[jimmydean]

Delphi Warning

Is this the key sign of the end of north america manufacturing and the start of a long drawn out depression?

By GM's own admission a couple of months back they opted to buy $1B+ in parts from India last year. Western corporations are in survival mode now as they look to exploit the east for cheap labour in the hopes that they are not the last one to file Chapter 11

Granted the supposed Delphi average union wage/benefit pkg is $65 which seems a bit extreme!

[JoeW]

I'm not sure where the $65/hr avg comes from, but I will add that about a year ago they were talking about the offshoring of American jobs and they posted the average wage for autoworkers in a number of countries. The US was at the top (no surprise there) at something like $37/hr and at or near the bottom was South Korea, and I think that figure might have been $2/hr.
The reality is that the average American auto worker is grossly overpaid, and the average South Korean auto worker is grossly underpaid.
When I saw how ridiculous the difference was, it occurred to me that perhaps the offshoring of those jobs wasn't a bad thing at all.
The average auto worker is standing there in an assembly line doing the same thing over and over again, right? $37/hr for that? Sounds like a job you really could get just about anybody to do, even someone without any education whatsoever.
If there are any auto workers out there, feel free to jump in and justify the high wages because I have got to have some fundamental misunderstanding of the nature of the work that is done.

[gary_malcolm]

$this->bbcode_second_pass_quote('JoeW', ' ') $37/hr for that?

[Eli]

The only real problem with all this is that you still have to have someone able to buy the car you are making.

The Delphi worker in the US could own two brand new cars that cost 30,000 each while the Korean worker could afford a moped.

What is happening is the American consumer cannot afford to keep consuming.

Industries have to find new markets for growth in consumption but now we have reached the point were continued growth will cannibalize other markets.

[FoxV]

$this->bbcode_second_pass_quote('Eli', 'I')ndustries have to find new markets for growth in consumption but now we have reached the point were continued growth will cannibalize other markets.

[Jack]

$this->bbcode_second_pass_quote('JoeW', '
')The reality is that the average American auto worker is grossly overpaid, and the average South Korean auto worker is grossly underpaid.

[frankthetank]

They wanted to cut there wages to $10/hr. Thats **almost** WalMart wages.

What next, the US GOV files bankruptcy?

[some_guy282]

$this->bbcode_second_pass_quote('frankthetank', '
')
What next, the US GOV files bankruptcy?

[falser]

$this->bbcode_second_pass_quote('JoeW', 'T')he reality is that the average American auto worker is grossly overpaid, and the average South Korean auto worker is grossly underpaid.
When I saw how ridiculous the difference was, it occurred to me that perhaps the offshoring of those jobs wasn't a bad thing at all.
The average auto worker is standing there in an assembly line doing the same thing over and over again, right? $37/hr for that? Sounds like a job you really could get just about anybody to do, even someone without any education whatsoever.
If there are any auto workers out there, feel free to jump in and justify the high wages because I have got to have some fundamental misunderstanding of the nature of the work that is done.

[nero]

I have a real hard time believing the $2/hour figure for South Korea, but leaving that aside outsourcing is a big problem for the UAW. The question in my mind is why are the foreign workers paid so little? How is the fruit of their labour distributed, and why aren't those workers demanding a greater share of the wealth?

The only hope for unionism (and good blue collar wages) in america is an agressive push to internationalize worker's rights. But somehow "globalization" doesn't include the globalization of worker's rights or environmental standards.

[strider3700]

$this->bbcode_second_pass_quote('falser', '
')
The actual cause of this phenomenon is the US dollar is grossly overvalued. US labor will never compete against other countries who's currencies are worth less.

[Eli]

And now we come full circle back to the undeniable fact that Global growth and growth in the United States was driven literally by cheap energy and cheap oil.

Without cheap energy available there is no growth and expansion. If Oil costs 100 dollars you can be damn sure that continued growth is not going to happen. When you get down to it this is an organic problem based on thermodynamics.

Right now the world economy is just looking for another sucker to buy into the Ponzi scheme since there biggest investor the US is now headed south.

When a Ponzi scheme collapses it is always the last person to buy in that gets screwed the most so look out China.

[jaws]

$this->bbcode_second_pass_quote('Eli', 'T')he only real problem with all this is that you still have to have someone able to buy the car you are making.

The Delphi worker in the US could own two brand new cars that cost 30,000 each while the Korean worker could afford a moped.

[Eli]

$this->bbcode_second_pass_quote('jaws', '')$this->bbcode_second_pass_quote('Eli', 'T')he only real problem with all this is that you still have to have someone able to buy the car you are making.

The Delphi worker in the US could own two brand new cars that cost 30,000 each while the Korean worker could afford a moped.

[spudbuddy]

Henry Ford's original game plan was a novel concept for its time; he wanted his workers to be able to afford the product that they manufactured.
North America never could compete with a global wage scale. It always was a rather delicate balancing act.

But absolutely - the whole pyramid scheme turns upside down when the almighty American consumer can no long consume...who's going to buy the stuff filling up the box stores?
I live in a great big expensive city - where $16/hr affords nothing more than a "just-out-of-college" entry level starter job.
50% of that income rents a tiny apartment. Wages are inflated, but so are prices, too. Middle income earners have lost a lot of ground.
The playing board is set up entirely for high rollers.
Add that to jobless recoveries...boom years for only the top 5%....same old stuff.

I think the only thing ultimately that will give job outsourcing and offshoring the real kick in the pants it deserves, is when transportation costs counterbalance the money saved on labor.
Remember...to a corporation, labor is like a social disease (STD's, athlete's foot, SARS, etc.)
All they want for Christmas is to pass that off to a good Simon Legree, who will whip the slaves with no mercy.
It always looks good on paper...in the long run will go over and sink more or less like the Bismark.............

[cube]

$this->bbcode_second_pass_quote('gary_malcolm', '.')........
Remember Henry Ford? He increased wages to make his employees able to spend more.

We are the engine that creates GDP.

[jimmydean]

$this->bbcode_second_pass_quote('Jack', '
')Keep in mind that the entire wage structure of the U.S. is high in comparison to a great many other nations. On the other side of the equation, the cost structure is also high.

If we cut the wage structure - whether of auto workers or medical doctors - we reduce the ability to pay prices to support the existing cost structure.

And in a highly leveraged economy, with lots of debt, that could lead to massive defaults. The implications are not pretty; keep in mind that the sudden reduction in global demand means that this is not a problem that will remain within the U.S.

[pup55]

$this->bbcode_second_pass_quote('', 'I')n 1999, the average Korean wage was US$1,241 per month, 35% of the average Japan wage, 49% of the average US wage, and comparable to Taiwan’s average, at $1,169. The average wage increased by 8% to US$1,338 in 2000,

[Eli]

Mowing a lawn and getting 10 dollars an hour tax free all of sudden sounds to people like a good job and all of sudden the Illegal workers are being shipped back south again.


Constitution? We don't need no stinking constitution.

[Peakoil_Tarzan]

The benefits of "Globalization" were greatly oversold to the general populace. Not only have the promised benefits failed to materialize for the average American, people in many developing countries have had the rug pulled out from under them by the neo-liberal economic policies of the American politicians and their corporate sponsors. Mexican farmers who once earned a living selling their produce locally have been shut out of the marketplace by the big chain's demands for large quantities of cosmetically perfect and bland, blister-packed produce. In India, farmers burned Monsanto's offices because they rightly feared that they were soon to be swamped by GMO crops that would render their product essentially valueless.

The great irony, of course, is that -- and Eli correctly points this out -- as capital accumulates in fewer and fewer hands, and the average worker becomes less able to buy the thing that he manufactures (and which makes the capitalist "rich"), the whole system begins to fail -- not just for the worker but eventually for the capitalist too. While you can argue that $37/hr. is too much to pay an autoworker, take away his/her salary and soon you have no market for your product. This week it might be Delphi; in 2007, it is likely to be GM. Mr. Wagoner may indeed feel that he has no choice but to eventually jetison GM's wage and pension responsibilities, but he should also understand that he is simultaneously cutting his own throat.