want to work for the wages or lack of wages that are going to be paid in a global economy. That's about equivalent to 1/3 of what they were getting before free trade. That's all your going to get in any kind of manufacturing from now on. I've said over and over again that all things come to an equilibrium in economics. Take away the protection that was offered by this country to our workers and what's happening is very predictable.
Posted by theweasel (anonymous) on November 24, 2008 at 5:21 p.m. (Suggest removal)
Labor-intensive? Blue collar jobs? Do you mean like the Doctors and Nurses at Beth Israel Hospital or the entire staff at NASA, including some astronauts? Perhaps you meant the Doctors at City Of Hope medical center. Or maybe you meant the veterinarians and instructors at International Guide Dogs or Guide Dogs of America. Perhaps you meant those menial positions at the Bureau of Engraving or all the researchers at the Bureau of National Affairs. I bet you meant those Doctors and scientists at the National Poison Control Center. I could go on but I you have already concluded that they are riff-raff. If you ever get sick and need a doctor in New York, let me know I’ll refer you someone who will be glad to see you.
Posted by mgdbottled (anonymous) on November 24, 2008 at 5:31 p.m. (Suggest removal)
Even with the state of health care in this country being pathetic, doctors and nurses are not at fault and they don't have to worry about their jobs going overseas. Vets seem to be plentiful, though. Last time I checked, doctors and nurses were't blue collar unskilled workers. We have a serious shortage of general practice doctors in this country and an oversupply of specialists. Takes two months to get an appointment with a regular doctor. I know, I just made an appointment. That's another matter though for another topic and another day.
Posted by theweasel (anonymous) on November 24, 2008 at 8:07 p.m. (Suggest removal)
Mgdbottled, perhaps if you read the posts or comments by others you could respond to the issues therein.
Posted by USA1 (anonymous) on November 24, 2008 at 8:48 p.m. (Suggest removal)
The first post asked about wages at garages. I don't know about Fergus Falls but someone I know works for Luther Family Dealerships (union) in the twin cities. Heres how their pay goes. First 8 hours regular time, anything from 8-10 hours time and a half, anything from 10-12 hours double time. They have both a day shift and night shift. 6am to 6pm, 6pm to 6am. They can work from 8-12 hours per day or night if they choose, 7 days a week. Just about all of their mechanics make 100-150k with overtime. Service writer about 85k with overtime, lot person was up to 65k to start with overtime. $672 base wage + $252 time and half + $336 double time = $65,520. Thats figuring 7 days a week, 12 hours per day if you wanted. Thats no joke. I doubt if anything around here pays that at a garage unless they're union.
Posted by USA1 (anonymous) on November 24, 2008 at 8:49 p.m. (Suggest removal)
Thats $65,520 per year, starting with overtime.
Posted by USA1 (anonymous) on November 24, 2008 at 8:52 p.m. (Suggest removal)
And it would actually be more figuring 16 hours of basic overtime.
Posted by USA1 (anonymous) on November 24, 2008 at 8:59 p.m. (Suggest removal)
I got it now (I asked them) $480 base + $288-16 hours overtime, + $252-14 hours overtime (8-10 hours per day) + $336-14 hours double time (10-12 hours per day) = $1356 per week = $70,512 per year.
Posted by Bcannell (anonymous) on November 24, 2008 at 9 p.m. (Suggest removal)
USA1 I doubt many people work 12 hours a day 7 days a week.
Posted by USA1 (anonymous) on November 24, 2008 at 9:17 p.m. (Suggest removal)
Probably not, but the person I know does. (his wife goes thru every bit)
Posted by USA1 (anonymous) on November 24, 2008 at 9:18 p.m. (Suggest removal)
Even if you worked 12 hours a day, 5 days a week thats still a pretty good paycheck.
Posted by USA1 (anonymous) on November 24, 2008 at 9:23 p.m. (Suggest removal)
And by the way, when I was in the twin cities I did work at a store from 10-14 hours per day, 5 days one week, 6 days every other week. But I was in my late 20's then. I could go without much sleep.
Posted by theweasel (anonymous) on November 24, 2008 at 9:29 p.m. (Suggest removal)
USA, I do not doubt your basic wage figures. However a good mechanic can make much more money without working any overtime.
The manufacturers have predetermined times needed to replace or repair all the parts of your car. For example, suppose that your alternator is shot and needs to be replaced. The manufacturer may say that it takes three hours to replace the alternator. An extra sharp mechanic (who has attended certain training schools) may be able to replace the alternator in one and one half hours. He will still be paid for three hours but has freed himself up to take on additional work during the time he gained by beating the set time.
Also in some shops (usually non-union shops) the mechanic gets a percentage kickback on parts sold to you or added to your car. Many times up to 20% of the retail cost of that part, sometimes the service manager will also get a cut of the cost of parts sold. That is why certain mechanics who have a history of fast work and selling more parts will be assigned choice jobs by the service manager.
Non dealership repair shops do the same thing but get their hourly rate figures for job times from the “Chilton Auto Repair Manual”.
Posted by Mr_Lincoln (anonymous) on November 24, 2008 at 9:56 p.m. (Suggest removal)
Thanks in part to managerial incompetence, but mostly due to pricey union contracts, it costs American carmakers too much to build cars here; they can’t compete. When you fold in health care, pensions, hourly pay, vacations and the rest, average total compensation for a Big Three autoworker is $73.21 an hour, according to data cited by University of Michigan economist Mark Perry.
Posted by Mr_Lincoln (anonymous) on November 24, 2008 at 9:57 p.m. (Suggest removal)
Toyota, Honda and Nissan pay a still-generous $44.20 an hour in total compensation — a cost edge of nearly 40%. Is it any wonder that Ford, GM and Chrysler can’t compete? Or that, after paying their workers, they never have enough cash left to retool?
Today the total market capitalization of the Big Three has fallen to about $7 billion. Is it better for the owners of those companies to suffer a total loss or for taxpayers to lose $25 billion? The answer is obvious. As such, the only case for a bailout is if it would force major changes on the industry. That won’t happen with current management in place or with giveaway union contracts that make the companies unviable.
Posted by USA1 (anonymous) on November 24, 2008 at 10 p.m. (Suggest removal)
The figures given to me were basic wages for a lot person, not mechanic. The only thing he said about their mechanics was that no one earned less than 100k (100k to 150k he said). I don't believe any in this town are up there, but maybe so. The only one they gave me a specific amount was for lot person. And yes I am aware of the parts they get from parts store and then charge list (they did that were I worked, sometimes doubling the price, and the mechanics did get a %) and the dealer time allowed for repairs when they just about always go under the time limit. Thats why when I did work for dealers (Ford, Chrysler) they LOVED warranty work! Always made money on that. But its still a good wage today anyway you look at it.
Posted by USA1 (anonymous) on November 24, 2008 at 10:05 p.m. (Suggest removal)
Like Larry Winget said. He would have no problem finding people who would work for HALF of what a UAW person earns.
Posted by USA1 (anonymous) on November 24, 2008 at 10:14 p.m. (Suggest removal)
Anyway. HAPPY HOLIDAYS!! We'll need it this year.
Posted by abdul (anonymous) on November 24, 2008 at 10:24 p.m.
(This comment was removed by the site staff.)
Posted by USA1 (anonymous) on November 24, 2008 at 11:28 p.m. (Suggest removal)
As Jay Leno said, "Lets let the blue collar workers build the cars and let the white collar workers (Wall Street) build the license plates"
Posted by theweasel (anonymous) on November 26, 2008 at 10:53 p.m. (Suggest removal)
Bad math fuels false union story
Nov. 24: Andrew Ross Sorkin of The New York Times is today's Worst Person in the World for using some twisted math to report that the average auto worker making $70 per hour. That wrong number has lived on to serve as the basis for right wing union busting arguments.
http://www.msnbc.msn.com/id/3036677/vp/2...
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