Sorry union folks, but this is a problem

[Dan Buick Man]

No Reason to Leave GM
Detroit Free Press

By Michael Ellis


April 11, 2006


On her 83rd birthday, Lillian Winkel celebrated the same way she spends
every day – going to work at a General Motors Corp. metal stamping plant in
Indianapolis .

The great-great grandmother, who is the second-oldest woman working at GM,
made $74,000 last year cleaning floors and emptying wastebaskets.

At nonunion plants, somebody cleaning offices couldn't dream of making the
$74,000 that Winkel earned last year. Including the pension and Social
Security she also gets, she received $114,000. Delphi Corp. Chief Executive
Steve Miller has said that janitors and landscapers should be paid nonunion
wages.

"I always work on my birthday," said Winkel, who turned 83 on March 2. "I
don't know anybody else who's going to give me three hundred and some-odd
dollars for my birthday. Thank God for General Motors."

Winkel loves her job, and she has no intention of accepting a check for
$35,000 from GM to retire. In an effort to cut costs following last year's
$10.6 billion in losses, GM has offered incentives to all its 113,000 U.S.
hourly workers to retire early or quit their jobs. The goal is to cut
30,000 hourly jobs by the end of 2008.

Tens of thousands of hourly workers are expected to take GM up on its
offer, which includes cash payouts of up to $140,000, depending on how many
years of service they have with the automaker.

"We haven't had a lot of clients who have flat-out said, 'no, I'm not going
to take it,' " said David Kudla, chief executive of Mainstay Capital
Management, a Grand Blanc financial advisory firm that has nearly 1,000 GM
and Delphi Corp. workers and retirees among its clientele.

That's the kind of response GM was hoping for when it announced last month
a historic plan to rapidly downsize its U.S. hourly payrolls.

Years of falling U.S. vehicle sales and lessons learned from Japanese
automakers in making the plants more productive have left GM with more
workers than it needs to run operations.

As GM lost market share over the years, it couldn't just fire excess
workers, due to the strength of the UAW and the protection it won for its
members in labor contracts – thus the early-retirement and buyout packages,
agreed to with the UAW in March after months of negotiations.

The attrition package is being offered at the same time GM plans to close
or idle a dozen plants or facilities in North America by the end of 2008.

For many GM hourly workers, especially those 36,000 who are already
eligible to retire and were thinking of settling down anyway, the package
is tantalizing.

Many of his clients are probably going to accept the GM offer, Kudla said.

"More so, many of them who are about ready to go anyway, and they have the
$35,000 sweetener on the deal," he said.

But not Winkel, who first joined GM as a spot welder in 1972, when then-new
government requirements on hiring minorities and women opened doors for
her.

"It was rough. You were working in a man's world," she said. "A lot of men
objected to us women coming in. They gave us the hardest jobs."

However, some of the men were more welcoming.

"The men used to never dress up, but when the women came in there, boy,
there were more divorces," she said. "It was like another Peyton Place ."

Ironically, GM's attrition package comes when Winkel says that workers are
busier then ever, and their numbers are already down considerably from
years past. Years ago, the work was hard. Workers, both men and women, had
to lift heavy steel auto parts, Winkel said. But workers could also slack
off or skip out of work, she said. People used to refer to her workplace as
the Las Vegas plant.

Not anymore.

"I have seen one of the biggest metamorphoses in my life," she said. "When
I went there in '72, it was noisy, it was dirty. But now it's a clean
plant."

Clean, in part, because of the broom she first picked up about 10 years ago
when she switched jobs in the plant.

GM has provided her with a good life, Winkel said. Winkel has a comfortable
nest egg and plenty of family to watch over. She's outlived three husbands.
She has two grown sons, who are both still working in their 60s. Then
there's the 14 grandchildren, 11 great-grandchildren and four
great-great-grandchildren.

But people know and like her at the plant. About two months ago, Winkel
spent time with GM Group Vice President Gary Cowger when he visited the
plant.

"He's really nice. He said to me, 'Ms. Winkel, you look fabulous.' I said,
'Well, black don't crack.'"

She's known other people who died soon after they walked through the
factory gates for the last time.

"I'm not ready to be thrown away," she said. "I'm not going anywhere. I
couldn't live the way I live if I weren't with General Motors."

 

[Pronto]

With the social security full retirement benefit age going to 70, working at 83 will be pretty damn common in the future. Working 34 years for one company is very rare. Good for her. I hope I'm able to work when I'm 83 since I will need to just to pay for health insurance.

 

[UNGN]

With the social security full retirement benefit age going to 70, working at 83 will be pretty damn common in the future. Working 34 years for one company is very rare. Good for her. I hope I'm able to work when I'm 83 since I will need to just to pay for health insurance.

When GM goes bankrupt and she and thousands just like her are left with nothing, whose fault will it be?

The greedy corporate CEO's that gave high paying jobs for life to their employees?

 

[Pronto]

It will be from GMs stupid management. They have missed the boat on design, fuction and marketing for 2 decades.

 

[Pablo]

I wish I could make 74,000 a year sweeping floors

And people wonder why GM is struggling


It doesnt take 30 years to learn that job.

 

[1QWIK6]

The greedy corporate CEO's...

YUP! PROBLEM IDENTIFIED.

CEO pay in US continues its relentless climb in 2005
By Joe Kay
Apr 12, 2006, 06:56

Few things expose the real character of American society and politics more clearly than the extraordinary and ever-increasing level of inequality, the accumulation of vast, almost incomprehensible, sums of wealth in the hands of relatively small group of people. The United States is a country in which the entire corporate and political structure is dominated by one overarching drive: the personal enrichment of a narrow oligarchy.

A glimpse of this state of affairs can be found in several recent surveys of compensation for chief executive officers at major US corporations. These CEOs are a subset of the wealthiest layer of the American population, and they perform a critical function—they ensure that the corporations they manage are operated in the interests of the major investors that compose the American ruling elite. For this service they are handsomely rewarded.

The reports only measure CEO compensation, neglecting other sources of wealth accumulation such as individual investment portfolios. Nevertheless, the figures reveal that a truly staggering level of social resources is being channeled into the pockets of these individuals.

USA Today published its annual report on CEO pay April 10, based on data collected by eComp Data Services. The analysis included a chart of the compensation doled out to chief executives at 240 of the country’s largest companies, where total compensation included direct salary, bonuses, incentives, gains from exercised stock options, and the value of newly issued stock options. Not all top companies are included in the survey. The Wall Street Journal and the New York Times published separate analyses of the figures.

The newspaper found that six of these CEOs took home over $100 million in 2005. At the top of the list was Richard Fairbank, the chairman and CEO of Capital One Financial, which recently announced plans for an acquisition of North Fork Bancorporation, part of a general consolidation in the banking sector. Fairbank exercised stock options that brought him nearly $250 million, giving him a total compensation of $280 million. “His personal haul,” USA Today noted, “exceeded the annual profits of more than 550 Fortune 1000 companies, including Goodyear Tire & Rubber, Reebok and Pier 1.”

Capital One’s acquisition of North Fork created a stir of controversy last month when it was revealed that the head of North Fork, John Kanas, will get a $135 million payout if the deal goes through, including $44 million to reimburse Kanas for personal income taxes. All told, top executives at North Fork will receive in the neighborhood of $350 million as a result of being bought up by Capital One.

The other executives at large companies breaking the $100 million mark were KB Home’s Bruch Karatz ($164 million), Cendant’s Harry Silverman ($133 million), Lehman Brothers’ R.S. Fuld Jr. ($119 million), Genentech’s Arthur Levinson ($109 million) and Occidental Petroleum’s Ray Irani ($106 million).

KB Home is a home building company and Cendant is a real estate services company. Both companies have benefited from the housing market bubble. Lehman Brothers is an investment bank, whose earnings like many of the top investment banks have been up as a consequence of intensified merger activity, including the Capital One deal and the rapid consolidation of the telecommunications sector—a process that has resulted in the wiping out of thousands of jobs. Irani’s earnings at Occidental reflect the extraordinarily high compensation handed out to executives at oil and energy companies.

Nine more chief executives among the companies surveyed received over $50 million last year, while 131 received over $10 million. All told, the 240 executives included in the USA Today summary of large companies took home a total of over $4.5 billion dollars.

The paper noted that “median 2005 pay among chief executives running most of the nation’s 100 largest companies soared 25 percent to $17.9 million, dwarfing the 3.1 percent average gain by typical American workers.”

A few of the top earners were not included among the largest companies. These included the CEO of Analog Devices, Jerald Fishman, “who cashed out $144.7 million from his deferred compensation plan and made another $4.3 million in salary, bonus and options gains,” the newspaper reported. Perhaps the executive with the highest income was Google’s head of global sales, Omid Korestani, who exercised stock options giving him a massive $288 million.

In general, stock options have become an increasingly lucrative means by which executives have enriched themselves. A stock option allows the recipient to buy a stock at some preset price at a future date of his choosing (after a set period has elapsed). If the actual value of the stock at the time is above the preset price, the stock can be bought at the lower price and sold at the higher to yield a quick profit. The aim of this form of compensation is quite simple: it creates a personal incentive for executives to boost the short-term value of their company’s stock.

A previous study from the Wall Street Journal, published March 15, found that executives at the 150 biggest companies in Silicon Valley (California’s technology center) took home $1.55 billion by exercising stock options in 2004, up 50 percent from 2003 and 177 percent from 2002. The 2005 figure is even higher, and represents a recovery after a sharp drop in stock option compensation following the stock market collapse in 2001.

In its study using slightly different figures, the New York Times found that mean CEO pay at 200 large companies increased 27 percent in 2005, to $11.3 million. The Times noted that CEO pay at big companies is more than 170 times average worker pay. In fact, this is a major underestimation. Based on Bureau of Labor Statistics data indicating an average salary of about $28,000 for a production worker, these CEOs earn on the order of 400 times the pay of ordinary Americans.

While pay for CEOs is rising by double-digit percentage points every year, wages for average workers are falling behind inflation, meaning that real wages are declining. The argument is often advanced that companies cannot afford to pay high wages or benefits to workers—who can be replaced with workers in lower wage countries—even as tens of millions of dollars are routinely doled out to top executives, whose skills are supposedly irreplaceable. Treasury Secretary John Snow recently explicitly defended the pay of CEOs on the basis that their salaries were the product of efficient market forces of supply and demand. “In an aggregate sense,” he said in an interview with the Wall Street Journal published March 20, “it reflects the marginal productivity of CEOs.”

What is really involved, however, is not differential compensation based on the value added to the company, but rather a massive transfer of wealth from the bulk of the population into the hands of the ruling elite. To keep investors happy, executives oversee job cuts and cost reductions, and if they are successful, stock prices soar and the executives themselves reap the rewards.

The extraordinary rise in CEO pay is part of a long-term trend in which management of major US companies has been increasingly subordinated to the immediate financial interests of Wall Street and the major investors. When profit rates in the United States began to decline in the 1970s, an attempt was made to counteract this tendency with CEOs tasked with pushing through job, wage and benefit costs in order to boost earnings. The trend continues today with individuals such as Delphi’s CEO Robert Miller, who was hired explicitly to implement massive cuts in labor costs to the detriment of tens of thousands of workers.

Of course, the link between stock price and CEO pay is not always exact, with some executives receiving large bonuses while their company’s stock flounders. The Wall Street Journal reported on March 18 that many companies backdate their stock option grants, so that the preset price for purchasing stock is lower than it would be otherwise, artificially increasing the payoff to executives. At the top of American corporations, there is a whole network of intersecting interests, in which members of company boards, who often are associated with other companies, and outside compensation consultants reward executives in exchange for particular benefits.

The focus on stock values and short-term earnings has created a situation in which the actions of executives often undermine the companies they oversee. A recent article, (“Value Destruction and Financial Reporting Decisions” http://papers.ssrn.com/sol3/papers.cfm?abstract_id=871215) academics John Graham, Campbell Harvey and Shiva Rajgopal interviewed chief financial officers at major American companies and found that “the majority of firms are willing to sacrifice long-run economic value in order to deliver short-run earnings. Companies do this in response to intense pressure from the market to meet expectations, and to avoid the severe negative market reaction to not delivering.”

Tying executive pay to stock values has also created an incentive to manipulate accounting books to obscure financial difficulties. Companies like Enron, WorldCom, Tyco and others that have collapsed into bankruptcy after accounting scandals in recent years are hardly unique. The executives at these companies made millions, and so long as the company stock price was soaring, the political and media establishment lauded them. Several now find themselves on the docket, but only after a lot of very wealthy people lost a lot of money.

The controlling interest of this very small layer of the population is the principal driving force behind government policies, both domestic and foreign. A recent analysis by the New York Times found that the Bush administration’s tax cuts on investment income will hand back an average of $500,000—more than most people will earn in 10 years—to individuals with incomes of $10 million or more.

An insight into the criminality and arrogance with which the US government carries out wars, assaults democratic rights and rips up the social gains of workers can only be gained through an understanding of the motivations and interests of America’s superrich.

 

[whtT]

I so love the media sometimes. [/sarcasm]

Honestly, how many janitors do you think have been with GM for 24 years straight and are making this much money? This is called a needle in a haystack (or a reporter's wet dream, take your pick).

The media adores these stories cause it makes a bad guy out of the union workers. But what they don't say is that she is probably the only one with this kind of salary for her position in the entire company. You have to read nearly the entire article to find out that she's been there for 24 years straight (which is probably incredibly rare) and they don't mention the fact that her department has probably had their staff cut in half and now she's doing the work that herself and three of her friends used to do.

Yeah, that's what's wrong with GM. Never mind the fact that Wagoner received $2.5 million dollars in bonuses last year (that's on top of a $2.2 million dollar salary - that's $22.2 million in the last 5 years according to Forbes ) for turning in $10.2 billion dollars or so in losses, or the fact that I get a recall notice on my truck about once every three months, or that they're selling less cars in the US than they are overseas now, or the fact that they have to sub out the design work of their small car platform to Korea because the US (non-union workers) have so much bureaucracy built into their departments that it takes them 4x the time to bring a car to market, or that they're still banking their entire future on large SUV's and trucks while Honda beats them up, down and sideways to more feul efficient vehicles, or that they've become known for producing bland, uninspired cars with bad quality.

How about we buy one less Superbowl ad next year and save 5 American jobs?

Yup. The hordes of those 83-year old union janitors sure are bringing down GM.

 

[UNGN]

I didn't say the management at GM wasn't idiots. It was their brilliant negotiating skills that allowed $74K, unfirable janitors.

We see pictures in the paper nearly every day of GM employees going to work to play dominos for the next year because their plant is closing.

All I'm saying is when GM declares bankrupcy I won't feel sorry for ANY of them and if my congressperson votes to bail them out with my money, I will personally campaign to remove them from office at the next election, whether they are Democrat OR Republican.

 

[S10xGN]

When GM goes bankrupt and she and thousands just like her are left with nothing, whose fault will it be?

The greedy corporate CEO's that gave high paying jobs for life to their employees?

YES, absolutely the greedy corporate CEO's! I mean, REALLY, would you turn down that kind of money just because it was unreasonably high?

 

[turboscott]

I didn't say the management at GM wasn't idiots. It was their brilliant negotiating skills that allowed $74K, unfirable janitors.

We see pictures in the paper nearly every day of GM employees going to work to play dominos for the next year because their plant is closing.

All I'm saying is when GM declares bankrupcy I won't feel sorry for ANY of them and if my congressperson votes to bail them out with my money, I will personally campaign to remove them from office at the next election, whether they are Democrat OR Republican.

Why not start trying to get them out the door now because you know they will try to bail them out. Although even the government can't bail them out at well over $300 billion in debt because the government has their own debt problems as it is.

 

[jdpolzin]

I have 2 friends and a father of a friend that work at John Deere. The dad has worked his entire life their running a machine. He is ready to retire now in 4 months and is making $46K a year. He has been harrassed and absolutely dishonored by the comany because they want him out. How's that for loyalty to an emlployee that has given most of his life to them? The funny thing is, they just hired a Janitorial Organizing Facilitator who is in charge of organizing janitors, not maintenance employees, JANITORS! In one plant. He is making $68K a year and is 29 years old. He was a prior janitor at Oscar Meyer. No education. The funny thing is that he is a Big Dogs son. HMMM, whats happening there?? My other 2 friends just started there 1 year ago at the same time. Their topout pay is $16.5 per hour with no pension and $30 a week charge for their insurance. They are both making $11.30 an hour right now. If this is anything like GM, I think we know where the problem is!! Good for that lady! It's nice to see the common folk get a little something for their dedication!! People too quickly blame unions for all their problems. Lets look at the Overhead and Management pay scales versus the rest of the company that does the work and spends tons of hours at their place of emplyment to get their $45K a year. Thanks

 

[Pronto]

Better GM pays her than her being on welfare all those years. She's done her work for 34 years, got a nice life for herself and something to give to her family when she passes away. That's the American dream. Does it really matter what "job" she does at the plant? Anyone that has gotten a cost of living (inflation) increase of about 2.5 percent a year for 34 years and started about 30K a year would be making about the same. Union or not. She probably started much less thatn 30k a year but those figures don't take into account and raises she got for good work or attendance, promotions etc. She changed to the janitorial job 10 years ago at 73. She probably couldn't work the line anymore but was willing to work.

 

[strikeeagle]

I hate to say this, but the sooner GM goes out of business, the better. A sweeper doesn't deserve $74K a year under any circumstances. ANY. So, for the purpose of this post, who gives a crap about what CEOs or anyone else makes - we're talking about a person pushing a broom for crissakes.

strike

 

[larry33kc]

Guy's line work is not even close to being easy, I know I work at Ford and it is so hard on the human body. So that is why janitor and painting jobs pay so much there because all the high sonority guy's can't work the line no more. At my plant you need at least 40 years to that kind of job

 

[strikeeagle]

Guy's line work is not even close to being easy, I know I work at Ford and it is so hard on the human body. So that is why janitor and painting jobs pay so much there because all the high sonority guy's can't work the line no more. At my plant you need at least 40 years to that kind of job

So, why can't they take a pay CUT when that's all they can do? Any job you can learn in an hour shouldn't pay much, should it? You know, it'd be a wonderful world if sweepers could make $74K, and burger flippers (arguably having more skills) could make $125K, and so on. But 3 billion Chinese ain't gonna let that happen now, are they?

strike

 

[larry33kc]

So I guess you think all the guy's that play pro football and made millions while playing, who retire after 10 years or whatever the case might be, and end up with hip and knee relacements from the pounding they took while doing there jobs don't deserve there pensions either.

That is why I try to stay out of these arguments because there are alot of ignorant people out there. I guess what we should all do is give up all our jobs that pay over $8.00 an hour, get rid of all the unions, pay for our own insurance, work 7 days a week 10-12 hours a day without overtime pay, forfeit all vacation time, and retirement, and have a work load that 10 people would have a hard time doing just so the fat man upstairs smoking the cigar can sell all of his stock and make millions just before the company folds up. I guess that would make you happy HUH

 

[strikeeagle]

So I guess you think all the guy's that play pro football and made millions while playing, who retire after 10 years or whatever the case might be, and end up with hip and knee relacements from the pounding they took while doing there jobs don't deserve there pensions either.

That is why I try to stay out of these arguments because there are alot of ignorant people out there. I guess what we should all do is give up all our jobs that pay over $8.00 an hour, get rid of all the unions, pay for our own insurance, work 7 days a week 10-12 hours a day without overtime pay, forfeit all vacation time, and retirement, and have a work load that 10 people would have a hard time doing just so the fat man upstairs smoking the cigar can sell all of his stock and make millions just before the company folds up. I guess that would make you happy HUH

It doesn't matter what makes me happy. It only matters what someone else on this small rock we live on is willing and able to do. If a fat man with a cigar can make millions getting hordes of Chinese to bang out Escalades for rice and fish heads then the fat man will get rich and the folks making Escalades here won't be making Escalades anymore. Simple enough. Between the essentially free labor in the developing world and machines, in the future, in the US, for the most part, only your brain will get you paid.

I don't feel good about it at all, but nothing you or I are going to do is going to change it.

strike

 

[no-nos]

wow $74K a year to clean up, i wonder how much are her union dues? :biggrin:

 

[jdpolzin]

That is exactly why we need to keep our jobs in this country. Thats why we have unions. We should not EVER!!!!!!!!!!!!!!!! GIVE INTO THAT KIND OF F-ING BS!!!!! People in this country are so freakin blind and wishy washy about everything. Fight for our jobs and keep business in this country. Fight against our companies going overseas. Fight against overseas companies stripping their people of everything and taking their lives away from them. WHY DO PEOPLE NOT REALIZE THIS!!!!???? I saw a bumper sticker that said " I love my country!!! But I FEAR my government." Do people not realize we have governments to protect our citizens? Protecting our citizens includes protecting their jobs. Our Free country will soon be filled with everybody riding bicycles around because we will be getting paid $5.00 and gas will be $25/gal if we dont watch it. But Hey, lets give the Mexican immigrants work over here for 6 months!! Sounds like a great idea!! COME ON PEOPLE OPEN YOUR FREAKIN EYES!! LETS SAVE OUR COUNTRY AND FIGHT FOR OTHER COUNTRIES' cITIZENS RIGHTS AS WELL!!

 

[strikeeagle]

That is exactly why we need to keep our jobs in this country. Thats why we have unions. We should not EVER!!!!!!!!!!!!!!!! GIVE INTO THAT KIND OF F-ING BS!!!!! People in this country are so freakin blind and wishy washy about everything. Fight for our jobs and keep business in this country. Fight against our companies going overseas. Fight against overseas companies stripping their people of everything and taking their lives away from them. WHY DO PEOPLE NOT REALIZE THIS!!!!???? I saw a bumper sticker that said " I love my country!!! But I FEAR my government." Do people not realize we have governments to protect our citizens? Protecting our citizens includes protecting their jobs. Our Free country will soon be filled with everybody riding bicycles around because we will be getting paid $5.00 and gas will be $25/gal if we dont watch it. But Hey, lets give the Mexican immigrants work over here for 6 months!! Sounds like a great idea!! COME ON PEOPLE OPEN YOUR FREAKIN EYES!! LETS SAVE OUR COUNTRY AND FIGHT FOR OTHER COUNTRIES' cITIZENS RIGHTS AS WELL!!

Shortly before he retired Alan Greenspan noted that in recent years inflation in the US had been kept in check in large part by cheap foreign labor, not because of any discipline on our part. Think about it. The developing world is working for nothing to maintain OUR lifestyle. And so we should hate them? I don't think so. Will it all come home to roost at some point? You betcha. BUT - show me an American who's wlling to pay even one cent more for something made here. Hell, you'd sooner find a unicorn.

strike