Posts Tagged ‘union’

Making Work for ATT

December 29, 2010

At work, we had a phone line through ATT that we didn’t use anymore. We also had a DSL line that we use for our phone system tied to that account. We wanted to cancel the phone line, but keep the DSL line. Sounds pretty simple, right?

Let’s just say it ended up being a lesson in the power of the International Communications Workers Union. When we canceled the phone line, they told us we would have a new account number. Nobody thought anything of it.

Then, the next morning, our phones were dead. I checked the DSL modem, to see if it was that or the phone system itself. The lights on the modem were all dead. Definitely a DSL problem. After calling ATT, we figured out that our new account number meant we had a completely new account. They couldn’t just cancel the phone line and keep the DSL line active. Perhaps this was a quirk in ATT’s system.

They told us that they would be able to turn it on for us in a few hours.   Then we got a call back from another rep saying that since we were in California, they couldn’t just turn it back on.  They had to send someone out to install the line.

We told them that we already had the modem, everything was hooked up, and we just needed the line switched. The answer was no. We had to have someone come out. So we scheduled it between 8 am and noon in a few days.

This was during a time when our office was closed for the Holidays, but I had some work to do so I came in with our IT guy. That morning at 9:30, we got an automated call from ATT saying that our line was now ready to use and we needed to register our account.   So now I came in to wait for an install that wasn’t even going to happen? They also were kind enough to tell us if we were having trouble, they could send someone out for $150.

I was mad, so I got on chat support with ATT. We got the modem activated and were up and running. I asked them why they told us someone had to come out. They said that on their records, no one was ever scheduled. I was dumbfounded.

After all this, an ATT truck pulls up in front of our office. The guy sits there for a minute, then comes in and asks “So you’re all up and running?”

We said that we set it up ourselves. We suspected that there had to be some sort of subcontractor or union agreement behind his visit, so we asked him if he was part of a union. That’s when he told us he was part of the ICW. We asked what he was going to do, and he said “say hi and leave.”

This was one of my first direct experiences with a union “make work” program. There was no need for him to come to our office at all, but the State of California requires him to do so. The union lobbied for these regulations not to ensure that our connection was up and running, but to make sure this person had a job.

Makes you realize why we’re so uncompetitive here in CA and in the US in general…

Bondholders Are Not Villians

May 27, 2009

I’m tired of hearing about the evil bondholders that are preventing GM from avoiding bankruptcy.  Why not call them what they really are?  They are the creditors to GM.  They lent GM money, and now are being villified for wanting to collect as much of that money as possible.

The Obama administration’s “offer” is for the bondholders to trade their $27 billion in debt for 10% of the failing company.  If they go to bankruptcy, the bondholders might get wiped out completely, but in a real bankruptcy, the bondholders usually get paid back first.  The problem is that this is not an ordinary bankruptcy.  It is rigged to give the government and the unions all the power.  The creditors and stockholders are the ones getting screwed.

Also, the “offer” gives the US and Canadian governments a 69% stake in the company.  So the primary debt holders get 10%, but the government gets 69%?  Who in their right mind would accept this rotten deal?

We all know the problem with GM is that their labor costs are too high.  Rather than actually trying to fix the problem, the government is handing the keys to the car over to the unions.  Since they are in a partnership with Uncle Sam, we now will be bailing them out forever.  The current model is unsustainable, but rather than actually fixing the problem we are setting up for permanent transfer of wealth from our pockets to the unions.

So, instead of just saying “it’s the evil bondholders’ fault,” we need to look at the actual offer and realize the only winners are Obama and the UAW, and the losers are every tax paying citizen of the country.

UAW Digging It’s Grave

December 11, 2008

They are already the scapegoat for the financial problems of the Big Three, and tonight, the UAW is making sure they look like the bad guys in this soap opera.

During negociations with members of Congress and the heads of the Big Three and the UAW, a bailout deal was supposedly really close.  It died when the UAW would not budge on pay cuts.  They said they would take cuts in 2011, but not in 2009.  Like they’re going to have a job in 2011 to get paid for in the first place!

The more hardball the union plays, the worse they are looking in the eyes of the public.  Who is going to have sympathy for them, when they get pensions, healthcare, and paid $30 an hour, when most of us have to fund our own 401k’s and foot some of our health insurance bills.  They are putting themselves in a very bad position, especially when Toyota, BMW and other foreign companies are keeping people employed and making a profit with non-union factories all across the Sun Belt.

The UAW needs the Big Three a lot more than the Big Three needs them, that’s for sure.  The loudest person saying “The Big Three are too big to fail” and “bankruptcy would be disasterous” is the head of the UAW, Ron Gettelfinger.  Why do you think he’s so adamant that the Big Three not go into bankruptcy?  Because he knows that when the automakers restructure, they will most likely ditch the UAW altogether.

The problem with their tough-guy stance right now, is that their tactics could backfire.  If they don’t make any concessions, the Big Three could turn to non-union workers now, with the full support of Congress and the public.  Why risk full unemployment for the entire union for a couple of bucks an hour?  Thirty bucks an hour is great pay for California!  They must live like kings in Michigan!

The UAW could look like heroes right now if they make the right concessions and act like they want to keep their jobs.  Instead, they are being uncooperative and are looking like the problem, not the solution.  I wonder how many union members actually are in favor of what their heads are doing?

All I know is that if they don’t get their act together soon, we’ll see the end of UAW within a few months.  While they might think they’re playing hardball for the benefit of the union members, the heads of the UAW are digging their own graves.

Big Three Bailout is Doomed

December 9, 2008

After many false starts, the White House and Democrats have come to a deal on the Bailout of the Big Three.  Among the provisions is the creation of a “Car Czar” to monitor how and where the automakers spend their bailout bucks and requirements for the companies and the UAW to come up with a plan for profitability by March.

On the surface, it sounds good, but this plan is doomed from the start, and will be a huge waste of fifteen billion taxpayer dollars.  The reason is simple:  The plan does not address any of the issues that got the automakers in trouble in the first place.

Making cars is not a very profitable business.  Toyota makes about $2,000 for each car they sell.  GM loses a couple hundred dollars, and Ford loses close to $2,000.  Those numbers are from a few years ago, but as you can see, even the most profitable company only makes a $2,000 per car.  When you multiply the profit over millions of cars sold, you get a huge number, but if you add costs anywhere along the line, it could wipe out a huge chunk of the company’s profits.

One cost that hurts the automakers is their cost of labor.  Total labor compensation for GM is around $78 per hour, while Toyota’s is around $48.  A big reason for this is funding the pensions and healthcare costs of retired UAW workers.  Also, negotiated programs like the “jobs bank” hurt the automakers.  The jobs bank requires that when a plant is not producing vehicles due to lack of demand, the workers still get paid up to 90% of their salaries.  GM spend about $1,500 per vehicle on these costs.  That’s almost the gap between them and Toyota.

While this bailout may call for talks between the Big Three and the UAW, it doesn’t look at the big picture, one that does not include a union at all.  Maybe that has to be part of the equation.  Do they really need to be unionized?  Toyota’s workforce is not unionized, and while there are some complaints, most workers seem to be content.  Of course, this option will never come up, but if we were really serious about fixing the automakers, this would have to at least be discussed.

The “Car Czar” is supposed to oversee how the companies will operate and approve almost all spending of the bailout dollars to make sure it is being spent domestically.  If you really wanted the Big Three to emerge as a profitable company, you should allow them to explore all options.  If they can find a cheaper way to produce vehicles or parts in Mexico, they should be able to.  There is an advantage to assembling cars with the skilled workers of the United States, why else would Toyota, Honda, Nissan and BMW do this?  So allowing them to explore all options will not kill U.S. jobs.  This is another reason why this bailout will not solve anything.

Also, part of the bailout is that the automakers have to show they will put the money towards more fuel efficient compact cars.  The Big Three makes their money selling trucks and SUVs.  They lose money building compact cars that can’t compete with the market niche the Japanes cars have.  Why can’t they develop more efficient trucks?  They might not be 50 mile a gallon Smart Cars, but they would do just as much to end our dependence on oil.  Again, if this really was about reforming the business of the automakers, we wouldn’t place ridiculous requirements on them.

Finally, the government needs to look at itself as part of the problem.  You would think that fuel efficiency would be easy to regulate, right?  Read this article on the Corporate Average Fuel Economy from Wikipedia.  Could this more convulted?  What the heck is a “harmonic mean?”  Can anyone in Congress actually figure this out?  This is an antiquated piece of legislation from the days of the oil embargos of the 1970’s that is still in place.  Before Congress puts any requirements on automakers, they need to repeal this stupid law.

The fact that the entire fleet of cars sold has to meet some requirement is absolutely ludicrous.  If Ford sells a million trucks, they then must sell millions of crappy, poorly designed, cheap compact cars to reach their fuel efficiency requirements?  The goal should be to increase the efficiency of that one model of truck.  Instead, they could make the truck less efficient and make the crappy car more efficient.  Overall, the “harmonic mean” stays the same.  The CAFE standards are completely ineffective, do not do what they were intended to do, and force the Big Three to sell cars that aren’t profitable.

Overall, the Big Three Bailout will only lead to more of the same and even more taxpayer dollars wasted.  They need to think outside the box and look at the bigger picture.  Instead, there will be small reforms that will be billed as big ones and in a few months, they’ll be back for more money.  If we really want Ford, GM and Chrysler to survive, we need to allow them to operate as free enterprises and not companies with their hands tied behind their backs.  Until we really look at the problems, any help for the Big Three is doomed before it even starts.