Detroit needs to face the unspeakable...

[HardDrive]

If US automakers are going to survive, I see them only having two choices.

First, break their relationship with the UAW. Forget playing nice, and simply go on a union busting campaign. There will be a massive backlash, but given the weak state of unions in this country, they could ride it out.

OR

Second.....become foreign automakers. Move all their plants to mexico or asia, at least for their low margin small and midsize cars. They will never be able to compete with the foreign companys on these models with our current labor prices and huge retirement plan obligations.

Agree? Disagree? See other options?

[red-beard]

Originally posted by HardDrive
Second.....become foreign automakers. Move all their plants to mexico or asia, at least for their low margin small and midsize cars. They will never be able to compete with the foreign companys on these models with our current labor prices and huge retirement plan obligations.

Too late, they've been manufacturing in Mexico for years...And Honda makes the Accord in the USA...

[2.7RACER]

This is a difficult problem. In the '70's Detroit was so arrogant that they just ignored the 10% penetration of foriegn cars in the US market. They said it was just a left coast thing that would blow over.
All of the US manufacturers made poor quality small cars and not much better quality large cars.
In the '80 when cars just weren't selling much of the blame went to the Americans that bought foriegn cars. Detroit lost 200,000 auto workers in five years.
I was there, I saw the people lined up in the snow for unemployment benefits. I saw the value of homes drop 15% to 20% and more.
In the '90's the folks in Detroit finally got the message and began building better cars with reliability to match the imports.
Unfortunately the foriegn cars were taking close to 25% of the market. The trend has continued into this century. Americans almost believe Honda's and Toyota's are American cars.
At the premium end BMW, Lexus, Mercedes and others found American buyers looking for quality and value.
The old American premium cars like Cadillac, Lincoln, Chrysler, Buick, etc. somehow got lost in the shuffle. They weren't viewed as the best cars for the money. These are the same brands that were the best in the '50's and '60's.
What happened? My view, an arrogant Detroit reacted too late to the competition from Japan and Germany.
The Japanese and German auto workers are paid very well. The Japanese cars made in America are assembled by well paid American workers.
So the problem isn't only over paid American union workers. The responsibility must be laid at the feet of the decision makers in the Detroit auto business. There are thousands of exec's paid over $100,000 a year to decide what gets built and how much quality goes into the product.
Don't these exec's bear some of the responsibility?
Is all the pain to be laid on the workers?
Is this another case of "well the American worker is going to have to compete on the world market with incompetent leadership".
With all this free trade we find ourselve in the fight of our lives to sustain the American way of life, the middle class.
Either we get better at making truly world class cars and everything else or we just continue the slide into less for us and even less for our children.
We need to look at everything we do, political, education, maybe even backing off some of this free trade.
We can't stand by while our nation slips away.

[tabs]

I wish I could be optimistic, but I ain't....It's going to be business as usual as your stabndard of living just slips alittle more each year that goes by.

W

[M.D. Holloway]

Harddrive & Redbeard - what say you do rock-paper-scissors for the use of that avitar!

[red-beard]

I've been using it since the summer of 2000...

It would be like Nostatic changing his...

[Shuie]

File for a gov't bailout so they can stop paying out pensions and get rid of the union. Outsource more. Keep beating their vendors down so they can make the same piece of crap cheaper than they made it last quarter

Or maybe they could just make a better car. Sounds simple enough. Its probably not. Its probably flat out wrong if I think about it. The employee pricing strategy seemed to work very well for them. Gas prices kept going up all year and they kept selling Yukons and Explorers. People are perfectly fine owning crap if they can get it for a low monthly payment.

[red-beard]

I am in an extremely mature industry. We make gas compressors. In the past year, we have started re-vamping our line and we are scaring the competition to death. This is not a union issue, but a management and decision issue.

Seriously, they need to embrace a real quality driving, data based management style. They need to listen to the employees and not just give stuff like this lip service. They need a much faster development process for new cars. They need to not meet federal regulations, cause they have to, but exceed them to differentiate themselves.

GM going under would not be the death of the auto industry. It would mean a shift of those workers to another manufacturer. GM would be better off to split off those divisions that are making money, spin them into other companies, then sell the remainder to other car companies, or go out of business.

[M.D. Holloway]

I worked on projects with Delpi in the past - what a boondoogle! real bright guys there, almost too smart if that is possable but the buracracy and lack of focus made every project take 3X longer than it had too. Even the folks at GM - namely purchasing seemed to be of the same stuff that makes up the New Orleans levie system - good enough guys without a clue.

I'm with you - break them up, make them lean, maybe they will come back maybe not. It worked for others (Bell?).

[oldE]

Tabs,
I agree with you 100% on this one. It was "Don't worry, be happy" for too long. While Japan was introducing us to efficient cars that ran for years, Detroit was pushing 'personal luxury' cars.
2.7 racer covered most of the main points. The biggest selling tool in the North American auto makers' tool box now is nostalgia: Mustang, Charger, PT Cruiser, SSR, T-bird.
Even Bob Lutz pushing the Solstice into production has come up with a Miata clone that has no trunk when the top is down.
Where is the leadership? Has the CMA generation of auto executives emasculated the NA auto industry? Chrysler has the cojones to push the envelope, stylistically, though they too have burrowed into their past to try to recapture a lost audience.
I agree it is good to see cars like the Caddy CTS (an Opel chassis), the GTO, (ditto, with a detour Down Under), the Ford Focus (Whoops, we don't get the new Europe only version) and the Fusion, (Oh yeah, that's a streatched Mazda 6), but it would be so good to see 'Detroit' come out with something better than a truck with four doors.
What we have been watching is the equivalent of the fall of the Roman Empire. And not just in the automotive sense.
Les

[kach22i]

Blaming the workers or the UAW is like Ford blaming the suppliers. Now the suppliers must have a high percent of their product made in China or meet Chinese pricing (it's in the contracts). So the US worker should work for third world wages? Could you?

The inefficient culture of doing business and making decisions is killing Ford and the others. It's the internal politics doing them in as much as outside competition.

Sure there is the retired workers, age of workers and health cost making for a lot of overhead for the older US companies, but that's not the whole story.

Look to the CEO salaries and bonus before you hit the little guy again. The little guy buys the cars he/she makes and that helps the economy.

No more trickle down stuff, the only thing to trickle down has been down my leg – not good.

[Shuie]

I'm not blaming any union. We wont find the answers to all of GM or Fords problems here. Its not that easy. If it were, they would have been fixed a long time ago. There is no single answer for fixing things like this.

How many employees do GM and Ford employee globally? Several hundred thousand each at a minimum. A company that big cant exist without a high level of bureaucracy and inefficiency. Lean or progressive management styles are not an option and change is always slow.

Don't forget that companies like this sell more than just cars and function on a global scale. I know things look bad for them in the US as a car company these days, but they are making money somewhere. If they were losing money in every country or logical division of the company they would have closed the doors. Where are they making money? I bet their finance divisions are making a ton of money.

[turbo6bar]

Ford bonds are hovering at 11+%, so the market doesn't like their forward outlook.

There needs to be widespread suffering, maybe kicked in the nuts type suffering. Everyone from the top to bottom (including retirees) needs a swift kick in the ass. What the fock were you thinking?

[Superman]

Unions are to blame. Make them read all the laws first before they get started, that way they won't have time to make new ones. Perhaps this over-simplistic view is what's gotten American auto maker management folks into the jam they're in. German auto workers are still COMPLETELY unionized and make terrific wages and benefits. But then, over there, companies wouldn't dream of bargaining with workers WITHOUT a representative. The good companies I deal with would not want to deal with worker issues without a representative. There is the viewpoint that the workers are the ENEMY, and then there is the viewpoint that the workers are the MEANS to profits. That's how we're getting our asses kicked. And not just in auto industries.

But then, that's a bit too complex for the blamers and propaganda-munchers. Far easier to cry "Burn him, he's a WITCH!" while tossing your empty beer cans at the TV screen.

[Tim Hancock]

Supe, do you think grossly overpaid workers who do not have to perform in order to keep their jobs, is in the best interests of a company trying to survive in an increasingly competitive market? A simple yes or no will suffice.

[Superman]

No.

[David]

I think they need a good blood letting starting at the top. Unfortunately these turn into popularity contests. For every good story I hear from auto industry people, I hear 5 horror stories.

I work for a utility company that had over 12,000 employees until deregulation. Now we're down to 1200 with just the power plants. As a relatively young employee, it always drove me crazy with the old utility mind set. Especially the employees that are over 40 that are used to spending half their day drinking coffee and shootin the *****. Then you've got the old guys that want to do everything the way it's always been done which I think is a big part of Detroit's problem.

[Superman]

There was your simple answer. Now my turn.

Do you think that the union is to blame when our auto makers are getting their asses kicked by German auto makers who pay wages and benefits as high or higher than ours? And a bonus question. When a hundred thousand workers for one company are highly productive, and another hundred thousand workers at another company are lazy and unproductive whose fault is that? Multiple Choice:

a) Union
b) Workers
c) Management

[DaveE]

Originally posted by Tim Hancock
Supe, do you think grossly overpaid workers who do not have to perform in order to keep their jobs, is in the best interests of a company trying to survive in an increasingly competitive market? A simple yes or no will suffice.

Tim, I worked on an auto assembly line for a few months a long time ago. A car a minute for 8 hours. Show me someone who doesn't do his job and I'll show you someone who isn't there very long. Also, look for an import at a GM plant parking lot. They are few and far between I'll guarantee. The hourly guys are pretty loyal.

[Tim Hancock]

Originally posted by Superman
No.

Wow, I underestimated you Supe!