Master Economics Offer: A Principled but Pragmatic Response to the Crisis Presentation by Jim Stanford, CAW Economist firstname.lastname@example.org To CAW-Ford Master Bargaining Committee – April 2008 PPP 30-yr avg The Loonie’s Destructive Flight
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A Principled but Pragmatic
Response to the Crisis
Presentation by Jim Stanford, CAW Economist
To CAW-Ford Master Bargaining Committee – April 2008
N.Y.C. APPROVES RULES ON LIMO FUEL EFFICIENCY
April 17 2008
The New York City Taxi and Limousine Commission (TLC) today voted to approve a regulation requiring that, beginning January 1, 2009, all new limos must be capable of city mileage rating of 25 miles per gallon (mpg). One year later, January 1, 2010, they must meet 30 mpg.
ANALYST FEARS LIQUIDITY AT BIG THREE
April 9 2008
Wall Street analysts are questioning whether General Motors Corp. and Ford Motor Co. can survive a sustained sales slump without a cash infusion.If the SAAR were to fall to 14.5 million units, GM would have enough cash to survive two years, says Himanshu Patel, an analyst at JP Morgan.
Cost/Hour = Cost/Retiree * No. of Retirees
Active Hours Worked
Cost per Retiree: Rising (8% per year?)
No. of Retirees: Up 1/3 in this contract
Hours Worked: Falling with each downsizing
Result: Cost per hour doubles in 3 yrs
- now worth $10/hr (FAS), $4/hr (cash)
The Globe & Mail
GM:“STATUS QUO” MUST CHANGE
April 14 2008
General Motors says its Canadian labour costs $30 per hour more than workers in non-union auto plants in the U.S., and says this gap must close in 2008 contract talks with the CAW.
Strong capital spending since the early 1990s, allocation of high-volume models
to Canadian plants, a high-quality workforce, and a commitment to productivity
by the union have all contributed to consistently superior productivity results.
Assembly and parts. CAW Research from Statistics Canada, U.S. Census Bureau. US 2007 data 3Q
Thanks to superior productivity and quality, and competitive costs, Canada’s
share of total North American production by the Big 3 continues to grow.
The rapid escalation of the $Canadian has converted our once-large
cost advantage into a slight cost disadvantage.
CAW did not take advantage of the undervalued currency in the 1990s to boost
compensation; the low dollar translated fully into a labour cost advantage.
The CAW’s 2005 Big 3 contract has already dramatically slowed the growth of
average all-in labour costs, thanks to small wage increases and health-care savings.
Retiree benefits gone
All-in labour costs per active hour worked, 3-company average.
Base Wages $34
Wage Premiums (OT, Shift, AWS) $5
Paid Time Off (Vac’n, Hol, SPA) $9
Current Health (PAYGO) $2.50
Current Service Retiree Health (FAS) $2
Current Service Pension $5
Sub-total Active Fringe $14
Statutory (EI, CPP, WCB, EHT) $5
Legacy/Retiree (mostly Retiree Health FAS) $10
TOTAL ALL-IN PER HOUR $77
Effective October 1, 2008 the following benefits will be improved for Active and Retired employees:
Wage gains (COLA)
Pension gains (driven by PCOLA, existing and future)
Health caps & SIBI
Car allowance (retirees)
St. Thomas pledge
$25 K retirement
New hire grow-in
40 hours vacation
AWS premiumOn Balance, A Step Forward
Savings offset much of the improvements;
Overall compensation protected