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Car Czar Says President’s Detroit Visit Highlights Lower-Paying Jobs

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Steven Rattner knows a thing or two about the American auto industry. He oversaw efforts to restructure the nation’s automobile industry as the former Counselor to the Secretary of the Treasury, and his knowledge of the industry and firsthand experience working with the White House eventually led him to write a book, Overhaul: An Insider’s Account of the Obama Administration’s Emergency Rescue of the Auto Industry. Today, Rattner noticed an interesting irony at play in the President’s visit to the General Motors plant at Lake Orion.

RELATED: Mitt Romney Catches Hell For Flip-Flopping On The Federal Bailout For The Auto Industry

Barack Obama visited the plant today along with South Korean President Lee Myung-bak, in part to celebrate the recent passage of the South Korean free trade agreement. Why is this worth noting? Rattner explains:

The small car that is being made at the Lake Orion plant – the Chevrolet Sonic – was originally scheduled to be made in South Korea, where its predecessor was made. That was because with a traditional Detroit cost structure, cars like the Sonic cannot be made profitably in the U.S. But as part of the new agreement with the United Auto Workers in connection with the 2009 auto rescue, the U.A.W. agreed to permit 40% of the workers in the facility to be paid so-called “Tier II” wages, roughly half of what a traditional U.A.W. member earns.

Those Tier II workers, he adds, will take home under $30,000 a year for their efforts.

But, hey. They’re working, right?

h/t StevenRattner.com

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  • Tim Tebow

    At least they have jobs–and they’re not on unemployment.

    Would Palin/McCain have helped them? Probably not.

    An undeniable success for the Obama administration and government in general.

  • Anonymous

    Detroit is the perfect case study of what happens when a city is controlled by the Democrats and unions for a half century. 

    By the time they were done, they had destroyed the job base, collapsed home prices, and reduced the standard of living to Third World levels.   And the agenda — of fat cat Dems working hand in hand with big labor to promote “good union jobs” — is exactly the same one Obama has been implementing in the rest of the US. With similar results, I might add.

  • Anonymous

    Stand by.  The Teabagging morons about about to dazzle us with the hilarious CZAR talking points they got from Michelle Bachmann.  The first person to spot one of these talking points gets a prize.

  • DEFENDER-90

    That sub $30.000 wage is that with over time?50,60 Hr work week.

  • Anonymous

    I seriously love Mediaite. 

    Work goes by so fast.  Cable news, fake eyebrows, superheros with pepper spray, post sex celebrity chat, actual news, skydiving sex, and commentary.

  • Anonymous

    Yeah, the American auto industry was such a failure.  Right.

    Don’t you people have any sense of embarrassment?

  • Jayamerican1

    If it wasnt a failure why did it nearly go under genius

  • Jayamerican1

    Two tier workers?  Sounds like class warfare to me

  • Anonymous

    The American auto industry is one of the greatest things to ever happen to this country. The reason you hate it is because it’s one of the greatest things to ever happen to this country. See how that works?

  • http://www.facebook.com/people/Bill-Rambler/1513697597 Bill Rambler

    five bailouts and 2 bankruptcies is not success even on the curve you were obviously graded on!

  • Anonymous

    Yeah, good thinking.

  • Tim Tebow

    It’s called LIFE, my friend. Things happen and we try to make the best of them. If all the stupid and unsuccessful people were allowed to die, how many people would post on here, buy Godfather’s Pizza, or countless other stupid things?

    There is no perfect world with perfect people, companies, or government–but if we work together, we can sometimes solve real problems together. See the events above.

    It’s kinda like we’re just one big family: it’s not perfect, and it doesn’t always work, but still we keep trying.

    To give up trying is to give up on civilization–something few on the right seem to understand or appreciate these days.

  • DEFENDER-90

    Let me tell you about a two tier system.
    When I worked at NUMMI(if you dont know google it) we had non union temps working on the line with us,making roughly $20Hr max.
    These temps worked 2 year’s max then let go.
    My union(UAW 2244) allowed this because  they were allowed to STEAL! EXTORT! money frome the temps,they were paying union dues the same percentage that I was with NO! BENEFITS! and NO! REPRESENTATION!  

  • Anonymous

    The American auto industry is a perfect example of what unions do — namely, squeeze the life out of their employers and communities.   Look at the Detroit economy and tally the damage.   The city economy will never recover from what the Democrats and unions, working hand-in-hand, have done. 

  • NDanielson

    The American auto industry was the envy of the world. Then your UAW union RUINED IT. Clown.

  • Anonymous

    Where do you think that city came from? I’ll give you a hint: It’s known as the Motor City.

  • Anonymous

    The UAW created it over seventy years. George W. Bush and the Republicans (and you) destroyed it in eight years.

  • NDanielson

    You’re beyond stupid.

  • Anonymous

    I post truth. Republicans hate truth.

  • DEFENDER-90

    What assemly plant did the UAW ever finance? Answer 0!

  • Tim Tebow

    How was it ruined? The company was fine until the recession and people stopped buying massive SUVs.

    Was it the unions that designed the cars that people didn’t buy?

    To blame a union for a company’s failure is to take the long-route to the truth: MANAGERS are largely responsible for success AND failure.

    Labor is a tool that works at the discretion of management–always was and always will be.

    WHO designs the product? WHO signs the labor contracts? Who decides EVERY decison in the plant?

    Not unions, my friend…

    Not unions.

  • Anonymous

    Do you think you’re making a point or something? Posts are so much more interesting if they have a point.

  • NDanielson

    The small car that is being made at the Lake Orion plant – the Chevrolet
    Sonic – was originally scheduled to be made in South Korea, where its
    predecessor was made. That was because with a traditional Detroit cost
    structure, cars like the Sonic cannot be made profitably in the U.S. But
    as part of the new agreement with the United Auto Workers in connection
    with the 2009 auto rescue, the U.A.W. agreed to permit 40% of the
    workers in the facility to be paid so-called “Tier II” wages, roughly
    half of what a traditional U.A.W. member earns.

    So how much are these outstanding union workers worth, sweetpea? How much more than the average worker should they be paid? How many benefits should they have beyond the regular middle class in MI? And, why? And who brokered the deal in 2009? All mouth and no brain, boy. Do you back up anything you spout???

    These “under paid workers” make the median income of any MI worker. Why are they entitled to more???

    http://www.senate.michigan.gov/sfa/Economics/MichiganPerCapitaDisposableIncome.PDF

  • Anonymous

    Moron, the passage you posted says the UAW workers took a 50% pay cut. Can’t you ask your mommy to help you read this stuff?

    I can’t believe how stupid Republicans are.

  • DEFENDER-90

    “The UAW created it in seventy years”
    NO! they did not.What plant did the UAW ever finance with there money,the answer 0.

  • NDanielson

    Figure it out yourself, Timmy. You’re much too smart for me to teach you anything. Non union automakers are doing quite fine in America, and abroad, and so are their workers, Timmy. Figure it out on your own Timmy. Good luck!

  • Rio

    Oh, dear, the recession?

    This from 2005:

    Why GM’s Plan Won’t Work

    http://www.businessweek.com/magazine/content/05_19/b3932001_mz001.htm

    This from 2006:

    Explaining the burden of legacy costs

    http://www.autoblog.com/2006/09/20/explaining-the-burden-of-legacy-costs/

  • NDanielson

    Moron, the passage you posted says the UAW workers took a 50% pay cut. Can’t you ask your mommy to help you read this stuff?

    I can’t believe how stupid Republicans are.

    And that 50% cut brought THAT PLANT down to the per capita AVERAGE OF MICHIGAN WORKERS! The moron is you! It is also the deal THAT YOUR BOY BROKERED. DUMB- ASSSSSSS.

  • Rio

    I believe the operative word you should be using is “was.”

    Like:  “,,,auto industry ‘was’ one of the….”  “The reason you hate it is because it ‘was’; one of the….”

    See how that works?

  • Anonymous

    I don’t care either way. You can express your hatred for this country any way you want.

  • Anonymous

    Look, you’re going to have to decide if you’re on the side of the higher wages or the lower wages. It’s impossible to debate with you if you don’t know your own position.

  • NDanielson

    You shame even the North Koreans with your stupidity.

  • Anonymous

    Atually, no. Detroit was funded by MASSIVE infrastructure projects paid for by tax payers, including auto workers.

  • DEFENDER-90

    The 20+year old  job’s bank did not help GM,paying workers when there factories closed  or do to technology advancments,robots ect, nearly $31Hr not bad.In 2006 there were nearly 15.000 workers in the jobs bank. I learned this in about this from My alternet committeeman.

  • Anonymous

    Your UAW buddies got to set their own wages and benefits for decades.  I hope they enjoyed it while it lasted. Because now they’ve destroyed the competitiveness of their employers and the financial well-being of their community.  Detroit will never recover from the damage done by Democrats and Big Labor. 

  • Tim Tebow

    “Who signed the contracts?”

    Don’t blame union negotiators for being smarter than management.
    Don’t blame unions for building cars that mangagement designed–and nobody wants.

    SUVs were a loser from the begining, but profit margins were so high–and the American consumer so stupid–that they kept going with it, despite the obvious failure of a glutionous vehicle in a shrinking oil market.

    You don’t blame a CEO for making $25 million–you tell us they deserve it.

    Works both ways, ya know?

  • Anonymous

    Oh, I didn’t know they got to set their own wages. I thought they engaged in collective bargaining or something. I’m glad you’re here to explain how it works. You’re very smart.

  • Tim Tebow

    huh?

  • Rio

    Pfft!  I don’t hate this country at all, came from a long line of vets that have served this country and am damn proud of what they did for us.  That includes my husband and son btw, also did a stint as a military wife during the Vietnam war, and have close family members still in, so, no, there has never been a time in my life that I’ve hated my blessed country.

    As for the auto industry, I do get peeved with that industry for at least three personal reasons.  Two being the fact that we bought two cars in 85, a Chevy Blazer that we found that the wiring was not hooked up when we tried to roll down the window and we also bought an 85 Dodge Omni.   When I took my mother on a trip during a rain storm, the windshield leaked like a seive all over my mother.

    Months later my job as a construction secretary took me to Chrysler, they were retooling.  I had to go into the plant and behold, the woman on the line that my car would have gone down was sitting there reading a book, she may have been the one that missed sealing my windshield.  I also had the pleasure of walking through the parking lot during lunch and saw union workers smoking pot and drinking during their lunch and if you didn’t drive a Chrysler product they would key and spit on your car so I had to drive my bosses in everyday because they drove Fords.  

    We later bought another car and at 1500 miles on a trip my transmission blew, oops, someone forgot to top off the transmission fluid and my dog and I had to be carhauled to a dealership 35 miles from the middle of nowhere in Iowa.

    Being as though I live in Chrysler country I know many responsible Chrysler workers, but, that didn’t help my situation…at all, they can’t be everywhere, right?  And, all these issues you have with new cars never gets traced back to the union workers that failed to do their jobs, not that it would matter if it did.

  • DEFENDER-90

    I learned this from My alernet committeeman. :)

  • DEFENDER-90

    There is no good faith collective bargaining between GM and the UAW, not when the UAW still holds between 6&7 billon in GM stock,in violation of the UAW constitution,thats what you call a conflict of interest.

  • Rio

    The automaker jobs bank has been around for years.  Laid off workers get 100% of their pay if they actively see employment, 85% if they sit home.  When they retool, they get 85% of their pay in addition to vacation pay, our Chrysler work force was older and it wasn’t uncommon for workers to get six weeks vacay per year.  If they did a model change the changeover would last anywhere from 4 to 6 months at 85% of their pay plus all benefits, healthcare, legal fees that did not include criminal defense, pensions, etc.

    Getting back to bargaining, if you noted in the GM article there was this paragraph:

    When GM shut down for 54 days during a 1998 lavor action, it knocked off a full percentage point off the U.S. economic growth rate that quarter.

    Keeping that in mind, what options would each side have?  Stick it our for more pay and benefits as opposed to the company, shareholders and the U.S. economy taking a hit,  the longer a strike would go on the bleaker it got.  When sales were up as they were prior to the mid 2000s, they worked the numbers and the companies gave in, now there’s no numbers to work and everyone lost.  Didn’t they. 

    Back to the jobs bank, 15,000 x $31 per hour per how long for no production, plus all the other pay and benefits adds to the cost and competition suffers.

  • DEFENDER-90

    RIO—-Im not 100% sure, I believe you stayed in the bank until a position became available.
    I do know for a fact there were people in the bank for 4&5+years.  

  • Rio

    Defender, they had the option to seek other employment and did get the 100% while doing so, but, where would they go to get the same bennies and pay?  To get the extra 15% all they had to do was show that they applied, didn’t matter if the places had any intention of hiring them. 

    My daughter’s friend was in the jobs bank for quite a while, will have to ask her how many years.  Being as though they had two incomes, it was convenient for her to stay home and take the 85%.  No babysitter or other costs involving going to work.  Two years ago she took the early retirement pay out and also was given an additional $15,000 bonus that she could apply to a new Chrysler product on top of being able to green sheet it.  She used it to purchase a Rubicon.

  • http://www.davidjkramer.co.cc// DavidKramer

    After reading through the comments, you folks kicked some arse in this here comment section.

    Hey lefties, go pick up some more talking points, they won’t help, but with some better zingers you might actually get some debate points.

  • Anonymous

    Fact: I bet the union was forced on them too just to work!

  • Hagen619dj

    Well maybe….would you work for only $30,000 per year?  Bet not!

  • Hagen619dj

    Another one of Obama’s do-good tactics to be televised doing something for the working world. He just can’t be trusted.

  • Hagen619dj

    Obama is noted for doing all these political jabs at looking like a good boy to the American people. NOT!

  • Anonymous

    I wonder if the suits running the union have a two-tier pay scale among themselves.

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