Chrysler : Labour Rates and Other Obfuscations

If you were to read the news lately, you could be forgiven for thinking that North American auto manufacturers pay their workers more than Japanese auto manufacturers do - even the Japanese manufacturers that are located in North America.

This may be true, but it's a very small difference if it is. What you are actually seeing quoted in the news are the labour rates. A labour rate is not what the employees get paid. It's the company's way of adding up the company's cost of labour - which includes actual dollars per hour, plus cost of benefits, plus the cost of pensions of workers who are retired.

It's that last one that makes it look so unrealistic. So when the Globe and Mail publishes a letter from Chrysler to its employees which says, "... the all-in labour costs at Chrysler Canada are $76 per hour while the Toyota Canada all-in rate is approximately $57 per hour" it's important to understand that much of that $19 of difference is actually Chrysler Canada's error in not maintaining a pension fund for its retired employees. Instead, Chrysler Canada promised the pension (presumably winning concessions from employees when it made the promise) and then simply declared the cost of those pensions as part of the present-day worker's cost.

Imagine the Widget Company. It has 100 retired employees who receive $39k per year pensions. Let's say the Widget Company has a staff of 100 workers who are making $39k per year ($20 per hour). Under the definition of "labour rate" used by Chrysler, the Widget Company would declare that its labour cost is actually $40 per hour because the company is putting the burden of the pension plan it promised but never managed on its 100 present day workers.

Rip-off, you say? Of course it is. I would just call it lying, personally, but the world of finance is often full of such misdirection.

It would get even worse when the Thingamajig Company comes to town. Then the stockholders could get angry at the Widget Company and its atrocious $40 per hour workers. "Why look", they would say, "the new Thingamajig Company has a labour rate of just $22 per hour!" This is because it either has no pensioners yet or because it allows a 3rd party to manage their pensions with the extra $2 per hour.

"Egad", the shareholders would shout, "You workers must make concessions! The fault lies in your greed! Give up your hard won benefits! Cut your salaries! This is a recession!"

And so Chrysler publishes a list of things it feels should be taken from employees in order to make up for the fact that Chrysler didn't put money away to cover its promise of retirement benefits and pensions. Chrysler workers will need to have less pay and benefits than Toyota workers because of that pension cost in the labour rate.

So Chrysler makes a list of ways to bring down the labour rate. Please note that nowhere in that letter does it mention anything about cutting the benefits or salaries of executives. Should we assume that's already happened? I wouldn't assume anything of sort, personally.

Somehow, putting a cap on dispensing fees costs $2.16 an hour? That cries out for an explanation. Chrysler would like to take way your Life Insurance and your out of province health care coverage as well as your semi-private hospital bed. It wants to add to your health care premiums.

The list goes on, but the point is clear: it's the union's fault.

In a way I have to agree.

It is the union's fault. It is the workers' faults. They wanted a pension plan and they trusted a corporation to maintain, fund and manage it. Why would anyone, ever, trust a corporation to take care of a person? That's just not what corporations are good at. That's why we keep them out of health care and education.

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Women in Afghanistan

There are certain occasions on which a coincidence of events would almost lead me to believe that some type of higher power is orchestrating the universe. This higher power is not benevolent, but rather some type of darkly humourous manipulator, content to make our lives in to some overwritten, overdramatized story line fit for a soap opera.

For witness, I give you a young lady, Karine Blais, recently killed in combat by a roadside bomb. We are to believe that she died for the freedom of an oppressed people and the new government that will set them free. We are to believe that we are fighting against religious tyranny in favour of moderation.

And so, we are to understand, this young Canadian woman gave her life for people yearning to breathe free.

And then we have this ridiculous law that the free, supposedly-less-religious, government of Afghanistan wants to pass. You know the one, where women - who often don't have a choice in getting married in the first place - can be required to have sex with their husbands with a specific frequency. 300 women came out to protest the law. Over a thousand people, men and women, came out to pelt those 300 with stones.

The articles says "small" stones, but this is relative term and we're talking about an area of the world where throwing stones at people is a form of execution. I can't help but wonder if this constitutes a threat of death in such places much like hanging someone in effigy would be here.

What of this? A young woman from Canada dies for the freedom of people who come out to pelt independent young women with stones for not wanting to be raped?

Irony so thick you can smell it.

No, wait, that's not how irony smells ...

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The Pope's Hope

Dear Pope Benedict,

I heard about your address regarding the need for hope and I thought I would respond.

I guess I find it hard to be hopeful, despite your papal command that I do so. Even though everyone knows that the pope is always right, I find it difficult to simultaneously be hopeful while also acknowledging that I'm such a terrible sinner that I deserve to burn in the fiery pits of hell in endless agony.

Call me a party pooper, but that's just such a downer.

I'm also a bit conflicted about your desire for hope in Africa where, as you say, "... growing numbers of her sons and daughters who fall prey to hunger, poverty and disease". It seems like condoms and other forms of birth control would solve a lot of the problems in Africa - especially the "growing numbers" part and the "disease" part.

It seems like Africa might need more than "hope".

Maybe you could sell some of those gold relics you hide all over the Vatican and use the money to send condoms to Africa.

I'm just saying.

Greg.

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