Action Alert: ABC's Overpaid Autoworkers

[Douglas Carpenter]

http://www.fair.org/index.php?page=3659

Action Alert

ABC's Overpaid Autoworkers

12/5/08

In an attempt to explain the plight of the Big Three U.S. automobile manufacturers, ABC's World News used a wildly misleading statistic regarding autoworkers' pay.

On the December 3 edition of the ABC newscast, reporter Chris Bury took aim at the supposed inflexibility of the United Auto Workers: "But the union did not offer to give back the big stuff, pay and benefits that remain a fundamental problem. Ford, Chrysler and GM pay union workers more than $73 an hour in wages and benefits. Japanese plants here shell out just over $44. For GM, that translates into $1,500 more per car more than Toyota has to pay."

This factoid, which is a favorite of the industry--and, increasingly, of the media as well (see Media Matters, 11/22/08 )--has been exposed as misleading for some time. In the New Republic (11/21/08), Jonathan Cohn called it "wildly misleading," and cited an analyst for the Center for Automotive Research who determined that "average wages for workers at Chrysler, Ford and General Motors were just $28 per hour as of 2007." The much higher figure, according to Cohn, results from a mathematical sleight of hand--taking "the cost of all employer-provided benefits--namely, health insurance and pensions--and then dividing by the number of workers." In other words, costs related to retired workers, who well outnumber current employees, are used to create an inflated figure that is misleadingly labeled as current labor costs.

Writing in Portfolio (11/18/08), Felix Salmon called it a "ridiculous number," adding: "Now that GM's healthcare obligations are being moved to a UAW-run trust, even that fictitious number is going to fall sharply. But anybody who uses it as a rhetorical device suggesting that U.S. car companies are run inefficiently is being disingenuous." The United Auto Workers also has a page on their website debunking the industry figures (http://www.uaw.org/barg/07fact/fact02.php).

And as the Wall Street Journal reported (11/20/08), "During the past three years, the union agreed to eliminate tens of thousands of production jobs, reduce healthcare coverage for union retirees and slash wages for new hires--moves that essentially level the playing field between the Big Three auto makers and their foreign-owned rivals." The paper went on to explain that these concessions are significant: "Analysts believe the changes will bring the average cost of union labor to less than $50 an hour by 2010 or 2011, in line with Toyota Motor Corp.'s labor costs. The Harbour Report, a closely watched scorecard of auto-plant productivity, earlier this year found that in 2007 the average per-vehicle labor costs for the Big Three in 2007 was no more than $260 above Toyota's"--far from the $1,500 premium ABC claimed GM pays.

ABC did include a quote from UAW president Ron Gettelfinger, saying that he "bristled at blaming auto workers"--but ABC's newscast was as much behind the finger-pointing as the industry is. As economist Dean Baker noted (Beat the Press, 11/18/08), this misinformation has serious consequences: "It certainly can affect public support for a bailout if they are led to believe that autoworkers are paid much more than is actually the case." ABC should correct the record.

ACTION:

Tell ABC that it should correct its December 3 report that inaccurately characterized autoworker salaries.

CONTACT:

ABC World News
Phone:[phone]

Webform:

http://abcnews.go.com/Site/page?id=3271346&cat=World%20News%20with%20Charles%20Gibson

,

[tbyg52]

1. Darn, you beat me to it!

:kick:

[NNN0LHI]

2. Just for the record the NYT started this lie

They seem pretty good at that stuff.

Don

[Moochy]

12. Ah the "Paper of Record"...

How many parts per million of industrial by-product would you like with your news? The right to taint the storyline first is a huge perk!

[Royal Oak Rog]

3. I just caught the end

But what was that idiot John Stossel blathering about last night on 20/20? ABC is off the charts, the bs they pass on as fact is amazing.

[NOW tense]

4. White Collar mindset about labor

We have become a nation of managers. We think that labor should be paid little because it is below us. We forget that we are standing on the shoulders of labor. Our parents and grandparents worked their asses off to put us in white collar jobs. Now we as a nation think that people doing some of the hardest work should be paid like sweat shop workers to trap them in that caste. The paradigm of honest pay for an honest day of work is dying. Are we heading into a caste system?

[sufrommich]

10. Well said and true. nt

[sftwrngnr]

27. I disagree

To claim that we have become a nation of managers and are "standing on the shoulders of labor," is absolute crap. I'm a software engineer, and let me say this: I WISH abso-friggin-lutely WISH that there was a union I could belong to. I consistently put in well over 60 hours per week, and a couple of weeks ago, managed to put in 120 hours for the week (yep, do the math, I pulled two 24 hour days and several days with between 2 and 4 hours of sleep). Do I get paid for the hours I work? Nope, salaried.

Are we heading into a caste system? Actually, YES, but not for the reasons you claim. I believe that ultimately, due to outsourcing, the ONLY actual jobs will in fact be labor jobs. Why should the company I work for pay me X dollars per hour, when they can hire three over-seas contractors for half?

My brother "recareered" when he was 40, got trained in welding and truck driving. He asked me what I thought, and I said "You'll NEVER have to worry about being outsourced, so I think its a great idea."

[Greyhound]

31. Funny. Both Ms. Greyhound and myself tried to talk our colleagues about

unionizing constantly in the 90s and were universally rebuffed. This was years before we met, in two distinct IT fields, yet we got exactly the same reactions. It was very disheartening as we both recognized what was going on, but could not get any others to see it.

Now, the profession is a dead-end. A constant struggle to find the next job after you've worked yourself out of the last one, always at the low end of the pay scale, never accumulating time off, and always on the brink.

We let them steal all the eggs and kill the goose.

[NOW tense]

33. I am not trying to be a jerk

but ORGANIZE! Why can't Software engineers organize?

Why should a company keep jobs here? Because they should start giving a shit where their bread is buttered. Corps need to know that you don't keep jobs here we are going to tax you till you die, and if they leave, we tariff them. The question to large CEO's should be, Are you patriotic?, What profit is enough?, Why is that gap between your pay and the labors pay so big?

[Greyhound]

28. We've had a caste system here since at least the Civil War.

[JitterbugPerfume]

5. it is all about union busting

[WCGreen]

6. What about ABC's overpaid workers, the one's behind the anchor desk...

The one's who, like John Stossal or whatever that Freddy Mercury look alike fuck his names is who is nothing but a right wing shill, make millions just for yacking on the TV. They really offer nothing to our society except preserving the status quo. Is it any wonder that the Disney mouthpiece would rant agains Unions? I bet Mickey et all are not protected by a union...

All those high priced salaries at ABC run up the cost of advertising which raises the cost of every day products to we the consumers so maybe they should take a pay cut to help us poor schlubs...

[spoony]

8. excellent points

I hope you don't mind if I borrow slightly in my letter to them.

[WCGreen]

16. Have at it....

[Hidden Stillness]

7. The Media IS the Voice of Corporate Management

Fucking liars! The UAW workers get about $28 an hour, with reduced pensions (compared to $24 an hour for Toyota), and the most recent hires, since the latest re-negotion--and they re-negotiate contracts all the time, continuously now--get $14 an hour, no pensions, and very reduced benefits. As Barney Frank has mentioned, ONLY the union has made concessions. Union workers have been losing jobs, plants, have had their jobs outsourced, etc., for many years; this is not new. We really started to hemorrhage jobs, and the job classifications re-stated downward, when people like Reagan and Bill Clinton de-regulated trade, and started rewarding corporations for moving operations to Third World countries--now, though, we are at the end, and the result may be the actual loss of the industry itself. No country that has outsourced its manufacturing base, and so now no longer producs anything tangible, remains a First World country. Further, here in the Midwest (and etc.), there are no jobs available; no one is hiring, places are closing and going bankrupt every day.

Some 2 to 3 million jobs are connected to the auto industry--plants, parts makers and suppliers, dealers, repair shops of various kinds--and millions more collapse when middle class workers can no longer afford to buy the kinds of things that they do--from groceries to clothes, to toys, to going to a restaurant or movie, etc., etc.--and then tax revenues are lost, so that meant schools, police and fire, garbage pick-up, etc., and more dies. By the way, for those who think this is an American problem alone: Toyota sales are down some 40%, and Honda is down some 30%; countries around the world are helping their industries. I agree, get rid of the fucking assholes who run the industry now--many of whom are not even auto people. It is not the union's fault!

Funny, that having good, stable, well-paying jobs with health care that is a burden to no one else but paid for as part of your contract, used to be considered an achievement and a greater social good. Now, all of a sudden, becasue of NAFTA style "free" trade, and the new capitalist propaganda, it is called "arrogant" and "uppity," and the private jet-owners cry that they can't "compete" with slaves in China. Never before has it been "compared" to the worst conditions on Earth--now, because of deregulation, it is your "fault," and you are under pressure to become it!

[navarth]

9. nore fine journalism from the folks who brought us "The Path to 9-11"

REC this thread people!!

[Occam Bandage]

11. That number is accurate.

ABC stated that the Big Three have a labor cost of $73 per man-hour worked in wages and benefits. They do. In this discussion, it doesn't matter how much is taken home in cash, and how much is taken home in benefits, and how much is not taken home by anyone at all. The lifestyle of the workers is not the focus of the discussion. Rather, the aggregate cost per man-hour of American companies--as compared to Japanese companies--is.

[Moochy]

14. Accurate and Misleading!

"the cost of all employer-provided benefits--namely, health insurance and pensions--and then dividing by the number of workers."

So it's accurate and misleading at the same time! no wonder you like it.

[Occam Bandage]

17. It's not misleading at all. The context of the discussion is not the lifestyle of UAW workers.

If it were, then we could have that discussion (though I'd question discounting health insurance, paid vacations, and pensions from a discussion of worker lifestyle). Instead, we're discussing the long-term viability of American automakers versus Japanese, and in that discussion comparing their total labor costs to the total Japanese labor costs. For that discussion, it doesn't matter how much cash the workers are getting. What matters is how much cash the automakers are paying in labor costs, in whatever form to whatever entity, for each man-hour worked.

The only thing misleading here is the OP, which tries to present a discussion about business models as a smear job against "overpaid workers," when the ABC segment did not have that tone at all.

[Moochy]

18. Tone deaf?

Go Status Quo! Sis Boom Bah, Corporations are always benevolent and truthful! FAIR is just a bunch of poopyheads!

Oh and fyi, Japan has UNIVERSAL HEALTH CARE
http://en.wikipedia.org/wiki/Health_care_in_Japan

[Occam Bandage]

22. Yes. Implementing single-payer in America would be the best thing we could do for American

manufacturing industries. Not sure why you'd think I would disagree with that.

[amandabeech]

32. I'm sure that you're aware that something like $25-$30 of that figure

represents benefits paid to current retirees and surviving spouses, and does not directly benefit today's workers.

I'm sure that you've also read about or read in its entirety the 2007 contract in which cost of retiree health benefits will be paid by a VEBA trust. The VEBA will be administered by the union and will receive payments from the automakers and the union during 2009 and early 2010. After all payments are made, the automakers will have no additional responsibility for retiree health insurance.

I'm sure that you are also aware that the defined benefit pension has ended for new workers and some current workers.

Both these developments and the two tier wage structure will take total compensation costs for unionized workers down significantly over the next two years and into the future.

I'm sure that you meant to discuss these issues, but used shorthand in your presentation.

[SmileyRose]

19. The CEO of GM told Sean Hannity that it is NOT accurate.

The CEO of GM was on Hannity radio. I am unfortunately blasted with the inane blathering at work on a daily basis. Rich Wagonner stated the following.


The accurate figure for GM averages around $52 an hour for workers over 20 years experience.

The accurate figure for GM averages around $34 an hour for workers under 10 years experience because of previous deep concessions by the UAW for new hires.

The $70-80 figure being sited includes, and shouldn't, pension costs for retirees - which are paid out of a trust, not out of GM's operating costs. It also includes retiree medical insurance costs. This figure is misleading because GM has been spending much more than usual the last 3 years putting money aside for the VEBA trust. Once the money goes into VEBA, GM's retiree healthcare costs will drop dramatically.

Wagonner made it clear that reporting these numbers WITHOUT the qualifying statements of the massive concessions the UAW has made is sloppy reporting at best and dishonest at worst.

He also stated the Big 3 have the most experienced workforce in the American Auto industry. The average senority of their workers is 22.3 years. Toyota's average senority is 11.7 years. He reminded Hannity that everyone in the world expects to get paid more for their experience and auto workers are no different.


I was shocked, but the man came through for labor.

[TahitiNut]

20. Wrong. The cost of retiree pensions and medical care have NOTHING to do with current ACTIVE worker

... hours worked. Zip. Nada.

The labor costs for CURRENT workers is about $42/hour. The benefits that FORMER workers are now receiving were EARNED BY THEM when they were working. Just because the companies failed to create formal retiree benefit RESERVES and account for those costs PROPERLY does NOT mean that it's legitimate to add retiree costs to current labor costs and divide by hours worked. It's flim-flam. It's a LIE.

The COSTS of FORMER workers now receiving retirement benefits ARE NOT reduced by reducing hours for the ccurrent workforce. Indeed, if the number of work hours were to be cut in half, there would be NO REDUCTION in retiree costs. Thus, this fallacious calculation of pro-rating retiree costs across hours worked would result in a HUGE increase in labor "costs per hour" under such a reduction in hours.

People sucked in by this FLIM-FLAM should be prohibited from anhing other people's money ... or even doing their own tax returns ... since it's clear they're not qualified to do so.

[Occam Bandage]

21. Not a current active worker, but then again, the pensions being earned by current workers

aren't in that either, so it balances with a constant workforce. You're redirecting the discussion to the state of an individual worker, which is all well and good for the individual worker, but isn't what ABC was talking about.

[TahitiNut]

24. Your post makes no sense.

Current UAW workers receive an average of $28/hour in wages and $14/hour in benefits (health care and pension) ... which is the the $42/hour figure. The fallacious $72 figure is the result of LUMPING FORMER WORKER BENEFITS onto CURRENT WORKERS and dividing by hours worked.

As a former high school math teacher, corporate internal auditor, and IS/IT professional, I'm APPALLED at the ABYSMAL math/accounting literacy of people who swallow this shit.

[Usrename]

34. They do make good money, but it's under $60K.

That isn't much different than what the foreign companies pay (otherwise those other workers (the ones who work for foreign automakers) would have unionized by now in order to get equivalent compensation, because that's how organized labor works).

I tell you what you can do to make your analysis much more consistent. Why don't you add in all the bonuses that management has carted off over the last 50 years and add that cost to your hourly rate for workers?

There must be a reason why you want to leave management's bonuses out of this calculation. Is it because they collected their compensation right away while UAW members deferred part of their compensation to cover their retirement?

Are you willing to go after all the stock options that management has received over the last 50 years and confiscate that too, or just the pension funds?

Just curious.

[Bozita]

23. That's the best explanation I've seen.

Well done!

[SmileyRose]

13. ABC - Workers are a LIABILITY / Upper Management is an ASSET

Kudos to DUer Orrex for pointing it out

If something is viewed as a liability, spending even 1 cent on it is too much.
If something is viewed as an asset, no extravagance is too great.


In this nationwide discussion regarding the big 3, I am quickly learning who hates me and who actually cares about me. Those who do are few and far between, even in the halls of Congress. Only a couple of "journalists" have bothered with truth (as usual).

It's hard to be SMILEY (SmileyRose) in a world that would just as soon see me die.

[Breeze54]

15. Yes!!! Because most Dems on DU are brain dead and Do not know the score!!

:eyes:

WE GET IT !!!!!

Gheesh!

[Pithlet]

25. Well, apparently not.

Just look upthread, for one example. Sheesh.

[G_j]

26. done

thank you

[Missy Vixen]

29. I sat through a segment on "20/20" last night on this

That SOB John Stossel couldn't tell the truth if it bit him in the face. Period.

Julie

[Better Believe It]

30. K & R

[Douglas Carpenter]

35. a kicfk

[bemildred]

36. I just don't see how you can say "overpaid" and not mention "CEO" too. nt

[Douglas Carpenter]

37. one kick for the next shift

[Blue_Tires]

38. k+r