The UAW and Domestic Automakers

socala4

I don't think anyone has shown it is a third rate box at all. If given the choice between a Civic and the Cobalt at a rental agency I would take the Cobalt.

Having just spent a week in a Cobalt, I would beg to differ. Crude motor, cheap plastics, yesterday's styling and a four-speed auto that hunted for gears and got lower fuel economy than it would have if it had a real overdrive. Mediocrity defined, with nothing exceptional about it.

Cobalts were born fleet cars and will remain so. When we finally get a breakdown of the fleet data, I'm sure we'll see that the Avis Factor will bring back memories of the dreaded old Cavalier. Let's hope that if Ghosn comes to power that he does something about this.

grbeck

socala4: Automakers such as GM are not losing sales or market share because of Budweiser or Jack Daniels, but because they make cars that people don't want to buy.

I am beginning to think that the GM product planners who approved an all-new subcompact that looks like a facelifted version of the last one must have been dipping into the Jack Daniels while at work.

That would explain the "all-new" Cobalt that doesn't look any more modern than a Ford Focus that debuted six years ago.

heel2toe

Hey, the Cobalt is the best car in the history of the auto business...

...graded on a curve from the model it replaced.

(And yea, I actually have logged lots of miles in three stick shift Cavaliers of different generations due to a overly-brand-loyal relative that loves small cars and couldn't be separated from a pesky GM card. It was truly an unbearably bad set of cars.)

gagrice

Having just spent a week in a Cobalt, I would beg to differ.

You would know more than me. I have not rented a small car in 20 years. I was only going by looks. And I don't like the looks of much that the Japanese have offered recently. I generally rent an Explorer or Trailblazer. I did rent a Camry in Victoria, BC. which was not bad for a small car. Had a Stratus for a day and took it back and rented a Malibu. I thought the Malibu was as nice as the Camry. Neither one as nice as a Trailblazer or Explorer. Just not much in the sedan market that I can say I like.

socala4

I am beginning to think that the GM product planners who approved an all-new subcompact that looks like a facelifted version of the last one must have been dipping into the Jack Daniels while at work.

That would explain the "all-new" Cobalt that doesn't look any more modern than a Ford Focus that debuted six years ago.

I'm not sure what happened, but my guess is that the design went through a committee process, which means that everyone has to have some input and gets a chance to "contribute" to the end result.

So what you're left with is a bland design that takes no risks, and benchmarks cars that came to market years earlier. GM isn't exactly known for its innovation or risktaking...

john500

GM can not improve vehicle reliability BECAUSE their operating costs are too high BECAUSE union labor and benefits are too expensive. The UAW can point the other direction all day, however, the reality is that the UAW is a huge part of GM's problem (albeit not the only one). This type of nonsense will hit everywhere very soon. The state of NJ is a classic example. Instead of trying to CONTROL SPENDING, they (in particular, an unnamed governor) simply raise taxes and increase the horribly bloated budget. Unfortunately for GM, they were designed as a for profit company.

GM's cars are as desirable as any other manufacturers. The shaken consumer simply doesn't want to lose money on resale or early repairs when the data has indicated that Toyota's and Honda's cars are more reliable.

You seem to have been browbeaten by the "poor me" worker stories to actually believe the nonsense that the worker is not an intrinsic part of GM's spiraling demise. If they have such high standards and work ethic, perhaps they should move on to a more challenging job and in another industry if needed. I've done that numerous times. Why can't the UAW patrons do that? Oh wait, that means that they won't collect disability paychecks for the next 9 years. Nevermind.

socala4

GM's cars are as desirable as any other manufacturers.

No, they aren't. It's not just a matter of reliability, but also fit-and-finish, styling, drivability and a lack of cachet value.

The Big 2.5 obviously score nicely when they develop styles and products that consumers want, such as the UAW-built Dodge Caliber. GM seems uniquely unable to connect with the tastes of the market, so even reliable Buicks don't sell very well. If GM could combine Buick reliability with some panache, it would be making money.

You seem to have been browbeaten by the "poor me" worker stories to actually believe the nonsense that the worker is not an intrinsic part of GM's spiraling demise.

Not really, I am not particularly pro-union, and I wouldn't claim that the members have exceptional work ethics. (I once worked as an intern in a UAW shop, so I saw for myself how uninspired both management and labor were on the job, at least in that facility.) However, the union plays no role in the bad styling or inadequate design and engineering that goes into the vehicles, they just assemble them per instructions.

As we've seen from its foreign built Saab-arus, Pontiacs and Chevys, GMNA does a poor job in appealing to consumers, no matter where the cars are built. Not many consumers like GM's Korean cars, either, and we surely can't blame the UAW for those.

john500

Which gets to the point. US consumers are told which cars they like via peer pressure, marketing and celebrity influence. There is no real "demand". It is the adult analogy to sneakers in a suburban high school. Nike Air Jordans are not more comfortable or durable than Kmart sneakers, however, the in-dude or in-chick will spend 6 times as much money for shoes that afford a sense of peer belonging and approval. The Dodge Caliber is as ugly as the Pontiac Aztek ( a total failure) and will be as unreliable. Both of the aforementioned cars, however, are slightly more attractive than the Scion Xb. The car is really inconsequential relative to the image of being foolish for buying a GM vehicle that peers have informed them will break down in a short period of time.

rockylee

Oh wait, that means that they won't collect disability paychecks for the next 9 years. Nevermind.

That was a low cheap shot. :sick:

Rocky

socala4

Whatever your explanation/ rational/ excuse/ etc. for GM may be, the fact remains is that fails to connect with consumers.

That is a management problem, not a union problem. GM needs to do something different with product, branding, distribution, etc., which are all beyond the reach of the common worker.

If the consumer is a sheep, as you may be inferring, then why doesn't GM behave like a proper sheepherder and lead the flock into its showrooms? Whether you want to blame the product guys, the marketing department or whomever, I don't see the workers anywhere on the blameworthy list.

rockylee

Air jordans are way more comfortable than "Kmart specials"
I'm actually going to buy those new New Balance shoes which might be "american made" since they do still assemble some shoes here

Like Socala, has said numerous times. GM needs to build per instruction well engineered vehicles. The UAW workers can only follow directions and use the resources given to them. Dad isn't proud he has to build parts for a Azteck. He said Stevie Wonder could design a better vehicle being blinde.

Rocky

rockylee

Like you and I have said in the past Diamler Chrysler has the same union and is making profits. The Europeans and Asians have labor unions which make the UAW look like Pee Wee Herman vs. Mike Tyson (in his prime)

Rocky

john500

I make no excuse for GM. They can do whatever they want. Make no mistake about this statement. The workers are GM and they are at the top or near the top of the blameworthy list. I do not buy into this worker / manager differentiation. GM is not the Third Reich commanding the poor third party workers. If they were, they would still be profitable because they would have had the lattitude to make the necessary changes as the years went by.

Chrysler's profitability is easily explained by "legacy costs" dating back to 1980 instead of 1900 due to the bankruptcy.

As far as the consumer, there are too many sheepherders now. It used to be just Ford and GM. Now there are dozens of sheepherders all reeling in the same fixed number of sheep. If a company wants to support a country of retirees, they won't be profitable at any market share.

rockylee

Many country's do support retirees and buisness's.

Rocky

Kirstie_H

Yes, but countries don't need to be profitable to survive. In fact, they generate ZERO profit at all... revenue, yes; profit, no. The difference is that GM has to take that tiny consideration into account.

rockylee

I agree Kirstie, however if you've read through alot of these forums wouldn't you agree that GM and the other Big 2 need to make desirable products that customers want to own thus making the UAW wages irrelevant. The Japanese, Europeans, Scandinavians, Koreans, all are mainly socalist country's and do have very strong labor unions which take a "fair" piece of the pie IMO. The difference is their employer has enough common sense to not build a Pontiac Aztek or a Pontiac GTO "a Grand-Am on steroids" as my friends call it. :surprise:

The bottom line is the domestics want to charge like the non-domestics, but don't want engineer a product that justify's that cost. Socala, has pointed out that the transplants have higher costs to build vehicles.

Rocky

rockylee

http://articles.moneycentral.msn.com/Investing/Extra/CEOsNearRecordPayRatios.asp- x?GT1=8380

"And we want to cut UAW workers from a middle income, to poverty" -Yikes and wake up america ! :sick:

Rocky

Kirstie_H

NOTHING - and I mean zippo, zero, nil, zilch, the big donut - makes wages (UAW or otherwise) irrelevant. If your compensation costs are too high, your product prices will have to reflect that. No one's going to buy a $30K Cobalt, even if it's been engineered by God himself.

In my way-too-arrogant-for-her-knowledge-base opinion, it's the whole picture - you have to balance compensation costs, engineering, marketing, and product choice in order to be a long-term, viable company. It's never going to be any single aspect that brings a company down; but you do have to look at compensation along with everything else when you're deep in the red.

rockylee

Well GM for one isn't no longer in the red. Well atleast last quarter it wasn't. I do agree with compensation has to be balanced along with everything else. I don't think it's to much to ask when your boss clears $22 million for a salary with bonuses and has a golden parachute for a retirement package to ask for a $50,000 salary with good insurance and retirement. While I agree that nobody will pay $30,000 for a Cobalt, they can't get people even excited about paying $15,000 for one either.

Assemble it (Cobalt) in Mexico if ya have to.

Rocky

P.S.

I'd buy a Cobalt engineered by God for $30K :P

imidazol97

>And we want to cut UAW workers from a middle income, to poverty

In this area there are many UAW workers (and retirees) who are upper income, not middle income. And they have a congressional level of retirement and healthcare all provided for by the purchasers of the cars, the fewer that are selling.

What are we going to do about the excessive executive compensation problem with companies, and that includes GM execs and the UAW/IUE unions for GM and Delphi? Ideas? I look at companies in which I've held stock and its ridiculous.

imidazol97

Is the three way concept being discussed by Kevorkian's guy on the board intended to change something with regard tot he unions? Or is Ghosen (spelling?) on both Renault and Nissan's management and that's the reason fr the three way beig discussed. I.e., why isn't joining with Nissan alone being discussed? Can we trust the French?

fintail

I'd trust the French no less than the stereotypical domestic cookie cutter MBA clone.

AFAIK Ghosn is involved with both Renault and Nissan.

socala4

I do not buy into this worker / manager differentiation.

Not sure why you wouldn't. Management is responsible for the product planning, design, engineering, positioning/ branding, distribution, styling, QC practices, parts specifications, supplier management and pretty much every aspect of the car and its packaging.

Labor doesn't have much to do with any of that. You really think that a guy pounding the rivets into Pontiacs had something to do with what the car looks like?

rockylee

Dad will make $2,800 a month on pension or $33,600 which is hardly upper middle income. Within three years he will get a raise to $3,000 a month or $36,000 a year. He will have to pay a very small portion of that money to healthcare premiums but is still thankful for the UAW fighting for a small piece of the pie.

He's not complaining, but said money will be very tight and my step-mom will have to keep working but she's 10 years younger. He has said at some point that he will probably go get another job (part-time) and told me that again a few days ago.

Dad has invested his money very wisely and thought real-estate was his safest investment and he also gets to use the property for pleasure. He said he wished their would of been a 401K plan back when he started to further grow his retirement savings. He agree GM is in trouble if they don't keep raising the bar on product. He also said they should of funded their pension obligations they agreed to over the years which would of reduced or eliminated the legacy costs.

imidazol97,

I sure wished I would of bough ten some GM stock I would of nearly tripled my money if my memory is serving me correct on GM's stock price. Wasn't it down to $9 or $10 a share a while back ? I could be wrong. :confuse:

It will be interesting if Ghosn will become CEO of the alliance and Uncle Rick gets a Golden Parachute. :surprise: Ghosn has the ability to secure a future for GM and it's former employees might be able to enjoy their retirements in peace, and it's current ones can wake up knowing Carlos will steer the ship back into safer waters.

These are my $0.02 cents

Rocky

P.S.

Y'all have a safe and good Saturday.....

imidazol97

The retirees I referred to are from past years. And probably not all union--may be management. But those folk aren't struggling on $36/yr and paying anything for healthcare. The ones having to go out now without their full years are a different story.

The management and engineers I know can't find enough places to put their worth after buyouts or retirement. The GM plants have fueled a lot of upper price level home groupings around our greater metro area. That's changing, partly.

GM low looks like 18.33$

rockylee

I understand what you are saying. However going from a upper $50K income (base) to $33,600 like dad, will make things very tight. He said the $35,000 if he would of been elgible would of helped out alot he said. Dad, has a little left on his mortgage which he's paid down dramatically over the last 5 years since my step-mom has provided him with a second income. A retired single UAW worker will pay $300 a yr. A family will pay $735. Current working employees pay nothing for healthcare except a $5 dollar co-pay. Dad says the new employees were told it could be up to 8 months before they get insurance and benefits and it won't be very good either. :sick:

Rocky

john500

Labor doesn't have much to do with any of that. You really think that a guy pounding the rivets into Pontiacs had something to do with what the car looks like?

Absolutely. The employee has everything to do with what the rivets look like and if the worker owns even one share of stock, the said worker is entitled and obligated to voice his/her concerns about events that affect his/her share price at the annual stockholder meeting (especially if the meeting is held in the same city that the worker lives). Electronic mail is prevalent at every corporation today. A meeting can be called with the head of design, the head of marketing, the vice-president or whoever the said employee feels is responsible for the failure. The likely result is that a "task force" will be developed consisting of several people that will listen and try to address the concerns. If the said employee is too cowardly to speak up, the employee is complicit and part of the problem. This is, of course, assuming that all of the rivets were installed correctly and that the one-sided criticism was justified.

If the employees actually believed in what they were doing, the employees would document part failures (ie from Consumer Reports or from internal company vehicle aging tests) and address management and the media if necessary to correct the problem. I haven't heard of this happening.

socala4

if the worker owns even one share of stock, the said worker is entitled and obligated to voice his/her concerns about events that affect his/her share price at the annual stockholder meeting (especially if the meeting is held in the same city that the worker lives).

Sorry, but that's a shareholder version of Disneyland, not reality. Unless you own a fair number of shares, no one on the Board or executive team is going to particularly care about your opinion.

And good luck coming out of it unscathed if you are the worker who begins to assail upper management during a public meeting. The first rule of being employed is that in a fight between a boss and a subordinate, the boss is going to win. You expect some blue-collar working stiff to sacrifice his livelihood for an exercise in political suicide?

fintail

I want to see evidence of employee shareholders of a car company ever having a say in design, or workers loudly questioning and confronting their incompetent overpaid irresponsible superiors in a public forum and retaining their jobs. That's very funny. Until evidence is shown...it's a really wild dream.

gagrice

Sorry, but that's a shareholder version of Disneyland, not reality.

I don't know about GM. When I worked for RCA Alascom during the 1970s they rewarded suggestions by us lowly worker bees. I got several cash awards for ideas that were implemented. $15,000 once which was the maximum pay out. Not everyone took the time to make suggestion. Pay out was based on 10% of money saved if it was a money or time saving suggestion. I know that RCA was not the only large corporation that did that.

imidazol97

I cannot believe that any of your proposal for employees having input will happen.

>employees would document part failures (ie from Consumer Reports

This especially would get the laugh and a boot out the door.

rockylee

The UAW workers can make suggestions on improvement processes. Most of my family whom works for GM/Delphi has done such. However the dash being plasticky because they purchased a lower grade from Johnson Controls is completely out of their hands. Socala, the bottom line is you are absolutely correct. So is imidazol97, and Fintail, and anyone else that agree that the assembly workers are powerless when it comes to engineering of vehicles. Upper Management will tell them that isn't part of their job description and get back to work. These question have been raised back in the 80's when my grandfather was so upset that he had to use a hammer to fit some of the parts togeather because the design of the valve lifters were awful. I remember he was outraged when upper mangement told him to get back to work. He use to pick me up on friday nights to spend the weekend with him and grandma at the lake, and he would tell me story's of the night or what happened that week on our way home. "God I was a lucky spoiled grandchild" If I become half as good as them with my grandchildren, I will feel like I accomplished something in my older years.

Rocky

brightness04

The point is not who does what during the weekend, but rather: in case one is unable to perform well on Monday, does he get the fired?? The non-union worker faces that risk, but the union worker does not. That difference in consequences makes a huge difference in what people will do. It's like if a diploma is guaranteed regardless passing or failing tests, you are guaranteed to lower the quality of education.

brightness04

You have a very exceptional family. Most GM/Delphi workers do not make worthwhile suggestions, just like employees at most other companies. Union workers are not innocent in the choice of material; their input comes in two ways:

(1) Their demand for high pay makes less money available for material;

(2) Their insistence on continued high pay regardless whether cars are made inevitably leads to over-production, which leads to fleet sales . . . where low-rent material is the norm.

Given these two fixed paramters under UAW, the management has no choice but to use low-rent material. Getting an "F" for your class is not the result of the professor writing the letter "F" on your report card and your having no power over it.

brightness04

My turn to apologize for the delay . . . been really busy this past week. I agree that management has to perform, as always. GM management's job however is especially difficult because brand image has enormous inertia. People like SocalA4 simply would not consider GM cars, regardless in reality GM vehicle reliability has surpassed that of VW for nearly a decade. People who never owned a MB still think MB stands for quality, when in reality they have been churning out crap for a decade.

GM downsizing and reducing over-production will go a long way to shore-up brand image. MB still has any brand image to speak of in a large part due to no pressure to discount and make fleet sales.

I'm not much of a groupie for Renault/Nissan. Yes, Ghosn should be applauded for busting up the career-for-life culture that existed at Nissan (akin to our union culture, both are really paternalistic feudalism). IMHO, the Nissan thing has more or less run its course. People are starting to realize that Nissan is not Toyota, both in terms of quality and in terms of technical advancement. Neither the 3.5L nor the FM platform are really technologically advanced. The attempt to buy GM could well be akin to AOL buying Time-Warner in Spring 2000 . . . ie. a way of cashing in chips at the top of a cycle. Incidentally, it also means that GM has real value if the union can be stripped from it.

rockylee

(1) Their demand for high pay makes less money available for material;

Explain to me why the vehicles made outside the United States by GM in non-union country's and brought back over here still stinks ????? brightness, the Japanese built affordable union made cars in Japan. The Europeans still make affordable union made vehicles. the Scandinavians, still make union made affordable vehicles also. How do they do it ? They make more and are less productive. :confuse:

(2) Their insistence on continued high pay regardless whether cars are made inevitably leads to over-production, which leads to fleet sales . . . where low-rent material is the norm.

Well maybe GM needs to hire some new engineers ? What do you think brightness, about Carlos Ghosn ? Is he smarter than Rick Wagoner ? just curious.....

Rocky

brightness04

Talks of executive compesation in the context of worker retirement liability could only appeal to folks who do not even bother doing back-of-the-envelope analysis. Even if Wagoner gets $Zero for his trouble, his $2mil entirely doled out to all the retirees, it would work out to be something like $10 per person per year . . . not gonna make any difference!

rockylee

Okay you answered my question about Uncle Carlos Ghosn. Osmosis I guess, LOL.

you wanting to strip the union of it's power might happen sooner than you think. I and dad talked a great deal and both agree automobile building will be a thing of the past here in North America within 20-30 years. China/India will have it all due to cheap laborers. The Japanese and Koreans will follow suit. I hope you and I will still be here arguing over this subject over the next 30 years. If you disagree with me, then I can say told you so, or vis versa

Rocky

rockylee

I agree with you pal.

What's the solution ? Tell my father, family, friends, to go take a hike because we GM don't want to live up to what we agreed on over the last X number of contracts ?

I personally think Congress could fix the problem with a couple strokes of the pen. This would bring back internal competition, instead of everyone rushing off to China/India for the cheapest labor rates.The next generation of UAW Big 3 workers are going to take it where the sun doesn't shine.

The UAW is backing your buddy Rick Wagoner, to remain as CEO and complete the GM turn-around mission. I was actually a bit surprised if you want me to be honest.

Rocky

brightness04

Japanese made cheap cars when a dollar bought 300 Yen; today, a dollar buys 114 Yen. That's why the cheap Japanese branded cars are being made in China. European make cheap cars in the former Easternblock countries; it's their version of Mexico/China/India. Volvo and Saab are not cheap cars . . . try price one of those in sizes comparable to domestics (S40 vs. Focus, S80 vs. 500, 9-3 vs. Malibu Maxx, 9-5 vs. Saturn L).

I like Ghosn, but I'm not a groupie of Renault/Nissan. IMHO, there's only that much an individual in an organization that size can do. If I were Ghosn, I'd be thinking of exit strategy before the next down turn, which is perhaps NOW!

brightness04

Tell my father, family, friends, to go take a hike because we GM don't want to live up to what we agreed on over the last X number of contracts ?

Plan B is usually a good idea when one lives by benefiting from ransom agreements.

Closing borders to trade is a guaranteed way to turn this country into a third-world country. Trade is what brings prosperity; that was the historical difference between the US vs. third-world countries. There were plenty "congressional meddlings" in those third world countries . . . we have not need to copy their historical mistakes.

brightness04

I agree with you that automaking will not be as big of a business in the US in the future . . . and good riddence. There is nothing intrinsicly glamorous about automaking. 20-30 years from now, someone somewhere may well be willing to work the automobile produciton line even cheaper than what the Chinese and Indian workers demand by then. It's a mature business that is commodidized. There is no huge profit in it. . . so let someone else do it if we want higher than average income . . . figure out some higher premium professions for ourselves.

rockylee

Trade between healthy economic country's like Canada, Japan, and the Europeans, is very good for our country and I agree 100% with you on that. However IMHO, trading with China and India, isn't healthy for most of us once everyone runs their HQ out of Shanghai over using cheap labor. The net result for the U.S. is a massive loss of jobs, which we see being played out. Just wait to the Chinese/India car company's start selling here. The Japanese, Koreans, Big 3, will all close their plants and start importing cars from China to compete. I will guarantee you that.

Rocky

rockylee

Okay my question is then brightness, where are americans going to work 20-30 years from now if 26% of the jobs (manufactoring) is eliminated ???? Many of which are good paying ! :confuse:

Look at our current economic situation. Thousands applied for those $14 an hr. no benefit jobs at Delphi, many of which will be temp jobs.

If you have the answer of how we as a country can lose that many jobs to china/india and not be economically hurt then I will be amazed. That 26% has alot of buying power in this country and once that's lost to Burger King, McDonalds, wages then every buisness will suffer to some degree IMHO.

Rocky

rockylee

"healthy economic country's" means country's that have citizens with spendable income to buy goods and services. The average chinese person lives in a small dinky apartment with mom and dad, and grandma and grandpa. The Europeans atleast have enough spendable income to buy a car, and buy expensive luxury's is all I'm saying. Yes their union workers do buy from american buisnesses

Rocky

brightness04

Many jobs were lost when horse carriages were replaced by cars; far more than 26% of all jobs were eliminated when automobile (tractors) turned the US from 3/4 being farmers to less than 2% farmers today! How's that, 73% "job elimination"?!

The reality is that, unless people are paid by the government not to work or minimum wage laws and other red tapes making it impossible to hire, the overwhelming majority of people without jobs eventually find jobs. That's how new industries get started.

If $14/hr could not find any worker, it would simply mean run-a-way inflation. How hard is it to understand, that your wage is only meaningful in terms of how many hours of unskilled labor you can in turn hire with that wage? Suppose now you are paid $14/hr, and a baby-sitter costs $7/hr . . . then you fall into a deep slumber, and wake up to find that you are making $50/hr, but baby-sitters going rate is also $50/hr . . . are you better off then or worse off??

A real job is already eliminated when technology advances make the job unjustifiable in market terms; "preserving" such a "job" would be a form of welfare.

brightness04

Sometimes it's helpful not to be held back by one's own prejudices. The last time I checked, more cars were sold in China last year than in any other country outside the US. The third place was Japan, not any European country.

socala4

Japanese made cheap cars when a dollar bought 300 Yen; today, a dollar buys 114 Yen. That's why the cheap Japanese branded cars are being made in China.

Note to self: Do internet research to learn when Toyota's California and Kentucky factories were relocated to China.

Oh, wait a minute, this is yet another one of Brightness' "facts". Nevermind.

brightness04

Both Yaris and Fit, the spiritual successors to what Japan exported to the US in the 70's, are being built in China, not in Kentucky. The vehicles that are built in Kentucky, such as Camry's, Avalons and etc., are not cheap cars. A little industry knowledge, combined with some common sense, goes a long way.

rockylee

Group wants judge to block changes to health care benefits because automaker plans to invest in Mexico.

http://www.detroitnews.com/apps/pbcs.dll/article?AID=/20060707/AUTO01/607070374/- 1148/AUTO01

Rocky