The current debacle with the automotive industry provides further insight and introspection into the alleged concepts of management ,lack thereof or cluelessness of both parties involved or both sides of the fence so to say.

One the one hand we have the management / effect on the economy viewpoint as portrayed in this letter to editor entitled “Have You Driven a Ford Lately:

As I watch the coverage of the fate of the U.S. auto industry, one alarming and frustrating fact hits me right between the eyes. The fate of our nation’s economic survival is in the hands of some congressmen who are completely out of touch and act without knowledge of an industry that affects almost every person in our nation. The same lack of knowledge is shared with many journalists whom are irresponsible when influencing the opinion of millions of viewers.
Sen. Richard Shelby of Alabama has doomed the industry, calling it a dinosaur. No Mr. Shelby, you are the dinosaur, with ideas stuck in the ’70s, ’80s and ’90s. You and the uninformed journalist and senators that hold onto myths that are not relevant in today’s world.
When you say that the Big Three build vehicles nobody wants to buy, you must have overlooked that GM outsold Toyota by about 1.2 million vehicles in the U.S. and Ford outsold Honda by 850,000 and Nissan by 1.2 million in the U.S. GM was the world’s No. 1 automaker beating Toyota by 3,000 units.
When you claim inferior quality comes from the Big Three, did you realize that Chevy makes the Malibu and Ford makes the Fusion that were both rated over the Camry and Accord by J.D. Power independent survey on initial quality? Did you bother to read the Consumer Report that rated Ford on par with good Japanese automakers.
Did you realize Big Three’s gas guzzlers include the 33 mpg Malibu that beats the Accord. And for ’09 Ford introduces the Hybrid Fusion whose 39 mpg is the best midsize, beating the Camry Hybrid. Ford’s Focus beats the Corolla and Chevy’s Cobalt beats the Civic.
When you ask how many times are we going to bail them out you must be referring to 1980. The only Big Three bailout was Chrysler, who paid back $1 billion, plus interest. GM and Ford have never received government aid.
When you criticize the Big Three for building so many pickups, surely you’ve noticed the attempts Toyota and Nissan have made spending billions to try to get a piece of that pie. Perhaps it bothers you that for 31 straight years Ford’s F-Series has been the best selling vehicle. Ford and GM have dominated this market and when you see the new ’09 F-150 you’ll agree this won’t change soon.
Did you realize that both GM and Ford offer more hybrid models than Nissan or Honda. Between 2005 and 2007, Ford alone has invested more than $22 billion in research and development of technologies such as Eco Boost, flex fuel, clean diesel, hybrids, plug in hybrids and hydrogen cars.
It’s 2008 and the quality of the vehicles coming out of Detroit are once again the best in the world.
Perhaps Sen. Shelby isn’t really that blind. Maybe he realizes the quality shift to American. Maybe it’s the fact that his state of Alabama has given so much to land factories from Honda, Hyundai and Mercedes Benz that he is more concerned about their continued growth than he is about the people of our country. Sen. Shelby’s disdain for “government subsidies” is very hypocritical. In the early ’90s he was the driving force behind a $253 million incentive package to Mercedes. Plus, Alabama agreed to purchase 2,500 vehicles from Mercedes. While the bridge loan the Big Three is requesting will be paid back, Alabama’s $180,000-plus per job was pure incentive. Sen. Shelby, not only are you out of touch, you are a self-serving hypocrite, who is prepared to ruin our nation because of lack of knowledge and lack of due diligence in making your opinions and decisions.
After 9/11, the Detroit Three and Harley Davidson gave $40 million-plus emergency vehicles to the recovery efforts. What was given to the 9/11 relief effort by the Asian and European Auto Manufactures? $0 Nada. Zip!
We live in a world of free trade, world economy and we have not been able to produce products as cost efficiently. While the governments of other auto producing nations subsidize their automakers, our government may be ready to force its demise. While our automakers have paid union wages, benefits and legacy debt, our Asian competitors employ cheap labor. We are at an extreme disadvantage in production cost. Although many UAW concessions begin in 2010, many lawmakers think it’s not enough.
Some point the blame to corporate management. I would like to speak of Ford Motor Co. The company has streamlined by reducing our workforce by 51,000 since 2005, closing 17 plants and cutting expenses. Product and future product is excellent and the company is focused on one Ford. This is a company poised for success. Ford product quality and corporate management have improved light years since the nightmare of Jacques Nasser. Thank you Alan Mulally and the best auto company management team in the business.
The financial collapse caused by the secondary mortgage fiasco and the greed of Wall Street has led to a $700 billion bailout of the industry that created the problem. AIG spent nearly $1 million on three company excursions to lavish resorts and hunting destinations. Paulson is saying no to $250 billion foreclosure relief and the whole thing is a mess. So when the Big Three ask for 4 percent of that of the $700 billion, $25 billion to save the country’s largest industry, there is obviously oppositions. But does it make sense to reward the culprits of the problem with $700 billion unconditionally, and ignore the victims?
As a Ford dealer, I feel our portion of the $25 billion will never be touched and is not necessary. Ford currently has $29 billion of liquidity. However, the effect of a bankruptcy by GM will hurt the suppliers we all do business with. A Chapter 11 bankruptcy by any manufacture would cost retirees their health care and retirements. Chances are GM would recover from Chapter 11 with a better business plan with much less expense. So who foots the bill if GM or all three go Chapter 11? All that extra health care, unemployment, loss of tax base and some forgiven debt goes back to the taxpayer, us. With no chance of repayment, this would be much worse than a loan with the intent of repayment.
So while it is debatable whether a loan or Chapter 11 is better for the Big Three, a $25 billion loan is definitely better for the taxpayers and the economy of our country.
So I’ll end where I began on the quality of the products of Detroit. Before you, Mr. or Ms. Journalist continue to misinform the American public and turn them against one of the great industries that helped build this nation, I must ask you one question. Before you, Mr. or Madam Congressman vote to end health care and retirement benefits for 1 million retirees, eliminate 2.5 million of our nation’s jobs, lose the technology that will lead us in the future and create an economic disaster including hundreds of billions of tax dollars lost, I ask this question not in the rhetorical sense. I ask it in the sincere, literal way. Can you tell me, have you driven a Ford lately?
Jim Jackson
Elkins

link: http://theintermountain.com/page/content.detail/id/513450.html?nav=5011&showlayout=0

all very true and valid points.   It can be said that truthfully did the American consumer not think in any way or manner that since the automotive industry was such a bullwark of the American and North American economy that by buying Toyotas etc that in some way this was shortsighted and would come back to haunt them.

It is true that the foreign automakers do have American / Canadian plants and that the vehicles are “made in North America”.  On the other hand though – the big paying jobs are still back home in the country of ownership/ origin.  In addition one only has to look under the hook for foreign labels ( in foreign languages – and not Spanish) to understand that many , if not most of the more expensive non- sheet metal components , are not made “here”.  Secondly the real high paying jobs – management , designers etc are not in the US .  For the most part the screwdriver assembly plants are mainly hiring laborers here , that are new and young with few health care problems and lower insurance costs.  There are some “white faces”  to appear in management and at the dealerships but these are still predominantly foreign made vehicles in an industry on which the basis of the American economy is based on – whether it is in actual manufacturing or in support services – be they repair , parts , maintenance etc.

These points are all true .  However some are misstated or misconstrued .  Whether these are half truths told as spin or are actually believed that is all unknown, indeterminable and debatable.

Contrast this by an actual email sent around by a “used car dealer”  who felt that he was getting the short end of the stick always:

WHAT AN EYE OPENER!!!

—–

According to Forbes:

Labor cost per hour, wages and benefits for hourly workers.

Ford: $70.51 ($141,020 per year)

GM: $73.26 ($146,520 per year)

Chrysler: $75.86 ($151,720 per year)

Toyota, Honda, Nissan (in U.S.): $48.00 ($96,000 per year)

According to AAUP and IES, the average annual compensation for a college professor in 2006 was $92,973 (average salary nationally of $73,207 + 27% benefits).

Bottom Line: The average UAW worker with a high school degree earns 57.6% more compensation than the average university professor with a Ph.D., and 52.6% more than the average worker at Toyota, Honda or Nissan.

Many industry analysts say the Detroit Three, must be on par with Toyota and Honda to survive. This year’s contract, they say, must be “transformational” in reducing pension and health care costs.

What would “transformational” mean? One way to think about “transformational” would mean that UAW workers, most with a high school diploma, would have to accept compensation equal to that of the average university professor with a PhD.

Then there’s the “Job Bank”

When a D3 (Detroit 3 carmaker) lays an employee off, that employee continues to receive all benefits – medical, retirement, etc., etc., PLUS an hourly wage of $31/hour.

Here’s a typical story….

Ken Pool is making good money. On weekdays, he shows up at 7 a.m. at Ford Motor Co.’s Michigan Truck Plant in Wayne, signs in, and then starts working — on a crossword puzzle. Pool hates the monotony, but the pay is good: more than $31 an hour, plus benefits.

“We just go in and play crossword puzzles, watch videos that someone brings in or read the newspaper,” he says. “Otherwise, I just sit.”

Pool is one of more than 12,000 American autoworkers who, instead of installing windshields or bending sheet metal, spend their days counting the hours in a jobs bank set up by Detroit automakers as demanded by the United Auto Workers Union – UAW – as part of an extraordinary job security agreement.

Now the D3 wants Joe Taxpayer to pick up this tab in a $25 Billion bailout package – soon to be increased to $45 Billion if Nancy Pelosi and Hillary Clinton have their way.

The “Big 3″ want this money – not to build better autos. No. They want it to pay the tab for Medical and Retirement benefits for RETIRED auto workers. Not ONE PENNY would be used to make them more competitive, or to improve the quality of their cars.

We ALL have problems paying for our Medical Insurance – but the Democrat leaders in Congress now want us to pay the Medical Insurance premiums of folks who have RETIRED from Ford, GM and Chrysler.

Not a good deal for us.

How about Chapter 11 – and getting rid of these ridiculous union contracts?

The interesting point of this exercise is to illustrate how both management and workers are to blame for the current debacle.  Its not unlike the hosuing crunch. No one told the home buyers to buy these large expensive homes which they could not afford at some point.   Yet the homeowners int rouble blame everyone but themslves .  Look in the mirror.

Its similar in the auto industry.   Mangement begs for money so we can have more of the same. As management downsized their companies to almost shells -  they rewarded themselves big time for a “job well done”.

Workers on the other hand have never offered pay cuts to any degree.  Instead of being grateful for high pay and benefits for a job that many say they were being vastly overpaid for and are anything but gratefull for being on the good end of stick.   Many are resentful and actually blame the company ” and the fat cats”  and will tell you that the guy ( they cannot even remember the name of Mr. Moore) was right abotu those “fat cats above”.

Its not unlike the bumper stick on cars ” If you are complaining about the armer or farmers don’t do this with your mouth full”.

Look in mirror boys.  With tariff levels you were protected in the past.  Welcome to life.  You abused the American consumer long enough.

http://www.jerkbossesihaveknown.com
Jerk Bosses I have Known
http://www.jerkbossesihaveknown.com





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1 Automaker · 70s 80s · Auto Industry · Automotive Industry · Camry · Camry Hybrid · Consumer Report · Economic Survival · Independent Survey · Inferior Quality · Initial Quality · Introspection · J D Power · Japanese Automakers · Lack Of Knowledge · Light At The End Of The Tunnel · Million Vehicles · Richard Shelby · Right Between The Eyes · Stuck In The 70s · U S Auto

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