Just to play devil’s advocate, this cartoon provides an interesting view point.
The UAW is not being ABUSED! They are a victim of their own “SUCCESS”, ie. 40 years of bullying, blackmailing and strong-arming the industry. What other emloyees get “30 and out” retirement with full pensions? What other emloyees get free Viagra as part of their medical package? What other employees get over 90% of their pay during layoffs?
The recent cutbacks occurred because they PRICED THEMSELVES OUT OF THE LABOR MARKET, without raising their productivity which German and Japanese workers all had to do in order to stay employed. Even with the cutbacks, the UAW labor cost, including benefits is $54/hr while Toyota’s non-union is just over $40.
In Canada, where there have been no cutbacks yet, GM’s labor cost is $78CAN/hr while Toyota’s is only $49CAN. Canadian “Detroit 3” plants are modern, have flexible manufacturing capability, but they can’t compete at the current rates. Toyota and Honda are both EXPANDING their manufacturing capacity in Canada while the president of the Canadian Auto Workers is still unwilling to make concessions.
Michael Porter of the Harvard Business School wrote an excellent book entitled “The Competitiveness of Nations”. I urge you to read it.
I said in the one paragraph: Could the UAW president have asked his members years ago to give back then like they’re going to now, and not have been thrown out on the street? Key words are- like they are going to now. I have no great love for the UAW, and I hope the UAW president who I saw on TV this morning delivers what he implied. Read my other comments. My main point is this whole mess is very complicated, and I’ll try and say it another way. Like a yokel. www.theyokelnews.com. Hollywood celebrities lead us out of this mess! the sheep will follow, and the loans will be repaid. No one of us has the right answer.
Can I add a negative response to my own reply to a negative response? I’m a little bit trying to make a pest of myself and promote my other agenda. If you go to web site you know what I mean. I’m trying to e-mail as many people as I can. So why not e-mail the UAW, I’ve said some somewhat kind things about their President and it was heart felt. Well, the web site is impenetrable if you’re looking for an e-mail adress. I called the listed phone # at 5.10 PM eastern time. With all this stuff going on you’d think you’d do better then a recording giving their hours as 8am to 4pm. Am I the fool for sticking up for them?
First, let’s lay blame where blame is due- the Maliozzi’s are complicit in the current auto debacle. How so, slavish Car Talk dittoheads may ask?
- Until the recent Come to Jesus turnaround (online only,) Car Talk has been unabashedly anti-diesel. Diesel has been, since Rudolf’s inception, the absolute most efficient way to propel our burgeoning behinds down the road. Yeah, a little smoky, perhaps, but the soot stays below the atmosphere.
- The Brothers have never met an AWD they haven’t hyped. Especially the Subaru Forester. My grandfather and father lived to sire without AWD. AWD drops efficiency and fosters the illusion that safety comes at a mpg price. We don’t need it. We need to learn to drive and when to stay home.
- The most egregious Car Talk felony, however, is ripping the curtain off the US social compact. The Car Makers pretended to make good cars and we pretended to like them. Car Talk became the pioneer voice of malcontents bad mouthing our way of life. Sure, the automakers stiff-armed any safety or environmental initiative until Californians banded together to get their Pension Fund to withold investment, but that’s just a little friendly give and take.
OK, Tom and Ray, get down to Congress and beg to keep your jobs.
Now, to the bailout.
One word- EXCISE_TAX
Double it
Triple it
Double it, again.
Use the money for the bailout, and here’s how it goes.
The additional excise tax money goes into a pool that any (ANY) carmaker can take as a loan as long as it goes to funding manufacturing/assembling a US car.
The first automaker to get a CAFE >50mpg will have the loan money forgiven.
The second automaker gets 50% of the money forgiven…
Adjust the excise tax, accordingly with a tax holiday 6 weeks before any reelection.
Kind regards,
Scott
I understand that without the bailout loan this industry won’t be able to support itself, but that may be the hard road we have to travel. Truth is, it hurts either way, with a bailout or without.
Your argument for the bailout is that it’ll hurt less by loaning tax dollars to the Big 3. However, these seem like risky loans to me. Although I agree, portions of the industry (including some of its suppliers - not all) will be gravely affected without a “stimulant” and our lives will be more difficult (economically speaking) during this transition. Yet, I’d rather take on the economic difficulty just to see the efficient producers replace the ineffiecient producers, and to allow American workers to spread out into new turn-of-the-century green jobs (come on Obama!). In my opinion, it’s time for the Big 3 and their unions to die out, along with their short-sited gotta-have-it-all attitude.
Of course, this approach also punishes many innocent people, and that’s a high price to pay. But the other approach means supporting a misguided, inefficient, over-unionized industry with no guaranteed loan payback or industry change. I won’t support that. But I will give my food, and clothing, and volunteer time to those in need, helping them make it through this tough time. I’ll support this industry from the bottom, not from the top. It’s a bit like tough love, letting them fall down, so that we can pick them up.
So just let the market correct itself; let good Americans have the opportunity to show up and help those in need. Don’t through more money at failing businesses. Those in need will survive on our generosity, and in time, we’ll all be the better for having pulled together through it all.
Chris
When one or more of the Big 3 colapse, we’ll need jobs for those workers. Let’s start building Nuclear reactors, since that’s what we’ll need for all the electric cars of the future.
Until the recent Come to Jesus turnaround (online only,) Car Talk has been unabashedly anti-diesel. Diesel has been, since Rudolf’s inception, the absolute most efficient way to propel our burgeoning behinds down the road. Yeah, a little smoky, perhaps, but the soot stays below the atmosphere.
…and the particulate matter ends up in the lungs of children, contributing to asthma. Also, I think the recent increased refining standards for diesel fuel have made it easier to “come to Jesus.”
My grandfather and father lived to sire without AWD.
I guess that proves you are right…NOT!
The most egregious Car Talk felony, however, is ripping the curtain off the US social compact. The Car Makers pretended to make good cars and we pretended to like them. Car Talk became the pioneer voice of malcontents bad mouthing our way of life.
Are you really trying to say Tom and Ray are responsible for our collective high standards when it comes to shopping for a car? I believe the Japanese are responsible for that. They dared to supply the market with cheap fuel efficient reliable cars. Japanese competition had much more influence than Tom and Ray could ever dream of having.
I can’t speak for Tom and Ray, but my belief is that both they and I want Detroit’s big three to get their heads out of their tailpipes and get their act together. We hope for the best from them and we are routinely disappointed. I don’t think anyone here wants Detroit to fail. The disparity between Japanese and domestic quality is not an illusion or marketing hype, although I will agree that marketing hype has contributed to an exaggeration of the disparity. In other words, Japanese quality isn’t that much better than domestic quality, but it is better.
I am sorry, but to suggest that we would all be happy with Detroit cars if it were not for Tom and Ray is booooooooooogus.
After playing around with this in my head, we have to consider the impact of letting the companies go vs. the impact of bailing them out, and I think a bailout is the lesser of two evils.
However…
I just took a civil service test that relies on the “rule of 3”; they rank us by score, and can only hire someone from the top-3 ranks at any given time.
Since there were a small number of applications sumbitted for aid, I now think we need the car companies to come back with even more plans, and then rank them. If you’re in rank 1, you’re “reachable”. In other words, don’t give them money based on the quality of the plans, but make them compete for their bailout.
If my answer seems obtuse, this is intentional. The plans that Chrysler and GM submitted are SO HORRIBLE, we have to think of a reason to rationalize bailing out only Ford. Okay, so maybe they have to get a minimum score to get a bailout, but if we did that, GM and Chrysler certainly don’t hit the requisite, say, 70%.
Ford did and said all the right things; GM and Chrysler did not. How can you stop making Saabs and Saturns, but continue to look for a buyer for Hummer? Hey, GM: THAT’S A BAD PLAN!
And, by the way, I think Nissan has made a number of stupid decisions over the last 5 years, too. Their current lineup, with the noteable exception of the 370Z, is a disaster. A trip to a Nissan dealership is as dismal as a trip to a Chevy dealership these days. It’s really no surprise to me that GM, Chrysler and Nissan have seen sales fall by half, while Ford, Toyota and Honda sales fell by a “mere” 31%.
So… What do we do if Nissan asks for money? And why wouldn’t they?
This proposal was originally tongue in cheek. However think about giving every tax paying citizen a $1,000,000 grant to use however they choose.
It would be much less expensive than the present $1 Trillion bailout package and would most likely produce better results.
Paul in Napa
One More Reality Check
http://www.detroitnews.com/apps/pbcs.dll/article?AID=/20081209/OPINION01/812090317
No, we should not. If bailing out the “Big Three” is so critical then let their biggest customers, the oil companies, do it. Exxon, alone, posted a $14B profit last quarter - an amount equal to almost half the current bail-out request. They could take care of all three and still have money left over.
Whitey, I agree that perception and facts are often confused, perception exaggerating the facts, good or bad. I once asked an advertising executive his definiton of sex appeal. He said it was “50% what you’ve got and 50% of what people THINK you’ve got”.
Japanese cars gained a reputation for quality and relaibility at the time when Detroit quality was dsimal, customer service virtually non-existant and correcting defects such as flaking GM paint was not done. If you combine arrogance with poor quality you create enemies for life. Especialy when it takes forever to remedy a design defect, such as the infamous intake manifold gaskets.
The design quality gap has narrowed significantly, as has “build quality” which is waht J D Power reports. At one time a GM executive admitted that they achieved Toyota assembly quality one day out of ten!
The best Detroit products are much better than the worst Japanese products. I would be more comfortable buying a Malibu than a Mitsubishi product, for instance.
What started this whole economic mess? Wasn’t the cause high risk home loans?
If we loan money to Chrysler and GM, how would you characterize the risk level of those loans? I would also call them high risk loans.
If we can’t learn from our own mistakes, we deserve a depression. As long as we keep repeating our foolish behavior, nothing will change.
Agree that the whole mess started by Americans living 'way beyond their means (too much easy credit); people bought houses they could not afford, leased cars they could not afford to buy, etc. Alan Greenspan naively preached more credit to keep the economy going.
When the structure collapsed, just like in 1929, only companies with strong balance sheets and good products could weather the storm. Sound companies cut back, changed product mix, reduced staff and bonuses.
Before the financial meltdown, the Detroit 3 were already behind the 8 ball with the wrong products, high production costs and unwieldy work practices. The latest crisis was the perfect storm to make them vulnerable to bankrupcy. To Ford’s credit, Mulally was well under way to srteamline Ford and make the product line more desirable to buyers. That’s why he only needs “standby credit”.
During the Great Depression 10,000 banks failed and many car companies bit the dust. Packard and Cadillac, both luxury car builders brought out cheaper models and pulled through. Honda, Toyota, Nissan and Mazda are cutting production, and putting more emphasis on smaller cars. Their flexible manufacturing techniques allow them to do this quickly. Toyota’s Texas plant building pickups will be converted to produce Prius Hybrids.
During tough times the weaker firms disappear and the stronger ones get stronger.
The large appliance business in the US has been going through this for the last 5 years or so. Only Whirlpool and GE are left as US owned entities; but GE has put the major appliance division on the block. In the mean time we have well established firms like LG, Samsung, Electrolux, Bosch, Miele, Haier and other foreign firms entering the market.
I agree Paul. However, I think it makes to much sense for the government.
Derek
OK, whitey. I’ll concede the diesel and AWD.
Just give my gas excise tax tied to a real American CAFE standard a chance.
Call it an auto ‘X-prize’ First US-CAFE >50mpg wins. and wins big.
The main thing is to irrevocably shift the price of fuel up and put the money into funding the future.
Regarding marketing savvy, I think this website is particularly interesting. In a time when GM is fighting public dismay and inner turmoil, citing boring cars as a big problem, they manage to produce a site that makes the Chevy Cobalt look like the ultimate ride for tuners. Check this out, yo! 
http://www.chevycobaltlabs.com
What skills do the auto workers have now that will make them a good fit on a construction site? Will all the reactors be built in Ohio, Michigan, Indiana, and other states with large auto manufacturing presence? If not, how will the workers get to work?
What is most to fear, is the dropping of oil prices and we go back to the guzzlers like we did in the 70’s. It’s the decisions we mAKE WHEN TIMES ARE GOOD THAT is most critical.
When we want to leave something for our kids…let’s make sure it just isn’t our “entertainment centers”.