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Thread: Chrysler Bankruptcy

  1. #10
    Super Moderator UGLY's Avatar
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    Default Re: Chrysler Bankruptcy

    Quote Originally Posted by FloggingSully View Post
    They renegotiated a their contract in 2007 to bring legacy costs in line with what foreign automakes pay.
    There is no possible way to make that happen. One reason being that the foreign automakers are not contractually obligated to their retirees with a pension plan. They have the ability to rework those programs as they see fit. I also dont believe that the Japanese offer pensions which would be paid purely by the automaker. I believe they are 401k contributions and some medical. Either way with the number of retirees for the Americans vs the foreign makes it impossible for the legacy cost to ever be in line. They may have negotiated a dollar amount per hour that is devoted to legacy cost that is in line with the Japanese but it certainly was not the total legacy cost.

  2. #11

    Default Re: Chrysler Bankruptcy

    Quote Originally Posted by UGLY View Post
    There is no possible way to make that happen.
    From FactCheck:
    "That last figure accounts for the biggest difference between labor costs of the Big Two and a Half and those of the "transplants," as foreign carmakers with manufacturing facilities on U.S. soil are called. Ford, in material it submitted to Congress for hearings this month (see "Congressional Submission Appendix (PPT)"), estimated the transplants' legacy costs at about $3 per hour, a number that has less to do with the level of benefits paid than it does with the fact that the transplants don't have many retirees yet, according to economist Kristin Dziczek of the Center for Automotive Research.

    The Ford chart also estimates that, as a result of a historic 2007 labor agreement with the UAW, the legacy costs of the U.S. automakers are expected to fall ? to about $3 per hour. That's because the deal calls for a new voluntary employee beneficiary association (or VEBA), a seldom-used 100-year-old tax loophole. A VEBA is a tax-exempt trust that can be used to fund almost any sort of employee benefit, but they are most commonly used to pay for health care expenses
    ."
    There's no such thing as a pretty good aligator wrestler.

  3. #12
    Super Moderator UGLY's Avatar
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    Default Re: Chrysler Bankruptcy

    I have got to see it happen. If they are using a tax loophole it might be possible. Still the legacy costs over all are more because of the number of retirees with the big three over the foreign auto makers.

  4. #13

    Default Re: Chrysler Bankruptcy

    Damn unions ruin everything. We all know they are the ones that come up with long term business plans and marketing and engineering decisions. Heck, the unions run the world!!!!!!!!!!!!!!!!!!!!!!!!

    May they all perish and let management take over the assembly lines. We all know that they need to get a blister from something other than a golf club.

  5. #14

    Default Re: Chrysler Bankruptcy

    Quote Originally Posted by UGLY View Post
    I have got to see it happen. If they are using a tax loophole it might be possible. Still the legacy costs over all are more because of the number of retirees with the big three over the foreign auto makers.
    Foreign cars sell because they are made better. When Chrysler and the big 3 get their heads out of their asses they will realize that an inferior product will have inferior sales.

    It's all the union workers fault.

  6. #15

    Default Re: Chrysler Bankruptcy

    Quote Originally Posted by Black-n-Red View Post
    Being that I am not a union expert nor an expert in labor law, I will not claim to know exactly what is the deal here. However, I will go out on a limb and say that if the UAW has a lot of pension money tied up in Chrysler, that would in essence make the UAW members creditors as well.

    I don't believe union members are creditors. A pension is only guaranteed by the PBGC (Pension Benefit Guarantee Corp).

    Creditors are entities that lent money to Chrysler.

  7. #16
    Super Moderator Zapp Brannigan's Avatar
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    Default Re: Chrysler Bankruptcy

    Quote Originally Posted by matclone View Post
    Sounds like someone needs to know something about Marx. Yeah, those big, bad unions caused the downfall of the auto industry and, conversely, the auto workers made no real contributions to the company: money, labor, or otherwise. Only capitalists provide capital.
    Of course the workers made contributions with labor...but they were paid for that labor with wages. That's why true creditors are given precedence, since they've yet to receive anything from their contributions.
    Jacob Schlottke---Gone too soon, and the world is a little less bright because of it. RIP, brother.

    One, two, Evans is coming for you...

  8. #17
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    Default Re: Chrysler Bankruptcy

    Thank you for admitting that labor contributed something to the enterprise. As for the specter of wages, aren't creditors paid interest, not to mention whatever other perks come with that status? In other words, I presume they've already rec'd something for their contributions too. As for future expectations, the workers had them too, not the least their pensions, which are not included in their wages. Priority of payments are a separate matter. I just had to comment in the face of the usual disingenous argument--the implication that workers contributed nothing and are entitled to nothing, whereas the creditors, the poor creditors, are somehow getting the shaft because of the dirty union that put the CEOs on the floor until they submitted to their demands.

  9. #18

    Default Re: Chrysler Bankruptcy

    Quote Originally Posted by matclone View Post
    Thank you for admitting that labor contributed something to the enterprise. As for the specter of wages, aren't creditors paid interest, not to mention whatever other perks come with that status? In other words, I presume they've already rec'd something for their contributions too. As for future expectations, the workers had them too, not the least their pensions, which are not included in their wages. Priority of payments are a separate matter. I just had to comment in the face of the usual disingenous argument--the implication that workers contributed nothing and are entitled to nothing, whereas the creditors, the poor creditors, are somehow getting the shaft because of the dirty union that put the CEOs on the floor until they submitted to their demands.
    Surely workers contributed something to the company. However, under almost any bankruptcy, the creditors are first in line. That's how our capital structure and legal system works.

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