Did they get outside investors to set that store up? I don't think they can be showing a profit it they have not delivered any cars yet. Time will tell.
The company is privately held, the company owns the store. So I don't believe there are any "outside" investors. Who said there was any profit? I'm sure there is not.
The trick is that they have to get the cars into the field SOON or those "orders" are going to transform into law suits and then all hell breaks loose. Orders are a contract. Tesla is under legal obligation here IMO.
Old Engines: -- again, all that is anecdotal evidence presented over a beer or two. Statistically, 60s engines would never last as long as a 2008 automobile IMO. They are cheaply built, crude in design and inefficient in comparison. At least that's how they look to me when I take an old one apart. Engine technology today is really fabulous.
So it's not that new cars didn't get better---it's that THEIR new cars got better FASTER than OUR new cars....
Old Engines: -- again, all that is anecdotal evidence presented over a beer or two. Statistically, 60s engines would never last as long as a 2008 automobile IMO. They are cheaply built, crude in design and inefficient in comparison. At least that's how they look to me when I take an old one apart. Engine technology today is really fabulous.
I will agree with evertything except cheaply built. Remember, technology is way more advanced today for things like casting, metalology, and such. Engines from the '60's will last longer than their counterparts from the '30's or '40's. Again, it is the newer technology.
Well "cheap" doesn't mean bad---the GM rockers arms are simply stamped out but they worked very well up to 100K or so. Blocks were mostly cast iron, crudely cast and kind of slammed together on the assembly line because precision was not required. Ditto the bodies. Modern buyers would never tolerate the sloppy fit and finish of 60s cars. Today's Corvette engine, while still an old pushrod V-8, has lots of alloy parts, is high tech in controls, and the whole car is put together with far greater care.
I think it's more electronics that bedevils modern cars, not quality control.
Buick used rocker shafts instead of studs. All those other things you mentioned I can agree with. Saturn (I believe) pioneered that displacment casting by which they filled the mold with styrofoam, and the molten aluminum burnt it away. Now we see alot of billet steel components in engines and plastics where there was once pot metal for trim and such.
wanted but their negotiators were keen on asking a reasonable amount that Boeing could actually give up. The union I was in, SPEEA (Seattle Professional Engineering Employees Association)struck Boeing in 2000 for 45 days. It was the longest white-collar strike in history.
Funny thing was, the 2nd offer the union accepted offered less in pay and benefits than the Company's first offer! And union leadership raa-raa-ed it up, hootin' and a hollerin' (we had to endure actual rally marches inside the engineering buildings, yep, they were loud and obnoxious)and basically losing sense of their faculties in order to "prove" the union's existence. A bunch of legalized thugs, the union. What a waste of time and money, that 2000 strike.
Boeing leaders are great on drinking hot, delicious Starbuck's and eating jelly donuts in these "I'm more important than all of you" meetings. Everything is kept quiet while these know-it-alls have their all-important meetings. What a bunch of grey-suited dorks.
Believe me, I know. I spent 20 years at Boeing. Apparently Boeing thought many, many suppliers from several different countries could build sub-assemblies that they could just ship to Boeing and have them magically fit together perfectly(yes, for the Dreamliner). These are the same Boeing execs who felt that whole groups of people were expendable back in 2003, while CEO Phil Condit felt that the time was ripe for an affair outside of marriage. For what looks like a viable, respectful jet airplane builder, Boeing has problems that I could write a book about.
These Starbuck's drinkers have somehow convinced select know-it-alls that they're indispensible, and so and so is dispensible. If they would spend more time watching their designs, planning their designs in a well-thought-out-way...and quit looking who they should lay off they might just get a decent grip and pull themselves up over Airbus Industrie.
Leading up to the 2003 layoffs of 40,000 good Boeing workers, the SPEEA newsletters were a hoppin' with people complaining about people like P.Condit suckering everyone in to thinking he's this smart know-it-all and at the same time the Company was "off-loading" buckets and buckets of Engineering work to Russia and small design houses, some of them led by former Boeing managers. By "offloading" my groups work to one of these former Boeing managers, Boeing saved themselves a lot of money. Good for them. They only have to pay out $10.00 and hours instead of $21.00 an hour. Wait a minute. Didn't Boeing just release(early in 2003) that they had $1.3B in cash reserves and those reserves were not showing signs of lessening up very fast? Boeing was making money hand of fist. Was it their jelly donut crowd starting to worry that their minions might get in their way of making more money? Could very well be just that.
Boeing has no loyalty to anyone in their Company. While an employee there I worked hard, saved the Company money by taking the necessary shortcuts to get the Illustration product out right the first time. Without compromising on safety and design integrity. Rework was usually minor. Would Boeing notice someone's work eithic and reward them? Wait a minute! We have jelly donuts and fine Starbuck's coffee to soak up here! Have at it jet aircraft dudes. What a flim-flam Company for flim-flam people. They can have it.
Lest you think I have unions, oh, wait just a cotton pickin' minute there. I would need to e-mail a SPEEA Rep. I know but the last retirement estimation I received in the mail about 6 months ago sharply raised my estimated retirement amount by about 400%. I couldn't believe it, I have moved to the SE Arizona desert and am in an entirely different industry, one that I find more rewarding. That is because when I help someone with their health, people tend to give back to you. They love that type of thing, it's more personal and "touchy-feely", dont'cha-know. At Boeing they would take your completed work package and look at you like "What, do you want a pat on the back of something?" A cold, metro-Seattle type of response, full of sarcasm and rebuttal. Dilbert was like a mirror-reflection of Boeing life.
But I had to do a quadruple take on my retirement estimates. Yikes. Some Union demand or something? That came through for them? Wow! I'll try to find out, but being that Social Security if apparently not going to be there this was a nice score. More on this important subject later. Maybe unions are all right. Maybe I will be repaid for my hard work and dedication. Hey, pass me those jelly donuts, would ya?
I greatly admire your abundance of knowledge in economic, politic, capitalism and corporate environment and probably many others too. But just to add a little bit to your knowledge is the existence of union for executives. They have an exotic name for it. They call it Business Roundtable that votes on, among others, executive pay and pension packages and policies to make almost impossible for share holders to terminate them without paying them huge severance pay. The average executive pay is more than 300 times that of average worker and is growing. Their pension is in the millions even if they run the companies to the ground.
I agree labor unions are no angels but neither are executive unions. With the excesses executives get, they are in no position to impress on others to make reasonable labor demands. Labor unions have made concessions in recent years due to companies' financial difficulties, but I have yet to see any real concessions made by executives. As it is now boards continue to reward executives for failures.
It is interesting that dill brought up governmental intervention in executive pay. If anything, government usually sides with managements rather than their workers or share holders. Several attempts to improve gas mileage standard were made in the 90's, but congress voted them down. If those attempts were successful, our Big 3 and our nation would be in much better shapes today.
Labor unions have made concessions in recent years due to companies' financial difficulties, but I have yet to see any real concessions made by executives. As it is now boards continue to reward executives for failures.
I agree and would like to add this. When you start looking at the makeup of these boards of directors it becomes apparent just how they do what you have said. The CEO of XYZ is on the board of company ABC and DEF. He votes his CEO buddy a big raise and expects likewise from the others. Interesting that one of our Presidential candidates was appointed to the WalMart Board of Directors. I believe her husband was the governor of the state that Walmart was headquartered.
In 1986, Sam Walton, the founder of Wal-Mart, had a problem. He was under growing pressure from shareholders — and his wife, Helen — to appoint a woman to the company’s 15-member board of directors.
So Mr. Walton turned to a young lawyer who just happened to be married to the governor of Arkansas, where Wal-Mart is based: Hillary Rodham Clinton.
Not too many years after that this same governor became President and pushed through NAFTA that has helped make Walmart the largest corporation in the World. Easy to see how this all works.
The only way I can see executive paychecks brought back to reality is by the SEC not allowing cross board membership. Or politicians wives and husbands being on those boards.
The only way I can see executive paychecks brought back to reality is by the SEC not allowing cross board membership. Or politicians wives and husbands being on those boards.
AMEN!!!!!! If our politicians did this type of thing in government, they'd be in jail for ETHICS VIOLATIONS......
I find it amazing that, as a publically traded company, these corporations can hide so much behind the veil of being a " private corporation".
BTW, maybe someone could link these posts to the UAW thread, where they are just as relevant.
The only way I can see executive paychecks brought back to reality is by the SEC not allowing cross board membership. Or politicians wives and husbands being on those boards.
Or go back to top marginal tax rates of 70-90%, that kind reduces the motivation to get the big paycheck.
Maybe on everything past a million bucks taxed at 90%. I think the high taxes was the motivation behind off shore accounts. I don't know what would work.
As recently as 1963 top rate was 91% for income above $400,000, which would be about $2.7 million adjusting for inflation. In 1980 the top rate was still 70% and applied at $215,400 (about $600,000, with inflation adjustment).
While such rates seem unreasonable, it does seem as if those at the top have taken more and more for themselves as rates have dropped. We also have the cult of the CEO today, where all success is credited to the guy at the top...not sure if this has always been the case in this country.
I'm surprised and saddened by cwzyx377's equating of executive's lack of reigning in their salary, pension, healthcare, retirement and stock options. Let me reiterate as I stated in at least one other previous post on this general topic that I am not opposed to merit pay for executives work and achievements in industry. I strongly feel that executive compensation should be many many times more than the typical assembly line worker. The unionized assembly line worker doesn't have to bring his job home with him at the end of the day. The executive does, way more often than not does. The assembly line worker rarely is required to work OT, the executive does, even if he doesn't stay past 5pm. The executive has to travel to places of business and do interviews as well PR activities promoting the company so the assembly line workers have a job on Monday morning to help them make money to feed their families. One thing that makes me ok with big executive compensation is that an executive has many years college and business school under their belt before ever getting a job in the car business. Add to that that the vast majority have risen through the ranks for more than 10-20 years time in the business, so it is a safe bet that most of those that have risen through the corp. ranks have some semblence of competence. I concede that not all executives are competent. I will also concede that not all executives are working for the greater good of the company at large.
Corp. executives have been groomed often times for many of the jobs they later attain in the copr. ranks for decades of time. It appears that unions are much more motivated to help themselves at the expense of the companies' greater good than are 95% of the executives out there. Unions by nature have a much greater parasitic relationship to corporate America than well over the majority of executive board members. Again that is not to say these executives never have parasitic relationships with corporate America. There are always some out there that are trying to soak the corporations bank accounts dry. As much as 300% more money and compensation to give a corp. executive is alot of money to pay someone. However that being said, so is paying the typical UAW worker over $60 an hour putting a few screws on a car or truck to attach windshield wipers. When you multiply this $60 an hour rate by many many thousands of auto workers at every US plant of a given auto maker, the executive pay doesn't seem quite so extreme because either side you take on this issue they are both really big money numbers. Yes, there are some in these factories making far less than $60 an hour but still the majority $40, $50 and there are some making in the general neighborhood of $60 an hour or more for their work. Labor unions have made concessions in recent years due to companies' financial difficulties. Most of the time they have only made these concessions when the companies health was on the line. GM's latest agreement with the UAW with healthcare cuts making the UAW responsible for some of their healthcare costs, and at the same time lowering the starting wages for GM factories to under $20 an hour. Also negotiated were the opportunities for GM to buyout workers healthcare options so GM wouldn't be held financially for their healthcare for the rest of their lives. The same general framework that GM was given both Chrysler and Ford were given as well. I know Chryslers negotiated settlement was slightly different because their needs were somewhat different than GM and Ford, but as of this post I can't remeber the details fully. I would think that if getting unions to the table to negotiate contracts and compensation is going to continue to be a real chore, and if these unions are going to hold hard and fast to previous compensation levels, it will only motivate the Big 3 to move their manufacturing operations overseas. I do not want to see the Big 3 go heavily if not entirely overseas for production costs reasons but I can't say I blame them and if it were up to me, I would have set up all my manufacturing overseas by now. Afterall, I have been monitoring Detriots auto industry very very closely now for over 30 years. I don't claim to be an expert but I'm not a lightweight with regard to their business either.
Dill, I have to blow holes in your argument. Sorry. But let's start on a positive note.
I am not opposed to merit pay for executives work and achievements in industry. I agree completely. Executive pay should be based on merit and performance. Good executives should be rewarded by better compensation. However, big-company executives in this country today are paid more like teachers, where time in the job counts more than performance.
The assembly line worker rarely is required to work OT, the executive does, even if he doesn't stay past 5pm.
Good execs work like that yeah...that's far from all of them though. And so called "generic workers" have to work overtime too in many fields. My last job was hourly and I averaged 10 hours of overtime per week, plus additional work from home.
One thing that makes me ok with big executive compensation is that an executive has many years college and business school under their belt before ever getting a job in the car business. Add to that that the vast majority have risen through the ranks for more than 10-20 years time in the business, so it is a safe bet that most of those that have risen through the corp. ranks have some semblence of competence.
Some executives barely finish 4 years of college. I've met a few. As far as "rising through the ranks," that works differently with executives. Entry level executives work as executives for small companies or business units and move on to big ones. They don't start in the accounting office or on the assembly line. So I'm wondering what sort of competence you're talking about. BTW, "business school" is an MBA. Just like any other master's degree, it takes a mere 2 years after getting a bachelor's.
On the example of competence, just look at the corporate performance of Ford, GM, and Chrysler in recent years, especially the past 20 or 30. I don't see much competence there at all. They made bad decisions, and bad deals, and left the mess for someone else to clean up, while they went off to count their retirement money.
Now, let's get back to where we agree, since I'm a nice guy and like agreement and harmony and all. While I also agree that a good (operative word GOOD) executive is worth more than a joe-bloe worker, I disagree about them being worth 600 times more. I also have plenty of business experience, most of which is in small to mid-size companies, though I also spent some time in large ones. Without exception, the BEST executives I've seen are the ones who work for the smaller outfits, primarily because their livelihood is dependent on doing a good job. There are no golden parachutes at this level.
At the large corporation level, this is much less true. One because these guys are invariably already wealthy, and two, because of the golden parachutes that they always seem to get for themselves. Their livelihood is NOT dependent on doing a good job. And while I give credit to guys like Donald Trump and Warren Buffet who do a good job anyway, we've got too many others floating around who will just coast if they can. We can also face the fact that those sort of lazy people exist at ALL levels of business: the executive level is only different because it's the most visible...oh, and their livelihood is not threatened, so there's nothing stopping them from doing a rotten job.
Anyway, I want to see executive pay become more performance-based, just like any other job. I work hard, I get rewarded, I work like garbage I get fired. Should be the same at all levels. And you know what? The hard-working execs who want to do a good job for their company won't mind a bit. However, the drones who are CxOs in most large companies these days would hate the idea.
Corp. executives have been groomed often times for many of the jobs they later attain in the copr. ranks for decades of time. It appears that unions are much more motivated to help themselves at the expense of the companies' greater good than are 95% of the executives out there. Unions by nature have a much greater parasitic relationship to corporate America than well over the majority of executive board members.
You know, sometimes, I'm dumbfounded by the sticking up for execs and bashing of workers.
Dill, check this out:
At American Axle (full disclosure; I'm a shareholder) the worker being compensated at $60/hr costs $124,800/yr total. The CEO, who was compensated at $27 MILLION last yr earned $3090.66 FOR EVERY HOUR HE WAS ALIVE LAST YEAR.
Rick Wagoner was compensated $14.4 million last year, earning $1643.84 for every hour he was alive.
Now, does $60/hr compensation seem too much???
Can we shareholders limit their compensation??? In theory, yes, but the board owns so many shares, it would be impossible to overcome.
>>At American Axle (full disclosure; I'm a shareholder) the worker being compensated at $60/hr costs $124,800/yr total. The CEO, who was compensated at $27 MILLION last yr earned $3090.66 FOR EVERY HOUR HE WAS ALIVE LAST YEAR.
Rick Wagoner was compensated $14.4 million last year, earning $1643.84 for every hour he was alive.
Now, does $60/hr compensation seem too much??? <<
Yep, the CEO compensation is also obscene. Whatever happened to fiscal responsibility on both sides management/labor? No wonder the US automotive industry is so screwed up. It is getting borked by both sides.
No wonder the US automotive industry is so screwed up. It is getting borked by both sides.
Don't think the foreign companies that are here have it made. there is already talk of Toyota wanting to limit compensation to it's workers to 150% of the area's average mfr'ing wage to maintain the cost edge that they had over the Big 3 until the new contracts were signed. I don't think you'd be too happy to here your boss say "Sure, you're doing a fantastic job, better that we could ask, but we're cutting your pay so we can maintain our edge (read; PROFIT MARGIN)"
Well, to be fair (as I was just pointing out the outrageous differences in compensation) most of that loss was attributed to GMAC. While N/A ops did lose money, it was less than analysts expected, and growth in other countries was great. So, all in all, he is doing a good job.
I find it kinda sick that the market rewarded GM for losing less than they expected it to lose. That isn't success in my book.
Well, in a (their) world where you have nothing but incestuous (business)relationships, and I don't exactly let union leadership off the hook either, it looks perfectly fine.
And the sad part is, say you want the government to intervene and most people will say "What can we do, it's a private company?", yet it's PUBLICALLY traded.
I don't understand why the SEC can punish somone for insider trading, yet they can't establish tighter rules as to who can serve on a board, and how many boards they can serve on, and set up a system that will keep these gratuitous pay raises from happening.
At least with a union workers $60 or $70/ hr compensation, you can see that it is a natural progression of wages and benefits, buying just about what it could in 1968 or 1978. But this explosion in CEO compensation comes from one place.......their friends.
First... $60-70 per hour is not typical. Second.... not sure why the thought that a "union employee" has no skills, deserving of high pay. Third... those wages are NEGOTIATED, and the company had full opportunity to negotiate less.
So it is not ok for a unionized employee to make past the magical $100K a year, but it is OK for white collar jobs? Makes no sense. Your post indicates that I should not complain about the high cost of health care or legal services, because they are not in unions??? LOL
Personally, I like unions, because I always had to get paid at least $1 more than my highest paid empoyee.
$60-70 per hour for a union worker is beyond obscene.
Most lawyers, CPAs, engineers, etc. don't make that much.
I believe that figure is the total cost to the employer for the labor, not the cash wages. So it includes pension, health and other insurance, the employer 1/2 of SS tax, unemployment tax, sick leave, vacation, etc. Given that I think you may be mistaken regarding the pay for those other jobs.
I'd guess the cash wages are maybe 1/2 of the total labor costs.
Cut it in half, and it doesn't sound nearly as bad, especially if you have a high cost of living. Still, many of these unionized companies have negotiated their way to the brink of bankruptcy or losing all their jobs to Mexico. Just because the management is just as incompetent as the union leaders doesn't make it a good idea.
On the other hand, I can't defend what some CEOs are getting paid.
Some mutual funds only invest in morally acceptable companies (no, I don't know how to define that). Along those lines, I would love to see a mutual fund that excludes companies that pay outrageous sums to their executives.
That's really the thing isn't it? We as the consumer have no way to exert pressure on these companies not to offer these outrageous executive compensation packages. If we chose to boycott those companies, I am not even sure they would connect the two things.
Wagoner has been CEO for several years IIRC, and has received hundreds of millions of dollars from a company essentially rushing towards an early grave the entire time. How has he earned even 1/100th of his pay?
As for union labor, it is a sad fact that globalization has made the UAW wages unsupportable in the 21st century. Deny it if you will, ignore it if you will (the UAW is certainly making a religion of doing so), but a reality it will remain.
It would help a little if these automakers could find a way to entirely eliminate O/T and structure the pay system on a merit-based foundation. Quality goes up, people on the line get bonuses on top of their base pay, which would be much much reduced from what it is today.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Still, many of these unionized companies have negotiated their way to the brink of bankruptcy or losing all their jobs to Mexico. Just because the management is just as incompetent as the union leaders doesn't make it a good idea.
On the other hand, I can't defend what some CEOs are getting paid.
Agree, and given that the union has now decided to strike the Malibu assembly plant, were I running the company, I think I'd continue to phase out UAW jobs in the US. Why pay these high wages only to have a strike, should you actually manage to create a vehicle that people seem to want to buy? Ford does not have to worry about this with their Fusion because they were smart enough to put the assembly line in Mexico.
As for union labor, it is a sad fact that globalization has made the UAW wages unsupportable in the 21st century. Deny it if you will, ignore it if you will (the UAW is certainly making a religion of doing so), but a reality it will remain.
So, how does all this globalization help the US and it's workers??? Whose decision was it to "go to Mexico" or any other third world country to get our major durable goods produced??? Do we accept shoddy workmanship or poor working conditions because the product is 25% cheaper to manufacture??? Do we save 25% on our purchase when the plant is shipped to Mexico?? (Like hell we do).
"Do we accept shoddy workmanship or poor working conditions because the product is 25% cheaper to manufacture??? Do we save 25% on our purchase when the plant is shipped to Mexico??"
Unfortunately, that is exactly the lesson large manufacturers learn. It is the WalMart example all over again: 5% of people will pay a premium for something they view as better quality, but quality is an intangible, so the other 95% will buy whatever is cheapest.
Globalization is not something someone dreamed up to somehow try to "help the US and it's workers". It doesn't even have a stated "purpose" as such, it is just a natural evolution of advancing transportation and communication technologies that divorce manufacturing location from sales outlets geographically.
We should not accept poor working conditions including pay for people in other countries, we should advocate like crazy for them to be improved to our level, but the economic reality is they will continue to do more and more of the manufacturing regardless of our success in improving global working conditions.
And ultimately I think what will happen is their conditions will improve and ours will worsen for wage workers. We will meet somewhere in the middle. This is the exact opposite, of course, of the message the UAW and wage workers everywhere want to hear....
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
And ultimately I think what will happen is their conditions will improve and ours will worsen for wage workers. We will meet somewhere in the middle. This is the exact opposite, of course, of the message the UAW and wage workers everywhere want to hear....
The reason we don't want to hear this is because it's worse for US. The only people who benefit from this is the CEO's, as they get rewarded for "cutting costs" without regard to the damage done to wage earners.
Sure, we can say that the US is too sophisticated to do these jobs (including auto manufacturing), and that that is progress, but where does it end??? Are we heading to a society where a bachellor's degree is only good enough to qualify for shift supervisor at McD's??? If so, then we need to rethink our educational priorities NOW, so that we can get back to where a HS degree means something, and a BS means more than Bull S**t.
nippononly: Unfortunately, that is exactly the lesson large manufacturers learn. It is the WalMart example all over again: 5% of people will pay a premium for something they view as better quality, but quality is an intangible, so the other 95% will buy whatever is cheapest.
But that isn't applicable to the new (and used) vehicle market. People have been migrating to Honda and Toyota, even though their vehicles typically go out the door for MORE than a competitive domestic model. Why? Because their products have a reputation for quality - backed up by independent reviewers and years of customer feedback - that the domestics do not posses.
If your example applied to the automotive sector, GM, Ford and Chrysler would be stealing market share from the foreign nameplates. Which is not what is happening.
Yeah, I hear you. Cars are machines that are rated by various and sundry as to their reliability, something we can't say about most commodities for sale at WalMart.
But I wasn't talking about the quality of the cars themselves, I was talking about the quality of the labor the automakers could procure for their money. THEY are the ones following the WalMart philosophy with regard to their labor. "All labor is pretty much equal, high-quality labor isn't worth the premium in cost, so I will buy the lowest-priced labor I can".
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
"Sure, we can say that the US is too sophisticated to do these jobs (including auto manufacturing), and that that is progress, but where does it end???....If so, then we need to rethink our educational priorities NOW, so that we can get back to where a HS degree means something, and a BS means more than Bull S**t."
Oh yes, you are 110% right, and this is something that nobody in the mainstream dialog has taken notice of. There is a massive crisis coming if this is not set to rights within a decade or two.
As for manufacturing, it is a virtual certainty that we won't stop the erosion of the workforce on American shores (except for a few specialty industries including one with very high visibility: the airplane industry). Even the UAW's most frantic efforts won't stop it. And what someone said earlier resonated with me: GM would be VERY SMART to close up shop in the U.S. ASAP - the current strike against production of the Malibu, its first popular car model in ages, is a PERFECT example of why they need to do this.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
To the original message: no, America doesn't need its own automakers. Lee Iacoca convinced everyone we did, but thats what he was paid to do, not because it was true or anything.
Plenty of countries get along without their own automakers. Look at Canada, or Brazil, or any of the Middle Eastern countries.
In all likelihood we will always have a automaker here in the US, and I believe that automaker will be Ford. GM is still the largest by sales volume, but in a technologically competitive industry, one where sportiness is valued in more than just one car (which, for GM, is just the Corvette), and where luxury means more than just wood and leather and size, GM just isn't cutting it.
I do not see Ford getting a good luxury brand soon, Lincoln is terrible, but its three big cars right now, the Focus, Fusion, and Edge are all in the right direction. The Focus would be better on the C1 platform and the Fusion should of never been: they should of just put the Mondeo in production on US assembly lines. Still, their cars are at least ok.
Plenty of countries get along without their own automakers. Look at Canada, or Brazil, or any of the Middle Eastern countries.
And we define "their own automaker" as having a corporate head office in that country deciding what vehicles to build? Because Brazil makes their own versions of GM and Ford and Fiat products, so the local companies can be considered to be local automakers. Canada reaps the benefits of having their own automakers by having two GM assembly plants, two Ford assembly plants, two Toyota plants, one Honda plant, CAMI, and a number of heavy truck producers as well as all of the parts suppliers (one of the largest Tier 1 parts suppliers in the world is based in Canada). And Iran does have a number of its own automakers including Iran Khodro, which is in the top 30 of the world's automakers.
The automotive industry, like it or not, is important. While having a home-based automaker might not have the cache it used to have, it's still a sign of a first-world country. Which is why Malaysia and Indonesia and Iran and of course China and India have their own car companies as part of their economic growth plans.
Comments
Old Engines: -- again, all that is anecdotal evidence presented over a beer or two. Statistically, 60s engines would never last as long as a 2008 automobile IMO. They are cheaply built, crude in design and inefficient in comparison. At least that's how they look to me when I take an old one apart. Engine technology today is really fabulous.
So it's not that new cars didn't get better---it's that THEIR new cars got better FASTER than OUR new cars....
I will agree with evertything except cheaply built. Remember, technology is way more advanced today for things like casting, metalology, and such. Engines from the '60's will last longer than their counterparts from the '30's or '40's. Again, it is the newer technology.
I think it's more electronics that bedevils modern cars, not quality control.
Heavy construction equipment
small private aircraft
military aircraft
machine tools
Don't forget politicians...at least they GENERATE energy...all that hot air and all. :shades:
Funny thing was, the 2nd offer the union accepted offered less in pay and benefits than the Company's first offer! And union leadership raa-raa-ed it up, hootin' and a hollerin' (we had to endure actual rally marches inside the engineering buildings, yep, they were loud and obnoxious)and basically losing sense of their faculties in order to "prove" the union's existence. A bunch of legalized thugs, the union. What a waste of time and money, that 2000 strike.
Boeing leaders are great on drinking hot, delicious Starbuck's and eating jelly donuts in these "I'm more important than all of you" meetings. Everything is kept quiet while these know-it-alls have their all-important meetings. What a bunch of grey-suited dorks.
Believe me, I know. I spent 20 years at Boeing. Apparently Boeing thought many, many suppliers from several different countries could build sub-assemblies that they could just ship to Boeing and have them magically fit together perfectly(yes, for the Dreamliner). These are the same Boeing execs who felt that whole groups of people were expendable back in 2003, while CEO Phil Condit felt that the time was ripe for an affair outside of marriage. For what looks like a viable, respectful jet airplane builder, Boeing has problems that I could write a book about.
These Starbuck's drinkers have somehow convinced select know-it-alls that they're indispensible, and so and so is dispensible. If they would spend more time watching their designs, planning their designs in a well-thought-out-way...and quit looking who they should lay off they might just get a decent grip and pull themselves up over Airbus Industrie.
Leading up to the 2003 layoffs of 40,000 good Boeing workers, the SPEEA newsletters were a hoppin' with people complaining about people like P.Condit suckering everyone in to thinking he's this smart know-it-all and at the same time the Company was "off-loading" buckets and buckets of Engineering work to Russia and small design houses, some of them led by former Boeing managers. By "offloading" my groups work to one of these former Boeing managers, Boeing saved themselves a lot of money. Good for them. They only have to pay out $10.00 and hours instead of $21.00 an hour. Wait a minute. Didn't Boeing just release(early in 2003) that they had $1.3B in cash reserves and those reserves were not showing signs of lessening up very fast? Boeing was making money hand of fist. Was it their jelly donut crowd starting to worry that their minions might get in their way of making more money? Could very well be just that.
Boeing has no loyalty to anyone in their Company. While an employee there I worked hard, saved the Company money by taking the necessary shortcuts to get the Illustration product out right the first time. Without compromising on safety and design integrity. Rework was usually minor. Would Boeing notice someone's work eithic and reward them? Wait a minute! We have jelly donuts and fine Starbuck's coffee to soak up here! Have at it jet aircraft dudes. What a flim-flam Company for flim-flam people. They can have it.
Lest you think I have unions, oh, wait just a cotton pickin' minute there. I would need to e-mail a SPEEA Rep. I know but the last retirement estimation I received in the mail about 6 months ago sharply raised my estimated retirement amount by about 400%. I couldn't believe it, I have moved to the SE Arizona desert and am in an entirely different industry, one that I find more rewarding. That is because when I help someone with their health, people tend to give back to you. They love that type of thing, it's more personal and "touchy-feely", dont'cha-know. At Boeing they would take your completed work package and look at you like "What, do you want a pat on the back of something?" A cold, metro-Seattle type of response, full of sarcasm and rebuttal. Dilbert was like a mirror-reflection of Boeing life.
But I had to do a quadruple take on my retirement estimates. Yikes. Some Union demand or something? That came through for them? Wow! I'll try to find out, but being that Social Security if apparently not going to be there this was a nice score. More on this important subject later. Maybe unions are all right. Maybe I will be repaid for my hard work and dedication. Hey, pass me those jelly donuts, would ya?
2021 Kia Soul LX 6-speed stick
I agree labor unions are no angels but neither are executive unions. With the excesses executives get, they are in no position to impress on others to make reasonable labor demands. Labor unions have made concessions in recent years due to companies' financial difficulties, but I have yet to see any real concessions made by executives. As it is now boards continue to reward executives for failures.
It is interesting that dill brought up governmental intervention in executive pay. If anything, government usually sides with managements rather than their workers or share holders. Several attempts to improve gas mileage standard were made in the 90's, but congress voted them down. If those attempts were successful, our Big 3 and our nation would be in much better shapes today.
Thanks again.
I agree and would like to add this. When you start looking at the makeup of these boards of directors it becomes apparent just how they do what you have said. The CEO of XYZ is on the board of company ABC and DEF. He votes his CEO buddy a big raise and expects likewise from the others. Interesting that one of our Presidential candidates was appointed to the WalMart Board of Directors. I believe her husband was the governor of the state that Walmart was headquartered.
In 1986, Sam Walton, the founder of Wal-Mart, had a problem. He was under growing pressure from shareholders — and his wife, Helen — to appoint a woman to the company’s 15-member board of directors.
So Mr. Walton turned to a young lawyer who just happened to be married to the governor of Arkansas, where Wal-Mart is based: Hillary Rodham Clinton.
Not too many years after that this same governor became President and pushed through NAFTA that has helped make Walmart the largest corporation in the World. Easy to see how this all works.
The only way I can see executive paychecks brought back to reality is by the SEC not allowing cross board membership. Or politicians wives and husbands being on those boards.
AMEN!!!!!! If our politicians did this type of thing in government, they'd be in jail for ETHICS VIOLATIONS......
I find it amazing that, as a publically traded company, these corporations can hide so much behind the veil of being a " private corporation".
BTW, maybe someone could link these posts to the UAW thread, where they are just as relevant.
Or go back to top marginal tax rates of 70-90%, that kind reduces the motivation to get the big paycheck.
While such rates seem unreasonable, it does seem as if those at the top have taken more and more for themselves as rates have dropped. We also have the cult of the CEO today, where all success is credited to the guy at the top...not sure if this has always been the case in this country.
Corp. executives have been groomed often times for many of the jobs they later attain in the copr. ranks for decades of time. It appears that unions are much more motivated to help themselves at the expense of the companies' greater good than are 95% of the executives out there. Unions by nature have a much greater parasitic relationship to corporate America than well over the majority of executive board members. Again that is not to say these executives never have parasitic relationships with corporate America. There are always some out there that are trying to soak the corporations bank accounts dry. As much as 300% more money and compensation to give a corp. executive is alot of money to pay someone. However that being said, so is paying the typical UAW worker over $60 an hour putting a few screws on a car or truck to attach windshield wipers. When you multiply this $60 an hour rate by many many thousands of auto workers at every US plant of a given auto maker, the executive pay doesn't seem quite so extreme because either side you take on this issue they are both really big money numbers. Yes, there are some in these factories making far less than $60 an hour but still the majority $40, $50 and there are some making in the general neighborhood of $60 an hour or more for their work. Labor unions have made concessions in recent years due to companies' financial difficulties. Most of the time they have only made these concessions when the companies health was on the line. GM's latest agreement with the UAW with healthcare cuts making the UAW responsible for some of their healthcare costs, and at the same time lowering the starting wages for GM factories to under $20 an hour. Also negotiated were the opportunities for GM to buyout workers healthcare options so GM wouldn't be held financially for their healthcare for the rest of their lives. The same general framework that GM was given both Chrysler and Ford were given as well. I know Chryslers negotiated settlement was slightly different because their needs were somewhat different than GM and Ford, but as of this post I can't remeber the details fully. I would think that if getting unions to the table to negotiate contracts and compensation is going to continue to be a real chore, and if these unions are going to hold hard and fast to previous compensation levels, it will only motivate the Big 3 to move their manufacturing operations overseas. I do not want to see the Big 3 go heavily if not entirely overseas for production costs reasons but I can't say I blame them and if it were up to me, I would have set up all my manufacturing overseas by now. Afterall, I have been monitoring Detriots auto industry very very closely now for over 30 years. I don't claim to be an expert but I'm not a lightweight with regard to their business either.
I am not opposed to merit pay for executives work and achievements in industry.
I agree completely. Executive pay should be based on merit and performance. Good executives should be rewarded by better compensation. However, big-company executives in this country today are paid more like teachers, where time in the job counts more than performance.
The assembly line worker rarely is required to work OT, the executive does, even if he doesn't stay past 5pm.
Good execs work like that yeah...that's far from all of them though. And so called "generic workers" have to work overtime too in many fields. My last job was hourly and I averaged 10 hours of overtime per week, plus additional work from home.
One thing that makes me ok with big executive compensation is that an executive has many years college and business school under their belt before ever getting a job in the car business. Add to that that the vast majority have risen through the ranks for more than 10-20 years time in the business, so it is a safe bet that most of those that have risen through the corp. ranks have some semblence of competence.
Some executives barely finish 4 years of college. I've met a few. As far as "rising through the ranks," that works differently with executives. Entry level executives work as executives for small companies or business units and move on to big ones. They don't start in the accounting office or on the assembly line. So I'm wondering what sort of competence you're talking about. BTW, "business school" is an MBA. Just like any other master's degree, it takes a mere 2 years after getting a bachelor's.
On the example of competence, just look at the corporate performance of Ford, GM, and Chrysler in recent years, especially the past 20 or 30. I don't see much competence there at all. They made bad decisions, and bad deals, and left the mess for someone else to clean up, while they went off to count their retirement money.
Now, let's get back to where we agree, since I'm a nice guy and like agreement and harmony and all.
At the large corporation level, this is much less true. One because these guys are invariably already wealthy, and two, because of the golden parachutes that they always seem to get for themselves. Their livelihood is NOT dependent on doing a good job. And while I give credit to guys like Donald Trump and Warren Buffet who do a good job anyway, we've got too many others floating around who will just coast if they can. We can also face the fact that those sort of lazy people exist at ALL levels of business: the executive level is only different because it's the most visible...oh, and their livelihood is not threatened, so there's nothing stopping them from doing a rotten job.
Anyway, I want to see executive pay become more performance-based, just like any other job. I work hard, I get rewarded, I work like garbage I get fired. Should be the same at all levels. And you know what? The hard-working execs who want to do a good job for their company won't mind a bit. However, the drones who are CxOs in most large companies these days would hate the idea.
You know, sometimes, I'm dumbfounded by the sticking up for execs and bashing of workers.
Dill, check this out:
At American Axle (full disclosure; I'm a shareholder) the worker being compensated at $60/hr costs $124,800/yr total.
The CEO, who was compensated at $27 MILLION last yr earned $3090.66 FOR EVERY HOUR HE WAS ALIVE LAST YEAR.
Rick Wagoner was compensated $14.4 million last year, earning $1643.84 for every hour he was alive.
Now, does $60/hr compensation seem too much???
Can we shareholders limit their compensation??? In theory, yes, but the board owns so many shares, it would be impossible to overcome.
The CEO, who was compensated at $27 MILLION last yr earned $3090.66 FOR EVERY HOUR HE WAS ALIVE LAST YEAR.
Rick Wagoner was compensated $14.4 million last year, earning $1643.84 for every hour he was alive.
Now, does $60/hr compensation seem too much??? <<
Yep, the CEO compensation is also obscene. Whatever happened to fiscal responsibility on both sides management/labor? No wonder the US automotive industry is so screwed up. It is getting borked by both sides.
Don't think the foreign companies that are here have it made. there is already talk of Toyota wanting to limit compensation to it's workers to 150% of the area's average mfr'ing wage to maintain the cost edge that they had over the Big 3 until the new contracts were signed. I don't think you'd be too happy to here your boss say "Sure, you're doing a fantastic job, better that we could ask, but we're cutting your pay so we can maintain our edge (read; PROFIT MARGIN)"
Didn't GM just declare yet another multi-BILLION dollar loss for the last quarter?
It's a good thing they can attract such great talent at GM with those huge compensation packages. :-P
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
I find it kinda sick that the market rewarded GM for losing less than they expected it to lose. That isn't success in my book.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Well, in a (their) world where you have nothing but incestuous (business)relationships, and I don't exactly let union leadership off the hook either, it looks perfectly fine.
And the sad part is, say you want the government to intervene and most people will say "What can we do, it's a private company?", yet it's PUBLICALLY traded.
I don't understand why the SEC can punish somone for insider trading, yet they can't establish tighter rules as to who can serve on a board, and how many boards they can serve on, and set up a system that will keep these gratuitous pay raises from happening.
At least with a union workers $60 or $70/ hr compensation, you can see that it is a natural progression of wages and benefits, buying just about what it could in 1968 or 1978. But this explosion in CEO compensation comes from one place.......their friends.
Large companies HATE free markets and competition. :shades:
Most lawyers, CPAs, engineers, etc. don't make that much. That is into the realm of what dentists and family practitioner MDs make.
So it is not ok for a unionized employee to make past the magical $100K a year, but it is OK for white collar jobs? Makes no sense. Your post indicates that I should not complain about the high cost of health care or legal services, because they are not in unions??? LOL
Personally, I like unions, because I always had to get paid at least $1 more than my highest paid empoyee.
Most lawyers, CPAs, engineers, etc. don't make that much.
I believe that figure is the total cost to the employer for the labor, not the cash wages. So it includes pension, health and other insurance, the employer 1/2 of SS tax, unemployment tax, sick leave, vacation, etc. Given that I think you may be mistaken regarding the pay for those other jobs.
I'd guess the cash wages are maybe 1/2 of the total labor costs.
On the other hand, I can't defend what some CEOs are getting paid.
Some mutual funds only invest in morally acceptable companies (no, I don't know how to define that). Along those lines, I would love to see a mutual fund that excludes companies that pay outrageous sums to their executives.
Wagoner has been CEO for several years IIRC, and has received hundreds of millions of dollars from a company essentially rushing towards an early grave the entire time. How has he earned even 1/100th of his pay?
As for union labor, it is a sad fact that globalization has made the UAW wages unsupportable in the 21st century. Deny it if you will, ignore it if you will (the UAW is certainly making a religion of doing so), but a reality it will remain.
It would help a little if these automakers could find a way to entirely eliminate O/T and structure the pay system on a merit-based foundation. Quality goes up, people on the line get bonuses on top of their base pay, which would be much much reduced from what it is today.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
On the other hand, I can't defend what some CEOs are getting paid.
Agree, and given that the union has now decided to strike the Malibu assembly plant, were I running the company, I think I'd continue to phase out UAW jobs in the US. Why pay these high wages only to have a strike, should you actually manage to create a vehicle that people seem to want to buy? Ford does not have to worry about this with their Fusion because they were smart enough to put the assembly line in Mexico.
So, how does all this globalization help the US and it's workers??? Whose decision was it to "go to Mexico" or any other third world country to get our major durable goods produced??? Do we accept shoddy workmanship or poor working conditions because the product is 25% cheaper to manufacture??? Do we save 25% on our purchase when the plant is shipped to Mexico?? (Like hell we do).
Unfortunately, that is exactly the lesson large manufacturers learn. It is the WalMart example all over again: 5% of people will pay a premium for something they view as better quality, but quality is an intangible, so the other 95% will buy whatever is cheapest.
Globalization is not something someone dreamed up to somehow try to "help the US and it's workers". It doesn't even have a stated "purpose" as such, it is just a natural evolution of advancing transportation and communication technologies that divorce manufacturing location from sales outlets geographically.
We should not accept poor working conditions including pay for people in other countries, we should advocate like crazy for them to be improved to our level, but the economic reality is they will continue to do more and more of the manufacturing regardless of our success in improving global working conditions.
And ultimately I think what will happen is their conditions will improve and ours will worsen for wage workers. We will meet somewhere in the middle. This is the exact opposite, of course, of the message the UAW and wage workers everywhere want to hear....
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Well, that resolves that, then
Even if true, no one is soley a "worker". All are also consumers. Many are also owners.
The reason we don't want to hear this is because it's worse for US. The only people who benefit from this is the CEO's, as they get rewarded for "cutting costs" without regard to the damage done to wage earners.
Sure, we can say that the US is too sophisticated to do these jobs (including auto manufacturing), and that that is progress, but where does it end??? Are we heading to a society where a bachellor's degree is only good enough to qualify for shift supervisor at McD's??? If so, then we need to rethink our educational priorities NOW, so that we can get back to where a HS degree means something, and a BS means more than Bull S**t.
All hail the upcoming globalized serfdom society.
But that isn't applicable to the new (and used) vehicle market. People have been migrating to Honda and Toyota, even though their vehicles typically go out the door for MORE than a competitive domestic model. Why? Because their products have a reputation for quality - backed up by independent reviewers and years of customer feedback - that the domestics do not posses.
If your example applied to the automotive sector, GM, Ford and Chrysler would be stealing market share from the foreign nameplates. Which is not what is happening.
When I buy cars, I want BMWs and Porsches (or Hondas for that matter).
When I buy rice, soap or a spark plug for my lawn mower, I am all about WalMart.
But I wasn't talking about the quality of the cars themselves, I was talking about the quality of the labor the automakers could procure for their money. THEY are the ones following the WalMart philosophy with regard to their labor. "All labor is pretty much equal, high-quality labor isn't worth the premium in cost, so I will buy the lowest-priced labor I can".
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Oh yes, you are 110% right, and this is something that nobody in the mainstream dialog has taken notice of. There is a massive crisis coming if this is not set to rights within a decade or two.
As for manufacturing, it is a virtual certainty that we won't stop the erosion of the workforce on American shores (except for a few specialty industries including one with very high visibility: the airplane industry). Even the UAW's most frantic efforts won't stop it. And what someone said earlier resonated with me: GM would be VERY SMART to close up shop in the U.S. ASAP - the current strike against production of the Malibu, its first popular car model in ages, is a PERFECT example of why they need to do this.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Plenty of countries get along without their own automakers. Look at Canada, or Brazil, or any of the Middle Eastern countries.
In all likelihood we will always have a automaker here in the US, and I believe that automaker will be Ford. GM is still the largest by sales volume, but in a technologically competitive industry, one where sportiness is valued in more than just one car (which, for GM, is just the Corvette), and where luxury means more than just wood and leather and size, GM just isn't cutting it.
I do not see Ford getting a good luxury brand soon, Lincoln is terrible, but its three big cars right now, the Focus, Fusion, and Edge are all in the right direction. The Focus would be better on the C1 platform and the Fusion should of never been: they should of just put the Mondeo in production on US assembly lines. Still, their cars are at least ok.
One can amass a little collection for the price of an average new car...it's just the maintenance that can get you.
And we define "their own automaker" as having a corporate head office in that country deciding what vehicles to build? Because Brazil makes their own versions of GM and Ford and Fiat products, so the local companies can be considered to be local automakers. Canada reaps the benefits of having their own automakers by having two GM assembly plants, two Ford assembly plants, two Toyota plants, one Honda plant, CAMI, and a number of heavy truck producers as well as all of the parts suppliers (one of the largest Tier 1 parts suppliers in the world is based in Canada). And Iran does have a number of its own automakers including Iran Khodro, which is in the top 30 of the world's automakers.
The automotive industry, like it or not, is important. While having a home-based automaker might not have the cache it used to have, it's still a sign of a first-world country. Which is why Malaysia and Indonesia and Iran and of course China and India have their own car companies as part of their economic growth plans.