Homework Assignment for the Big Two and a Half: Solve Retirement and Health Care

Nancy and Harry wrote Mulally, Wagoner, and Nardelli with instructions on how they should re-do their homework assignment, to be turned in on December 2.

Congress is prepared to consider additional legislation that would give the assistance you seek, provided that you submit a credible restructuring plan that results in a viable industry, with quality jobs, and economic opportunity for the 21st century while protecting taxpayer investments.

In order for Congress to act in a timely manner, this plan must be presented to Congress by December 2nd, specifically to Senate Banking Committee Chairman Christopher Dodd and Financial Services Committee Chairman Barney Frank.

Most of their instructions are what you’d expect: guarantees of transparency and guarantees that taxpayers won’t get screwed if the companies go under.

Provide a forthright, documented assessment of the auto companies’ current operating cash position, short-term liquidity needs to continue operations as a going-concern, and how they will meet the financing needs associated with the plan to ensure the companies’ long-term viability as they retool for the future;

Provide varying estimates of the terms of the loan requested with varying assumptions including that of automobile sales at current rates, at slightly improved rates, and at worse rates;

Provide for specific measures designed to ensure transparency and accountability, including regular reporting to, and information-sharing with, any federal government oversight mechanisms established to safeguard taxpayer investments;

Protect taxpayers by granting the most senior status for any government loans provided, ensuring that taxpayers get paid back first;

Assure that taxpayers benefit as corporate conditions improve and shareholder value increases through the provision of warrants or other mechanisms;

Bar the payment of dividends and excessive executive compensation, including bonuses and golden parachutes by companies receiving taxpayer assistance;


Require that government loans be immediately callable if long-term plan benchmarks are not met

There’s the predictable requirement that the car companies meet their CAFE obligations.

Demonstrate the auto companies’ ability to achieve the fuel efficiency requirements set forth in the Energy Independence and Security Act of 2007, and become a long-term global leader in the production of energy-efficient advanced technology vehicles;

And then there’s this requirement, which they don’t really explain, but which speaks volumes.

Include proposals to address the payment of health care and pension obligations; 

Ah, the payment of health care and pension obligations. It seems we’ve been talking about those things a bit around here. Funny thing is, through two whole days of hearings on the woes of the auto industry, nobody really wanted to talk about those things. Because, of course, the payment of health care and pension obligations is the one thing–the big thing–that still makes the Big Two and a Half uncompetitive as compared to their competitors. It’s also the thing that separates us from other advanced nations, which subsidize these things and would refuse to allow an entire industry to be wiped out because of these things. And, with the big payments into the UAW’s health care fund coming up, it’s a looming payment that no one seemed to want to talk about at the hearings. Until this homework assignment.

Frankly, I don’t know what Nancy and Harry and Barney and Chris expect to get in response to this particular line item. A proposal for universal health care? An expanded social security system (because, with the stock market down 50% in the last year, we know that 401Ks don’t work as advertised)? A beg for a bailout of these two items? Maybe the demand for a gas tax that would go toward paying off pension benefits?

I’m working on answers to the rest of these questions. But jeebus, how does an industry being killed by its legacy costs propose to fix that?

52 replies
  1. palolololo says:

    I’ve always said once the auto industry realizes they can’t pay their employee and retiree obligations,the country will be move rapidly towards some sort of national health care. I didn’t think it would include the auto
    industry going belly up.

  2. MadDog says:

    Include proposals to address the payment of health care and pension obligations;

    Frankly, I don’t know what Nancy and Harry and Barney and Chris expect to get in response to this particular line item. A proposal for universal health care?…

    That is exactly what Congress wishes for under the Xmas tree! And unlikely to get the car manufacturers to bite on.

    The promises of the Democrats for universal health care are the rubber that is now going to have to hit the road (a car analogy? Why yes, now that you ask. *g*).

    What better situation could have been asked for? /snark

    Not saying it will actually get accomplished in the next few sessions, but eventually the Democratic Congresscritters and Administration are finally going to have to put up or shut up on their own promises and look under that hood.

  3. masaccio says:

    Here’s a rough idea about the cost of the pension issue, from the GM 9/30/08 financials (p.66):

    Prepaid pension decreased by $16.6 billion (or 82.1%) to $3.6 billion at September 30, 2008 from $20.2 billion at December 31, 2007 and by $15.3 billion (or 80.9%) from $18.9 billion at September 30, 2007. These decreases are due to: (1) losses of $6.3 billion on the hourly and salaried pension plan asset portfolio; (2) recording a $2.7 billion liability related to the Settlement Agreement; (3) recording a $2.7 billion liability due to the increase in the monthly pension benefit paid to salaried OPEB plan participants as compensation for the elimination of post-65 healthcare benefits; (4) the transfer of $2.1 billion of Delphi pension liabilities to us; and (5) recording a $2.0 billion increase due to the 2008 UAW and IUE-CWA Special Attrition programs.

    I can’t find anything that tells me how much the pension plan ought to hold to be sure it will have enough to meet its obligations. I understand the $6.3bn loss to be a cash loss. The other 5 items look like non-cash items. They look like future liabilities, so I don’t understand how they impact the balance sheet.

  4. flounder says:

    I think signing on to be for universal health care and diluting their stock by sending every taxpayer a share of preferred stock would do a lot to smooth things over.

  5. bobschacht says:

    Everything is coming full circle:
    The talking heads were saying today that Health Care will have to wait, while the Obama administration deals with more pressing issues. But it may be that the business plan the Big 2.5 need to succeed must involve national health care in order to succeed. As well as getting the retirement plans off their books– which automaker was it that made the deal with the union for the union to take over the pension fund? Maybe that’s what is needed.

    In other words, solving the legacy costs issue might hinge on Federal solutions to health care and pension benefits?

    Bob in HI

  6. Gerald says:

    Two points.

    First National Health Care won’t be on the books before the end of 2009 if then. My estimate is that it will take 2 years (end of 2010) at least if it succeeds. In 2 years according to historical trends, the Republicans will be stronger, and the task will be harder from then on.

    Second (and I have been working on trying to express this for days, coming along with Marcy’s help) I have shown some problems for GM even if there is a National Health Care Policy. This is below in the thread ”The Difference between GM and Toyota: The Health Care”

    To restate it here.
    Assume there is no bankruptcy however that is achieved.
    Under Obama’s proposed Health Insurance plan (thus far anyway) GM would be required to provide insurance for it’s active employees or if it opts out, to pay a tax which would be used for that insurance. Most probably that insurance will be a step below what has been negotiated in the past with the Union, and I don’t know what the contract would do there, but maybe it would be renegotiated. GM is still not free and clear as some have been thinking, but that medical burden should be somewhat less than before. What that means relative to the $1,500 to $2,000 estimated medical cost per car share, I don’t know. I would guess a few hundred dollars less with the same coverage. Say $300.

    GM’s retirees would be treated the same since there is no bankruptcy. GM would be required ”contractually” to provide insurance for the retirees or it could take the opt out and pay a tax, and then by contract law be required to provide the difference between what the Government plan provides and the old retiree contract requires… They don’t seem to be able to readjust those old retirement plans.

    Some might think that since the retirees are not working anymore, then GM would be off the hook. This is not the case if no bankruptcy. GM is still their contractual provider.

    GM’s obligations would still be very heavy at say $300 dollars less on the cost per car for medical insurance (say $1,200 to $1,700 instead of $1,500 to $2,000) and it would probably perish in a few years much as British Leyland (Triumph) did in 8 years. The economic climate is just too bad.

    Now let us look at a scenario where GM wouldn’t be responsible for the retirees medical. Say the contract is broken! Maybe the bankruptcy court put humpty dumpty back together without that retiree medical benefit contract.

    As Marcy pointed out, though while making another point, about the large ratio of retirees to active workers, GM is much better off, and would be I think quite viable.

    Now the problem is mainly on the retirees. Fortunately the retirees are still getting their pensions though reduced (from the Government Retirement Insurance Plan’s formula), but they would be treated just like the regular non-employed population. They would have to buy insurance on their own to be in the system just like somebody that had never worked for GM. It should be easier to get insurance though.

    Of course at 65, everyone is covered by Medicare.

    • ThingsComeUndone says:

      Do you know just how many retirees the big three have? because if the big three go bankrupt the retirees lose their pensions.
      That would cause a huge drop in consumer spending. Where are the retirees located red states that are warm and cheap to live in perhaps?

      • SouthernDragon says:

        They’re finding out that Florida is still nice and warm but not so cheap to live in anymore. Property taxes continue to rise and those who live in condos are finding their condo fees going up. Two weeks ago whole wheat bread went from $1.69 to $2.79.

          • ThingsComeUndone says:

            I admit that I don’t know for sure where the retirees are but everyone in the north dreams of the South in winter. I think the GOP red staters might be surprised about about how many of their voters are from up north.
            The big three had a lot more workers in the past who are now retired and I’m pretty sure they are not in Detroit anymore.

            • SouthernDragon says:

              Oh, we’re very aware of it. There’s a set portion of property taxes that go to schools because the northern retirees voted against any bond measures for schools because they didn’t have any kids in school. Just one example of their political clout.

          • SouthernDragon says:

            I had an aunt and uncle who lived in Myrtle Beach. At the time, 1950’s, it was just a sleepy little beach town. Go there now. Big chain hotels and golf courses.

    • lokywoky says:

      Why does everyone assume that the GM/Ford/Chrysler pensioners should just be dumped in a heap with ‘everyone else’?

      You, like a lot of people don’t seem to understand just how those pension funds were set up in the first place – and the health care plans.

      Union contracts that were negotiated with these companies are CONTRACTS! In most cases, including the car co’s, union members GIVE UP money on wages and salaries to put into these plans. They also give up current wage increases to get health care paid for after they retire.

      Rush Limpballs thinks it’s a crime for people to retire before they are 65. Well I don’t. Most people would like to retire sooner. Many auto workers who do have already put in 30 or more years working for these outfits, giving up current wages and salaries to get the benefits that will carry them through their retirement. This stuff is supposed to be IN ADDITION to Social Security and Medicare.

      Buying insurance on the open market? You must be nuts. When people are in their 50s and 60s – they cannot buy insurance. Or the premiums are so high they can’t afford it – even with their pensions. That is the reason for the company-provided health care.

      The only thing that will fix the health care thing is Universal, single-payer.

      The only thing that will fix the pension mess is for the companies to step up to the plate and realize that they were supposed to keep these funds segregated from their operating budget (which they did not) and unfortunately the ‘deregulators’ allowed them to draw down these ‘trust funds’ for that very purpose. Too bad. These pensions were earned by the workers and need to be paid. I don’t care how they do it. It is not fair for the workers to have money put into this in lieu of wages and then be told – oh well, we decided it’s too expensive for us to pay you this.

      Unfortunately, a bankruptcy will allow them to dump the pensions, the health care, and the unions, all in one fell swoop. Oh wait…that’s what the Repukes have been wanting all along.

      • ThingsComeUndone says:

        The only thing that will fix the pension mess is for the companies to step up to the plate and realize that they were supposed to keep these funds segregated from their operating budget (which they did not) and unfortunately the ‘deregulators’ allowed them to draw down these ‘trust funds’ for that very purpose

        I don’t suppose that we can charge anyone with something criminal can we?

        • SouthernDragon says:

          Spend a lot of money trying to prosecute and gain nothing in the end cuz the companies don’t have any money.

      • earlofhuntingdon says:

        You raise an important point. Healthcare and pension commitments are hard contracts. They are deferred compensation. Labor gave Big Auto concessions “today”, in exchange for being paid “tomorrow”. Payment was to be in the form of benefits.

        Management gambled that over time, the cost of providing benefits “tomorrow” would be lower than higher pay “today”. Or it didn’t care what the costs were, since “they” wouldn’t be around when it came time to pay the piper. The deal was repeated every negotiating cycle for decades.

        Management took much of its compensation “today”, via immediate career success, via higher salaries and bonuses, and via deferred cash and stock grants, most of which were to pay out well before retirement. Management’s bet turned out to be lousy, and now it wants out of the liability. Not a new dynamic: Big Telco just reacted the same way when it sought and received Congressional immunity from suit for its assisting in illegal domestic spying.

        What’s different is that the auto industry, the US economy and its place in the world economy are all fundamentally different than in the 1960’s, ’70’s, ’80’s or ’90’s. What’s different, as Paul Krugman points out, is that the US economy today is in dire straits. So is the US government, which has whopping debts and perhaps its lowest political and financial credibility in modern times.

        Those circumstances are what justify federal assistance. No, that assistance shouldn’t come free or without strings. That should have been true of the much larger sums just ladled out to Wall Street (but wasn’t). The assistance should be focused on revivifying US manufacturing, on helping individual companies, and the suppliers, communities and employees dependent on them, reorganize with less pain than having their few possessions thrown into the proverbial street (literally or in bankruptcy court).

        Congress doesn’t seem to want to go there. It shelled out hundreds of billions to Wall Street with its eyes closed. The Dems have no stomach to tackle hard problems, and the GOP wants to profit from them. The consequences of the massive failure of Big Auto would not be limited to millions of unemployed and the plundering of its assets by “investment” banks and Chinese investors. It would make it deepen the current recession, make it last longer and cost more to get out of, and leave us without critical assets needed for our long term economic health.

      • bmaz says:

        Yeah, you make excellent points. Let me draw an analogy that will drive people nuts. What about military pensions and benefits after retirement? Well, come on what about it blowhards that are so quick to call for trashing the pensions and benefits of the auto workers, are you also arguing to trash and burn the same for those in the military???

        Because, there is a lot of yammering about how the CEOs of the auto companies made bad decisions and are upside down financially; and based on that, think that the workers ought to be taken to the woodshed. How the hell is that any different than the employer of the military? Their employer, the US government, makes the auto company executives look like the most brilliant and responsible financial minds on the planet in comparison. Talk about yer upside down and bad management. And speaking about people who take early retirements; jeebus, a lot of military people are retired and taking full benefits at 40 -45 years old. Sorry. How do we afford this if we can’t afford the auto workers?

        You want to bankrupt GM? Then bankrupt the US too; they need the “reorganization” a hell of a lot more.

  7. ltgra says:

    It seems like the auto industry is still fighting the last war.

    Car buyers, especially ones who have been in acidents, want heavier bigger cars. So everyone drives around in bigger and bigger cars.

    This is a direct impact on mile per gallon. and the environment and Global warming.

    So do we worry about the few and not all the population?

    The legislation I would like passed would be maximum 500 pound cars, 100 mile pergallon minimum and five years to get all the carsthat don’t meet those standards off the road.

    by imposing these standards evryone is in the same ball park and the planet wins!

    instead of bailing out the auto makers simply take over the pensions and obligations of the auto makers it would have to be cheaper.

    so with all these proposals enacted everyone can now go back to the game

  8. earlofhuntingdon says:

    That homework assignment is a cheap thrill at the Saturday afternoon matinee. It is Congress attempting to redirect the simmering boil of resentment against Big Finance onto Big Auto, by ask Big Auto everything Congress and the administration refused to ask Wall Street: What will you do differently? Give us specifics. Demonstrate your commitment to change. Show us why we should trust you to not to divert public monies into black holes, like excessive compensation, or to ship it offshore to still profitable operations. All the administration asked Wall Street was how much do you want?

    This is Congress pretending to do its job — deflecting some of it, such as national healthcare, onto Detroit’s shoulders — while its members go home to celebrate, lick their wounds, thank their patrons or send out their resumes. Fiddling while Detroit and the heart of American manufacturing burns.

    This is the Beltway bureaucratic mind chanting its old mantra, “We can do it later, if necessary; if wait, maybe we won’t have to do it at all.”

    This is also Democrats, who have much to thank old and new unions for, being too weary and wary, avoiding a lasting conflict with the GOP. It may be a rump party, but it can still bite like a wolverine.

    • ThingsComeUndone says:

      The only *Cough* first world country with no healthcare, the death penalty, we lock up more of our own people per capita than the Commie USSR or White South Africa ever did.
      We have a lot of work to do/things to change.

  9. ThingsComeUndone says:

    Congress is prepared to consider additional legislation that would give the assistance you seek, provided that you submit a credible restructuring plan that results in a viable industry, with quality jobs, and economic opportunity for the 21st century while protecting taxpayer investments.

    I hope this plan appears on the Net. I want to see what kind of MPG their cars plan to get.

  10. SouthernDragon says:

    We’re going to have to be more like European countries and put a larger tax on gasoline. After a while Americans will force the auto industry to produce more fuel efficient cars and/or alternative energy cars. Slap a $2 or $3 a gallon tax and folks won’t like their tanks as much.

  11. ThingsComeUndone says:

    In the Japanese health care system, healthcare services, including free screening examinations for particular diseases, prenatal care, and infectious disease control, are provided by national and local governments. Payment for personal medical services is offered through a universal health care insurance system that provides relative equality of access, with fees set by a government committee. People without insurance through employers can participate in a national health insurance program administered by local governments. Since 1973, all elderly persons have been covered by government-sponsored insurance. Patients are free to select physicians or facilities of their choice.

    It is compulsory to be enrolled in a Japanese insurance program if you are a resident of Japan. The two main categories of health insurance are referred to as Kenkō-Hoken 健康保険 ([social] health insurance) and Kokumin-Kenkō-Hoken 国民健康保険 (national health insurance). National health insurance is generally reserved for self-employed people and students, where as social insurance is normally for corporate employees [1].

    In the early 1990s, there were more than 1,000 mental hospitals, 8,700 general hospitals, and 1,000 comprehensive hospitals with a total capacity of 1.5 million beds. Hospitals provided both out-patient and in-patient care. In addition, 79,000 clinics offered primarily out-patient services, and there were 48,000 dental clinics. Most physicians and hospitals sold medication directly to patients, but there were 36,000 pharmacies where patients could purchase synthetic or herbal medication.

    National health expenditures rose from about 1 trillion Yen in 1965 to nearly 20 trillion Yen in 1989, or from slightly more than 5% to more than 6% of Japan’s national income. The system has been troubled with excessive paperwork, assembly-line care for out-patients (because few facilities made appointments), over medication, and abuse of the system because of low out-of-pocket costs to patients.[citation needed] Another problem is an uneven distribution of health personnel, with rural areas favored over cities.[2


    my bold

    Health care in the United States is provided by many separate legal entities. The U.S. spends more on health care per person than any other nation in the world.[1] Current estimates put U.S. health care spending at approximately 15.2% of GDP, second only to the tiny Marshall Islands among all United Nations member nations.[1] The health share of GDP is expected to continue its historical upward trend, reaching 19.5 percent of GDP by 2017.[2] In 2007 the U.S. spent $2.26 trillion on health care, or $7,439 per person.[3]

    According to the Institute of Medicine of the National Academy of Sciences and others, the U.S. is the only wealthy and industrialized nation that does not have universal health care.[4][5] In the United States, around 84.7% of citizens have some form of health insurance; either through their employer (59.3%), purchased individually (8.9%), or provided by government programs (27.8%; there is some overlap in these figures)


    My Bold So we spend about 15.2% of GDP to insure only 84.7% of our people vs Japan who insures everyone for 6% of their national income.
    Plus they live longer than us.

  12. Knut says:

    I think the Health Care bill will be along with the stimulus package the top bill on this winter’s agenda. I don’t think Obama wants to drag this out. His original proposal, which has some theoretical flaws, has fewer in the context of an economic meltdown, since people will be losing their company benefits right and left. This will make for strong public support for having a public system available. It may be the case that when the economy recovers, the private insurance companies will try to start cherry-picking again, but that bridge can be crossed when we come to it. This is likely to be a prolonged economic depression, so we won’t see much of it all that soon.

  13. ThingsComeUndone says:

    Why are we not sending in independent accountants to review the books? We are trusting the car companies to report their own numbers in public?
    Treasury Sec Paulson got in trouble when he said that he didn’t know where the money was being spent.
    Now Congress expects us to trust the big three’s numbers?
    The same guys who swore that Toyota was losing money on every Prius?

  14. Leen says:

    Health care “It’s also the thing that separates us from other advanced nations, which subsidize these things and would refuse to allow an entire industry to be wiped out because of these things”

    That about covers it. Wondering when Micheal Moore will come out with Sicko 2 , Sicko 3, Sicko 4 etc. He definitely could do a run.

    I am dealing with a stepfather/teamster/WWII vet who has been in the health care, nursing home assisted living maze for close to a year now. I have heard so many stories of people who have played the American game straight down the line, worked for 40-50, paid their taxes, health care etc etc saved a bit and then spend all of their savings to fill in the gaps when it comes to their care in their twilight years.

    Talked to a couple in their late 80’s the other day who had gotten divorced because the health care industry would take their savings because he was ill. This is criminal…and pathetic

  15. waynec says:

    Retirement and health care are definitely important.
    Also near the top of the list is what the big2.5 are going to build when they get bailed out.
    It turns out that lithium batteries that are used in electric cars, hybred cars and plug-in hybred cars require both lithium (Surprise!) and cobalt.
    Lithium and cobalt are not found in abundance in the US, but are found in abundance in countries that are not friendly to the US. Bolivia, China, Siberia.
    Electric cars may be a tradeoff. Forerign oil for foreign chemicals.
    So, what should the big2.5 build?

  16. sunshine says:

    Who stands to gain the most if our auto companies go under? Who has the loudest mouth in oppositition to the auto loan? Why?

    Who (politicians and lobbyist) allowed China to import more auto’s knowing the big 3 were already in trouble?

    Why not put a tariff on auto’s and auto parts that are imported to cover the auto workers retiree’s benefits?

    China will be importing cars next year. Is this a payback because they are giving us loans? Can this be stopped? Or just put tariffs on them? Is that what schrub is worried about and why he paid becareful of protectionism?

  17. sunshine says:

    GM can be green when they want to be. Maybe it’s just here they push not green things. How much did the “largest rooftop solar plant” cost them? THey have 2 here is the US, where?

    GM to build the worlds largest rooftop solar power plant producing 15.1 million kWh annually (w/video).
    World’s Largest Rooftop Solar Power Station Being Built for GM Europe in Zaragoza
    Zaragoza, Spain (PRWEB) July 8, 2008 — General Motors Europe, part of the leading global automotive group, Veolia Environnement, world leader in environmental services, the energy developer Clairvoyant Energy and the Government of Aragon, Spain, today announced a further commitment to energy efficiency with the construction of the world’s largest capacity rooftop solar power station.
    Veolia Environnement and Clairvoyant Energy are building a solar power station with a capacity of 10 Mega Watts at GM’s Zaragoza plant, which assembles more than 480.000 vehicles a year. As part of the scheme initiated by GM, the rooftop power station will be owned and operated by a joint-venture company comprised of Veolia Environnement, Clairvoyant Energy and the Government of Aragon.

    Annual output from the photovoltaic solar power station at Figueruelas near Zaragoza is expected to be 15,1 million kWh, sufficient to meet the demand of 4.600 households with an average annual consumption of 3.300 kWh.

    Operational at the end of September, 2008, the rooftop power station will feed electric current into the local grid of Red Electrica and sell the energy to Endesa.

    The massive solar array designed by Veolia Environnement and Clairvoyant will consist of 85.000 light-weight solar modules with an active photovoltaic surface area of 183.000 square meters and provide for an annual reduction in CO2-emissions of 6.7 thousand tons.

    The solar power station on the roof of the Zaragoza plant is the third one on GM facilities worldwide. “GM’s Zaragoza plant will become home of the biggest rooftop solar power station worldwide. This has significant potential to reduce costs at the plant, and we will evaluate the results of the Zaragoza rooftop power station for possible similar energy projects at GM Europe’s 11 assembly plants and eight component plants. Underlining our vital commitment to environmental compatibility, this solar energy project links to GM’s larger advanced technology strategy that supports extended range electric vehicles and the use of alternative energy for propulsion,” said GM Europe President Carl-Peter Forster.

    General Motors Corp. (NYSE: GM), the world’s largest automaker, has been the annual global industry sales leader for 77 years. Founded in 1908, GM today employs about 266,000 people around the world. With global headquarters in Detroit, GM manufactures its cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. In Europe, GM sells its vehicles in over 40 markets. It operates 10 vehicle-production and assembly facilities in seven countries and employs around 55,500 people. More information on GM can be found at http://media.gmeurope.com and http://www.gmeurope.com.


    • bmaz says:

      Um, maybe the market, tax structure and other conditions are a little different here than there. Maybe they are in the process of greening here too. I really don’t understand the people that are so up in arms about GM not building a whole fleet of tiny efficient cars when no one would have bought them in the US. They were supposed to build a bunch of crap no one wanted? Maybe all the solar stuff you like so much was cost efficient, or close to it, in Spain; but was far, far from that here. Are they now to be crucified for not doing it?

      This stuff is a lot more complex than a lot of people are factoring into the equation.

  18. sunshine says:

    GM is green with many things, not just efficient with gas in cars and trucks, why?
    If GM goes bankrupt, that’s just the GM in US, right? All other GM companies will go on as always?

    Additionally, GM is one of the largest corporate users of landfill gas in the U.S. Landfill gas is the natural by-product of the decomposition of solid waste in landfills. Six GM facilities, including assembly plants in Fort Wayne, Ind., Shreveport, La., and Orion, Mich., have a portion of their energy needs filled through landfill gas. The sum of the landfill capacity at the six plants is equivalent to the energy needed to heat over 25,000 households per year. Additionally, landfill gas installations at GM plants generate annual savings exceeding $5 million.


  19. sunshine says:

    How can they be so green yet be so far behind the curve with auto unless the oil companies were holding them back?

    Monday, August 25, 2008
    General Motors To Install Largest Rooftop Solar Power Plant in Eastern USA.

    General Motors to Add 1.2 Megawatt Rooftop Solar Installation at Baltimore Powertrain Plant

    Installation will be one of the largest on the East Coast
    First GM global manufacturing plant to be landfill-free and have solar installation
    Baltimore, Maryland – General Motors announced today it will add a 1.2 megawatt solar power installation to the roof of its transmission assembly plant in White Marsh, Maryland.

    The system will be deployed under an agreement with SunEdison, North America’s largest solar energy services provider. Under the agreement, SunEdison will finance, install, operate and maintain the system.

    When fully operational in the third quarter of 2009, the system will be one of the largest rooftop solar installations on the East Coast. The system will consist of more than 8,700 solar panels and will sit on approximately 300,000 square feet of roof space.

    The installation will generate about 1.4 million kWh of clean renewable solar energy, which is equivalent to the demand of about 140-150 U.S. households with an average annual consumption of 10,000 kWh. Additionally, the installation will enable GM to displace about 20 percent of the plant’s current power purchased from the local utility with a renewable energy resource, while reducing the plant’s utility bill.

    “This project will help GM reduce costs while serving as a clean, renewable energy source,” said John R. Buttermore, GM Powertrain Vice President of Global Manufacturing. “Through innovation and commitment, GM is making a significant, positive impact on the environmental issues facing our world.”

    The White Marsh plant reached landfill-free status in 2007, because it no longer sends any production waste to local landfills. All the waste generated at the facility is entirely recycled or reused. The Baltimore plant is GM’s first global manufacturing facility to operate landfill-free and have a solar power installation.

    Additionally, GM is one of the largest corporate users of landfill gas in the U.S. Landfill gas is the natural by-product of the decomposition of solid waste in landfills. GM is one of the largest users of renewable energy as well. Last August General Motors received the Corporate Energy Management of the Year Award from the Association of Energy Engineers (AEE). The award recognizes the company’s worldwide leadership in energy efficiency and renewable energy.


  20. sunshine says:

    Toyota: Auto Industry Race to the Bottom

    by Barbara Briggs, Special to CorpWatch
    September 16th, 2008

    Cartoon by Khalil Bendib

    Beneath Toyota’s buffed shine lies a dark undercoat. The Toyota Corporation enjoys a fine reputation for well-built cars, environmental innovation, flexible production lines and effective management practices. But in its quest for ever-increasing efficiency, profitability and growth, the world’s largest auto manufacturer has sparked a race to the bottom that, like its car sales, is global in scope.

    Around the world, the company has been complicit in union busting

    in the Philippines, and engages in cozy relationships with Burma/Myanmar’s military dictatorship.

    In the U.S. – where Toyota has 13 facilities employing some 36,000 people, and sells an average of 56,923 vehicles each week –

    the need of the Big Three (General Motors, Ford and Daimler Chrysler) auto companies to compete is causing profound changes in the industry.

    And in Japan, at its flagship operation in Toyota City, some 30 percent of the workforce is temporary workers who earn as little as half what permanent employees do. In the surrounding area, a network of closely-related supplier companies utilizes thousands of foreign guest workers under conditions that, by many definitions, qualify as human trafficking.

    Toyota Japan has also created a work environment so stressful that, each year, an

    estimated 200 to 300 employees are incapacitated or killed from overwork and stress related illness.


  21. sunshine says:

    Coming to America

    Prius in the Making

    In 2002, the year he died, Kenichi Uchino was 30 years old and married, with a three-year-old daughter and a one-year-old son. He had worked as a quality control inspector for the Prius hybrid at Toyota’s Tsutsumi plant in Toyota City, north of Nagoya. Following his father and grandfather, who were both lifetime Toyota employees, Uchino had joined the company right out of high school, and was a good worker.

    But as Toyota management added more and more responsibilities to his work load, Uchino began to feel the strain of the enormous overtime that was expected – and mostly unpaid. After his official, eight-hour shift was over, he prepared reports for the next shift. He had additional tasks relating to health and safety and traffic control inside the plant. Uchino was also a quality-circle leader. Toyota prides itself on employee participation in problem solving and constant improvement. Several times a month, workers meet in groups of ten or so, and are expected to submit at least two well-fleshed-out suggestions each month for improvement. All this time – to meet, to coordinate the group, write up suggestions and so forth – took place off-the-clock.

    Adding to their physical and mental strain, Toyota workers alternate weekly between day and night shifts. On the day shift, Uchino routinely worked 13 to 15 hours a day, often six days a week, from 5:40 a.m. to 8:00 or 9:00 p.m. The week before he died, he put in 85 hours counting the three hours he worked at home on Sunday. The week he died, he was on the night shift, normally 70 hours a week, from 3:20 p.m. to 5:20 a.m. He typically got home around 7:00, just as his wife Hiroko was getting up to make breakfast. But on the morning of February 9, 2002, he never came home. At 4:20 a.m., 13 hours into what would have been his regular 14-hour shift, he collapsed in his office. Twenty minutes later he was pronounced dead from a heart attack. But the real cause of death, was a condition so common that a word was created to describe it: “karoshi,” literally death from overwork.

    “He kept saying and hoping things would get better,” said Hiroko Uchino in an April interview, “but they didn’t, and he died.”

    Hiroko was left with two young children to support. When Toyota refused to acknowledge her husband’s death as work-related, she went to the Japanese Labor Bureau and then to court to win his pension. Kenichi Uchino had kept meticulous records of his work time, which totaled a stunning 155 hours of overtime in the 30 days before his death. Toyota claimed that he had only worked 45 hours of overtime – saying that the rest of the time was voluntary. Almost six years later, in November 2007, the court recognized 110.5 hours of overtime (putting aside the hours Uchino had worked offsite) and judged that, indeed, Uchino had died of overwork.

    This was the first time that anyone had won a judgment from Toyota establishing that karoshi qualified as a work accident. But Hiroko Uchino did something else that was a first: She spoke publicly about her husband’s death by overwork – practically a revolutionary act in a culture where families and communities are expected to be completely loyal to the companies that employ them.” People don’t talk about the problems [work-related illnesses and deaths] as it reflects badly on Toyota,” Hiroko Uchino said. “People tend to keep it to themselves.”

    What Hiroko Uchino did not know, when she decided to fight for her children’s future, was that she would become the voice in Japan for Toyota’s overworked employees. Uchino’s case paved the way for a July 2008, Japanese Labor Bureau ruling that overwork was the cause of the January 2006 heart attack death of a lead engineer for Toyota’s Camry hybrid, days before the car was to be introduced at the Detroit Auto Show.

    But pressure on workers to “ganbaru” – endure without complaint – remains so strong that the few cases make it into the legal system. Those that do, are the “tip of the iceberg,” said a highly regarded lawyer familiar with karoshi and disability cases in the Nagoya/Toyota City area. Speaking anonymously in an April 2008 interview, he charged that up to 300 Toyota workers suffer serious work-related illness or death each year.


    • sunshine says:

      Guess I was long winded, sorry. My point is without unions this is the type of conditions workers get. Look down below, Toyota plans to cut there pay to new hires by 50% and that was before talk of a recession.

      In 2007, the Wall Street Journal noted, “Toyota Motor Company…now sets the bar for labor costs in the U.S. auto industry.” Recognition of that influence was echoed that same years by Automotive News: “Toyota is going to set the pattern for the entire industry – wages, benefits and pensions.”
      Meanwhile the Big Three’s falling sales and market share have forced the American companies to adopt, and their workers to accept, two-tier wage and temporary worker schemes eerily similar to those used for years by Toyota – just to compete. And the race to the bottom seems to be just warming up. In September 2008, an internal Toyota memo leaked from its Georgetown, Kentucky plant, laid out management’s plans to cut $300 million in labor costs in its U.S. operations.

      In April 2008, the Wall Street Journal reported that Toyota plans to end its practice of pegging its hourly wages to UAW rates, and will now pay new hires only 50 percent above the local prevailing wage. In Kentucky, this would mean a savings of about 12 percent, or $3.00 per worker hour – which, of course, will put even more of a squeeze on the Big Three U.S. auto companies and their unionized workforce.

      • bmaz says:

        Ah, okay then. I agree with that proposition. Maybe wordy, but a valid point. There are some dedicated union busting efforts going on too. And the insistence of some on bankruptcy is not about negotiating with the unions (again) but instead about busting them. Pretty thinly disguised at best too I might add.

  22. sunshine says:

    In its zeal to “increase productivity,” Toyota presses its suppliers to produce more and more for less and less money. When there is a downturn in auto sales, the parts plants are the first to feel the pinch – and since a high percentage the workers at Toyota’s subcontract plants are temps, they are easily shed. Extensive, obligatory overtime is the rule, and it is very common for workers not to be paid correctly. For example, in one plant, workers interviewed normally worked 97-hour-weeks, typically receiving only one or two days off a month and no paid holidays. Some workers told investigators that their employers failed to pay what was owed.

    Toyota’s supplier plants also make extensive use of guest or “trainee” workers – under conditions that in some respects qualify as human trafficking: The workers, most of whom come from China and Vietnam, pay manpower agencies in their home countries as much as $8,000 to $10,000 for a two- or three-year contract.

    Despite this commitment, Toyota’s foreign workers in Japan are second-class citizens. On arrival the guest workers’ passports are confiscated. During the first year as “trainees,” they are not covered by Japan’s labor or minimum wage laws. They work alongside Japanese workers, putting in the same long hours, but often earning less than half the minimum wage – as little as $2.76 an hour, or $479 a month. As guest workers, they are required to remain with the same employer – no matter how bad the working conditions – and to live in the company housing assigned to them – even though some are charged twice what their Japanese colleagues pay for comparable accommodations. Any worker who tries to change jobs, or who complains about conditions may be forcibly deported. By the time food, housing, and taxes are deducted, some guest workers end up earning less than $600 for an entire year, according to several advocacy organizations and unions that work with subcontract plant temp and guest workers.

    Toyota Tsusho (together with Suzuki) is working with the military-run Myanmar Auto and Diesel Industries (MADI) in the manufacture and sale of vehicles – including, presumably, vehicles used by the military. This collaboration with the military lends support to continued repression, the impoverishment of the Burmese people, and a broad pattern of human rights violation. In September 2007, according to the U.S. State Department, “the Burmese Government brutally cracked down on peaceful demonstrators, using gunfire, rubber bullets, batons, and tear gas against them and those observing in the vicinity. The authorities killed at least 30 people during the crackdown and arrested more than 3,000.”


  23. Hmmm says:

    Death from overwork in Japan is, sadly, neither uncommon nor unique to Toyota. It ties in with the traditional culture of extreme dedication to one’s company, and the effect has been exacerbated by the long economic doldrums there, since companies have been trying to do more and more with less and less. Not unrelatedly, there have been disturbing increases in suicide trends in Japanese society generally, especially among the unemployed, the underemployed, and the elderly. Crime by the elderly — robberies of businesses mainly, to get money for food — is the new trend that’s caught my eye. There is a youth brain drain and the average age is increasing rapidly.

    The Japanese people are, in short, having an extremely hard decade.

  24. sunshine says:

    I am glad there is a policy “show me the plan and I’ll show you the money”.
    I am glad there will be 6 days to discuss it before it’s voted on. I’d like to see someone else decide how the auto co’s spend that 25 billion if they get it. I don’t know, maybe Ralph Nadar or Michael Moore. I think either one would do a better job of managing that money.

  25. sunshine says:

    So goes the auto unions, other unions to follow.

    The basic structure of the auto contracts is often copied by other groups in the Midwest, including teachers, state workers, police and firefighters. Outside the Midwest, other industries often mimic some auto contract provisions as well, including the airline and steel industries.

    “The UAW has blazed a lot of trails in the auto industry that have opened up in many other industries,” says Harley Shaiken, a professor of labor studies at the University of California, Berkeley. “For example, in the early 1950s, paid health care, pensions and job security were pioneered by the UAW.”


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