The classic GM approach during the '70s–and beyond–was to begin production before adequate reliability/durability testing had been completed, thus making the first and second year buyers of their new models their testing crew. By the third year of sales, many of the original bugs had been corrected, and by the time that a model had reached the end of its production run, it was usually a pretty good car. Unfortunately, that type of business model winds-up reducing the number of repeat buyers, and a company’s sales are–eventually–greatly diminished by the masses of unhappy customers.
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Complete hogwash.
A GM Toyota joint venture in California in the late 80’s produced Corollas and the Chevy version, the Nova and later Geo Prizm with UAW labor. The quality was very good… As good as a Japanese built Corolla. Toyota now has 11 manufacturing plants in the US.
Honda started building Accords in Ohio about the same time with non-union labor paid as well as any UAW member working in Ohio at the time. High quality… as good as the Japanese-built cars. Honda has since expanded to 5 US assembly plants. Their North American revenue is about $6 Billion, far exceeding any other region.
Honda employees have rejected unions each time it has come to a vote as have Nissan and VW US plants. If their quality of work life and compensation was so poor, don’t you think the UAW would have prevailed?
Spot on!
So union busting was not the problem, cheap labor was not the problem. Incompetence was the problem.
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I think that was SOP for all of the Detroit 3. They didn’t make enough money to fund a full development cycle and had to sell product during development. The Asian brands did make enough and worked out a lot more issues before selling their cars.
If expensive USA union labor was the reason cars were so expensive why was the Cadillac Esclade so expensive when it was built in Mexico?
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Because people are ignorant and will pay a premium for what is basically a glorified pickup truck. The big 3 need these vehicles that make obscene profits to help pay their legacy costs.
Foe example, the Ford makes an average of 10k profit on each F150 they sell, add in dealer profit and there is easily 15k profit generated by a pickup truck, why do they get away with it? Because Americans are stupid enough to pay it.
I don’t believe that cars are more expensive because of union labor, I belive that it cuts into profits of the big 3. Plus Small Cars= Small profits. Luckily for every small car GM sells, they sell 10 pickup trucks at an obscene profit to keep the whole operation afloat.
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Yeah and it bit new employees. Since 2013 new hires have no pension. Do you enjoy a pension plan Mustangman? If you are so against pensions, why do you like Fords?
I worked for GM 18 years and an additional 9 for GM’s spinoff, Delphi as a white collar engineer. I quit shortly after Delphi filed for bankruptcy and took my pension out and put it into an IRA. That along with my 401K allowed me to retire quite early on my own dime. So No, I do not enjoy a pension plan. Had I not moved my pension, it would have been kicked to the PBCG and I’d still be working.
New hires at most manufacturing businesses don’t get a defined benefit pension, they get contributions from the company into their 401k plans. Plans that go with the employee when they move to another company. This a normal situation for new hires at any company and it is the plan UAW members have had since 2008.
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There are two major types of pensions, defined benefit and defined contribution. Defined benefit plans are the old ones where the employer’s pension plan will send the pensioner a check each month in an amount disclosed in the pension plan documentation.
In a defined contribution plan the employer puts money into a retirement plan like a 401K, equal to a small percentage of the employees pay. The employee can also contribute and the employer might match the employees contribution up to something around 10%. This might be what the Honda employees get and it is all that I’ve had since around 1980. I put the max in since then and have a great retirement built up, even after the recent market pullback.
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My current public sector job has both an old school pension plan AND deferred compensation plan
At my old private sector job, there was only the 401k . . . and the employer did NOT contribute, as far as I recall
Most companies don’t have a pension plan. As an engineer I’ve worked for many different companies over the years. Last company I worked for that had a pension plan was Digital Equipment Co. I left in 1993. Every company since then only had 401k. Personally I prefer this model. You leave a company you just roll your 401k over to an IRA. The only problem with this is you have to be disciplined. And unfortunately, there are many who are NOT. I have relatives who are in the late 70’s who NEED to work just to survive. Their only other source of income is SSN.
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A wonderful benefit to the employee that businesses thought was a benefit to them. It removed the pension legacy from their books and put the responsibility on the employee. The 401k also removed the “golden handcuffs” common to long serving employees of companies.
Example; An employee gets to about 25 years and won’t leave the company because of the pension they are almost about to get while management exploits this by limiting raises and promotions of an experienced employee for that last 5 years or so.
The 401k gave the freedom to change employers and maintain your pension. This resulted in a lot more turnover of valuable employees who jumped ship for more money and a better job.
I learned the hard way about not saving for retirement. When I was working, Mrs. Triedaq gave me $2.50 each week so I could go on coffee break with my friends and colleagues. Coffee was 50¢ a cup on campus. One of my colleagues found that we could get coffee for 25¢ a cup at McDonald’s with our senior citizens discount. I would have been ahead $1.25 a week, but I was so happy when Friday came that I would spend the $1.25 every Friday for a cinnamon roll. Now, in retirement, I have to go to the mission for a cup of coffee.
The reason I say this is that it is difficult for some people to forego immediate pleasures rather than saving for retirement.
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It’s a 2-way street. I know of several people who forced into early retirement at half benefits kist a year or less away from getting full benefits. Companies use an employees pension as a tactic to hurt the employee. Most companies do the right thing. Others didn’t. And there’s the companies like Tyco that tied the employees pension fund into the companies stock. When the stock tanked some of those people lost everything.
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In my area, a LOT of professionals–programmers, mathematicians, attorneys, and others–were employed by Lucent Technologies, a spin-off of AT&T. When Lucent went bust, so did their pensions.
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That doesn’t seem too much of a burden … lol … Actually sounds like a good motivation to visit the Mission on a regular basis. Me, I don’t purchase coffee from vendors, I do the coffee thing the hard way, make it myself. Folger’s Instant and hot water. 200 cups for less than $10. What’s that, 20 5 cents a cup? Pretty good for 20 5 cents. [arithmetic not my strong suit … lol … ]
I never had much luck w/company pensions of either type. Social Security and being frugal (i.e. cheap) has always been my strategy. Maybe why I have to roll my car windows up myself with the hand crank … lol …
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That is why I left Delphi after bankruptcy. I wasn’t going to let them screw me by dumping my into the PBGC where I would have to work to 67 to get 60% of my pension I should have gotten. A lot of my co-workers stayed hoping that would not happen. It did one month before Delphi exited bankruptcy.
The basis for the 401k was created by accident in a tax law reform in 1978.
Life is too short to drink Folgers, let alone Folgers instant.
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One of my first consulting jobs in the Telecom industry was for Lucent in Andover MA. Now the home of a new Amazon distribution center. When I was there they were flying high. About 5 years later came their downfall. I knew several engineers who lost their jobs and pensions.
I retired from the field of education a few years after Lucent went bust, and I enrolled in a Paralegal/Legal Assistant degree program at a nearby college. The only other students in that program who were nearly as old as I were the folks who had lost their Lucent jobs and Lucent pensions, and decided to enter a new field.
What was even more ironic was that much of the law faculty was comprised of Lucent’s former legal staff.
Does anyone know why Vega used an electric fuel pump? Unusual for the time.