The Big 3 and UAW

Steve-o

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The problem is that there is more than enough blame to go around for all parties. The "Big Three" were clueless enough to think they could shove just anything onto the railroad cars and Americans would buy it. The "Big Three" executive management is on the gravy train that most U.S. publicly-traded corporations are on, with Boards of Directors letting CxOs themselves vet their compensation and with being so scared that they won't attract "talent" that they're afraid to put some teeth into CxO failure. The UAW was clueless to think that semi-skilled labor making $50-75 per hour was a gig that was going to last forever at a time when skilled labor in other industries was taking a solid hit in the wallet and the sales of "foreign" cars was headed toward the 50% mark. We're all in trouble because no one wants to be the one to deliver bad news, so we just incrementalize our way out of mediocrity at a time when "bold moves" (pun intended) and unpopular decisions need to be made.

They're closing the Ford Ranger plant here, not because the product was shoddy or even because it was a particularly inefficient plant (economically speaking). They're closing the plant because no one wants to buy Rangers -- a product Ford really has not changed for the last 15 years. Geez ... wonder why no one wants to buy? :rolleyes:

A guy I know retired a few years ago, after "30 and out" at that plant. To be fair, he tells lots of stories about hijinks while working. Apparently it wasn't all nose-to-the-grindstone there. At the same time, though, it's apparent that Ford and UAW management never had a good handle on the big picture. This guy does a lot of his own home repair. I've seen his work, and he's damn good at it. I have no doubt that, if he had been allowed to build the best product, he could have. Who can say how stifled he was by the "meet-the-quota" "meet-the-specs" environment created by management?

I work at a manufacturing company and know that keeping a plant open and running costs a fortune. But imagine what Ford might have done if they'd abandoned the rush to next quarter's financials, engaged customers and (gasp!) employees using the company's products -- and their competition, designed something different and useful, and slowed the line a little so that workers could build it as well as possible. Imagine what it might have been like if Ford flew Ranger product engineers and plant engineers out here to talk with plant employees (line and off-line) about what would help them do their jobs better or faster or more efficiently? Imagine if Ford had the stones to either kill off Mercury (and save the money they're spending on ... what??) or give it a solid (and fashionable) brand image based on the presence of Mercury-badged models already being manufactured by Ford Europe, Volvo, or Mazda.

Instead, we get Ford killing the Ranger after ignoring it for 15 years, just at a time when a small pickup might make a lot of sense at the gas pump, and warming over the Focus -- another car that might sell in decent numbers with $4/gallon gas -- when the folks in Europe are already getting an above-average car in their Foci (many of which are diesels) Meanwhile, I'm sure Alan Mulally has gotten himself a plum separation package which will be engaged after a few years of tweaking and primping. And Ford and the thousands of middle-class jobs it offered in both line work and back office, will shrink into insignificance.

It may sound like I'm taking the UAWs' side in this. I'm not generally a big union fan. I am a fan of believing that workers are the difference to any company. Ford is not Mulally or his gang of minions. It is the guy who bolted together my Ford/Lincoln/Mercury, it's the person who writes up the car when it needs dealer service, it's the engineer who thought of some cool, usable features. What one executive can do in the space of his couple of years at a large publicly-traded company -- besides slash and burn -- is minimal. The financial performance of a corporation over one or two quarters should not define its future. Unfortunately, that's the way things are these days.
 

undata

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GM is making progress

I still am afraid to get a genuine GM car. But I think they are making good progress. The GM dealer has much better service than any Volkswagen dealer I have found yet.

Ford has responded by becoming more of an importer. They have models based on Volvo platforms, they have joint Jaguar/Ford models.

Chryser I don't know about. Their PT Cruiser guy went over to GM and started the HHR. Which will be our next acquisition, but under my wife's company's leasing program. So if it's not reliable we won't get hurt. It looks like GM has made made progress with UAW, we would all like lifetime job security, but sorry friends, doesn't work that way anymore.

__________________________________

1997 Passat TDI - had to replace injector pump@100,000 - painful
2004 Chevy Aveo - trouble free for 3 years
 
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CoriolisSTORM

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Saw yesterday where Chrysler has 72 hours before the UAW decides to strike with them, not sure if they've reached a deal yet. I am NOT for a union, but to each his own I suppose. To be fair I've mostly seen the bad sides of unions when my mother and grandfather worked for unionized companies. Generally the Big 3 are collectively dumb in what we want. The Euro focus is a great example and the diesel model Chrysler products in Europe vs. our gas junk are another.
 

naba

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naba

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Looks like UAW is now on strike. It is said that Chrysler has about 71-day supply of cars and trucks. So UAW is really doing Chysler a favor :p
 

CoriolisSTORM

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naba said:
Looks like UAW is now on strike. It is said that Chrysler has about 71-day supply of cars and trucks. So UAW is really doing Chysler a favor :p
not ALL cars though, that's more of the patriots, compasses and their less fuel efficient stuff that's got a 71 day supply. Their Wranglers (4 door more than 2) Aspen and new minivan are in short supply as it is!
 

Rod Bearing

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Blah blah blah...woe is me...Unions are ruining it all...wah wah wah...

The Unions are a part of the legacy cost problem, but not even close to 50% of it.

The Big 3 top execs sit on one anothers boards and dole out massively over inflated pay and benefit/retirement packages to each others do-nothing 4 day golf outing per week execs every day of the week to the tune off hundreds of millions of dollars, and you stay silent.

The unions don't design the junk the big 3 make either, nor do they design the manufacturing processes, or build the factories.

Ford moved to Mexico and said it would be the saving grace of the company to shed the unions and legacy costs, and guess what, they still might go belly up.

Driving the average wage DOWN in the US isn't the solution for the Big 3. Designing and building stuff that sells is the answer.

Quit using the Unions as your personal whipping boy.
 

Ntnbutrbl

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By now you know that the strikes at GM and Chrysler were very short lived. My view is that the strikes were called by the UAW leadership for political purposes for their membership to tell them that the UAW leadership did not concede on request by the car companies. The concessions, however, were necessary for economic survival and some in the rank and file are not always up to speed on things like that; just don't care if the car companies survive or not.

From past performance, it is easy to fathom that there are UAW and other union people who will commit economic suicide to spite the company, to refuse to lower wages to match the competition or to otherwise refuse to admit to reality. Note the huge reduction in UAW membership roles, 1.53 million in 1965 to 557,000 in 2005.

It is not helpful either, that car and other companies pay executives outrageous salaries far above what is needed for adequate, even lavish living.
 

Tin Man

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Detroit's 3 finally on track, tough critic says

Better cars, smarter execs, lower costs

October 14, 2007
BY TOM WALSH
FREE PRESS COLUMNIST

Chalk up this past week as a big win for the home team, Detroit's three automakers.

General Motors Corp. workers ratified a new labor contract by a ratio of nearly 2-1.

Chrysler LLC and the UAW forged a new tentative pact with only a hiccup of a 6-hour work stoppage. Ford Motor Co. lured marketing hotshot Jim Farley away from Toyota Motor Corp.

GM stock surged past $40 a share for the first time in more than two years, closing at $42.64, up 11.6% on the week. Ford shares rose 10% to $9.20.

If it's too early for Detroit to declare victory over automotive competitors from Japan, Korea and Europe -- and yes, it is too early -- we can at least enjoy this spate of good fortune for our much-maligned home team.

Still skeptical? OK, but have a listen to Maryann Keller, a relentless critic of Detroit's auto industry for the past three decades as a Wall Street analyst, author, consultant and now a director of two auto-related companies, Lithia Motors and Dollar Thrifty Automotive.

"For the first time in 30 years I think that Detroit is going to finally turn around," Keller told me Friday.

"The cars are better, the management is smarter and the costs are down with these new contracts. The UAW and Big 3 have finally figured out how to save each other and create a headache for the Japanese."

Wow, has Keller, the author of "Rude Awakening," a 1990 book on GM's fall from supremacy, suddenly gone soft on Detroit?
Hardly. She still has harsh words for earlier Detroit products and executives, but she does see a sea change in the works.

"Detroit was just incompetent for three decades," Keller said in a telephone interview. "I mean, who could have come up with cars as bad as what they offered in the 1980s? ... They did everything in their power to shatter their reputation.

"Who could have imagined anything more incredibly stupid than what (then-GM Chairman) Roger Smith did to the Cadillac division during the 1980s? Remember the Cimarron? Or the Allante?" the convertible with leakage problems so bad that "when it rained outside it also rained on you inside the car? Those cars were jokes."

Keller argues that the success of Toyota, Nissan and Honda in the American market was due as much to Detroit's mistakes as to appealing and economical Japanese products.

"Detroit enabled the Japanese to be successful. Detroit now has it in its power to make the Japanese suffer a little bit, or stall out," she said.

"Is Detroit going to really continue to get its act together," she asked, "in terms of quality, design and technology? If they do, and they now have a cost structure that makes them much more competitive, the bottom line is, they can stop the Japanese juggernaut. No question."

By allowing more flexible deployment of workers and assuming responsibility for a trust that manages retiree health care, Keller said, the UAW has improved the outlook for both the carmakers and the union. "I think the UAW has done more for its potential to improve membership in the last 30 days than in the previous 15 years," she said.

Keller sees promise, and a few problems, at each of the Detroit 3:

• At GM, she said CEO Rick Wagoner, with able assists from Vice Chairmen Fritz Henderson and Bob Lutz -- and a prickly nudge from billionaire investor Kirk Kerkorian and his adviser Jerry York -- has improved quality and efficiency and has created more attractive products.

"But GM could not solve its problems alone," she added. "I think GM needed the UAW to realize that together they can ally to actually improve the future of the Big 3. And I think that's happened."

• Chrysler, Keller said, has made interesting moves under new owner Cerberus Capital Management to hire Robert Nardelli as CEO and snag executives Jim Press and Deborah Wahl Meyer away from Toyota.

"But there's an awful lot of Chrysler product that you just can't sell at anything close to list price," she said, noting the high rebates and other incentives on many vehicles.

"A major product overhaul will cost a whole lot of money and it's going to be interesting to see how much Cerberus is willing to sink into it."

• Ford President and CEO Alan Mulally has impressed Keller in his first year at the helm.

"I think he's taken time to understand who the people are in his company and where he needed to make changes. I'm impressed with the fact that he got Farley. I think that is a bigger win for Ford than Jim Press was for Chrysler, because Press, while he had an illustrious career at Toyota, had moved into a more ceremonial role."

Still, Keller said, Ford has a pile of problems, starting with some of its brands. "They have to figure out what they're going to do with Mercury. I think they have to figure out, what's a Lincoln? I'm not sure what a Lincoln is today."

All three of Detroit's automakers need to focus more on fuel economy, Keller suggested, "because it's going to be the issue that defines this industry in the next decade, whether they like it or not."

Detroit's auto companies may have convinced one of their toughest critics that they are back in the game, but that doesn't make the game any easier.

Contact TOM WALSH at 313-223-4430 or twalsh@freepress.com.

Find this article at:
http://www.freep.com/apps/pbcs.dll/article?AID=/20071014/COL06/710140723/1014/BUSINESS01
 
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BKmetz

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Hey, how can anyone read that and bash the union or company for all the problems in the world? This smacks of cooperation! This denies the union and management haters their argument.

***... ;)

.
 

CoriolisSTORM

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Tin Man said:
Better cars, smarter execs, lower costs

October 14, 2007
BY TOM WALSH
FREE PRESS COLUMNIST

Chalk up this past week as a big win for the home team, Detroit's three automakers.

General Motors Corp. workers ratified a new labor contract by a ratio of nearly 2-1.

Chrysler LLC and the UAW forged a new tentative pact with only a hiccup of a 6-hour work stoppage. Ford Motor Co. lured marketing hotshot Jim Farley away from Toyota Motor Corp.

GM stock surged past $40 a share for the first time in more than two years, closing at $42.64, up 11.6% on the week. Ford shares rose 10% to $9.20.

If it's too early for Detroit to declare victory over automotive competitors from Japan, Korea and Europe -- and yes, it is too early -- we can at least enjoy this spate of good fortune for our much-maligned home team.

Still skeptical? OK, but have a listen to Maryann Keller, a relentless critic of Detroit's auto industry for the past three decades as a Wall Street analyst, author, consultant and now a director of two auto-related companies, Lithia Motors and Dollar Thrifty Automotive.

"For the first time in 30 years I think that Detroit is going to finally turn around," Keller told me Friday.

"The cars are better, the management is smarter and the costs are down with these new contracts. The UAW and Big 3 have finally figured out how to save each other and create a headache for the Japanese."

Wow, has Keller, the author of "Rude Awakening," a 1990 book on GM's fall from supremacy, suddenly gone soft on Detroit?
Hardly. She still has harsh words for earlier Detroit products and executives, but she does see a sea change in the works.

"Detroit was just incompetent for three decades," Keller said in a telephone interview. "I mean, who could have come up with cars as bad as what they offered in the 1980s? ... They did everything in their power to shatter their reputation.

"Who could have imagined anything more incredibly stupid than what (then-GM Chairman) Roger Smith did to the Cadillac division during the 1980s? Remember the Cimarron? Or the Allante?" the convertible with leakage problems so bad that "when it rained outside it also rained on you inside the car? Those cars were jokes."

Keller argues that the success of Toyota, Nissan and Honda in the American market was due as much to Detroit's mistakes as to appealing and economical Japanese products.

"Detroit enabled the Japanese to be successful. Detroit now has it in its power to make the Japanese suffer a little bit, or stall out," she said.

"Is Detroit going to really continue to get its act together," she asked, "in terms of quality, design and technology? If they do, and they now have a cost structure that makes them much more competitive, the bottom line is, they can stop the Japanese juggernaut. No question."

By allowing more flexible deployment of workers and assuming responsibility for a trust that manages retiree health care, Keller said, the UAW has improved the outlook for both the carmakers and the union. "I think the UAW has done more for its potential to improve membership in the last 30 days than in the previous 15 years," she said.

Keller sees promise, and a few problems, at each of the Detroit 3:

• At GM, she said CEO Rick Wagoner, with able assists from Vice Chairmen Fritz Henderson and Bob Lutz -- and a prickly nudge from billionaire investor Kirk Kerkorian and his adviser Jerry York -- has improved quality and efficiency and has created more attractive products.

"But GM could not solve its problems alone," she added. "I think GM needed the UAW to realize that together they can ally to actually improve the future of the Big 3. And I think that's happened."

• Chrysler, Keller said, has made interesting moves under new owner Cerberus Capital Management to hire Robert Nardelli as CEO and snag executives Jim Press and Deborah Wahl Meyer away from Toyota.

"But there's an awful lot of Chrysler product that you just can't sell at anything close to list price," she said, noting the high rebates and other incentives on many vehicles.

"A major product overhaul will cost a whole lot of money and it's going to be interesting to see how much Cerberus is willing to sink into it."

• Ford President and CEO Alan Mulally has impressed Keller in his first year at the helm.

"I think he's taken time to understand who the people are in his company and where he needed to make changes. I'm impressed with the fact that he got Farley. I think that is a bigger win for Ford than Jim Press was for Chrysler, because Press, while he had an illustrious career at Toyota, had moved into a more ceremonial role."

Still, Keller said, Ford has a pile of problems, starting with some of its brands. "They have to figure out what they're going to do with Mercury. I think they have to figure out, what's a Lincoln? I'm not sure what a Lincoln is today."

All three of Detroit's automakers need to focus more on fuel economy, Keller suggested, "because it's going to be the issue that defines this industry in the next decade, whether they like it or not."

Detroit's auto companies may have convinced one of their toughest critics that they are back in the game, but that doesn't make the game any easier.

Contact TOM WALSH at 313-223-4430 or twalsh@freepress.com.

Find this article at:
http://www.freep.com/apps/pbcs.dll/article?AID=/20071014/COL06/710140723/1014/BUSINESS01
That was a great read, thank you. I would like to see the big 3 band together to take the market back (kind of like the Germans started to do with Bluetec). Not gonna happen I know, but still, wishful thinking.
 

lbhskier37

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Good for the big 3. So how many years is it going to take them to bring back all the engineering talent they squandered and redesign all the crap they have out there now?
 

CoriolisSTORM

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lbhskier37 said:
Good for the big 3. So how many years is it going to take them to bring back all the engineering talent they squandered and redesign all the crap they have out there now?
crap? All the Chrysler Group has to do is bring some Euro turbo diesels and fix their interiors (the main sore spot with them is all the plastic!) and we will be good, the looks are great and the design is good and reliable. (IMO)
 

lbhskier37

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CoriolisSTORM said:
crap? All the Chrysler Group has to do is bring some Euro turbo diesels and fix their interiors (the main sore spot with them is all the plastic!) and we will be good, the looks are great and the design is good and reliable. (IMO)
Interiors are really a weak spot with the big 3, Chrysler especially. I spend my time in my car driving, not outside it admiring the great looks, so interior is what matters to me. If they get rid of the cheap plastic I would take a look. I was curios and looked at a Sebring the other day and the interior felt to me like a late 90s Cavalier, I couldn't believe Chrysler, which at one time was a more premium brand, had a crap interior like that. Makes me wonder how the Dodge interiors look.
 

CoriolisSTORM

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lbhskier37 said:
Interiors are really a weak spot with the big 3, Chrysler especially. I spend my time in my car driving, not outside it admiring the great looks, so interior is what matters to me. If they get rid of the cheap plastic I would take a look. I was curios and looked at a Sebring the other day and the interior felt to me like a late 90s Cavalier, I couldn't believe Chrysler, which at one time was a more premium brand, had a crap interior like that. Makes me wonder how the Dodge interiors look.
Give me until tomorrow and I'll show you... Its dark outside, and the caliber is supposedly the worst about it of all their stuff. I like mine though, just wish there was LESS plastic. There's people that have made leather armrests and such for Chrysler stuff as well. I do plan on (if I decide to keep mine for a while) upgrading the cloth seats to the Compass style two tone leather, that'd help out the interior a lot. Chrysler stuff is better than Dodge for interior quality, can't speak much for Jeep, my TJ isn't one for creature comforts or anything either, but its meant to be washed out too.
 

Tin Man

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lbhskier37 said:
Interiors are really a weak spot with the big 3, Chrysler especially. I spend my time in my car driving, not outside it admiring the great looks, so interior is what matters to me. If they get rid of the cheap plastic I would take a look. I was curios and looked at a Sebring the other day and the interior felt to me like a late 90's Cavalier, I couldn't believe Chrysler, which at one time was a more premium brand, had a crap interior like that. Makes me wonder how the Dodge interiors look.
We are getting a new Enclave to replace the ML and 2002 NB. The interior is better but not as good as the German cars. It is styled extremely well, though. The car looks like a fish, not a painter's truck or brick.

Buick is now tied with Lexus for the top reliability for the first three years. Quite an achievement. The Enclave comes with a great engine, wonderful ride/handling, and is a people mover to boot. Given the 20 cubic feet behind the 8 adult seating, nothing beats it IMO.

As long as GM and the other two keep their eye on what the customer wants, maybe they can finally get ahead.

TM
 

Intech

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UAW & The Big 3 Automakers

A lot of points and counterpoints from both sides have been made on this issue, and I'd just like to add something that I was never aware of, and I'm not sure that many people are. That is how lucrative the contracts that the UAW and the 'Big 3" are (were?). We all hear about retirement and medical costs etc., but what we don't here about, are the smaller issues that very seldom make it to the general news. I heard about one of them from a friend of mine who is an investment banker on Wall Street, and who happens to handle both GM and Chrysler's contracts (he's not the only one), and since, I believe, it's unethical and maybe even illegal to divulge these things, I won't name him. However, over dinner not too long ago, he was grumbling about just these items, and he told me one of them. That being, when a person is laid off from one of these companies, he not only gets unemployment benefits, but also 90% of his pay from his former employer until he finds a job within 30 miles of his house, that pays the SAME as what he got before he was laid off. In other words, he can stay home for as long as he wants. Not a real incentive to get another job eh? 90% for staying home vs 100% to find another job? That's a "no brainer"

I'm not blaming either side for this, after all the UAW wants to get as much as it can for it's workers, and the Big 3 have to agree, so who's fault is it?
 
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