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Is the government trying to save GM, or just the UAW??

ProfJohn

Lifer
Jul 28, 2006
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I had never heard of the two fleet rule until I read the article below. Afterwards I did some digging and learned about the rule and it is quite an eye opener.

A lot of people argue that cafe standards are a good thing and talk about how great it is that we have raised gas millage so much in the last decade or two. Little did we know that these same rules are being used and abused to help the UAW keep its stranglehold on the big 3 car makers.

See, the two fleet rule states that cars made in the US, Canada or Mexico are treated as one fleet and cars made elsewhere are treated as another fleet. And each fleet must achieve the cafe standard on its own.

This effectively forces the big 3 to make small cars in the US or Canada even though it is impossible for them to make money doing so. If the two fleet rule did not exist then GM, Ford etc could make the larger profitable vehicles in the states and import the cheap small cars from Brazil, N. Korea etc. This would drastically improve the profitability of the big three and would have NO effect at all on overall millage standards.

Again!!! And this is very important. The two fleet rule has NOTHING to do with cafe standards and everything to do with protecting the UAW. Knowing this does anyone really think that the Democrats are going to let GM declare bankruptcy? The unions are the life blood of the party, they can't afford to lose them or the hundreds of millions they spend on behalf of Democrats.
 

ProfJohn

Lifer
Jul 28, 2006
18,251
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Here is the WallStreet Journal OP-Ed about the two fleet rule and other stuff.
GM Bankruptcy? Tell Me Another
President Obama rightly says "sacrifices" must be made if GM is to emerge as a viable company. But there's one sacrifice he won't make: his re-election chances, by leaving the fate of the UAW truly up to a bankruptcy judge.

Keep that in mind amid the defenestration of Rick Wagoner, who was not as popular with UAW Chief Ron Gettelfinger as Mr. Wagoner's replacement, Fritz Henderson. Keep that in mind amid reports the administration favors a "quick and surgical" bankruptcy. It's a bluff. The same administration that inserted itself into GM's corporate governance to order the resignation of a CEO is hardly likely to defer to the prescribed legal order for a failing company, namely bankruptcy. Even a "prepackaged" filing runs too much risk of a judge imposing more "sacrifice" on the UAW than the administration is prepared to tolerate.

GM bondholders understand this: They've been intransigent precisely because they calculate the UAW is too important to Democratic electoral politics for Mr. Obama to risk losing control of the reorganization process to a bankruptcy judge.

The GM bailout has become a political operation run out of the White House. It will stay that way. Talk of UAW layoffs already disguises the fact that UAW workers are actually offered generous buyouts and early retirement -- they aren't just sent away with a last paycheck. What about Chrysler? A few weeks ago, Fiat was saying it would consider a merger if a loan from Washington was guaranteed. Now Washington is saying a loan will be forthcoming as long as Fiat does a deal. That's not an ultimatum -- that's a nod and a wink.

Mr. Wagoner did more than any GM executive to deal with the cursed legacy of 75 years of too much government attention. Not for him, though, and not for Team Obama, the real solution to make GM "viable": Getting rid of its North American business to end its UAW captivity.

That captivity, imposed by the 1935 Wagner Act, is the sole relevant factor distinguishing the Detroit Three from the world's other auto makers. The result is downright weird: "Our" auto companies operate in a world that's less "American," in a sense, than the Japanese and German companies that come here and enjoy a free labor market.

The Wagner world was given a second lease on life by a peculiar feature of Congress's 1975 fuel economy law. Known as the "two fleets" rule, it effectively forces Detroit to make its cheap small cars in high-wage domestic UAW factories, even if it means losing money on every car. The rule has no fuel-economy function. Its only purpose is to shield the UAW monopoly inside each Detroit auto maker from global labor competition.

You wouldn't have noticed, but a legislative accident two years ago almost stripped away the two fleets rule. A couple of Republican senators from the South took the lead in crafting the Senate's new fuel economy bill, and built it to please Nissan, which had railed against two fleets for its own reasons.

In the final bill, to no one's surprise, two fleets was quietly restored by Rep. John Dingell and Illinois Sen. Obama (among others) as a political favor to the United Auto Workers.

The UAW's Mr. Gettelfinger had testified, coyly, during Congressional hearings that failing to renew two fleets might cost 17,000 auto workers jobs building small cars. He didn't say that two fleets is in fact the fulcrum by which, for the past 30 years, the UAW has been able to defeat globalization.

He didn't say two fleets was the sine qua non for the past generation of the UAW's power to suck the Big Three dry.

Mr. Obama played the tough guy in getting rid of Mr. Wagoner, but he won't go after the labor monopoly. In fact, the union will emerge with a stronger grip on Detroit -- because it will be a major shareholder in a reorganized GM.

The irony is that Detroit has given plenty of evidence that it can make money, even with UAW overhead. Three of the top seven best-selling vehicles in February were Ford, Chevy and Dodge pickups.

Better than trying to rewrite GM's business relationships -- the job of a bankruptcy judge -- Mr. Obama might take up the duties of a president. He might try giving the country a coherent auto policy for a change. He could repeal two fleets so Detroit could build its small cars profitably offshore and tame the UAW monopoly in the process. He could dump CAFE or impose a $5 gasoline tax so at least customers would have a reason to buy the cars Washington is forcing Detroit to build.

None of this will happen. Mr. Obama will be content with incoherent policies that poll well -- which means GM, Chrysler and perhaps Ford eventually will need taxpayer subsidies as far as the eye can see -- or until a real bankruptcy sometime after November 2012.
 

masteryoda34

Golden Member
Dec 17, 2007
1,399
3
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So basically what you are saying is that the Government has infinite wisdom when it comes to regulating the "free" market. We should probably allow them to make all of our economic decisions, then we can have maximum efficiency.

/sarcasm
 

NeoV

Diamond Member
Apr 18, 2000
9,531
2
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actually GM is very likely to declare bankruptcy

your understanding of the 'two fleets' is highly flawed btw, as is the op-ed's take, particularly on this part:

"Known as the "two fleets" rule, it effectively forces Detroit to make its cheap small cars in high-wage domestic UAW factories, even if it means losing money on every car. The rule has no fuel-economy function. Its only purpose is to shield the UAW monopoly inside each Detroit auto maker from global labor competition. "

That's a highly-slanted, grossly misleading interpretation..but then again you eat stuff like that up, so no surprises
 

ProfJohn

Lifer
Jul 28, 2006
18,251
5
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Originally posted by: NeoV
actually GM is very likely to declare bankruptcy

your understanding of the 'two fleets' is highly flawed btw, as is the op-ed's take, particularly on this part:

"Known as the "two fleets" rule, it effectively forces Detroit to make its cheap small cars in high-wage domestic UAW factories, even if it means losing money on every car. The rule has no fuel-economy function. Its only purpose is to shield the UAW monopoly inside each Detroit auto maker from global labor competition. "

That's a highly-slanted, grossly misleading interpretation..but then again you eat stuff like that up, so no surprises
Well, instead of throwing insults why don't you correct my mistake???

I shall be waiting.
 

ProfJohn

Lifer
Jul 28, 2006
18,251
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link 1
The ?two-fleet rule,? established with the first corporate average fuel economy (CAFE) standards in 1975,
divides each manufacturer?s car fleet into two separate compliance classes ? domestic and foreign ? based
on where a majority of a vehicle?s parts are made. Each class must separately meet the 27.5 mile per
gallon (mpg) passenger vehicle standard. The two-fleet rule for light trucks was eliminated beginning in
model year 1996.

Originally, the rule was meant to protect U.S. auto jobs by preventing manufacturers from importing large
numbers of foreign-made smaller cars ? primarily designed for foreign markets with tougher fuel
economy requirements ? in order to meet CAFE standards. At the time, foreign automakers did not
object, as none had domestic production facilities. In recent decades, however, more foreign automakers
have opened production in the United States.
link 2
Eliminate the two-fleet rule ? CAFE standards require that the average fuel efficiency for domestic and imported fleets be calculated separately, with domestic fleets being defined as models that are made with at least 75 percent domestic parts. This two-fleet rule should be abandoned, the committee said. Not only has the global marketplace rendered these designations obsolete, but the committee found no evidence that U.S. autoworker jobs were affected positively or negatively by this system, which was the initial reason for the distinction.
link 3. This one is straight from the UAW
The UAW has repeatedly emphasized two points about the CAFE program. First, we have urged that the structure of the CAFE program be modified to eliminate discrimination against full line producers based on their product mix. Second, we have emphasized the importance of retaining both the fleet wide averaging and the two-fleet (domestic and foreign) components of the passenger care CAFE structure. The combination of these two provisions ensures that full-line auto manufacturers must maintain small car production in North American. This protects the jobs of over 17,000 American workers who are currently employed in U.S. assembly plants that produce small passenger cars, and almost 50,000 workers who produce parts for these vehicles.
As I said it is NOT about gas millage, it is about saving UAW jobs and nothing else.
 

tweaker2

Lifer
Aug 5, 2000
12,296
3,656
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If you would, I need some clarification ProfJohn.

Are you specifically referring to the UAW as a union entity as you had mentioned in your thread title or are you referring to individual auto workers as you had bolded in your last post?
 

ProfJohn

Lifer
Jul 28, 2006
18,251
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Originally posted by: tweaker2
If you would, I need some clarification ProfJohn.

Are you specifically referring to the UAW as a union entity as you had mentioned in your thread title or are you referring to individual auto workers as you had bolded in your last post?
The union as an entity.

And it really doesn't matter. What I said is true. The 'two fleet' rule was created to save UAW jobs. The government, via legislation, is forcing the big 3 to make cars at a loss.
 

ProfJohn

Lifer
Jul 28, 2006
18,251
5
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BTW the UAW made over $2 million in political donations last year and Obama was the #1 recipient...
 

heyheybooboo

Diamond Member
Jun 29, 2007
6,278
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Other than your typical rancor and propaganda what's the point here, Johnny?


Originally posted by: ProfJohn
A lot of people argue that cafe standards are a good thing and talk about how great it is that we have raised gas millage so much in the last decade or two. .
For your information:

1) CAFE has not done diddly in the last 25 years.

2) Average Total Hours Per Vehicle: 2007

Toyota - - - - - -30.37
Chrysler - - - - - 30.37
Honda - - - - - - 31.33
General Motors- 32.29
Nissan - - - - - - 32.96
Ford - - - - - - - 33.88
Hyundai - - - - - 35.1

3) The 'Big 3' in the US dominate in plant efficiency rankings



So what kind of FUD will you now spread about average labor costs?

 

retrospooty

Platinum Member
Apr 3, 2002
2,031
74
86
Originally posted by: ProfJohn

Well, instead of throwing insults why don't you correct my mistake???

I shall be waiting.
Or he could do exactly like you do to others, and claim that his highly exalted ass need not explain things to you mere forum trolls...

:D

 

miketheidiot

Lifer
Sep 3, 2004
11,062
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locks like a rather dumb case of protectionism.

regardless, the uaw has gotten the shaft pretty good the last few months, so i doubt that this rules still exists simply for the uaw's interests.
 

MikeMike

Lifer
Feb 6, 2000
45,885
66
91
I love people who have no idea how a manufacturer like GM works, how they control costs, etc. try and discuss what's best...

amazing.
 

miniMUNCH

Diamond Member
Nov 16, 2000
4,159
0
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Yep... AT has a few smart folks but is mostly full the idiots these days... pretty much why i seldom post here anymore.
 

ProfJohn

Lifer
Jul 28, 2006
18,251
5
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Originally posted by: miketheidiot
locks like a rather dumb case of protectionism.

regardless, the uaw has gotten the shaft pretty good the last few months, so i doubt that this rules still exists simply for the uaw's interests.
The law is still there and still mainly for the benefit of the UAW. Or did you miss this part?
"In the final bill, to no one's surprise, two fleets was quietly restored by Rep. John Dingell and Illinois Sen. Obama (among others) as a political favor to the United Auto Workers. "

Notice Obama's name? The same Obama who got more money from the UAW than any other politician in Washington...
 

DaveSimmons

Elite Member
Aug 12, 2001
40,730
670
126
See, the two fleet rule states that cars made in the US, Canada or Mexico are treated as one fleet and cars made elsewhere are treated as another fleet. And each fleet must achieve the cafe standard on its own.

This effectively forces the big 3 to make small cars in the US or Canada
But not Mexico?

Are Mexican plants staffed with highly-paid UAW workers?

If UAW workers add so much cost, I'm curious why after 34 years the small-car production hasn't moved there, besides the need for a private army to guard the plants?
 

ProfJohn

Lifer
Jul 28, 2006
18,251
5
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Originally posted by: DaveSimmons
See, the two fleet rule states that cars made in the US, Canada or Mexico are treated as one fleet and cars made elsewhere are treated as another fleet. And each fleet must achieve the cafe standard on its own.

This effectively forces the big 3 to make small cars in the US or Canada
But not Mexico?

Are Mexican plants staffed with highly-paid UAW workers?

If UAW workers add so much cost, I'm curious why after 34 years the small-car production hasn't moved there, besides the need for a private army to guard the plants?
That is a good question.

Perhaps it has to do with the fact that Mexico has only been counted for a few years now.

Most likely has to do with the fact that the UAW won't allow the big 3 to close or move plants.
 

Beanie46

Senior member
Feb 16, 2009
527
0
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Originally posted by: ProfJohn

Most likely has to do with the fact that the UAW won't allow the big 3 to close or move plants.

Wow....so, quick run to Atlanta and tell the ex-GM and ex-Ford employees that the Doraville (GM) plant and the Hapeville (Ford) plants are still open and working. (Just two examples of the plants no longer open.....closed, in other terminology, and fairly recently.)

GM's shut down quite a few plants, by the way, as has Ford, all within the last few years, so the contention that the UAW won't let any of the auto manufacturers shut down plants is just silly. By the end of 2007, for instance, Ford had closed 10 plants and continues to close more---6 more were/are slated for closing from 2008-2012.

GM's doing much the same thing......Moraine, OH, Janesville, WI, Grand Rapids, MI, Lansing, MI, Oklahoma City, OK, Spring Hill, TN, Flint, MI, Pittsburgh, PA, Ypsilanti, MI, Portland OR......just to name a very few that GM's closed in the last couple of years.



 

boomerang

Lifer
Jun 19, 2000
18,890
639
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Originally posted by: ProfJohn
Originally posted by: DaveSimmons
See, the two fleet rule states that cars made in the US, Canada or Mexico are treated as one fleet and cars made elsewhere are treated as another fleet. And each fleet must achieve the cafe standard on its own.

This effectively forces the big 3 to make small cars in the US or Canada
But not Mexico?

Are Mexican plants staffed with highly-paid UAW workers?

If UAW workers add so much cost, I'm curious why after 34 years the small-car production hasn't moved there, besides the need for a private army to guard the plants?
That is a good question.

Perhaps it has to do with the fact that Mexico has only been counted for a few years now.

Most likely has to do with the fact that the UAW won't allow the big 3 to close or move plants.
That chip on your shoulder must have dropped your IQ about 60 points. That statement is so far from reality that it puts your state of mental health in question. In case you glossed over the post above this, read it carefully, slink off somewhere and think about getting some therapy.
 

smashp

Platinum Member
Aug 30, 2003
2,443
0
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Originally posted by: boomerang
Originally posted by: ProfJohn
Originally posted by: DaveSimmons
See, the two fleet rule states that cars made in the US, Canada or Mexico are treated as one fleet and cars made elsewhere are treated as another fleet. And each fleet must achieve the cafe standard on its own.

This effectively forces the big 3 to make small cars in the US or Canada
But not Mexico?

Are Mexican plants staffed with highly-paid UAW workers?

If UAW workers add so much cost, I'm curious why after 34 years the small-car production hasn't moved there, besides the need for a private army to guard the plants?
That is a good question.

Perhaps it has to do with the fact that Mexico has only been counted for a few years now.

Most likely has to do with the fact that the UAW won't allow the big 3 to close or move plants.
That chip on your shoulder must have dropped your IQ about 60 points. That statement is so far from reality that it puts your state of mental health in question. In case you glossed over the post above this, read it carefully, slink off somewhere and think about getting some therapy.

Living here in NE Ohio, I can say that plant shutdowns have happened alot in the last couple of years. Hell a couple old plants are just storage for Boat, campers, and cars now.


PJ has no original ideas in that melon of his.

Now maybe i should reply to my own post here 6 times in a row before anyone else does, because i got em now
 

ProfJohn

Lifer
Jul 28, 2006
18,251
5
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Well... despite all these plant closings GM is still only operating at 78% capacity. link

The company's market share has been shrinking faster than it has been closing plants.

Their market share has gone from 40% in the early 80s to around 20% today.
 

smashp

Platinum Member
Aug 30, 2003
2,443
0
0
Originally posted by: ProfJohn
Well... despite all these plant closings GM is still only operating at 78% capacity. link

The company's market share has been shrinking faster than it has been closing plants.

Their market share has gone from 40% in the early 80s to around 20% today.
So its managements fault.


thanks for playin
 

piasabird

Lifer
Feb 6, 2002
17,168
60
91
Well we could use this kind of information when China asks for a one-world currency. We should tell them we will accept a one world currency when they aggree to a One-World-EPA Agency. China is one of the largest polluters on the earth.
 

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