My wife told me about this video. In just three minutes you are hit with the real reasons why a Big 3 Auto Maker bailout is simply not a good idea. What do you think?
Unions and minimum wage have driven manufacturing out of the US, forcing people to pursue services jobs as the replacement. it does't take 75 dollars an hour to build a car.
The President of the UAW has stood up and said the union will not accept any more cuts. NO cuts in payment or benefits. A friend of mine has said he would be happy if the Big Three moved their entire production to the South (Southern US), therefore finally able to shake free of the unions entirely and compete with the foreign car makers on an equal footing. What he doesn't understand is if The Big Three do move their ENTIRE operations South, it will be SOUTH of the U.S. BORDER to Brazil or Mexico, not to North Carolina or Georgia.
CP, I think that Ford has already gone under.. where they go from here is the question. Do they go to the courts or the congress? My thinking is the bankruptcy courts will give them a process to restructure that could be helpful in their dealings with the unions.
Autoblog had an interesting opinion post recently about the reported fact that it costs the big 3 $70 per hour to build a car. It turns out that only about $38 of that goes to worker pay and benefits, similar to what non-union automakers pay. The remaining $32 goes to support retired workers. They tried to make the point that it was the unions who set that wage ($38) and that the non-union shops only follow it to keep the union out.
A little silly as an argument. First, I'm not sure if those facts are accurate. Secondly, if they are, it's an assumption that the wages are similar because of the union. Thirdly, it was the union that pushed for the generous retirement benefits that are nearly doubling the cost of building a car. Fourthly, he doesn't mention what it costs the non-union shops per hour for the same thing. Its' an apples to oranges argument. Lastly, there are a lot more reasons the union is a problem than wages. Arcane work rules and antagonistic behavior come to mind.
My Dad worked a consulting time study job a few years ago at a Jeep plant to measure the efficiency of the line and look for improvements. The union did all that they could to make his job difficult. he spent one whole day waiting in an office because the union was blocking their entrance into the plant to do their job. They were convinced they were there to speed up the line and demanded something or the other from management in order to let them in. I don't remember exactly what, I just know Dad spend a day getting paid to sit in a holding room of some kind at the plant.
Then, he had to have a union rep with him at all times in the plant. He was a good guy, Dad said, genuinely wanting to work with him to get this job done. At one point, dad needed to walk a few feet away to check something and the guy agreed. Another employee went nuts 'cause Dad was without his chaperon, who was something like 10-15 feet away.
I wonder how much extra money Chrysler spent on that time study because of the roadblocks the union put in the way?
BTW - Some of the things in that video is being done in the US by Honda. I have a friend who's an engineer there. All Honda employees wear white jumpsuits, for example. Nearly all Honda plants can produce any Honda car. For example, the Ontario builds Odyssey vans and Civics. When the market shifted to small cars this summer, it went all Civic and the Odyssey production shifted to a southern US plant only. They're working toward making that 100% and should be there soon.
Somebody smarter than me needs to begin to do some creative thinking (i.e. "outside the box"). We do need some kind of a 'labor union' structure to keep the 'corporate structures' from exploiting their employees. The problem with the labor union system we have in place today is that the wheels continue to be greased with greed, money and power rather than basic fairness in the work place.
There is no denying that by removing unions with nothing to replace them, the laborers would be screwed within one generation. I don't think the proper model for balance has been presented yet.
As strange as it may sound, of the Big Three, Ford is actually in the best shape and Chrysler the worst. Chrysler actually has nothing new in future product planning because Daimler got rid of their best engineers before divesting itself of the company altogether. As someone with close ties to the automotive industry, I hear all sorts of things before the general public (or Congress) does.
A great deal of Ford's woes can be traced back to Jacques Nasser and before him to Alex Trotman (RIP). Acquiring foreign auto companies and an auto repair chain (later sold at a huge koss) in Europe proved to be a major millstone around Ford's neck. Ford recently lost billions in selling Jaguar and Land Rover to Tada (India), including being forced to hand over half a BILLION to fund the retirement of the workers of both companies. They ended up losing over 2/3rds of the original investment and not many companies can withstand such losses. During his reign at Ford, Nasser also pandered to Wall Street in ways that were nefarious, including withholding payment to vendors until after the quarterly earnings were announced. In all honesty, I don't think "Jac the Hack" could safely live in Michigan now. The mere mention of his name generates the same kind of hatred here as Osama Bin Laden does.
Thanks CR for that interesting comment about Ford. Many want to lay all of the blame on the unions and seem to think that the execs bear little of the responsibility. Your comment spoke to some of that. Thanks.
I'm not sure I understand, Bob. It sounds like you'd like to see Ford go under, but doesn't the video suggest it's the UAW that should go under?
ReplyDeleteUnions and minimum wage have driven manufacturing out of the US, forcing people to pursue services jobs as the replacement. it does't take 75 dollars an hour to build a car.
ReplyDeleteThe President of the UAW has stood up and said the union will not accept any more cuts. NO cuts in payment or benefits. A friend of mine has said he would be happy if the Big Three moved their entire production to the South (Southern US), therefore finally able to shake free of the unions entirely and compete with the foreign car makers on an equal footing. What he doesn't understand is if The Big Three do move their ENTIRE operations South, it will be SOUTH of the U.S. BORDER to Brazil or Mexico, not to North Carolina or Georgia.
ReplyDeleteInteresting comments so far.
ReplyDeleteCP, I think that Ford has already gone under.. where they go from here is the question. Do they go to the courts or the congress? My thinking is the bankruptcy courts will give them a process to restructure that could be helpful in their dealings with the unions.
Autoblog had an interesting opinion post recently about the reported fact that it costs the big 3 $70 per hour to build a car. It turns out that only about $38 of that goes to worker pay and benefits, similar to what non-union automakers pay. The remaining $32 goes to support retired workers. They tried to make the point that it was the unions who set that wage ($38) and that the non-union shops only follow it to keep the union out.
ReplyDeleteA little silly as an argument. First, I'm not sure if those facts are accurate. Secondly, if they are, it's an assumption that the wages are similar because of the union. Thirdly, it was the union that pushed for the generous retirement benefits that are nearly doubling the cost of building a car. Fourthly, he doesn't mention what it costs the non-union shops per hour for the same thing. Its' an apples to oranges argument. Lastly, there are a lot more reasons the union is a problem than wages. Arcane work rules and antagonistic behavior come to mind.
My Dad worked a consulting time study job a few years ago at a Jeep plant to measure the efficiency of the line and look for improvements. The union did all that they could to make his job difficult. he spent one whole day waiting in an office because the union was blocking their entrance into the plant to do their job. They were convinced they were there to speed up the line and demanded something or the other from management in order to let them in. I don't remember exactly what, I just know Dad spend a day getting paid to sit in a holding room of some kind at the plant.
Then, he had to have a union rep with him at all times in the plant. He was a good guy, Dad said, genuinely wanting to work with him to get this job done. At one point, dad needed to walk a few feet away to check something and the guy agreed. Another employee went nuts 'cause Dad was without his chaperon, who was something like 10-15 feet away.
I wonder how much extra money Chrysler spent on that time study because of the roadblocks the union put in the way?
BTW - Some of the things in that video is being done in the US by Honda. I have a friend who's an engineer there. All Honda employees wear white jumpsuits, for example. Nearly all Honda plants can produce any Honda car. For example, the Ontario builds Odyssey vans and Civics. When the market shifted to small cars this summer, it went all Civic and the Odyssey production shifted to a southern US plant only. They're working toward making that 100% and should be there soon.
Somebody smarter than me needs to begin to do some creative thinking (i.e. "outside the box"). We do need some kind of a 'labor union' structure to keep the 'corporate structures' from exploiting their employees. The problem with the labor union system we have in place today is that the wheels continue to be greased with greed, money and power rather than basic fairness in the work place.
ReplyDeleteThere is no denying that by removing unions with nothing to replace them, the laborers would be screwed within one generation. I don't think the proper model for balance has been presented yet.
Hi Bob,
ReplyDeleteAs strange as it may sound, of the Big Three, Ford is actually in the best shape and Chrysler the worst. Chrysler actually has nothing new in future product planning because Daimler got rid of their best engineers before divesting itself of the company altogether. As someone with close ties to the automotive industry, I hear all sorts of things before the general public (or Congress) does.
A great deal of Ford's woes can be traced back to Jacques Nasser and before him to Alex Trotman (RIP). Acquiring foreign auto companies and an auto repair chain (later sold at a huge koss) in Europe proved to be a major millstone around Ford's neck. Ford recently lost billions in selling Jaguar and Land Rover to Tada (India), including being forced to hand over half a BILLION to fund the retirement of the workers of both companies. They ended up losing over 2/3rds of the original investment and not many companies can withstand such losses. During his reign at Ford, Nasser also pandered to Wall Street in ways that were nefarious, including withholding payment to vendors until after the quarterly earnings were announced. In all honesty, I don't think "Jac the Hack" could safely live in Michigan now. The mere mention of his name generates the same kind of hatred here as Osama Bin Laden does.
Thanks CR for that interesting comment about Ford. Many want to lay all of the blame on the unions and seem to think that the execs bear little of the responsibility. Your comment spoke to some of that. Thanks.
ReplyDeleteI liked what you said about balance Ken. There is definitely a need for sane (vs insane) employee representation.
ReplyDeleteGreat story Doug about your dad and union folks.. sad that folks act that way.
ReplyDelete