Common Sense Has Left the Building...

[Toad]

I think you are missing that the Japanese are paying close to the same hourly rate as the US manufacturers, ~$4.35 less. That's not enough to explain GM losing $2300 a vehicle while Toyo makes $1500 a vehicle.

There are other intrinsic differences that cannot be laid soley at the feet of the unions.

First of all, Toyo makes better vehicles than GM. Big problem for GM right there.

Then GM's workforce is older...they've been in business longer... so their healthcare costs are higher. On top of that, GM probably has a better, more comprehensive healthcare program than Toyo USA. I suppose you can blame the unions for negotiating good healthcare packages but that seems a benefit worth having and should be a compliment rather than a complaint against the unions.

Then you come up against GM's inability to modernize their factories and produce cars as fast as Toyo. You can blame the unions for that but it's a management function, coupled with engineering the design of the car. Face it, Toyo is better at figureing out how to screw cars together than GM is.

Same with plant utilization, clearly a management function. GM is at 85% and Toyo is 107% with overtime. Which management team makes best use of the available capacity?

Which ties again into design/marketing. If GM built competitive vehicles, they'd be running their factories flat out like Toyo is. It's not that the market isn't there..it's that they don't have what the market desires. Not a labor issue there Laz.

As I said, there's plenty of mud to go round. Both management and labor have been wallowing with pigs.

The point is that BOTH sides are at fault.

I am CERTAIN of this: If labor agreed to work for free for a year to "save" GM,  the designs wouldn't change and the price of the cars would either stay the same or go up and management would give themselves a gazillion dollar pat on the back in the form of bonuses, stock options and golden parachute retirement. And you know that's true.

[soda72]

Originally posted by Dago
This stuff slays me, you will read they "need" to pay the bonuses to retain the top management, you know, the guys who lead them into such a horrible financial situation.  

Yeah, you really want to retain those kind of leaders.  

They are being paid bonuses becuase they came up with plans that would reduce cost...











great plans like cut employee's wages....

[Skuzzy]

I dunno Toad, even if GM had more efficient ways to build a car, they still could not fire anyone, thus there would be really no cost savings to even try and find a better way to build a car.

Dunt get me wrong.  While I am no fan of unions, I am also no fan of management whose only desire is to bilk a company for as much as they can, then bail and leave the mess to someone else.

I am not going to go back through the union argument.  I am just thankful to work in a state where I do not have to be a member of one to get a job.

[lasersailor184]

I think you are missing that the Japanese are paying close to the same hourly rate as the US manufacturers, ~$4.35 less. That's not enough to explain GM losing $2300 a vehicle while Toyo makes $1500 a vehicle.

The rate at which a person gets paid is different then what it costs an employer.

Someone may be making 10 dollars an hour, however he costs the employer roughly 25 dollars an hour with fees, taxes, health insurance, workman's comp insurance...  The list goes on and on.

The union workers may be making 4.35 dollars more an hour, but they're probably costing hundreds more in unseen costs.

[midnight Target]

Depending on the compensation package the usual burden rate for labor is between 2.5 and 3.5.

This means a guy making $10 per hour is costing the company $25 to $35.

UAW is probably on the high side of this number, so an auto worker in the $20/hr range is costing $70.

[Toad]

MT, that would apply to the Toyo wage as well, then, correct?

Except it doesn't as is evidenced by the age of the workforces and the difference (partly as a result of age) in healthcare costs, etc., etc., etc., etc.

Laser, a lot of those "unseen" costs are common to both companies, like taxes.

The point, if you read it, is that there are many reasons for the disparity and not all of them can be placed on the union. Mangement has it's share of waste, stupidity, theft and deriliction of duty.

If you think they don't, you're only fooling yourself.

[Skuzzy]

Between the crooked unions and the crooked management, it is a wonder we are manufacturing anything in this country anymore.

But, at the rate of departure, we probably will not be manufacturing anything by the end of this decade.  The crooked mamagement will be rich.  The crooked union leaders will be rich.  The employees,...uh,..well,...hmmm.

[midnight Target]

I've worked in many different types of manufacturing companies  including union shops and non union shops, large scale product as well as small. That burden rate would be correct for all of those companies, so the rate for Toyo would likely be the same, but I've been wrong before... I think it was August...



of 1980.

[john9001]

last time i checked china led the world in the production of steel, the USA and japan were tied for second.

tied for second in the world wide production of steel.

not bad for a "service economy" that's "exporting" jobs.

[lazs2]

toad... if you read the link you gave you will see that the total wage package cost is about twice as much for GM as for toyota.

lazs

[Shamus]

Legacy costs are what are killing the U.S. auto companies here right now, they have 4 times as many retirees as employees .

GM and Ford have some of the most efficient plants in the country but under utilization drives up the unit cost.

They also have some of the least efficient, old, technologically deficient plants that they are trying to close.

Look at GM in China, they are the big kid on the block, making money hand over fist in brand new plants, of course their biggest customer is the government of China who is buying all the Regals that can be produced.

The products are for the most part boring but they only have so many design and engineering dollars to work with.

Maybe a bankruptcy with the inevitable shedding of retiree pensions and medical obligations is the only way out.

BTW, the jobs bank that everyone likes to bring up as the poster child of UAW inefficacy and arrogance was initially proposed by GM management.

shamus

PS: I posted this and forgot about the original post, yes management's attitude at Ford, Delphi, GM etc., you know the "we deserve  bonuses while the Corp goes down the drain" attitude is rather odd.

[Skuzzy]

Originally posted by john9001
last time i checked china led the world in the production of steel, the USA and japan were tied for second.

tied for second in the world wide production of steel.

not bad for a "service economy" that's "exporting" jobs.

Uh, you do realize much of the metal we produce is being shipped to other countries so they can build manufacturing to handle all the business being brought thier way from U.S. companies?
For all the things other countries like to say we do poorly, it is widely recognized we have some of the best steel (quality and strength) manufacturing in the world.

[Xargos]

Foreign Countries are paying these CEO's off in an effort to distroy the middle class of America, thereby destroying America.  I say these CEO's need to be hung for treason.

[Toad]

Originally posted by Skuzzy
The crooked mamagement will be rich.  The crooked union leaders will be rich.  The employees,...uh,..well,...hmmm.

...uh...well... will be working for peanuts at jobs that are going nowhere.

The same thing that always happens.

Cheerful, ain't I?

[Toad]

Originally posted by lazs2
toad... if you read the link you gave you will see that the total wage package cost is about twice as much for GM as for toyota.

lazs

Delve into the "why" of that statement and you'll see it's not just the unions Laz.

Older workforce, more retirees, higher health care costs job bank/full pay initiated by management (as shamus pointed out..thx)....

As I said earlier, there's mud on both of them but it certainly isn't solely the unions at fault here.