The Mighty Have Fallen

[Gawain 0]

GM is no longer the largest automaker in the world. As expected, Toyota has become the world's largest automaker, selling more units worldwide in the first three months of this year.

http://www.cbsnews.com/stories/2007/04/24/business/main2720069.shtml

So far, this is the only link reporting the news I've found. GM is leading Toyota with growth in China, but that will not save them. China has its own automotive ambitions, and GM isn't part of them.

The American automakers are hurting bad. When notable percentages of vehicles account for health benefits alone, not other overhead, not salary, not buildings, utilities, etc., it is a sign of more ill tidings to come.

I am not a fan of unions in all forms. Some industries benefit from them greatly. Auto manufacturing is not one of them unfortunately. Case-and-point, Toyota, Honda, Nissan, Merecedes, and BMW all run thriving operations here in the US, where it is not the cheapest place to make stuff, and they operate at a profit, making the highest quality vehicles that can be found anywhere...ever...and there is not a UAW rep to be found anywhere. On top of that, many of these people are clearing more than their UAW counterparts.

The big three are hurting so bad, the state of Michigan is on a huge economic development advertising campaign. Jeff Daniels is their spokesman....and that's with the majority of GM, Ford, and Chrysler's vehicles not even being built there anymore.

UAW needs to wake up and take a stiff drink of coffee. The days of full pensions for unskilled labor and non-contributory medical benefits are long gone. There isn't an enterprise today that supports such a business model.

I am not saying any of these people don't work hard, quite the opposite. However, the union's efforts of self-preservation and remaining relevant are backfiring on them now.

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[akarunway 1]

Quote

GM is no longer the largest automaker in the world. As expected, Toyota has become the world's largest automaker, selling more units worldwide in the first three months of this year.

http://www.cbsnews.com/stories/2007/04/24/business/main2720069.shtml

So far, this is the only link reporting the news I've found. GM is leading Toyota with growth in China, but that will not save them. China has its own automotive ambitions, and GM isn't part of them.

The American automakers are hurting bad. When notable percentages of vehicles account for health benefits alone, not other overhead, not salary, not buildings, utilities, etc., it is a sign of more ill tidings to come.

I am not a fan of unions in all forms. Some industries benefit from them greatly. Auto manufacturing is not one of them unfortunately. Case-and-point, Toyota, Honda, Nissan, Merecedes, and BMW all run thriving operations here in the US, where it is not the cheapest place to make stuff, and they operate at a profit, making the highest quality vehicles that can be found anywhere...ever...and there is not a UAW rep to be found anywhere. On top of that, many of these people are clearing more than their UAW counterparts.

The big three are hurting so bad, the state of Michigan is on a huge economic development advertising campaign. Jeff Daniels is their spokesman....and that's with the majority of GM, Ford, and Chrysler's vehicles not even being built there anymore.

UAW needs to wake up and take a stiff drink of coffee. The days of full pensions for unskilled labor and non-contributory medical benefits are long gone. There isn't an enterprise today that supports such a business model.

I am not saying any of these people don't work hard, quite the opposite. However, the union's efforts of self-preservation and remaining relevant are backfiring on them now.

I'm HARDCORE union. I'll think on this and get back to ya. Union has helped me bigtime. Not to say they don't have their faults. We need new leadeship for sure. Nepotism runs rampant is my big beef. And them stealing 1.5 billion out of our pension fund a couple yrs. ago. Took my raise to give a golden parachute package to the wrongdoers. Fuckin assholes

I hold it true, whate'er befall;
I feel it, when I sorrow most;
'Tis better to have loved and lost
Than never to have loved at all.

[livendive 8]

Quote

GM is no longer the largest automaker in the world. As expected, Toyota has become the world's largest automaker, selling more units worldwide in the first three months of this year.

http://www.cbsnews.com/stories/2007/04/24/business/main2720069.shtml

So far, this is the only link reporting the news I've found. GM is leading Toyota with growth in China, but that will not save them. China has its own automotive ambitions, and GM isn't part of them.

The American automakers are hurting bad. When notable percentages of vehicles account for health benefits alone, not other overhead, not salary, not buildings, utilities, etc., it is a sign of more ill tidings to come.

I am not a fan of unions in all forms. Some industries benefit from them greatly. Auto manufacturing is not one of them unfortunately. Case-and-point, Toyota, Honda, Nissan, Merecedes, and BMW all run thriving operations here in the US, where it is not the cheapest place to make stuff, and they operate at a profit, making the highest quality vehicles that can be found anywhere...ever...and there is not a UAW rep to be found anywhere. On top of that, many of these people are clearing more than their UAW counterparts.

The big three are hurting so bad, the state of Michigan is on a huge economic development advertising campaign. Jeff Daniels is their spokesman....and that's with the majority of GM, Ford, and Chrysler's vehicles not even being built there anymore.

UAW needs to wake up and take a stiff drink of coffee. The days of full pensions for unskilled labor and non-contributory medical benefits are long gone. There isn't an enterprise today that supports such a business model.

I am not saying any of these people don't work hard, quite the opposite. However, the union's efforts of self-preservation and remaining relevant are backfiring on them now.

I agree with almost every single thing you said. Nitpicking, I'd say that Honda and Toyota vehicles are a notch above Nissan and several notches above Mercedes & BMW in quality of construction. Unfortunately, I think the surname of DaimlerChrysler is dragging down their standard. I expect to see the same in the other European lines that GM (Saab) and Ford (Jaguar, Volvo, Land Rover) have acquired. My last four vehicles have been a Nissan, a Honda and two Toyotas. I drive the "domestics" at work, and my next vehicle will be a Toyota. They just build better vehicles.

Blues,
Dave

"I AM A PROFESSIONAL EXTREME ATHLETE!"
(drink Mountain Dew)

[billvon 2,427]

>the union's efforts of self-preservation and remaining relevant are backfiring on them now.

I think this will be a problem that solves itself (sadly.) Unionized auto manufacturers will go out of business, out-competed by more efficient, better paying car companies that do not have unions in their factories.

[Gawain 0]

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I'm HARDCORE union. I'll think on this and get back to ya. Union has helped me bigtime. Not to say they don't have their faults. We need new leadeship for sure. Nepotism runs rampant is my big beef. And them stealing 1.5 billion out of our pension fund a couple yrs. ago. Took my raise to give a golden parachute package to the wrongdoers. Fuckin assholes

Like I said, I'm not 100% anti-union, but in light of what you wrote, I'm not sure that any real benefit you might cite would be worth the crap you're forced to endure. It would be cool to see your "PRO vs CON" list in the industry you're in.

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[willard 0]

My sister works at a Honda transmission plant in Georgia. She loves her job.

[Zenister 0]

the American Auto industry has had its head in the sand for years... and that willful ignorance is now coming back to haunt them...

"if you are not looking forward, you are already moving backwards"

it will be years before they can recover, and cost thousands of people their jobs before it changes...

____________________________________
Those who fail to learn from the past are simply Doomed.

[ExAFO 0]

Survival of the fittest, no tears should be shed.

Many Foreign-name cars are more American than the Big 3.

Illinois needs a CCW Law. NOW.

[kallend 1,647]

It's MANAGEMENT that is paid the big bucks to run the companies, not the unions.

If GM and Ford marketed vehicles that people wanted to buy, they wouldn't be in trouble.

...

The only sure way to survive a canopy collision is not to have one.

[willard 0]

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It's MANAGEMENT that is paid the big bucks to run the companies, not the unions.

If GM and Ford marketed vehicles that people wanted to buy, they wouldn't be in trouble.

GM was the worlds top selling manufacturer until Toyota just surpassed them. They didn't hold the top spot for so long by making cars and trucks nobody wanted.
Ford has been the top selling brand of truck for years. Just imagine how many they would have sold if people actually WANTED them!

[Gawain 0]

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Survival of the fittest, no tears should be shed.

Many Foreign-name cars are more American than the Big 3.

I'm not shedding tears, I'm a bit mad actually. These three companies (well, Ford and GM mostly) have seen the writing on the wall for years. Neither side has been willing to face the tough facts.

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[ExAFO 0]

They all demanded exorbitant wages and produced a sub-par product. Good riddance.

Illinois needs a CCW Law. NOW.

[Gawain 0]

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It's MANAGEMENT that is paid the big bucks to run the companies, not the unions.

It isn't a management only pension fund that is crippling GM right now. It isn't a management only health plan that is costing GM billions. Labor out numbers management by at least 20:1 at GM. There are assembly line workers who are paid massive hourly wages that easily outstrip middle-management salaries. The overhead of the assembly line is way, way higher than at the "office".

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If GM and Ford marketed vehicles that people wanted to buy, they wouldn't be in trouble.

If GM and Ford made vehicles that people wanted to buy...

People don't want a Chevy Cobalt, a "new" car with 10 year old technology, stuffed with shit that doesn't work or last long, with options that come only in packages from the factory, not a-la-carte at the dealer.

People don't want a Buick Lucerne, which is an entry level luxury brand, but the luxury items are optional (in packages of course).

People don't want 15 different frigging kinds of the Trailblazer, sold under the Chevy, GMC, Buick, Saab, Saturn nameplates.

People don't want an Opel, stripped, badged as a Saab, with a 20 year old engine design.

Ford is going to turn itself around, I believe. Their quality (compared to GM) is stellar. Their brand base is far more defined, and their products are fresh (at great expense to the company), but they still need work. To your point about marketing, Ford is failing miserably, and there, we agree.

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[jakee 1,257]

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Ford has been the top selling brand of truck for years. Just imagine how many they would have sold if people actually WANTED them!

God only knows why! Horrific vehicle

Do you want to have an ideagasm?

[willard 0]

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Ford has been the top selling brand of truck for years. Just imagine how many they would have sold if people actually WANTED them!

God only knows why! Horrific vehicle

When I was in business our customers (quarries and explosives distributors) specified Ford trucks 90% of the time. They were the only trucks that could take the abuse that they put their trucks through. I think they would have a good argument against your labeling Ford trucks as "horrific".

[seedy 0]

I agree with you about marketing or making what the consumer wants. I just heard another OnStar commercial for GM. Seems like they are trying to make that their biggest selling point. I could care less about OnStar, I have a cell phone. Make me a quality vehicle instead.

I had a Chevy Colorado as a work vehicle. Biggest piece of junk I'ver ever driven.

I intend to live forever -- so far, so good.

[nathaniel 0]

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It's MANAGEMENT that is paid the big bucks to run the companies, not the unions.

Well yes but they're not exclusive. Mgmt's biggest mistake appears to have been pension arrangements with the unions. Along with lots of other big and small mistakes of course, but the cost of the pension commitments was seriously misjudged--the quantities involved are staggering.

Had the UAW understood what they were asking for I doubt they would have negotiated for it in the first place. I'm not totally certain--it'd be an interesting econometric question to look at. Perhaps the unions did better for themselves by juicing out the manufacturers and going out of business by 2010 than they would have by rolling over and continuing business, esp if they're able to get much out of the manufacturers as they go bankrupt. I doubt it tho--presumably the money is substantially getting spent in support of retirees' lifestyles and not getting substantially invested.

Throw in the risk of regulatory intervention and I think it's a losing game for the unions still tho. Tough question.

My advice is to do what your parents did; get a job, sir. The bums will always lose. Do you hear me, Lebowski?

[billvon 2,427]

>Had the UAW understood what they were asking for I doubt they would
>have negotiated for it in the first place.

Classic prisoner's dilemma. Go for the quick buck instead of the (possible) moderate long term gain? A gain that you only see if someone else doesn't go for the quick buck first?

Most people never plan beyond 10 years; 2-3 years is a more common planning horizon. And in the next 2-3 years, union workers will make more money by demanding big benefits packages and high wages. At least, those who still have jobs.

[akarunway 1]

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Ford has been the top selling brand of truck for years. Just imagine how many they would have sold if people actually WANTED them!

God only knows why! Horrific vehicle

I'm driving a 1982 F-150 right now. One of the best vehicles I've ever had. Climbs the mountains, tows way more than it weighs. Maybe I got lucky w/ this one. Bought a new Dodge Ram off the show room floor in 1999. Fucker started falling apart at 5000 miles. Assembled in MEXICO. Imagine that.

I hold it true, whate'er befall;
I feel it, when I sorrow most;
'Tis better to have loved and lost
Than never to have loved at all.

[akarunway 1]

Quote

>Had the UAW understood what they were asking for I doubt they would
>have negotiated for it in the first place.

Classic prisoner's dilemma. Go for the quick buck instead of the (possible) moderate long term gain? A gain that you only see if someone else doesn't go for the quick buck first?

Most people never plan beyond 10 years; 2-3 years is a more common planning horizon. And in the next 2-3 years, union workers will make more money by demanding big benefits packages and high wages. At least, those who still have jobs.

Good thing is my union job can't be automated. And the demand for powerhouses and water treatment faculities is enormous right now. I'm sure they'll flush my pension down the toilet before I ever see it tho. Time to look ahead. I will and I do take pride in all my work. I'll sign my name to anything I've ever helped build

I hold it true, whate'er befall;
I feel it, when I sorrow most;
'Tis better to have loved and lost
Than never to have loved at all.

[TrophyHusband 0]

options that come only in packages from the factory, not a-la-carte at the dealer.

[nathaniel 0]

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Classic prisoner's dilemma. Go for the quick buck instead of the (possible) moderate long term gain?

I don't think it's the prisoner's dilemma. First off because neither of the unions and the management had discrete choices. Second because the outcomes are structured differently in the different time periods.

But pretending that it was a boolean choice between pension and no pension, the mgmt played along when the unions were burning them--mgmt were probably better off at the time and figured they could renegotiate down the line before the burn set in, but never took adequate steps to do so. I do think that the political climate was different when the deals were made and fate was sealed--I gather unions had much greater political influence then, and I gather that a greater proportion of voters these days identify themselves as owners of capital.

In this way it may be or have been part of mgmt's strategy to go bankrupt, break the union obligations once and for all via court order or bailout, and emerge from bankruptcy freshly competitive. They may have been banking on an inevitable bailout when they signed the deals, and the same political currents that today have weakened the unions have also reduced their prospects for a bailout.

If they were truly cunning they'd go out of business for a while but finagle some kind of deal to preserve the capital assets and the IP, and open up again in a year with a new logo and without the unions.

My advice is to do what your parents did; get a job, sir. The bums will always lose. Do you hear me, Lebowski?

[kelpdiver 2]

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It isn't a management only pension fund that is crippling GM right now. It isn't a management only health plan that is costing GM billions.

Any long standing company that did pensions and health care for retirees is at risk. The ones that could maintain a dominant position (GE and IBM for example) can deal with that. But car makers and airlines have had to deal with new competitors and even if their marketing plans were intelligent they'd be in trouble.

The model of company providing health insurance is just a bad one. Some day we're going to have to go a different direction. Can't blame management for the rapid premium increases. Can't blame the workers for wanting coverage.

Pension woes, otoh, are definitely the fault of management. In boom times, they underfunded (or zero funded) the accounts because the market was doing it for them. And in the hard times, when they could dollar cost average their way back up, the company's cash flow is weaker, again encouraging them to make up some BS numbers to pay less in.

This problem has esssentially been fixed for future generations by switching from defined benefit to defined contributions. My company kicks in 6% into an account that is basically like another 401k. It means no risk for the companies, and it's better for someone like me who doesn't plan (or expect to be able to) to stay at one place for 20 years.

-------------
GM's problem is that is has (how many now?) different divisions selling the same product. Hardly efficient. Toyota has just as many types of trucks and SUVs and attractive sedans, but sells them as Toyota or Lexus. (Most recently is the Scions - are those sold separately?)

GM did have the first green car and they buried that memory away. Meanwhile Toyota is leading that market.

[Gawain 0]

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It isn't a management only pension fund that is crippling GM right now. It isn't a management only health plan that is costing GM billions.

Any long standing company that did pensions and health care for retirees is at risk. The ones that could maintain a dominant position (GE and IBM for example) can deal with that. But car makers and airlines have had to deal with new competitors and even if their marketing plans were intelligent they'd be in trouble.

IBM and GE (along with many others that have more dominant unions, like Verizon et al) have switched from traditional pension plans to Cash Value plans.

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The model of company providing health insurance is just a bad one. Some day we're going to have to go a different direction. Can't blame management for the rapid premium increases. Can't blame the workers for wanting coverage.

I don't blame the workers for wanting it, but even federal employees pay into their plans.

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Pension woes, otoh, are definitely the fault of management. In boom times, they underfunded (or zero funded) the accounts because the market was doing it for them. And in the hard times, when they could dollar cost average their way back up, the company's cash flow is weaker, again encouraging them to make up some BS numbers to pay less in.

In the case of GM and Ford, this doesn't seem to be a problem. What's really kicking them are these retiree-health plans -- very expensive.

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GM's problem is that is has (how many now?) different divisions selling the same product. Hardly efficient. Toyota has just as many types of trucks and SUVs and attractive sedans, but sells them as Toyota or Lexus. (Most recently is the Scions - are those sold separately?)

GM did have the first green car and they buried that memory away. Meanwhile Toyota is leading that market.

Agreed.

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[SkyDekker 1,141]

Max, it doesn't happen too often but I fully agree with you. Unfortunately, it will greatly impact Canada and Ontario more specifically too.