Fixing GM...

[Larry Gude]

Wash Post...David Ignatius

http://www.washingtonpost.com/wp-dyn/content/article/2005/12/01/AR2005120101174.html

A Japanese economist he had known for many years asked him a stark question: "What great nation will allow its major manufacturing company to fail?"

Reasonable, as far as it goes.

But suppose we took GM's near-death experience as a national wake-up call and decided to get serious about reviving the long-term health of the U.S. manufacturing sector. What if political leaders treated this as a fundamental national mission, equivalent to President John F. Kennedy's call to put a man on the moon? Could government make any difference?

The bait.

Try this thought exercise: Suppose a government plan could revitalize the automobile industry and the rest of the transportation sector, encouraging it to leapfrog several generations of technology; suppose this same plan could cut U.S. dependence on foreign oil to zero; and suppose, finally, that the plan could develop new technologies that would bump our economy to a higher growth path and foster U.S. economic leadership in the 21st century. Would that idea be worth exploring?

The hook. I blew frosted mini wheats, banana and blue berrys all over the paper and had to re-read it on line.



Our Japanese economists is coming from a Japanese background; private enterprise coupled with strong national support.

The US model is the US way. GM, like Ford, like Standard Oil and like Cat and endless other US companies over the years stomped a mudhole into global competition and walked it dry WITHOUT much in the way of national backing. Our companies just won because they simply dominated. Can you say "Microsoft"?

The one thing the Feds actually built was the space program and we're not exactly talking about a product that beat all comers off the shelf. We're talking boutique, single customer stuff here. Nor is NASA any model of efficiency or resourcefulness. Neither the model T nor the C series pick up truck came from Washington DC.

If anything, Dear Mr. Ignatius, government plans were the end of Standard and, most recently, with Microsoft, not exactly a partner for developing or winning squat.

Simply put, GM has been to slow to react to reality. Part of reality is the albatros hung around its neck in terms of wages and benfits to people who don't produce anything anymore; retirees.

Now, why'd GM sign so many labor contracts that spelled potential doom? A major reason was because the government helped make it so. Anything as big as GM was is a simple target for politicians to take a chunk out of; make my constituents happy or you will have an enemy in congress. Make them happy and you will have a friend in congress.

Be careful who you sleep with.

GM's path to renewal, check that, survival, is to get lean. Not exactly a government specialty.

There was no governemnt plan that brought GM to existence. There was no government plan that helped GM leapfrog in technology and grow to such dominance. There will be no government plan now.

Far, far from it.


The one thing the feds can do is figure out a way to deal with what is due to retirees. They helped make that mess through implied and tacit understandings or government help. If the feds could go back in time and change one thing that would have prevented GM's current pickle it would be to eliminate rules and laws that allowed GM and others to underfund retirement plans and make all those great promises for the future.

In that case, GM would have never made the promises and would not have the problems today.

There's your great government plan; Get out of the way.

 

[dustin]

If GM, or any US auto manufacturer, wants to stay in business they will have to change to compete. And they will have to change by doing it themselves. This is the only way for them to take ownership in their company.

 

[dustin]

linky to info about the 30,000 jobs and reasons for GM cutting them

Ironically, the Navy is facing a lot of the same things GM is. Albeit with bombs on target being the deliverable vices vehicles sold. I can see where GM is having issues with retirement pay, as retirement pay and health care are some of the most expensive things for the DOD.

 

[Pete]

If GM, or any US auto manufacturer, wants to stay in business they will have to change to compete. And they will have to change by doing it themselves. This is the only way for them to take ownership in their company.

U A W

 

[ylexot]

GM's path to renewal, check that, survival, is to get lean. Not exactly a government specialty.

It might also help to make products that consumers want. Have you noticed Ford's recent commercials touting fuel economy and hybrid vehicles? I haven't seen anything equivalent from GM.

In general, I think US auto manufacturers have been living off of brand loyalty for far too long.

 

[Larry Gude]

That's the worst part!!!!

It might also help to make products that consumers want. Have you noticed Ford's recent commercials touting fuel economy and hybrid vehicles? I haven't seen anything equivalent from GM.

In general, I think US auto manufacturers have been living off of brand loyalty for far too long.

Americans by and large are more than happy to buy American and are willing to pay for it....IF it's a quality product.

We've bought two Toyotas in a row and they ain't cheap but they were so easily worth the extra $5 to 10 k over Tahoe and Trailblazer and Expedition and Dakota and all the rest.

Toyotas say 'quality' from the road test to the fit and finish to when you open and shut the stupid doors.

Build it good, US. I'll buy it and pay for it!

 

[vraiblonde]

This is what happens when major manufacturers or service companies go union - they begin to suck so bad that nobody wants their crap. I defy anyone to name one union company that delivers an excellent product in a cost-effective manner.

I love my Toyota so much I bought their stock and it's done very well. US auto manufacturers are no better than welfare recipients who lay around on their ass with their hand out, begging for money for doing zip zilch nada. Airlines are the same way.

So to hell with GM - I hope they have to close their doors. That's what they get for running a welfare line instead of a real business.

 

[Larry Gude]

Well...

...there's a catch 22 there...

I defy anyone to name one union company that delivers an excellent product in a cost-effective manner.

I can't speak for cost effective but in construction, the union elevator and escalator guys were simply better, way better. Lotta other trades to.

There are areas like construction and trucking and probably airline maintenance and so forth that benfit from removing time pressures from critical jobs and only a good union is strong enough to be able to enforce a consistent level of professionalism.

I worked non-union and it was alla bout get it done and blame another contractor if something went wrong. Hi pressure and they'd hire anyone, including guys who were, get this, thrown out of the union.

Not all unions suck.

 

[Ken King]

Some Toyotas are "union made". The US plant that makes the Corolla and the Tacoma are both UAW plants. http://www.uaw.org/uawmade/cartruck2006.cfm

 

[vraiblonde]

The US plant that makes the Corolla and the Tacoma are both UAW plants.

Now I want to go test drive them and see if they suck as bad as other UAW cars.

 

[Ken King]

Now I want to go test drive them and see if they suck as bad as other UAW cars.

Check the VIN as some are made in the US, some in Canada, and some elsewhere. The link gives the values for the US plants.

 

[Nickel]

My Nissan was made in Tennessee. :shrug:

 

[gumbo]

U A W

You got it, thats the problem.
No one can keep paying no skilled clowns $30 an hour plus and binnies,
to put in bumper bolts or door panel screws.
Union workers have bled the well dry.
Ironically we will see these same, no skilled clowns faces on our TV screens soon enough.
All of them boo hooing about how they don't know what they will do now.
Like they really didn't know they were riding a cash cow, being over paid.
Like most people that make good money and not really earning it.
They over spend and are financed to the gills.

Well good..Let um eat bean sandwiches. they drained another perfectly good American manufacture dry.

It's not that Toyota's and Nissan's were better.
It's that GM along with others have cut corners so much trying to over come, over paid union no skilled clowns.

 

[dustin]

It's all too little too late. GM is only beginning to operate outside of the normal Ford type mass production system. Toyota has been operating in a demand based pull system since the 1940's.

IMO unless GM has a radical shift across the board in the next few years, which includes contracted parts suppliers, the unions, etc., they will keep heading downhill...and out completely.

 

[ylexot]

I saw on the news that Ford is having problems too and is going to be laying people off...

 

[Pete]

You got it, thats the problem.
No one can keep paying no skilled clowns $30 an hour plus and binnies,
to put in bumper bolts or door panel screws.
Union workers have bled the well dry.
Ironically we will see these same, no skilled clowns faces on our TV screens soon enough.
All of them boo hooing about how they don't know what they will do now.
Like they really didn't know they were riding a cash cow, being over paid.
Like most people that make good money and not really earning it.
They over spend and are financed to the gills.

Well good..Let um eat bean sandwiches. they drained another perfectly good American manufacture dry.

It's not that Toyota's and Nissan's were better.
It's that GM along with others have cut corners so much trying to over come, over paid union no skilled clowns.

I have to agree. I have an uncle who has worked at Fisher Body (GM) plant for 32 years. He is on layoff right now 2 years shy of retirement age. He is unskilled, I wouldn't go so far as call him a clown but he started out assembling and has moved around the plant as automation came in. He makes an astronomical wage for what he does. Right now he drives a fork lift delivering large parts to the line for the tidy sum of $34 an hour courtesy of the UAW. Now he is a great guy and a relative but $34 an hour to drive a fork lift inside a building?

Well he is actually layed off and has been since May. He still draws his full salary, paid by GM but instead of going to the plant he works for the local Commission for the Aging helping old folks with fix it jobs they can't do for themselves as part of a union deal with GM that will not allow GM to lay off workers. Instead GM still has to pay a person full wages, but gets to write the cost off as charity.

It will be a miracle if he escapes the 30K layoff GM announced in November. He needs 2 more years to qualify 100% for his pension. Yes on top of getting $34 an hour for unskilled labor he has a qualified pension plan and a kick ass bennie package. He doubts he will last the 2 years because he is too junior in the work force. 32 year? Too junior? How is this possible? Seems people start at GM and it is such a cushy job they NEVER leave.

 

[gumbo]

I have to agree. I have an uncle who has worked at Fisher Body (GM) plant for 32 years. He is on layoff right now 2 years shy of retirement age. He is unskilled, I wouldn't go so far as call him a clown but he started out assembling and has moved around the plant as automation came in. He makes an astronomical wage for what he does. Right now he drives a fork lift delivering large parts to the line for the tidy sum of $34 an hour courtesy of the UAW. Now he is a great guy and a relative but $34 an hour to drive a fork lift inside a building?

Well he is actually layed off and has been since May. He still draws his full salary, paid by GM but instead of going to the plant he works for the local Commission for the Aging helping old folks with fix it jobs they can't do for themselves as part of a union deal with GM that will not allow GM to lay off workers. Instead GM still has to pay a person full wages, but gets to write the cost off as charity.

It will be a miracle if he escapes the 30K layoff GM announced in November. He needs 2 more years to qualify 100% for his pension. Yes on top of getting $34 an hour for unskilled labor he has a qualified pension plan and a kick ass bennie package. He doubts he will last the 2 years because he is too junior in the work force. 32 year? Too junior? How is this possible? Seems people start at GM and it is such a cushy job they NEVER leave.

No offense intended. It's just,I grew up near the GM Plant in Los Angeles.
I knew allot of lazy clowns that worked there and at General Dynamics.
Some of them being from 2nd and 3rd generation GM workers.
The rest being from some unskilled union slug family.
I know someone has to do it. But to make that kind of money putting in left side tail lights or door panel screws all day is just retarded.
If you know what General Dynamics makes. Here's the scary part.
General Dynamics would get most of the GM rejects.

 

[Larry Gude]

GM would be OK...

No one can keep paying no skilled clowns $30 an hour plus and binnies,

...if that's all it was. As Pete mentioned a guy driving around delivering parts is making $34.

I got a guy who helps me out part time and he's trying to get up to speed with Mac in Hagerstown. He says there's these older guys eligible for early retirement whom their wives make 'em go to work everyday because the way the rules work these guys have accessed every wage multiple there is and they get over $100 an hour for eight hours for what amounts to 2 hour days BUT they got to show up every morning.

In between them and the parts guys are the bulk, people making $40-60 an hour.

Now, I'm a capitalist through and through and I don't care if a guy makes $1,000 an hour on the line if it works from a supply and demand standpoint.

If you have 100,000 people making $10 an hour more than what the job is worth, that's $1,000,000 AN HOUR that your company is bleeding. That's $2 billion a year.

That's why some hot shot gets a $20,000,000 bonus; he comes in, starts cutting and slashing because the entrenched can't or won't, to get expenses in line for years to come and in exchange gets 20 hours worth of company labor savings.

Of course, the Union will come along and fight tooth and nail for every penny and everyone will look at the lost sales vs. the expenses of a shut down (aka 'strike') and see how long they can hold out.

All the while, agreements made in the past, pension dollar amounts, healthcare costs and so forth continue to mount.

And still, the one thing that both sides can control, the one thing that can make all the problems bearable, quality, suffers.

So, I buy a Sequia for $45k instead of a Tahoe that listed at $40k and was offering $10k in rebates.

Why? The market. My three year old Yota is still worth what Chevy tried to sell me new, $30k.

And I'd buy a used Toyota over a new Chevy or Ford.

 

[tikipirate]

At the same time GM announced the 30K layoffs, the UAW announced they had billions in their strike fund, enough to strike Delphi for 8 months.

So instead of trying to keep GM production up and revenues coming in (as much as possible, anyway) the UAW is still boasting about ways they can screw GM. Then they act incensed when layoffs are announced.

 

[Larry Gude]

That will only make the problem worse...

At the same time GM announced the 30K layoffs, the UAW announced they had billions in their strike fund, enough to strike Delphi for 8 months.

So instead of trying to keep GM production up and revenues coming in (as much as possible, anyway) the UAW is still boasting about ways they can screw GM. Then they act incensed when layoffs are announced.

...GM cannot, if it isn't obvious enough, continue with the added problem of having a union loaded or bear and prepared to sit for the long haul.

Stockholders might be in favor of some sort of deal to get the unions to back off. Prospective stock buyers aren't coming near a company that has a gun pointed at it's head.

The union is begging for attention.

There was a tire plant in Nebraska that recently, the last year or so, TOLD it's employees, all union, that all operations of the plant were getting moved to South America and if the people agreed to certain conditions, wage and benefit considerations, they'd leave the plant open for about 400 of the most senior people for something like 20 years, to get them all to retirement.

They said "No!" to the concessions.

Goodyear shut the plant.