One more thing to throw in to the mix is the United States perpetuation of what is nothing short of a terrible energy/transportation policy. Our car driven culture (no pun intended) simply is not sustainable.
Detroit has been one of many forces holding our country back from adopting reforms that will help taken on a better energy strategy. Better land management, including a stop to sprawl is another. We simply cannot afford to continue to build things so far apart. We need communities built so that things such as shared walled housing, walkable downtown districts, and better pubic transit.
The argument comes out a lot that we need 'cleaner' cars. Actually, we need a society that simply uses less cars. Of course, that isn't the America Chrysler, Ford or GM wants (or any other automaker for that matter).
An America that is more efficient and less wasteful is a stronger America. The more we perpetuate the idea that we burn a gallon of gas to get a gallon of milk is the more we set ourselves back.
U.S. Auto Industry deserves the grave they dug for themselves
by drew sagan 76 Replies latest jw friends
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drew sagan
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Big Tex
And throw in the idea that this is the problem when one company gets so large it endangers the national economy if it fails. The logic in rescuing AIG was that it was so large it couldn't be allowed to fail. Same with Freddie and Fannie.
Frankly break them up into smaller, more profitable separate entities.
Part of restructuring should be breaking GM divisions up into separate auto makers. The Big 3 could easily become the Big 6. Then let them stand or fall on their own. -
sammielee24
ford & gm pay workers $70+ an hour, toyota,etc pay $40+ an hour.......we wonder why our vehicles have gone from $3,000 in the 60's to over $25,000 now.if this bailout is done, americans are simply giving in to more extortion from the unions.......magoo
I don't know what planet you got that figure from but my father worked his ass off in the car factory for 30 years and he never once made any $70 bucks an hour. You think it's all that easy for a 60 year old man to crawl in and out of cars and work on a production line? You think he liked getting up at 3 am on a Saturday morning to drive 2 hours to a job that he was mandated 5 hours to work and then get home - or the years he couldn't afford the drive and lived away from his family by boarding at a facility?My father never once complained, not even when there was a strike and he took some part time, back breaking work, picking tobacco...the reason he has a pension now is because he had a union working on his behalf. The CEO's made millions in benefits a year and sorry, but in my mind, without labor you don't make those millions. The reason you have such a decline in this country is because you've decimated the unions - people are working for 5 bucks an hour at 3 part time jobs and somehow that's okay as long as you don't have a union. If those people had one job, a union and benefits that paid them 15.00 bucks an hour, then maybe you'd have a standard of living you want to remain at instead of a declining standard of living you struggle to survive in.
sammieswife.
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BurnTheShips
I don't know what planet you got that figure from but my father worked his ass off in the car factory for 30 years and he never once made any $70 bucks an hour. You think it's all that easy for a 60 year old man to crawl in and out of cars and work on a production line? You think he liked getting up at 3 am on a Saturday morning to drive 2 hours to a job that he was mandated 5 hours to work and then get home - or the years he couldn't afford the drive and lived away from his family by boarding at a facility?My father never once complained, not even when there was a strike and he took some part time, back breaking work, picking tobacco...the reason he has a pension now is because he had a union working on his behalf. The CEO's made millions in benefits a year and sorry, but in my mind, without labor you don't make those millions. The reason you have such a decline in this country is because you've decimated the unions - people are working for 5 bucks an hour at 3 part time jobs and somehow that's okay as long as you don't have a union. If those people had one job, a union and benefits that paid them 15.00 bucks an hour, then maybe you'd have a standard of living you want to remain at instead of a declining standard of living you struggle to survive in.
My grandfather scrubbed toilets for two and three shifts in his first US job. Then he sweated in a sweltering Florida vegetable packing plant for 25 years for what to me is chump change. You think it is all easy for a 60 year old man to be crawling under forklifts and dangerous automated packing machinery? Or out in the hot sun fixing refrigerating units? Or having to deal with the lowest kind of human garbage on a daily basis? He never complained either and his knees are shot to hell.
I want to know: who the hell owes him so we can shake them down?
BTS
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sammielee24
The comment was in response to unions and the bashing that goes on - I didn't degrade any person doing any job. I grew up picking field crops and worked in motels cleaning toilets until I got a job in a factory. I ended up working in administration in a non union environment but in a unionized facility. I've seen it from all sides and I fully support the unions.
Maybe people whose families had to work hard to survive without unions, should do something about the lives of all those people who follow. Maybe if they had unions, the work conditions would have been better and the pay would have helped him. Maybe you could have been an activist for unionization so that others could have had a standard of living that rose with the years instead of remained low or less than it could have been.
People in the country only have the benefits they do - vacation time, sick time, hours of work, conditions of work - because unions pushed to enact laws to help the worker.
I fully support unionization...I may not agree with all the decisions or some of the policies that end up in the contracts - but I fully support their existence and usefulness. Another reason I believe the Obama presidency will benefit all the people in this country...sammieswife.
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Big Tex
Interesting article. Makes sense to me:
http://money.cnn.com/galleries/2008/autos/0811/gallery.autos_crisis_causes/index.html
What's Really Killing Detroit?
SUV addiction
Raking in profits is good, but taking eyes off the car market isn't.
Detroit depended largely on SUVs for sales and profits for many years. But those vehicles were very popular, and there was very little competition from foreign automakers.
In 2002, General Motors sold more than 2.8 million light trucks including 1.2 million SUVs. That was an increase of 6.2% from the year earlier. That same year, GM sold 2.3 million cars, a drop of almost 9% from the previous year.
When gas prices spiked in 2007, buyers suddenly shifted to smaller cars. That was quickly followed by an economic crisis that drove down sales of all types of vehicles. But trucks remain an important part of Detroit automakers' product strategies. Even with marker share for cars increasing, GM sold more trucks than cars in October
At the same time, automakers need to remember that cars matter, too.
What's to come: For now, GM has scrapped work on a future-generation engineering platform for its next-generation big trucks and SUVs, but that doesn't mean these vehicles will go away.
Chrysler recently announced the shut-down of its plant in Newark, Del. that makes the Dodge Durango and Chrysler Aspen full-sized SUVs. That leaves it nearly out of the large SUV business, at least for now.
Lack of small cars
Fact: They do make smaller cars but they're not judged to be competitive.
It's difficult for Detroit automakers to compete with Asian automakers in small cars. Compacts are less expensive for consumers to buy but are still nearly as expensive to build as larger cars. Consumers are also demanding higher quality and sophistication in small cars making it hard to get by with a cut-rate product.
Currently, eight of the nine small cars Consumer Reports recommends are made by foreign carmakers. Only one, the Ford Focus, is domestic.
The real problem is that small cars are often the first cars people buy. Every small car sale Detroit automakers lose is another customer they'll have to work harder to win over later. The lack of strong entry-level products has probably done more damage to domestic automakers than too many SUVs.
What's to come: Some more promising-looking domestic small cars are headed here soon. Ford will begin selling its European Ford Focus and Fiesta here in 2010. GM will also begin selling the new Chevrolet Cruze here in 2010.
And Chrysler has entered into an agreement with Nissan that allows it to begin selling one of the Japanese automaker's small cars here, most likely under the Dodge brand.
Lousy Quality
Fact: Detroit has lagged Toyota and Honda, but Ford has finally closed the gap.
Consumer Reports now considers the reliability of Ford Motor Co.'s cars (leaving aside its large trucks and SUVs) to be about as good as those of Toyota and Honda.
Chrysler has improved too, but it has been overshadowed by much bigger improvements at its rivals. Between 2005 and 2009 Chrysler's score in J.D. Power's Vehicle Dependability Study improved. But the overall industry average improved much more, so its ranking actually sank to well below average.
Consumer Reports considers GM reliability to be much improved, but it's not as consistent as that of other brands, like Ford. GM has made huge strides, however, in the "perceived quality" of its vehicles.
In more recently designed GM vehicles interiors are more attractive and feature richer-feeling materials. Ride and handling qualities are also more sophisticated.
Detroit's past quality problems have left a lingering bad taste for many car buyers though. It's one thing to repair quality. Repairing trust will take much longer and might not happen soon enough.
What's coming: There's no doubt that quality will continue to improve. Detroit automakers may finally have a chance to catch up as the entire industry finds a balance between even more complex automobiles and greater reliability.
Lack of hybrids
Fact: Hybrid cars represent a small and not very profitable segment of the market.
The Toyota Prius alone makes up more than half of all U.S. hybrid car sales. Meanwhile, Toyota makes money while Detroit automakers do not. But it's not true that Toyota is profitable because it makes hybrids - and vice-versa for Detroit
The No.2 seller of hybrids in October was Ford Motor Co. which sold 9% of the vehicles in this country. GM now offers as more hybrid models - seven in all - than Toyota, which offers six. (Toyota obviously sells far more of theirs.)
But hybrids still represent only 2.6% of all U.S. vehicle sales. Last month, Americans bought about 22,000 hybrid vehicles of all types, according to data from R.L. Polk and HybridCars.com. In that same month when overall U.S. auto sales plummeted 31%, GM alone sold more than twice that many full-size pickups.
Because of high costs for batteries and sophisticated electronics, hybrids are more costly to produce, making them less profitable than other cars - if they turn a profit at all. (Toyota has said the Prius does make money.)
Profits aside, Toyota has benefited from the public image boost of being the industry leader in hybrids. A recent survey of car shoppers on Kelley Book's KBB.com auto site showed that more buyers considered Toyota a leader in fuel economy than any other automaker.
What's to come: Ford, GM and Chrysler are introducing more hybrid models over the next two years. GM's emphasis has been on the Chevrolet Volt, a plug-in electric car with a small engine on board to generate electricity for longer drives.
Chrysler has also said it will begin selling a range-extended electric vehicle similar to the Volt at about the same time the Volt goes on sale.
Union workers
Fact: Pay isn't the problem, it's benefits. But the UAW has made significant concessions.
GM, Ford and Chrysler all hire union workers to work in their U.S. factories. But their Asian competitors have based most of their U.S. factories in Southern "right-to-work" states where companies don't have to hire union staff. Combine that with an overall younger workforce with fewer retirees, and Asian automakers have big cost advantages in the U.S.
But even the Detroit automakers themselves don't claim to pay more than Asian automakers working in the U.S. GM estimates its hourly pay for an assembly line worker is about the same as that of someone working for an Asian manufacturer here.
The differences come from retirement and health-care. Detroit automakers pay a lot more per worker-hour because they have more retirees to whom they extend full health-care benefits.
What's to come: The UAW recently made significant concessions that should save GM, Ford and Chrysler a lot of money in the long run.
The union allowed Detroit automakers to pay newly hired workers less per hour than previously hired employees. It also agreed to take over the cost of retiree health care provided the automakers paid lump sums into an investment fund to cover the costs.
Fat executive paychecks
Fact: It's a tough job and their pay is about average, but they may have to take cuts
At $8.9 million, the total annual compensation for Rick Wagoner, chief executive of GM, is slightly below average for a leader of an S&P 500 company, according to the Corporate Library. On the other hand, the average leader of an S&P 500 company isn't on Capitol Hill asking for federal assistance to keep his company afloat.
Ford CEO Alan Mulally makes considerably more than Wagoner. He'll pull in about $12 million this year. Mulally's been to the Hill, too, but he has publicly said that Ford doesn't need bail-out cash. He's there because if GM or Chrysler goes down the cascading financial impact would be bad for the entire industry.
Considering that Mulally was hired from the outside to get Ford back into shape, and that Ford is now the strongest of the Big Three automakers, it could be said that he deserves that money.
Chrysler, now a privately held company, isn't required to divulge how much its CEO, Bob Nardelli, gets paid.
What's to come: In exchange for help, Congress may ask for some CEO scalps. Wagoner has said he doesn't intend to step down and that removing him would only mean bringing in someone with less knowledge of GM and its troubles.
Many industry analysts believe Wagoner has done the best job anyone could given the company's inherent challenges.
But if big automakers do want help from Uncle Sam, they may have to agree to cuts in compensation.
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hillbilly
I fully support unionization...I may not agree with all the decisions or some of the policies that end up in the contracts - but I fully support their existence and usefulness ~Sammilee
I do to.
The UAW has shot the golden goose several time over in the last 50 years. By not policing there members and insuring productive behavior that particular Labor union has helped to bring down the business it relies on for it's members wages.
Walk through a UAW plant mid-shift ...check the restrooms.. most look like a shopping mall week before Christmas. Shop Stewards who can fight and win over theft, document fraud, and general shiftless-ness of individual members.
Of course, at an auto plant one will find that the NON Union personel are just about as entitled as those who pay the dues. AUTO is a pretty dysfunctional lot of folks.
(granpa worked for Olds 33 years)
Hill
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sammielee24
The UAW has shot the golden goose several time over in the last 50 years. By not policing there members and insuring productive behavior that particular Labor union has helped to bring down the business it relies on for it's members wages.
Walk through a UAW plant mid-shift ...check the restrooms.. most look like a shopping mall week before Christmas. Shop Stewards who can fight and win over theft, document fraud, and general shiftless-ness of individual members.
Of course, at an auto plant one will find that the NON Union personel are just about as entitled as those who pay the dues. AUTO is a pretty dysfunctional lot of folks.
Which is to say that is the same argument we have with teachers unions, nurses unions etc. There are varying levels of corruption and laziness at any level in any environment - union or non union alike however, I don't tar them all with the same brush. The auto companies have made some bad decisions and got lazy in the area of competitivness and progress. People have complained, including those working in the industry about those things for years. One factor that rears up again and again in the industry in the USA, is the cost of health insurance - a factor that doesn't exist in some of the other countries they set up shop in. The UAW isn't any worse than any other union - the CEO who earned 8 million bucks only got his bonus because the guys on the floor did their job. That's the way it is. Perhaps GM etc should have parlayed those bonuses into a lower percentage and put more of the profit into progressive vehicles. Free trade also played a major role so while we can all agree that everyone involved has to take some responsibility for the mess it's in now, all the blame cannot be placed on the shoulders of the union or the people working in those unions. For that reason, I still support dollars from the bailout funds going toward the auto makers in order to keep those millions from losing their jobs. It's a no brainer as far as I'm concerned - it's too late to worry about the trillions in debt now..might as well move forward - give them the loans, put conditions on them and look at all facets of the business, including the free trade agreements, in order to save those jobs, keep the economy moving and make headway. Allowing the companies to crash at this time, will throw close to 3 million people on the unemployment rolls and with that unemployment, follows retail, services, healthcare, education and a further reliance on government funds to exist.
We should note that a bunch of plumbers are asking for bailout money too because they consider themselves a bank..the mayors of any number of cities are asking for money - just about anybody and his brother wants a shake at the jar - and I don't see it stopping any time soon.
sammieswife.
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hillbilly
I don't tar them all with the same brush~SL
Neither do I. Outside of a few big Locals in the North East you could not get away with half the stuff that goes on in an Auto Plant if you were a Carpenter or electrician, etc. matter of fact...when we go to a plant on a shut-down (to do what never got done all year by the UAW folks in "trades") we get a little ashamed for those guys. We get a years stuff of work done in about 2 weeks. And not just stuff that the line needed to go down for either.
I blame managment for some of that ... they are dolts. Cousins to some of the college guys who run Power plants.
Even in the Union business ... we talk about how the UAW doesnt get the concept of "value added" when it comes to labor. That is the bread and butter of the trades sector...manufacturing never got it (until it was too late).
Nutshell... UAW has priced the membership right out of a job. Not just wages... some of the backwards work rules, transfer policies etc. It all costs.
Hill
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beksbks
I don't have time to read all this thoroughly right now, but my question to all you anti union people is this. Are you anxious for America to get into a race to the bottom? How is it going to help this country keep rolling along, if we keep letting them drive wages down?? Please explain how this works?