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GM Is Now Detroit’s Smallest Auto-Making Employer

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Re: GM Is Now Detroit’s Smallest Auto-Making Employer

#91

Post by bumby »

dreamcompiler wrote: post #50
AmVess wrote: post #8

They are pushing production and engineering to anywhere not the USA, so this trend of having fewer workers isn't going to stop until all that's left of GM is the headquarters. I'm not Chicken-Littling either. This trend has been many decades in the making, and it only has one logical endpoint. I was looking at their trucks, and left the showroom when I saw one that had 45% domestic content. I bought a truck that had…

When Henry Ford built cars, he knew that the people making his cars were also buying his cars. That mantra was thrown out in the 80s. The new mantra was "make sure the people making the stuff are poorer than the people buying the stuff, and you [shareholders and executives] can pocket the extra profit margin." The flaw in this theory is obvious: Eventually you run out of poor people willing to build things they thems…

This is actually a myth (or clever PR) about Ford raising the wage to enable his employees to buy the product they were creating. There's been numerous reports that show the economics of that don't really make sense. The wage raise was actually to prevent turnover to improve productivity; it wasn't uncommon to have people walk off the assembly line mid-shift, shutting down production.

https://www.forbes.com/sites/timworstall/2012/03/04/the-stor...

Re: GM Is Now Detroit’s Smallest Auto-Making Employer

#92

Post by bumby »

MrGilbert wrote: post #90
manfredo wrote: post #58

Earlier quoted context omitted.

Were that the case, we'd see a prevalence of people unable to afford cars. This is not the case. The cost of an automobile is an even smaller fraction of an average person's disposable income than it was during Henry Ford's day. And this isn't considering the fact that a modern car is far safer, more comfortable, more fuel efficient, and just broadly way better than a model T. American workers are too highly paid to…

So, let's compare the automotive industry then. I might be mistaken, but I'll try my best. And yes - I totally ignore taxes, healthcare, and anything else - which might be important, so... take it with a grain of salt. In the year 1916, Henry Ford lowered the price of the Model T to 345 USD[1]. Using an inflation calculator[2], this tranlates to roughly 8120 US-$. At the same time, Ford raised the salary to 5 US-$ pe…

Appreciative of the breakdown, but I think there might be some issues with your methodology.

For one, far fewer households today are single salary. Say what you will about whether this is a good or bad thing, but I think it's probably more appropriate to base the numbers on an "automotive household income" if that's such a thing.

Also, your salary resource is a little weak. It has a huge range ($34k-$144k average). I speculate this isn't relegated to just using automotive manufacturers but also includes their suppliers. Anecdotal experience shows me that the lowest paid Tier 2 union employees on a line make that much if you include overtime. Tier 1 workers make much more (close to double, in my experience). Then you take the skilled trades (e.g., electricians and machinists) where its more common than not to make six figures, all things considered. This is all before we're getting to the degreed engineers. Payscale.com shows average Ford engineer salary nearing $90k. Engineers on the line generally make more because of the work conditions and overtime (it wouldn't be uncommon for a process engineer to make double that). I don't know what the actual numbers are, but I wouldn't balk at data that's easily double the numbers you covered. It could easily be on-par or even below the Model-T numbers when it comes to monthly household income.

Re: GM Is Now Detroit’s Smallest Auto-Making Employer

#93

Post by InfiniteRand »

One thing that makes these employment numbers a little questionable is that car manufacturers are mostly component assemblers, with differing amounts of components made in-house vs bought from other companies which may be US companies or might not be.

I know this is true for a lot of things, but my occasional experience with the auto-industry gives me the sense that it is more true for the auto industry than other places.

Re: GM Is Now Detroit’s Smallest Auto-Making Employer

#94

Post by dsfyu404ed »

24gttghh wrote: post #85
dsfyu404ed wrote: post #76

Earlier quoted context omitted.

I'm really tired of this "hurr-durr Hilux indestructible" meme. They used it because they were there and available. In areas with limited supply chain infrastructure there is very much a network effect when it comes to machines that need a pretty substantial supply chain. It would have been the S10 war or the Ranger war had GM or Ford been the dominant manufacturer in that region. Toyota does not make cars that are m…

Okay, drop a building on a Ford Ranger and clear the rubble away and try to drive it away after. That is, after you've drowned it in the ocean and set it on fire. https://www.drivingline.com/articles/top-gear-tries-to-kill-...

When I wrote my original comment I was this >Top gear is automotive themed entertainment not a documentary. Anyone who has ever worked on cars knows this. You can bet there was a lot of off camera hackery to get the truck running each time. It didn't just drive away.

I used to pull these trucks (well, all sorts of vehicles) apart for a living. If you pulled the same stunt 10x with 90s Hiluxes and 90s Rangers you'd have more Rangers driving away in one piece because they have a better (taller web specifically) frame and that was the the weak point (at least in topgear's test it was).

Re: GM Is Now Detroit’s Smallest Auto-Making Employer

#95

Post by sarcher »

bumby wrote: post #92
MrGilbert wrote: post #90

Earlier quoted context omitted.

So, let's compare the automotive industry then. I might be mistaken, but I'll try my best. And yes - I totally ignore taxes, healthcare, and anything else - which might be important, so... take it with a grain of salt. In the year 1916, Henry Ford lowered the price of the Model T to 345 USD[1]. Using an inflation calculator[2], this tranlates to roughly 8120 US-$. At the same time, Ford raised the salary to 5 US-$ pe…

Appreciative of the breakdown, but I think there might be some issues with your methodology. For one, far fewer households today are single salary. Say what you will about whether this is a good or bad thing, but I think it's probably more appropriate to base the numbers on an "automotive household income" if that's such a thing. Also, your salary resource is a little weak. It has a huge range ($34k-$144k average). I…

When Henry Ford set minimum salaries, he wasn't impacting the wages of the engineers who designed the cars - he was impacting the wages of those who made less than $5 at the time the change was made. A minimum wage was being set, not an 'average' wage. So comparing a $5 minimum wage to the 'average wage today including white collar workers like line engineers' fails to be a convincing comparison. It's even less convincing now that I realize, after reviewing your comment, that you're including overtime wages for "Tier 2 union employees" when MrGilbert's data specifically doesn't include overtime wages. If you need to work overtime today to have the same relative affordability as that available a century ago - that's not progress!

And when it comes to 'automotive household income' the numbers work out even worse than MrGilbert's example. The average American household owner more than one car per driving adult. https://www.bts.gov/archive/publications/passenger_travel/ch...

Yes, yes - perhaps the autoworkers we are talking about are not 'average' and own fewer cars per household. And yes, yes - moving the minimum wage probably resulted in wage increases for higher paid workers as well. If you want to move the goalposts again do some legwork and show some work, otherwise you're just promoting a paper-thin narrative on the basis of "but what if".

Re: GM Is Now Detroit’s Smallest Auto-Making Employer

#96

Post by ppseafield »

bumby wrote: post #92
MrGilbert wrote: post #90

Earlier quoted context omitted.

So, let's compare the automotive industry then. I might be mistaken, but I'll try my best. And yes - I totally ignore taxes, healthcare, and anything else - which might be important, so... take it with a grain of salt. In the year 1916, Henry Ford lowered the price of the Model T to 345 USD[1]. Using an inflation calculator[2], this tranlates to roughly 8120 US-$. At the same time, Ford raised the salary to 5 US-$ pe…

Appreciative of the breakdown, but I think there might be some issues with your methodology. For one, far fewer households today are single salary. Say what you will about whether this is a good or bad thing, but I think it's probably more appropriate to base the numbers on an "automotive household income" if that's such a thing. Also, your salary resource is a little weak. It has a huge range ($34k-$144k average). I…

Indeed it would be nice to see a more definite and representative source for income. I wonder, since the process is more complicated, you should now include both the line engineers and also the people working near minimum wage to make the parts for these cars. Did Ford make most of its own parts? How much was off the shelf, and were there industries that existed solely to make parts for these cars?

> For one, far fewer households today are single salary. Say what you will about whether this is a good or bad thing, but I think it's probably more appropriate to base the numbers on an "automotive household income" if that's such a thing.

How many households had two Model Ts, and how many households today have two cars?

Re: GM Is Now Detroit’s Smallest Auto-Making Employer

#97

Post by bumby »

sarcher wrote: post #95
bumby wrote: post #92

Earlier quoted context omitted.

Appreciative of the breakdown, but I think there might be some issues with your methodology. For one, far fewer households today are single salary. Say what you will about whether this is a good or bad thing, but I think it's probably more appropriate to base the numbers on an "automotive household income" if that's such a thing. Also, your salary resource is a little weak. It has a huge range ($34k-$144k average). I…

When Henry Ford set minimum salaries, he wasn't impacting the wages of the engineers who designed the cars - he was impacting the wages of those who made less than $5 at the time the change was made. A minimum wage was being set, not an 'average' wage. So comparing a $5 minimum wage to the 'average wage today including white collar workers like line engineers' fails to be a convincing comparison. It's even less convi…

I think the 'more than one car per household' is a fair point but I think it gets watered down by the >1 car per driving adult...this may be just that we consume more, not need more. If that's the case, it implies vehicles are more accessible today, not less.

But I stand by the assertion that claiming a $40k average wage is way off. The base salary of most Tier 1 non-skilled employees was still in the $70k-$80k range, and this was years ago. The skilled trades made much more. This is without overtime. It seems like MrGilbert was cherry picking the data. And I hope you also realize that there is a difference between the manufacturing engineers and design engineers. Manufacturing engineers probably should be included in my opinion, and they are some of the highest paid, but I'd even be willing to concede that and still stand by the general point.

I included overtime because it is a such a large part of the manufacturing experience. And yes, some people game overtime as a way to inflate their wages. And the overtime pay increases didn't come about until the Fair Labor Standards Act. If you look at the history, the $5 per day wage actually does include overtime (if you define overtime by today's standards). We could debate whether or not this is progress (many of those I personally knew would call it progress because they wouldn't have the opportunity to make that wage elsewhere, which is why there is little turnover even today). I actually don't think it's unfair to include overtime to get the total compensation comparison, but even without overtime the $40k number seems pretty far off.

The larger point being, it's not as simple of a comparison as 'don't include overtime' and select the lower end of the overall automotive salaries (including lower paid suppliers). We can further complicate things by factoring in the preferred employee pricing etc. It's complicated, even if we want it to be a simple narrative.

The loss of manufacturing jobs is a big part of the reduction in size of the middle class United States, especially in the Rust Belt. This is largely due to automation reducing the number of available well-paying jobs not because the car companies are systematically mistreating workers. People still vie heavily for those jobs because they are some of the highest paying jobs available.

Re: GM Is Now Detroit’s Smallest Auto-Making Employer

#98

Post by bumby »

ppseafield wrote: post #96
bumby wrote: post #92

Earlier quoted context omitted.

Appreciative of the breakdown, but I think there might be some issues with your methodology. For one, far fewer households today are single salary. Say what you will about whether this is a good or bad thing, but I think it's probably more appropriate to base the numbers on an "automotive household income" if that's such a thing. Also, your salary resource is a little weak. It has a huge range ($34k-$144k average). I…

Indeed it would be nice to see a more definite and representative source for income. I wonder, since the process is more complicated, you should now include both the line engineers and also the people working near minimum wage to make the parts for these cars. Did Ford make most of its own parts? How much was off the shelf, and were there industries that existed solely to make parts for these cars? > For one, far few…

>How many households had two Model Ts, and how many households today have two cars?

Like my response above, I think that's a valid and interesting point that should be factored in. I'd also be curious to see how much this plays into the overall debt load of consumers. I.e. does the necessity of dual-incomes force the need for multiple vehicles which in turn forces a higher debt load than previous generations? Where I come from, taking on vehicle debt is considered as much of a given as mortgage debt.

Re: GM Is Now Detroit’s Smallest Auto-Making Employer

#99

Post by bumby »

jtdev wrote: post #83
manfredo wrote: post #58

Earlier quoted context omitted.

Were that the case, we'd see a prevalence of people unable to afford cars. This is not the case. The cost of an automobile is an even smaller fraction of an average person's disposable income than it was during Henry Ford's day. And this isn't considering the fact that a modern car is far safer, more comfortable, more fuel efficient, and just broadly way better than a model T. American workers are too highly paid to…

> The cost of an automobile is an even smaller fraction of an average person's disposable income than it was during Henry Ford's day. I seriously doubt that... at $50,000+ for a new pickup, and $35,000+ for a new car? And used vehicles are still quite expensive as well (unless you buy an absolute pile of junk). Financing terms keep stretching longer to keep the appearance of an affordable monthly payment, but many Am…

I agree, but this seems to be driven by people wanting more car features. You can still get manual transmission/manual window cars for $11k.

Re: GM Is Now Detroit’s Smallest Auto-Making Employer

#100

Post by javagram »

jtdev wrote: post #83
manfredo wrote: post #58

Earlier quoted context omitted.

Were that the case, we'd see a prevalence of people unable to afford cars. This is not the case. The cost of an automobile is an even smaller fraction of an average person's disposable income than it was during Henry Ford's day. And this isn't considering the fact that a modern car is far safer, more comfortable, more fuel efficient, and just broadly way better than a model T. American workers are too highly paid to…

> The cost of an automobile is an even smaller fraction of an average person's disposable income than it was during Henry Ford's day. I seriously doubt that... at $50,000+ for a new pickup, and $35,000+ for a new car? And used vehicles are still quite expensive as well (unless you buy an absolute pile of junk). Financing terms keep stretching longer to keep the appearance of an affordable monthly payment, but many Am…

You can get a brand new car for under $20K (e.g. Honda Civic or Honda Fit)

People buy $35K cars because they can.

Look at sales of something like the SmartCar. They were very low despite the car being $12K-15K as people were willing to pay more.

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