2008.12.30
To the poor house ... or the $37 million apartment
Wonder how the guys at the top of the financial collapse are doing, now that the house of cards has fallen? Quite well, it turns out, unsurprisingly.
The New York Post reports today that Peter Kraus, a former top executive with Merrill Lynch, just bought a $37 million Park Avenue apartment -- "featuring 11-foot-high ceilings, three fireplaces, three maid's rooms, a library, a gallery and a family room/gym." In September, Kraus got a $25 million golden parachute from Merrill when it was sold to Bank of America, even though he had only started work there that month. B of A received $25 billion in taxpayer money as part of the bailout.
I don't want to hear anyone complaining about the salaries of autoworkers ever again. What's the hourly rate for $25 million in a month?
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I'm not saying it isn't important, but these are 2 separate issues. GM lost $39Billion last year, so in the scheme of things....
GM has 74K workers, where a typical union worker earns about $25/hour more than a typical Japanese auto worker. You know in Japan workers actually take less pay during economic downturns. A simple re-negotiation of union contracts can result in billions saved. Of course you're going to hear about auto worker wages again.
And then there are government sources of abuse like Democrat Charlie Rangel who actually writes Federal tax law but does not pay his income taxes and receives gifts of interest free loans to buy luxury resorts. I bet corporations are less corrupt than the government, or maybe they're more related than we know.
Comment by Jim — December 31, 2008 @ 3:32 pm
Actually, Jim, the differential between domestic and foreign autoworkers is nowhere near $25 an hour. If you read the link above, you'll find that, in some cases, workers for Japanese automakers are actually making more than their brothers and sisters in Detroit.
Comment by Dan Radmacher — December 31, 2008 @ 3:37 pm
yea.... let the auto unions keep their $33 million dollar lake front resort. Hey maybe we can get free memberships since we just bought it with our tax money???????
Comment by JOHN — December 31, 2008 @ 4:00 pm
Actually Dan, it really is near there, and US auto workers make significantly more than other US manufacturing jobs. Kind of funny how that unionization and lack of competitiveness go hand in hand.
http://www.nytimes.com/2008/12/10/business/economy/10leonhardt.html
Comment by Jim — January 4, 2009 @ 3:37 pm
No, Jim, it's not really near there. From the article you cite: "Detroit’s defenders are right that the number is basically wrong. Big Three workers aren’t making anything close to $73 an hour (which would translate to about $150,000 a year)."
Comment by Dan Radmacher — January 4, 2009 @ 3:43 pm
Wrong Dan. If you read the link I cite, then you'll see that Detroit auto workers make more in both their industry as well as other manufacturing positions. Conclusion is that unions significantly raise input costs to manufacturing leading to uncompetitiveness.
Comment by Jim — January 5, 2009 @ 9:51 am
Jim,
Have you read the piece you cited? There's the quote I just gave you that said that no, autoworkers do not make anything close to $73 an hour. Then the article goes on to say that the main problem facing Detroit is not the pay gap (about $10 an hour). Instead, the article says, "The real problem is that many people don’t want to buy the cars that Detroit makes."
That problem cannot be laid upon the unions.
Comment by Dan Radmacher — January 5, 2009 @ 10:02 am
Toyota, Subaru and Honda can make a better care for less money because their payroll overhead is lower.
Comment by Henry — January 5, 2009 @ 10:44 am
Union negotiated health care and pension costs are the reason Detroit pays more than just $10/hr gap. Unions also won't allow certain layoffs and plant closings that the companies need to reduce costs. Unions won't let outsourced jobs and parts come from non-unionized companies further undermining their competitiveness.
http://www.analysisonline.org/site/aoh_display.asp?sec_id=140002434&aoh_id=376
Too many rules from the unions prevent auto cos from being competitive.
http://laborpains.org/index.php/2008/12/12/22-pounds-uaw-rules-and-regulations/
And the UAW would not make any concessions during this time of crisis.
http://www.huffingtonpost.com/2008/11/16/auto-workers-union-rules_n_144220.html
If Americans today don't want American cars, then it's basis is in poor quality during the 70's and 80's. Who made the cars back then? The UAW. And if it's not about labor costs then why did the auto bailout talks break down over union labor costs?
Comment by Jim — January 5, 2009 @ 5:28 pm