The American Auto Industry Story-Funny but sad and true

[Neal Clayton]

i just bought a toyota truck about 6 months ago myself, come on in the water's fine .

the previous one i had before that was also a ford. no major problems, but always the 'little things' that broke. cheap electronics were usually the culprit. it was rare for a winter to go by that i didn't lose a sensor, or a fan motor, or other such thing, all on a vehicle with less than 100k miles.

never again.

i just wish toyota would sell a 6 cylinder diesel hilux here.

[Frank Hagan]

The problem with the European diesels (as well as the Japanese) is that they don't meet the California (and soon, EPA) smog rules for NOx emissions. BMW has just now started selling diesels in California, but to do it they have a urea-injection system that requires the urea (ammonia) to be refilled at every oil change. If you let it go too long, the car won't run. The VW diesel coming soon has a similar system, although my brother tells me it will have a larger store of urea to use and won't require replacement every 5,000 miles.

Automakers don't want to produce a car that can't be sold in all 50 states (especially with the prospect that other states will adopt the California rules).

BTW - the European cars never test as well under our EPA testing as they do in Europe, so you can't take the MPG figures from Europe and assume they are the same here. VW recently complained about it, but the new EPA mileage ratings reflect what you actually can get (my Prius has an EPA rating of 45 MPG now, and I get an average of 50.2).

Diesel and bio-diesel blends are great ideas, but no car manufacturer recommends more than 20% biodiesel (and most limit it to 5%). Until the manufacturers accept the ASTM rated biodiesel in higher percentages, biodiesel is not a viable alternative.

[Ben Rafael]

Around here $14 is pretty darn good for not having anything but a high school diploma starting out in the job world. Then again..here in Ohio houses don't cost $100 sq ft like they do out your way.

$100 per sq ft? That would be a down payment. In bad neighborhoods houses can easily cost $300 per sq ft.

[Ben Rafael]

Benefits and taxes will be more than $3 per hour. Usually, you use an adder of 25 to 50% above the wage you pay. The employer's match on social security is $1.05 on $14 per hour (probably more ... I just did 7.5% and I think the rate is something like 7.85%). The health care insurance cost averaged $12,100 per employee in 2007 (for an employee and three dependents), and companies typically pay about 75 - 80% of that; that's $4.65 per hour right there ($12,100 / 2080 hours * .80). You have $5.70 added on, more than a third, with just two of the common benefits American workers have. And that's not including vacation, sick days, employer matching of 401k, worker's compensation contributions, etc.

I just posted what I read and it didn't include the SS match. Regardless, it is still over $50 less per hour than UAW requirements.

[Bryan Rocker]

$100 per sq ft? That would be a down payment. In bad neighborhoods houses can easily cost $300 per sq ft.

I live here in Ohio, just moved from Beavercreek to Maineville and I can tell you that there are lots of house around here over $100 a ft. Its all about location. Yes there are a ton of cheap houses in Dayton, but I wouldn't live there. When I moved into Beavercreek I bought my house as a fix-ur-upper and it ran $85 a ft with updated houses running $100 a foot and this was in 2005. The house I just bought down here in Maineville ran me just under $100 a ft. Just keep in mind your mileage may vary......

[Ben Rafael]

I live here in Ohio, just moved from Beavercreek to Maineville and I can tell you that there are lots of house around here over $100 a ft. Its all about location. Yes there are a ton of cheap houses in Dayton, but I wouldn't live there. When I moved into Beavercreek I bought my house as a fix-ur-upper and it ran $85 a ft with updated houses running $100 a foot and this was in 2005. The house I just bought down here in Maineville ran me just under $100 a ft. Just keep in mind your mileage may vary......

Construction costs for homes here are typically $200 per ft or more. Might have dropped since this economy has weakened.

[Frank Hagan]

I just posted what I read and it didn't include the SS match. Regardless, it is still over $50 less per hour than UAW requirements.

Right, I think that the Detroit autoworkers have something like a $70 per hour "burdened cost" when they calculate the benefits (healthcare), taxes, unemployment coverage and pension payments. And it only gets worse; if they shrink to the point where they lay off half their workers, that $70 per hour rises to something like $140 an hour because the fixed cost of providing those benefits to retirees remains and is spread out over less workers.

No matter what, the worker gets screwed. The executives will still walk away with millions in severance, but the worker (and the retiree) will get nothing. Its easy to say that the workers benefited from their union representation all these years, but its hard to say that when they are out of a job and the pension plan they had relied on is suddenly gone.

[Ron Dunn]

How do these pension plans work?

In Australia we have two levels of retirement funding. The first is a pension, funded and paid by the Federal government. It keeps you alive, just.

The second level is called Superannuation. This is a joint contribution from employee and employer, held in one of the independent superannuation funds.

A fund can lose money, but nothing that happens to the employer after the employee's resignation or retirement affects their income.

Of course, we also have a national health care system called Medicare that provides basic hospital and medical coverage, which is usually supplemented by private health insurance. That helps with the retirement situation.

Are pensions in the US tied to the worker's previous employer/s?

[Neal Clayton]

How do these pension plans work?

In Australia we have two levels of retirement funding. The first is a pension, funded and paid by the Federal government. It keeps you alive, just.

The second level is called Superannuation. This is a joint contribution from employee and employer, held in one of the independent superannuation funds.

A fund can lose money, but nothing that happens to the employer after the employee's resignation or retirement affects their income.

Of course, we also have a national health care system called Medicare that provides basic hospital and medical coverage, which is usually supplemented by private health insurance. That helps with the retirement situation.

Are pensions in the US tied to the worker's previous employer/s?

we have basically the same things, only with different names. the only difference is our version of superannuation is private and controlled by the employee, with some limits on when they can do things with it. that's what fuels our stock market. millions upon millions have their retirement accounts in private/corporate run investment funds.

the catch is they are only allowed to modify their investments at set times each year. so the people who were stuck in the stock market when the crash came around were just that, stuck. they lost half of their retirement. private pensions are rare in the US, mostly reserved to government and union employees. most have been replaced with the above mentioned employee-controlled private retirement accounts.

the employee can choose to cash out the retirement account, they'll have to pay back taxes on any returns plus a 10% penalty if they choose to do so before retirement age. that's what wall street fears, and why these stock market crashes are taken so seriously here. if the markets get bad enough for individuals to take their retirement accounts out of the markets, that will be a huge loss in capital that wall street can't replace.

if you leave your job the retirement account goes with you.

[Brian Elfert]

Kia is opening a site in west point georgia. They will be paying their workers there about $14 per hour plus "typical" benefits. The benefits should cost Kia about another $3 per hour. How in the world can UAW contract automakers compete against this?

One questions is what is included as "benefits"? The UAW costs of $70 per hour probably includes the FICA, unemployment tax, and other taxes the automaker pays to keep an employee on the payroll.

$3 an hour for even health insurance alone isn't much. Is vacation in the $3 per hour? The employer's portion of family healthcare would probably exceed $3 an hour.

My employer says it costs on average $19,000 a year per employee for benefits and other expenses besides salary or wages. We do still get a pension of some sort, but nobody would say our benefits are terribly generous. Our health care is nothing to brag about as we will for 2009 pay 20% of the premium plus 20% of all costs and a $500 deductible (more for families) and the maximum out of pocket doubled.

[Ron Dunn]

Thanks for that, Neal ... but can you shed some light on the comments earlier in this thread about retired auto workers losing things like medical cover if their previous employer goes bust?

[Brian Elfert]

ford replaced the late 80s/early 90s model F250 diesel truck, then made with an international harvester drivetrain that got 20-21 miles a gallon and would easily last 750k to 1 mil miles, with a new engine that gets 13 miles per gallon and is much more delicate, everyone i know who has one has had it in the shop within the first 100k.

The ford diesel engine is still made by Navistar, the new name for IH. Ford has used IH/Navistar for all of their pickup diesel engines from day one.

The EPA keeps forcing new regulations on diesel engines which is why the engines keep changing. Pretty much every diesel engine has lost MPG with the latest regs, but Ford seems to have fared worse than others.

[Chuck Thoits]

So is it that we as consumers don't want fuel efficient cars/trucks?
Big oil does not want us to have fuel efficient cars/trucks?
Or the environmentalist don't want us to have them?
I have heard people say that the fuel efficient cars don't have any power.
I have heard that the EPA keeps the efficiency down with there standards.
And I have heard that the big three are in the pockets of big oil. Kinda like the Tucker the car was made to good so they rubbed him out.
One other thing. How long would the $14,415,914.00 (that the CEO of GM made in 2007) last if it was used to pay for the retirement plans? A year maybe 2 just guessing. Here is just a side thought. If the labor that a worker is doing is earning the boss a pay check of that size, is not his efforts worth at least 1% of his bosses pay?

[Frank Hagan]

Chuck, Americans voted with their checkbooks over the last few years: we want big, powerful vehicles. Part of the reason is that we have a big country to drive around in, and none of our smaller vehicles are rated to pull trailers. When I was a kid, any sedan or station wagon could pull a boat or tent camper. Now, only big SUVs and trucks can; no American made sedan can pull a trailer.

So a guy with two kids who wants to take them hunting or fishing has to have either a truck or a SUV to tow. Most people can't afford to buy several vehicles, so they get one that can do everything they need it to do.

We're mad at GM, Ford and Chrysler because we think they should have "seen this coming" and built a bunch of econo-boxes that we wouldn't buy, just so they could have them ready for when we decided gas mileage really was important. When gas rose to $4 a gallon, we were shocked that the automakers weren't ready with high mileage vehicles. But they were giving us exactly what we wanted to buy, and it takes them about 3 years to bring a car to production.

[Karl Brogger]

Considering the skill set required to bolt a seat into a car, and the corresponding income, I should be making alot more. ALOT more! Sometimes I use nails, screws, theres even glue involved.

Unions were founded to keep employers from taking advantage of the employees. Who's protecting the employers now?

If someone makes an electric car that can go 600 miles on a charge, function in the winter, and tow 26k lbs, I'll be all over it.