Peter Morici: Why The Big Three Left Washington Empty Handed

[kach22i]

Peter Morici: Why The Big Three Left Washington Empty Handed
http://enterpriseforum.com//Article.asp?id=306707
The leaders of General Motors, Ford and Chrysler recently had their long awaited summit with President Bush..........................

He makes some good points.

[RallyJon]

The managers who are running those companies so poorly, with a track record of appallingly short-sighted and greedy decisions, asking for policy changes to facilitate their recovery from their mistakes--what a crock of sh-t.

How about you plow your dividends and bonuses into R&D for a few years you incompetent fools?

[sammyg2]

Toyota and Honda are rock-solid in the reliability dept,

LOL the transmission in my toyota Tundra was replaced after 30,000 miles. There is a recall on it right now to replace the front ball joints.

The electronic rear differential in my wife's Honda pilot was replaced at 22,000 miles and the transmission was modified (under a recall) at about 12,000 miles.

Yopu nailed it on the head with your observation of a quality stigma, people think that the hondas and toyotas are a little better than they really are and that the american cars are a little worse than they really are (except for that ford crap, I hate fords ).

[cashflyer]

I really find it hard to believe that there are people who are so ignorant and/or stupid enough to defend and support unions, and yet are somehow still functioning members of society. Seems like you would be able to spot them by the drool on their chin and the glazed look in their eyes.

Toyota’s hourly labor costs at U.S. plants are about $35. At the Detroit Three, it is about $80, thanks to cumbersome work rules, excessive sick leave, extra time off, and other benefits imposed by an arcane UAW contract.

[legion]

Quality is directly related to the union issues.

If an engineer for G.M. wants to see if parts on the line are deficient, he has to call in a union supervisor to go and get the parts he wants to inspect. Guess what happens? The union supervisor goes and picks out the best examples of parts. The engineer wants to see the parts with problems so that he can correct the problems, but the union prevents him from ever being able to see and diagnose any problems.

[Tim Hancock]

Originally posted by sammyg2
LOL the transmission in my toyota Tundra was replaced after 30,000 miles. There is a recall on it right now to replace the front ball joints.

The electronic rear differential in my wife's Honda pilot was replaced at 22,000 miles and the transmission was modified (under a recall) at about 12,000 miles.

This supports your observation of a quality stigma, people think that the hondas and toyotas are a little better than they really are and that the american cars are a little worse than they really are (except for that ford crap, I hate fords ).

Sammy, no doubt you are in the minority. My Dakota 4 x 4 was in the shop 8 times before I traded it at 40,000 miles for my Tacoma 4 x 4, which I have only changed the tires and oil after 70,000 miles.

Dad's put over 200 k on all four of his previous Accords (my brother just junked his last one at 325,000 miles due to a slipping tranny).

I will NEVER EVER EVER EVER buy a car from the big three again!!!!!!!!!!!!!!! I could give a rats's arse about the UAW. I love and have served our country, but the big three lost my respect in the early 80's and I could care less what happens to them.

[john70t]

Don't forget the gov has a limited pension protection plan for failed companies, while the CEOs(in so many fields) get a golden parachute regardless of performance. I'm suprized shareholders haven't been banging on the door with pitchforks and torchs.
The sales problems are probably a carry-over from the 80's/90's reputation combined with incompetent managment, deceptive lease-plans, pressured sales, and a consistent history of ignoring the US customer.

The Teamsters and IAM did (much)less than sh&t for me, but then there's the fear of LA street-pickup wages in every worker.
Don't say "they" wouldn't....if they could.

[Porsche-O-Phile]

+1 to what Wayne said. . . Perception is more important than reality sometimes.

[legion]

Don't get me wrong. I think management is as much to blame.

I wonder if management at the Big Three would make more headway if they said: "We will cut executive compensation by 50% if the union makes the following concessions..."

Ironically, my Fact-A-Day calendar has the following entry today:

What pay ceiling did financier J.P. Morgan believe should be set for a company's top manager?

A: No more than 20 times the pay of the company's average hourly worker.

[m21sniper]

- Unions. There was a time in this country when there were sweatshops and dangerous working conditions. Those days are (mostly) gone, but the pendulum for unions has swung the other way. Unions now extract and exort concessions from companies with a significant clout. In reality, the companies really have very little choice in the matter - either give in to the unions, or they will strike and put the company out of business. In order for big Detroit iron to survive, they will need to extract significant concessions from the unions. This won't happen until they are in bankruptcy, or almost near to there. The model for this is the airline industry. Years of bloated union contracts have melted away in the sea of bankruptcies that we've recently seen. These companies that have emerged from BK are now healthy, competitive, and paying a market wage instead of an artificially inflated one. There is a time and place for unions, but right now, they seem to be their own worst enemy.

Agreed.

- Reliability. US cars have been notoriously crappy over the years. Getting rid of that reputation has been very difficult, despite many advances in quality recently. The stigma still remains - Toyota and Honda are rock-solid in the reliability dept, but anything out of Detroit is may be a crap shoot. Recent studies have shown that the US car makers are close or on par with some of their models as the Japanese, but the reputation from past mistakes is a difficult one to shake.

-Wayne [/B]

This point i dispute.

I've personally blown up twice as many Toyotas as American cars.(yes, that's all american cars vs ONLY toyotas- and i've only ever owned 3 toyatas!)

As an ex-auto tech, it is my humble opinion that japanese cars are overpriced junk, as opposed to amercian cars, which are underpriced junk.

Is it really any wonder why i drive German?

[sammyg2]

Yep, I've had good luck over the years with other toyotas but my last truck was a chevy silverado.
150,000 miles, the only thing I had to do other than routine was change a wiper motor (later recalled after I sold the truck), a door handle, and a water pump. Not bad for 8 years of service.
I was going to buy another one except the dickwad asshat salesman started playing his sillyassed games and telling me lies that only a fool would believe.

I left and drove to the nearest dealer which happened to be a toyota dealer, and bought a tundra. As soon as it had gas in it I drove it over to show the asshat at the chevy dealer what happens when you treat people like they are stupid. That was fun.

Next fall I'll probably trade it in and get a new truck and chances are it will be made in the good ole USA (toyota Tundra). No offense to our Canadian friends, where the chevys and fords are put together.

[Superman]

For the most part I agree with Wayne.

Design - Yup.

Unions - Wayne did a respectful job of describing this problem. I agree that unions should consider concessions. Unfortunately, the politics of union leadership will preclude this. I disagree about airlines. Sixteen dollars an hour is actually not what I want to pay for the mechanic that maintains aircraft that carry me aboard. That compensation package should be moved in the OTHER direction. But just as politics works against sense in union leadership, driving maintenance costs forcefully downward as a way of competing with another airlines who are already doing that......is going to bite us. Hard.

Reliability - Absolutely. This is not just perception. I'm not sure anybody knows what it would take to kill a Toyota engine. They simply don't fail.

And again, finally, I think it is hilarious that anyone might kinda, sort of, tentatively, admit the possibility that management might, maybe, in some cases, be responsible for the health of the company they direct. But it's all the unions' fault. Legion, that's like saying that the driver might, maybe, in some ways, sort of been responsible for the collision but those darned tires were really to blame. Talk about shifting responsibility. Really. Consider the twisted logic that's got you blaming company fortunes on everyone but management. Think.

[legion]

Your analogy doesn't hold water Supe. Tires can fail while the vehicle operator is doing nothing unsafe or unusual--especially when they are of low quality. Consider that analogy.

[Tervuren]

Originally posted by Superman
For the most part I agree with Wayne.

Design - Yup.

Unions - Wayne did a respectful job of describing this problem. I agree that unions should consider concessions. Unfortunately, the politics of union leadership will preclude this. I disagree about airlines. Sixteen dollars an hour is actually not what I want to pay for the mechanic that maintains aircraft that carry me aboard. That compensation package should be moved in the OTHER direction. But just as politics works against sense in union leadership, driving maintenance costs forcefully downward as a way of competing with another airlines who are already doing that......is going to bite us. Hard.

Reliability - Absolutely. This is not just perception. I'm not sure anybody knows what it would take to kill a Toyota engine. They simply don't fail.

And again, finally, I think it is hilarious that anyone might kinda, sort of, tentatively, admit the possibility that management might, maybe, in some cases, be responsible for the health of the company they direct. But it's all the unions' fault. Legion, that's like saying that the driver might, maybe, in some ways, sort of been responsible for the collision but those darned tires were really to blame. Talk about shifting responsibility. Really. Consider the twisted logic that's got you blaming company fortunes on everyone but management. Think.

So, you are saying my motor blowing parts from the inside to the outside - was the driver's fault?

[Icemaster]

Originally posted by Porsche-O-Phile
[BPerception is more important than reality sometimes. [/B]

Perception BECOMES reality...

[Moneyguy1]

Having experience with a number of marques over the years, I would rather have a Ford sedan than a Passat. I have hed the misfortune of owning three German cars (other than the Porsche buys over the years) and none of them lasted past 30k without SERIOUS problems. Have had four Fords that have in two cases passed 150k without anything but normal maintenance.

[MichiganMat]

German, Japanese, American... all junk.

I drive a Land Rover. God Save The Queen!

[JSDSKI]

Originally posted by legion
Your analogy doesn't hold water Supe. Tires can fail while the vehicle operator is doing nothing unsafe or unusual--especially when they are of low quality. Consider that analogy.

Yeah, I guess the driver had no choice when it came to brand or quality. Those crummy tires just put themselves on the car in the dead of night - while the driver was asleep. Poor guy. Probably had a union guy choose the tires for him. Certainly wasn't one of the procurement managers or directors who made that choice or squeezed the last cent out of a supplier to help the stock ride a little higher just before quarterly dividends.

Naw, the free market would never let that kind of thing happen.

Poor old board of directors and managers just cruizin' to their year end bonus when some freakin' union guy picked the wrong tires and negotiated another bad vendor contract again. Then there's the damn engineers with their constant whining about grade 8 bolts....

There's enough stupidity and greed for blame to be evenly handed out....

[dd74]

The CTS is actively saving Cadillac. It is a very good car, on par with BMW, Mercedes and Audi. It is just as fast, handles as well, and has better build quality than at least Mercedes and Audi.

And if that's enough, the CTS-V will hand a C-series AMG its ass, and take care of an M3, if properly driven. And all for, what, $45,000 if you wheel and deal.

Put all this together with high success at the race track with a car that has approaching 60% off-the-shelf factory parts, and one could say, at least within Cadillac, that American cars are just as good.

Their design is nice, to boot. The 2008s look even better.

So the fact is, the American car companies can do. They have good products. You just have to sift through the crap to get to cars like the CTS, the 3000M, the Cobra, or the (gasp!) marked-up $250,000 Ford GT.

[MichiganMat]

I've been reading about the management of the Big Three throughout the second half of the 20th century and, honestly, its a miracle they've made it this far. With all the backstabbing, inside jobs, failed projects, and overrall greed, I can hardly believe some of them are even still in business.

Ever hear "The Aristocrats" joke? Its become more and more real with each page I've read.