YouSaid · the spoken record

Steven Rattner

lines on the record: 53
first: 2023-09-22
most recent: 2023-09-22
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Private executive car parking area straight to, I think it was the 49th or 50th floor and the Renaissance Tower to his office. Without stopping any of the floor, so you didn't have to mingle with any of the ordinary people, the executive offices were behind a locked door. You had to have a certain kind of pass to get through that door. It was unbelievable, unbelievable to me to see an iconic company run like that. And it was clear from day one that a big part of what we needed to do there was to change management. This is not labor. It was not Labor's fault that these companies got in trouble. They have some responsibility, but management had an awful lot of responsibility.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say, interestingly, and this is a little different than what we my most memorable moment was when we got inside of General Motors. I had been taught and brought up in my investment banking world to think that General Motors was a really iconic company, well managed for the most part, especially in finance. They were renowned for their finance department. When we got inside General Motors, I could not believe how badly that company was run. They didn't even really have a model, a financial model that we could use to project the results for five years. They had some cut and paste thing, but they didn't even have really a model that could be manipulated and where you could change assumptions and things like that. The culture of the company was terrible. It was a get along, go along kind of culture. Nobody would challenge anybody. The CEO had an elevator that took him from his private”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“My most memorable moment, there's a competition for that award. I had many, many, it was a fascinating experience. It was the best thing I ever did with my life. I felt like I actually made a contribution and we were able to achieve it.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“People who care passionately about labor and the people who care passionately about the energy transition, many of them are the same people, and I certainly would even consider myself one of them. But you have to decide what your priorities are. And if we want to be competitive in EVs and not end up like semiconductors where they're all made somewhere else, then we have to accept that there are going to be some costs to that. I don't mean financial costs, I mean costs in terms of jobs, because as you correctly said, EVs require a good bit less labor, and we just have to accept that. And trying to protect old jobs is never a winning strategy for any country or any company.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“But this is something the OAW is worrying about, and it's analogous in a way to what the screenwriters are worrying about. They're worrying that AI is going to put them out of work. The UAW is worrying that the EVs are going to put them out of work. And this is, again, where there's a very interesting tension in America today between”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, again, that's a money issue, really. And so it's a question of how you want to allocate the money. If you give the existing permanent workers more than whatever, then there's less to deal with what were called the temp workers now. And so it's really a question as much for the union as for the companies as to how they want to allocate it. The temporary worker thing has been significantly improved since 2009 in terms of the amount of time a new worker is a temporary worker before they become a permanent worker. And I think that will continue to shrink under this new contract. I think the companies are prepared to give something on that front. But again, as I said, it's as much for the UAW as is for the companies as to where their priorities lie.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot of their parts, most of their parts, they've outsourced those years ago. And so, and this was something we encountered in 2009 as well.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“They couldn't afford to strike all three companies. They didn't want to do what historically has been done with strike one company. But what's going to happen now is that gradually other facilities are going to close because there's no place to send the parts because there's nobody to assemble the cars and trucks at these three facilities that have been shut down. And then those facilities will shut down and those workers will be laid off. Under the rules, the companies can't simply shut those facilities and lay off the workers unless they have a legitimate business reason to do that, i.e. they're oversupplied with whatever that particular facility does. So yeah, this could easily ripple through the entire set of facilities around the big three, the Detroit three. They could shut down. You could have 130,000 workers on strike or not on strike, but laid off and on strike. There will be significant effects on parts suppliers, by the way. Let's not forget that these companies don't make.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it will get worse because what's happened is, as you know, first of all, the way they structured the strike is unprecedented. They closed three plants, one for each of the companies. And they did that in part because they didn't want their strike fund to get depleted too quickly.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Plumber, you couldn't touch a piece of electric piece of equipment or whatever, and we reduced those to six. And that is still more or less where things stand, but there are other kinds of flexibility the companies need to manage, especially in relation to the EV transition. So what I would like to see happen is a robust pay increase, and I think the companies have offered a reasonable one, but there's more to go, I'm sure. And the gap there, as I said, I think is bridgeable. And for the union to give up most of these, I'm going to call them crazy demands and hopefully also address any kinds of workplace flexibility issues that the companies feel they need to be competitive.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Certainly, the attitude at the companies is that this is not going to get settled quickly because the gap between the two sides is so vast. And I think the companies, as I said, and you may or may not agree, there's no possibility that the companies can possibly accept paying people 40 hours and working 32 or anything like that. It's not in the realm of reality. And so I think at the end of the day, what I hope will happen and what would be the right thing to happen is for the union to drop a lot of these ancillary demands. And there are also, by the way, demands and requests around the issue of workplace flexibility. One of the things that we did in 2009 was to basically strip away a lot of the work rules that we felt were impeding efficiency. General Motors, I believe from my recollection, had something like 300 job classifications for its workers.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“First, in relation to your opening comments to your listeners, I think this podcast will be relevant for a long time. From everything. Unfortunately. Unfortunately.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Startups coming along. And at the moment, the Detroit 3, as we call them, are losing a lot of money on their EVs and just really beginning to roll them out in force. And it's going to be a tough competitive experience for them. And that's why things like labor costs become important.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“It's going to be a challenge, but I think there's a yin and a yang to this. I think on the positive side, they have 100 years of history in a very complicated industry. Everything from design, engineering, supply lines, manufacturing, distribution, marketing, and so on. And so that's an advantage that they have. The disadvantage is their legacy companies, and they really need to reinvent themselves in a way to compete. I was a skeptic about the ability of companies like Tesla to come into a market that was so established and compete effectively, and I was wrong about that. Obviously, it can be done, and you now also have a whole bunch of other.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Solidarity. And so that's how the market can work better. And it is working better. In fact, it's working so well that it seems clear that the original estimate for the cost of the IRA, which I think was around $500 billion, Goldman Sachs thinks it's going to be $1.3 trillion. Other people are somewhere in between. And that may sound like a bad thing. And it is obviously from the standpoint of the budget deficit, but it's a good thing in the sense that these incentives have taken so many projects that were not economic and made them economic. And so you've had this enormous take up, and we will have a lot of progress made in this country on energy transition projects because of it.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Think a 30% or some large tax credit associated with it And the project suddenly made economic sense and we invested in it.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“In some industries where the prospects for return don't seem fulsome enough for us to invest, if they're important enough, then the government needs to step in. So let's talk about how the government can do this in a way that is most cost effective. If you think about it very broadly, the government can provide subsidies, they can provide tax incentives. The problem with subsidies is then you have the government in effect picking winners, and that scares me. The advantage of tax incentives is you're basically letting the market decide which projects are going to go forward with the tax incentives providing an added boost. We have seen in my investment role, we have seen projects that came by a couple years ago that we could not get pencil out to make the returns meet our thresholds. And so we didn't invest. We literally had one of those same projects come back after the IRA was passed, and suddenly there's a”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“They're high end EUV, what's called an EUV machine has something like 650,000 parts in it. It's one of the most complicated pieces of machinery, if not the most complicated, made. Those parts come from all over the world. The intellectual property is owned by countries all over the world, including by us. Some of those parts are actually made in California. And so we're not going to get away from that. The world's not going to get away from that. We have to accept that we're always going to be at some risk of supply line problems if the world becomes a less forgiving place. So I would like to see us make some batteries here. I think it is a much easier challenge than making semiconductors here. So I think it's possible and likely that we will make some Tesla makes its batteries here, of course. But again, we shouldn't get overly optimistic about how many we're going to make and what the costs are going to be.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“I would like to see us make more batteries here because there are a lot of batteries made in China. I don't worry quite as much about that as I do about semiconductors because there are also batteries made in South Korea and lots of other places that are friendly to us. Look, we are living in a global world and we're not going to get away from that. We're not going to get away from that. We have spent too many years globalizing. There's a company called ASML that you may have heard about, which makes the equipment that makes semiconductors.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“If we believe we can execute it well, and as I said, I have my questions about that, it is just as important as many, many other things the government does. And we just would need to find $52 billion somewhere else to pay for this because it should be a priority if we can execute it.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Look, first, let me say a couple of things. First of all, I am on the more skeptical end of the value of industrial policy. I think when the government gets into the business of picking winners, there are many, many ways in which it can mess up. I will freely concede that what the Asian countries, the four Asian countries I mentioned did in semiconductors, which was heavily through industrial policy, worked. And so there are plenty of examples it worked. Lots of people like me would say, okay, if you give me full control of this, and I don't have to deal with all this other stuff and politics and whatever, I can make this work, there's a certain amount of hubris in saying that, but that's what a lot of us would say. But that's not how it's going to work. It's going to work as a whole different kind of process. And that, I think, brings a lot of risks. In terms of the cost, we're not talking about that much money. We have a federal budget deficit of $2 trillion. We're talking about $52 billion over a number of years. It is important.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Doesn't matter. So in the chip world, you can separate I, at least in my own mind, separate it into a kind of three groups of chips. You have memory chips, which are basically a commodity. We make a lot of them. That's not going to be an issue. You have, as you said, low-end processing chips. We make some of those. They're made in plenty of places in the world. We can be competitive there. But none of that matters if you don't have high-end ships because you need those, again, it's not just your phones, it's the fence department's missiles. It's all kinds of stuff that cannot function without them, and we don't make any of them here. We literally don't make any of them here.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot or some, or look, I don't know. I'm rather skeptical as possible, but in a perfect world, you'd want a lot more. NVIDIA does not make anything. It doesn't matter what their profits are. They could design chips every day. Yeah. From now till the end of civilization. But if they don't have somebody to make them.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“One thing, one of the most important things that I learned in the auto rescue and that we were lucky to have was we were told by the White House, you focus on fixing the companies, we'll worry about all the other issues that are out there, whether it's environment, labor, whatever. You can't have multiple objectives in a policy that's that important and be successful, in my opinion. You have to have one objective and be willing to make certain sacrifices around it to be successful.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Called in Phoenix, but it's going to cost a lot and it's going to make barely a dent in our semiconductor situation. So we can talk about our industrial policy towards semiconductors. We have the Congress has approved $52 billion for mostly for tax and grants to build these things another, I think, $12 billion of it for research and development. But then they've gone out with an RFP for companies to apply with all kinds of other conditions and things around it like that companies have to provide child care.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Industrial policy, which relates to your question to develop those industries there. And so, where do we sit now? We sit now where 92% of the world's high-end semiconductors, the most important ones that power your phones and lots of other things that you use, are made in Taiwan, which obviously has a series of issues surrounding it. And now suddenly we want to bring that back here. But what we're finding is, and what we're going to find, is that that is not easy. We don't have the ecosystem of engineers, suppliers, and so on that has grown up around the semiconductor industries elsewhere. We have this permitting problem. We have a high cost structure. TSMC, Taiwan Semiconductor, which is the leading company in making this stuff, has a facility up on the Oregon-Washington border they've had for a number of years. They say their costs are 50% higher than they are back in Taiwan. And so, yeah, they're building a fab as these factories are.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“So, look, what happened with semiconductors? And I've actually spent a fair amount of time on semiconductors recently because I think it's a fascinating subject, is that we, of course, invented semiconductors basically. After Sputnik, we basically had our Sputnik moment. We said, we got to become a technology leader. The Defense Department got heavily involved. DARPA and the Internet was one outcome of that. Our leadership in semiconductors with Intel in particular being our national champion, but many, many other companies, Qualcomm, AMD, whatever, also being products of that. But what then happened was that we also encouraged, and we were not the main reason this happened, but you then had a semiconductor industry grow up in South Korea, Japan, Taiwan, and Singapore. We encouraged it because we felt that if those countries were strong economically, it would help resist China better in its own economic expansion. Those countries pursued a very vigorous”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“And then it comes back here, all adding to cost. And of course, the Chinese don't exactly observe a lot of environmental protections when they do that kind of stuff over there. And meanwhile, there's a smelter in Idaho, I'm told, that is built sitting there not operating because it can't get permitted because of environmental concerns. And so, and of course copper is a key ingredient in EVs and all the energy transition things we're talking about. And so there is a tension in this country between various goals. And we have a goal of obviously making this energy transition. If we want to make an energy transition, we're going to have to radically change the permitting process. It would be great if you want, at some point we can talk about semiconductors, which is another.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a great question. And the answer is yes, we obviously do focus on this labor problem. But for example, permitting in the US and the environmental regulations and all that surrounds it is really, really tough. Let me give you an example that has nothing to do with the car industry, but we recently looked at a copper investment and a copper mine in Arizona fine. What I learned though is that much, and I don't know the percentage of the copper ore that we mine here gets sent to China to be smelted.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“That were really so much a fabric of America that we really felt like we had to save, that it was the right thing to do with taxpayer money, which, by the way, we got virtually all of it back.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“It's an iconic American industry. It's an industry that every country takes some national pride in having their own company in effect. If you look at Europe, there's been some mergers recently to try to rationalize it. But you had every country in Europe felt like it had to have its own car company, even though it really didn't make sense for every country in Europe to have its own car company. And so if I were to stand up and say, you know, we don't really need a car industry in this country, I'd be probably drawn and quartered or burned at the stake or something like that. There's a lot of emotion and feeling around it. The car industry is 3% of our GDP. Then it may not sound like a lot, but that is a lot. And I think there's a strong feeling that we need to have a robust car industry here. And I get that. As I said, when I got into the auto rescue job, I did see a couple of things. One was the unbelievable pressure I manufacturing that I just described and how tough this was. And secondly, I saw these iconic companies.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“And it's not an organized effort. It's not a government policy. It's not a government edict, but companies are reassessing their supply lines and saying, okay, maybe we shouldn't rely on China, but then they have to get it from somewhere else. And by definition, if they were getting it from China because it was the cheapest they could get, it's going to cost more to get it from somewhere else. And that does add at some point into inflation and cost for everyday Americans. And so this is not going to be a top-down decision from Washington. This is going to be a decision made company by company to try to balance secure supply lines with being able to keep prices to consumers at reasonable levels. And I think when the dust settles, it will not be as big as big as people think it might be because of the cost problem that companies are going to find. The costs are higher and are going to maybe pull back from some of the deglobalization that you see talking about. So now if you're ready, we can talk about binomics and industrial policy.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“And again, manufacturing is different. So let's talk about deglobalization and industrial policy and binomics, because they are somewhat different, obviously, related. I think the wake-up call during the pandemic and in the context of what's going on with China to many American companies and government officials is that we globalized to a great extent to cut costs for Americans. And it's important to recognize that part of why we had so little inflation until the pandemic was because we were importing manufactured goods from China, from other places, not cars, that were much cheaper than anything we could make here. And so prices for things like clothes were very barely moved, I think, during this period because they were able to source it more cheaply. Now companies and, again, the government are saying, well, the supply lines are too stretched, and this is how you get in trouble. And so there will be...”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Let me try to unpack that and you're going to again have to remind me of a couple of good questions that you asked that I won't remember. Look, the first point that you alluded to I just would like to mention for the benefit of the listeners, which is, and it may be it's obvious. But as you said, what's happening right now is we have a historically low unemployment rate, 3.8%, and about 1.5 jobs for everybody who's actually looking for a job. And so that has led workers in many, many industries to feel empowered to ask for more. And so obviously you have the screenwriters and the actors on strike. You have hotel workers in LA on strike at the moment. You've had very large contracts to the UPS drivers, to the American Airlines pilots, and so forth. But those are all service industries. And if you pay those people more, sure, it cuts into profits a little bit. It may add to inflation a little bit because the companies raised their prices. But fundamentally, those jobs don't leave. They can't leave. You have to have, if you're an LA hotel worker, that's the only place you're going to work.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“And so if your labor costs go from five to seven, as you said, that means your profit margins go from 10 to 8. And you've wiped out 20% of your profits. And that's a lot to a company. I mean, companies like these that are high cost companies with lots of moving parts, no pun intended, they watch or they're supposed to watch every penny, every cost item, and work unbelievably hard to keep costs down to make some reasonable profit. These are not companies with 40% profit margins where maybe it doesn't matter. And so it is important to these companies to have labor costs be competitive with other companies that are basically doing the same thing with labor costs that can be half of what they are for the Detroit III.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, let's think about it this way. I think I don't have this figure in my head, but let's just say, and I think it's probably directionally about right, that the profit margins all going well, and there are plenty of times when they're not going well, the profit margins for these kinds for these big companies is maybe 10% or something like that.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yin and the yang of this whole situation with the UAW, in a sense, is that its attention between jobs and pay. The more you pay, the fewer jobs you ultimately have, because inevitably these jobs will migrate out of the union facilities and into non-union facilities”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Actually, it has a unionized plant there which has low wages. But if you talk about the non-unionized plants there, you're talking about wages of 9 to 13 or 14 dollars a day, not an hour, a day. And if you talk to auto executives who operate there, they will tell you that they get very good productivity out of their Mexican workers. Some will say they get better productivity. And the consequence of that is that the number of auto workers in Mexico has crossed the line and is now higher the number of auto workers in the US. Our number of auto workers did recover after the 2009 exercise, but Mexico simply grew faster and has outgrown us and is now a larger source of employment at these very, very low wages. And so this isn't changing. Again, you have the Chinese, as we talked about coming and potentially other low-wage countries. And so it really worries me about the future of manufacturing.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“And then suddenly I'm plunged into manufacturing. And what I saw was really scary to me, which was that we basically have a high cost structure in this country appropriately. We want our manufacturing workers to earn a good living. But in an increasingly globalizing world, and we can talk about whether the world is now going to deglobalize, but at least has been globalizing, it was getting harder and harder for us to compete. And that's why, in large part, we lost so many manufacturing jobs over these last 15 or 20 years. And so you had, from the union's point of view, you had jobs moving from the Midwest to the South, from union jobs to non-union jobs, but you also had a lot of jobs moving to Mexico from these same companies, including the Detroit companies, the Detroit 3 have 20 facilities in Mexico of one sort or another. And when you look at the wage structure in Mexico, you're literally talking about”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's pretty unlikely. I think that it's not just Tesla, but when you look at the auto companies that have been operating in the south for a long time, which were Toyota Honda, the German companies and so forth, they are also not unionized. And I believe I'm right, although my memory is a little hazy in saying that I think there have been efforts to try to unionize them that have failed because the workers understood, look, I think we should step back and talk about the general issue of manufacturing in the United States, not just autos. But this was a real wake-up call for me. I had spent my whole career working essentially with service industry companies, mostly media and telecoms.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“But sooner or later they probably will be here. And so what has been a tough business is getting even tougher. And it's important for these companies to have a cost structure that they can live with.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Going to be significantly challenging, and we should talk about the labor piece of it because that's very relevant. But As you ask, let me talk about some of the other elements of it. Look, you have a whole bunch of new entrants coming into this industry starting from scratch. I'm reading at the moment Walter Isaacson's new biography of Elon Musk. And Tesla, he started with a blank piece of paper when he did Tesla, and he was able to design a manufacturing system, a set of supply arrangements, not without a lot of commotion and difficulty and so forth, and with no unions, by the way, and build Tesla in effect from the ground up. The legacy companies have a way of doing things that's existed for now 120 years plus or minus. And so they have to completely rethink a lot of how they operate, a lot of their processes, and they have to compete against not just Tesla, but Rivian and Lucid and the Chinese companies you mentioned are not yet here because of the high tariffs that we have on auto imports.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“About things like restoring the jobs bank where you get paid even if you're laid off. When you talk about going back to a defined benefit pension plan from defined contribution, which would be wonderful, but very few companies even have those anymore for new workers, those are demands that the companies simply can't meet. I think what this will hopefully come down to is a bid ask on cash compensation. The union wants 35, 36 percent. The companies have offered 20%. This would be over four years. And some other one-time payments, something like somewhere in there, there's a deal to be done. But all the rest of this stuff is mostly going to have to go away to have an outcome that I think is appropriate for these car companies.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“The auto companies are making very, very good profits at the moment. Nobody can argue about that. But this is a tough business. The profit margins are relatively thin. The capital expenditures required are large. The transition to EVs is going to be very expensive and painful for these companies. And so when you boil it all together, if you look at General Motors, for example, its stock price from when it went public, I think about 12 years ago, I think it was 2011, has not budged. The overall stock market is up 275%. And so Wall Street investors are basically saying we don't think these companies are actually doing that great. And therefore, they have limits as to what they can do and still have the resources and the profits they need to keep investors happy and do this transition. And so when you talk about things like getting paid for 40 hours but working 32 hours, when you talk”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Was unwilling to have the existing members make a significant and more significant sacrifice, i.e. actually reduce their cash compensation. And so again, you think of it as a pot of money and has to get allocated and a disproportionate amount of it got allocated to the existing workers at the expense of these new what we used to call tier two, now they call them temp workers who had just started at the company were getting paid a lot less.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Let's take that in pieces and you can remind me of a couple other questions that I'm not going to remember. Because I'm focused on your first question There's no doubt that it is odd, I think unfair in many respects, a bad dynamic to have two people working on the same assembly line performing essentially similar functions. Maybe one is putting on windshield wipers and one is putting on door handles and one is getting paid literally, at least back then, was getting paid literally half as much in cash and much reduced benefits package relative to the guy or woman who is standing next to him doing essentially the same job. That's a bad dynamic, but it occurred in part for the reason I said that the union”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Or any of that kind of stuff. And in contrast today for a variety of reasons, the UAW has a leadership sean. Who is much more of a firebrand, who's Who's actually conducted a lot of these negotiations publicly, which is not the way it worked, certainly when I was involved with it or the way I think it's worked most times in the past. And that reflects a couple of things, I think. I don't know Sean Fane, but I think it reflects a couple of things. One, that, in fact, as I'm sure we'll get into, the auto workers haven't really done that well in the last 15 years. And so they do have legitimate concerns, grievances, whatever you want to call it around that. Secondly, the UAW, as I'm sure you know, has been through a variety of corruption scandals in the last few years, had a whole succession of presidents. These were not Ron Gettelfinger kinds of guys. And I think the membership is just angry and frustrated and disappointed in their union. And I think Sean Fane has been able to capitalize that. He's really more of a firebrand than he is a dispassionate negotiator.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“It was very different than today, and I think it was different for a couple of reasons. First, there was a crisis, and as Ram Emmanuel President Obama's chief of staff liked to say, never let a good crisis go to waste. And so the UIW got it. They understood that without this shared sacrifice, these companies would go bankrupt and perhaps even. And lose all of those jobs. And so they got the message in that sense. Secondly, they had a president, Ron Gettelfinger, who I dealt with extensively, who was a very reasonable guy. He had an agenda. He had members he wanted to take care of. We respected that. He respected us. The discussions were always very cordial. Nobody, at least in the meetings I was in, ever started yelling and screaming or pounding.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“In which workers were getting paid even if they were laid off during a downturn, they could get 90% of their wages for actually working. And so it was a very complicated package of a lot of stuff. But we did think that in total it reduced the automakers' labor costs by a meaningful amount.”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source
“Cash compensation of the established workers. I don't want to get into a huge fight with the UAW, but it's important to note that the way the types of concessions that the UAW was willing to make mostly affected these newer workers rather than the established Workers. It was a case of the UAW, in effect, think of it as there was a big pot of money, and how does it get allocated? And the UAW's attitude was that the existence of the Workers should be protected, and the new workers should, in effect, take a lot of the pain. But there were other changes made around health care. Especially for retirees around the so”
2023-09-22 · Odd Lots · Steven Rattner on the UAW Strike and the Challenges of Bidenomics · IDENTIFIED FROM THE TRANSCRIPT · source