Capitol Hill Blue Forums Political Issues Finance, the economy & Economics Bailing out the auto industry - yes or no?

I don't think anyone suggested you can be a tool&diemaker out of high school.... you can't be an engineer out of high school either.

Is the seniority issue usually a problem?

I take credit/blame for bringing up the question of similarity or difference. Now that we have a little more information, it's clear that you and I see the matter quite differently. You seem to think that they are "quite similar" based on the same information that leads me to believe they are "quite different"; i.e., going to college versus going to work.

Someone made the assertion earlier that "the only way to learn how to do something is by doing". What does an engineer fresh out of college know about doing the work of engineering, compared to what a tool and die maker knows about tool and die making after four years of on-the-job training?

The other part of the apples/oranges consideration that I brought up is that of population. How many engineering positions are available? How many UAW tool and die makers are making $83,000 a year?

The answer to the first question, according to the latest US Census, is about 730,000. I haven't found an answer to the second question yet, but according to the bureau of Labor Statistics, there were only a total of 101,000 tool and die maker positions in the entire country in 2006, and according to the State of Michigan,, the median wage was around $20 per hour. The average UAW tool and die maker's wages in 2002 were around $27 per hour, according to the Michigan website.

Clearly, then, the tool and die maker who brings in $83,000 per year is far from the "average".

Actually, I brought up the comparison in wages simply because they were the only numbers I found related to the topic of this thread - those numbers are directly from the UAW contract negotiation documents. Whether THEIR number of 83k is closer to the lower or upper end, I did not know... which is why I asked.


In any event, you do bring up some further numbers that are very interesting.

First of all, though, the number of positions for tool&die maker of 101,000 is just one profession; from the UAW's own numbers, the total is 180,681 in 2007. (and I'm sure there are many more in the entire U.S.)

How about wages? Well, again from the UAW's own figures, the "typical" (that's the word they used) assembler averages 27.81 per hr straight time; elsewhere they use an average 10% overtime figure, so that pegs their "typical" annual pay at $66,500 (before bonus); the "typical skilled-trades" UAW worker got 32.32 per hr straight time (according to the UAW), which yields $77,300 before the 2700/yr bonus.

Also, I ran across this, although the original article in the IndyStar is no longer available:

That's a LOT more than 83k per year, but then again those are GM's figures, likely somewhat inflated...

Still couldn't find "starting pay", but if it's $20/hr, that's $47,840 per year...

For engineers, on the other hand, the starting salaries for engineers, 2007 range from $47,960 to $60,713...

Incidentally, back when I was in engineering school (1984), starting salaries were 30k-50k... just to keep up with inflation, they'd need to be 61k to 102k now... I have no idea what starting wages for UAW workers were in 1984, but engineers have definitely been losing their race.


What am I trying to prove? Absolutely nothing! (I really don't know enough about the automotive industry...)

But, I've learned a few things... for one, I've learned that if I'd want to live comfortably, the skilled trades are far more financially rewarding then the engineering profession, on average (not to mention that after the 4 years of training each requires, the skilled tradesperson does not have a huge debt to pay off)

Unless you are in the auto industry, the skilled trades and engineering profession are both disposable these days in the USA.
Skilled trades workers get laid off left and right constantly and engineering work is largely outsourced.

Why should a company pay an engineer good money when they can have someone in China or India do the work and then send the CAD files via the internet?

Most of the skilled trades work in assembly is in "right to get fired" states.

Good point, Jeff.

It bears repeating that we're talking about very tiny segments of the overall workforce here, with tool and die makers comprising about 1/10th of one percent and engineers not quite one percent. And it's worth noting that these numbers will continue to diminish until we actively create some kind of parity between pay scales at home and abroad.

It's easy to demand that pay be reduced for American workers, as long as they are not members of our own family or community, and provided we can create enough of a straw man to knock about. It may make more sense though, to look at who is profiting by outsourcing, and advocate for a cut in their pay, and correspondingly higher wages for the workers abroad.

Supposedly Obama plans to reward companies that do not outsource their labor with tax breaks, in an incentive to create and keep more of these jobs at home.
I'd be very pleased if this works, so I guess we have to wait and see. With regard to the stimulus packages aimed at green tech and electric cars, I have no doubt that these are wise investments, but they won't pay off immediately. The marketplace will have to provide the incentives to make them pay off.
Without an active market to BUY the technology it will just sit on the shelves or in the sales lots.

Just to make sure we're clear, I didn't demand or even suggest any workers' pay be reduced, nor have I seen it suggested by any post in this thread until yours. In fact, I mentioned that apparently they have already had their pay reduced in recent years, until it will now be at "parity" with the foreign competition.

Your point about both engineers and trades being outsourced is well-taken. I left the engineering field and went into IT, which has suffered even more - as an independent contractor my rate was cut by 60%, at which point I was paid significantly below either of the professions mentioned... now as a small business owner I work twice as much for even less and less as the economy crumbles... but so far I still wouldn't trade it, and I still believe I'll make my own personal comeback, without any bailouts because there are none for small business.

Even so, I don't begrudge the engineer or the union worker what they managed to negotiate... we all make our choices.

Why should I bail them out, though? That is the question isn't it...

We're clear, RB. My comment wasn't directed at anyone in particular, more toward a comparison of the two approaches.

Like you, I'm an independent contractor, and I'm being hurt by this downturn as well. And yes, that is the question: why should "they" get bailed out? Any of "them". We hear the answer is "because it affects us all" and I can't help but wonder why they didn't think of that when they started outsourcing.

I think I know the answer too. It's a "rhetorical wonder".

I swear I just saw a story in HuffPo which mentions that UAW is refusing to budge on concessions.
That's why I am suspicious when anyone mentions "parity with foreign competitors".
I'd really love to find that HuffPo article but it's gone for now.

I normally think it's admirable for a union to refuse concessions but surprisingly I do find myself on the other side with regard to the UAW. This union has done very well for its workers, so well in fact that they may very well bleed the beast to death.

At this point it might behoove the UAW to scale back their contract, not because everyone else is sacrificing and tightening their belts, but just to survive.
If GM declares bankruptcy and reorganizes, I wonder if that terminates management's obligations to the UAW.
I suspect that it does, since a reorganized corporation isn't the same corporation anymore...supposedly.

Would the UAW be wise to strike its workers the moment the company reopens for business?
What do you suppose GM's reaction would be?
I'm not an expert on unions but strikes can only last as long as the union funds can hold out and if GM shuts the plants and sets up agreements down South in RTW states with new Chinese owners then the UAW is finished, and so is the auto industry up North.

Hard choices in hard times. If it were my decision, I might be more receptive to choices which allow the industry to continue in the states where the jobs are most needed, and currently there are a lot of nonunion assembly plants down South already.
It might also strengthen the argument that RTW states attract plant facilities better than closed shop states.

I'm just saying that there might be a happy medium somewhere that benefits both the corporations and the labor unions, and GM doesn't have the time to build new factories down South, bailout or no bailout.
They DO however, have time to position their ongoing partnerships with Japanese automakers who currently have plant operations in the Southern US.
And they MIGHT have a plan to position an agreement with Chinese investors as well.
An immovable union position might just finish off the domestic auto industry altogether, if the Chinese don't do it for us.

I don't think the unions have the bargaining power that they once had in the old days and I don't think the union bosses see the reality staring them in the face either.

Here's another view about the high wages of the average UAW worker.

http://www.tnr.com/story_print.html?id=1026e955-541c-4aa6-bcf2-56dfc3323682