How GM can avoid bankruptcy

MSN Money ^ | 11/17/2005 | Robert Walberg

[hubbubhubbub]

A prerequisite for a strong union is weak management.

[Mr. Burns]

How else are they going to get out from under their crushing insurance and pension costs that the unions have trapped them in?

The unions didn't "trap" GM. GM trapped itself by being all too eager to sign a deal without any strike action. Decades of looking at only the short term costs of strikes without comparing them to the long term implications of generous deals are the "root cause". Wisely are not, they are signed contracts, and no union could or should let them off the hook.

[nicollo]

I repeat: UAW unionization did not occur in a vaccum. The U.S. government made it happen.

Yes, politics matter.

[Richard Kimball]

The reason for the overlap is that Pontiac, Cadillac, Buick and several other GM dealers want to sell pickups. Because of protected territory, these dealers can't carry Chevrolet pickups in an area with a Chevrolet dealer. It used to be that there wasn't much difference except for the nameplate. GMC, however, has started creating more luxury options, as Chevrolet was designed to be more of a working man's lower middle class to middle class line.

The original premise to all the lines were that people would move up the scale as they aged and got more earning power. Chevrolet to Pontiac to Buick to Oldsmobile to Cadillac.

Toyota has started "GMing" by expanding it's lines. The Scion is for the young people, the Toyota for middle class, and Lexus for upper class.

[longtermmemmory]

goon politics are showing their limited lifespan.

[Bulwark]

But why don't you ask the question why? The UAW has a lot of influence over who the managers are. They want guys who are easy to deal with. And that means they don't want the smartest knives in the drawer.

No... I honestly think you're barking up the wrong tree. I don't think the UAW had anything to do with the fact that there are at least 4 or 5 versions of the Chevrolet Trailblazer rolling around. Do we really need that many? Couldn't they just as easily, and much more cheaply, sell two?

[BlueStateDepression]

"Yes, there are unions, but it is not in their interest for GM to go broke "

Just because it isn't in their interest to do so doesn't mean they won't. After all, the Eastern Airlines mechanics really showed management who was boss, didn't they.

Did Management show who was boss over at American Airlines when they got a wage/benefit concession from labor (stewerdesses and pilots I think it was, but might have been mechanics too) and then turned around and wrote themselves a big ole bonus? Remember that action?

Lets have a look at how many dollars is spent rewarding the labor, keeping in mind that without labor there would be NO profit at all. Take a look at that as to each person that is actual labor.

This is about the folks on the assembly line. This is about the people turning wrenches. This is about the folks operating heavy machinery that can malfunction and take their hand or their arm or their life.

With the advance of technology, I would observe the fact that many things are automated that used to be done manually. Those are the pensions that people are scream about today. Those folks EARNED that pension. A union did not extort it.

For those today that operate CNC machines(or the like) in place of the manual labor, they exhibit a higher level of intelligence that is required to operate them. Intelligence is what is said to make 'suits' in the office worth so much money right? 'Education' right? Have a look at the pay scales and tell me who is taking too big a chunk!

Maybe, just maybe, it is time for the fat cats to take the reduction. This is not to say take something away from them because they have it, I am opposed to that. I am saying it is time to be realistic about the distribution of net profits. (please don't start with the socialist troll crap cuz that ain't even what I am talking about).

I used to paint corperate jets. In Aircraft, painters are considered by most other shops (wood shop, trim shop, R and R, sheet metal shop, engine shop, avionics) to be the bottom of the barrel.

Much the same way many look at labor in general when they see it from the management or stockholder viewpoint. Painters,BY FAR, work the hardest(hold a D/A above your head for a 12 hour shift sanding the bottom of the wings and tell me otherwise, or put on a chemical suit similar to the ones worn by our soldiers when they invaded Iraq and go out in a hanger that is 120 degrees) and have in general the lowest pay scales in a facility.

Painters carry the same responsibility as any other aircraft mechanic. A small piece of tape can make an airplane crash. Don't believe me? Bet me and lose.

Why do I mention this you ask? Ok here you go.An example how 'suits' step on labor, keep in mind GM does the vey same thing jsut in different ways. Corner cutting.

We would get a job bid at say, 1200 manhours for strip and paint. Now keep in mind it takes around 17 days to turn a complete. Salesman and suits wheel and deal with a customer.'Hey, Ill give you a ten thousand dollar break on your paint job if you order up this avionics package'. Which shop do you suppose takes that hit? Avionics? HA, yeah right! Comes right off the top of the paint shop.

Paint shop, being mostly labor, is who gets that hit? Yup, you got it, the boys doing the actual Work. You just got the airplane and you are already 150 hours behind. Additionally, 20 to 25 % comes off for aministrative 'costs'. Paint shop just lost another 300 hours. Before that job has even begun, 1/3 of the bid on the job is gone.

The whole time you work on that airplane you are told you are behind and you better pick up the pace. Then when you do you, get told you make too much and should have a paycut or a benefit cut. Rediculous.

At every turn, labor is blamed for a company's problems. Unions are the problem. Pensions and healthcare for workers are the problem. I would argue that at every turn labor is stepped on while other contributers to problems get a free pass like Clinton and his fightagainst terrorism. It makes me sick.

Someone spraying 110 gallons of methylene chloride at a time, not to mention 55 gallon drums of Acetone or Methyl Ethyl Keytone as wash solvent,or the other long list of dangerous chemicals, hazardous waste and falling potential involved with the aircraft painting field, NAAAH they don't need so stinking healthcare!!!! SHEESH!!!!

Gm has more problems that a union contract. They have more problems than the cost of health care or even pensions. Other contributers are the out of balance devision of profits, poor customer service after the sale and IDIOT examples like this one.

When you buy a New GM vehicle you typically get a 3 year warranty on your starter. BUT, if you have a problem after that time you can buy ANOTHER one and you get a lifetime warranty. Keep in mind now its the SAME starter. Marketing bit them in the behind on this one.

How much money is spent on advertising? Tax breaks ya say? Hmmm...ok. Say Unions, pensions, salaries and healthcare to me the next time you see a GM commercial during the Superbowl, the NBA playoffs or some such high dollar sporting event.

You can have the narrow minded view of blaming labor all you want to but the reality is that this problem goes way beyond just unions or their members.This is not to say they are not contributers, because they are part of it.

The automobile industry plays a huge roll for the shape it is in today. Their business practices are catching up with them just like Enron's did. Not the same thing mind you, but the same result. Poor choices made that some just refuse to admit, while they just keep on sinking with the ship spouting one sided talking point excuses that really do not hold up when a light is turned on the overall problem, instead of admitting the painfully obvious truth and making the changes required.

How many times will you sell someone a truck, taking their trade in at half (or less if you can)what you are going to sell it for, that loses 20 % (or more) of its value the instant you sign the title, and expect them to come back and buy another one? How many times will people repeat this losing end of the deal process before they say " UH UH UH not me again"?

How long will they buy into the warranty when in three years(or five or even seven if you pay extra) fixing their truck costs 500 bucks minimum everytime they bring it to the dealer to get it fixed? Especially when you see companies offering TEN year warranties.

As this nation grew strong, the products pushed quality, value, longevity, reliability and service. Focus on the profit has made many, today, forget what it was that Kept it. Returning happy customers. Selling once is easy, selling again, to the same person, is a whole other ballgame.

GM, like other corperations, has lost its way. When you have a quality product that is working and selling, some take that for granted and turn to profits and ways to cut the corners to make more profit. This is where they lose their way. If the right things are present, the profits will take care of themselves due to return business and productive workers.

When you step on those that bring the profits, eventually you lose. Stepping on labor is stepping on those that bring the profits, no different than stepping on customers with poor service and looney tune marketing. Without those two entities there ARE no profits.

If GM continues to defer responsibility for the choices they have made and continue on the same path they have been on, they will fall. So will other companies that follow that same path. It is time they get back to treating labor and customer as their livelyhood because that is exaclty what they are. SO you suspect no bias against GM on my part, do know that my Grandfather(rest his soul) retired out of the Janesville Wisconsin plant after three decades of service. He earned that pension and GM made good on it. If you think he got rich, you are mislead by the word pension.

[TheForceOfOne]

GM should go under and resurface as a new U.S. automaker less the unions.

[PAR35]

Didn't bother to read more than the first couple of paragraphs of your pro-union rant.

[grey_whiskers]

Hi, it's me, grey_whiskers.

Met you over on the DNA sequencing thread.

I agree with you in large measure about your anti-GM, pro-worker diatribe.

Try going to my Freeper home page and reading my vanity on "Another Look at Outsourcing" then tell me what you think.

Cheers!

[38special]

I'm a Ford man myself but I want to see GM survive. It's always been a good rivalry. Just say no to the Jap cars.

[Meldrim]

I'd add their Jeep line to Chryslers list. The Wrangler and Liberty are great vehicles for what they were designed to do. The Liberty is a little heavy on the gas though.

[dinodino]

Are you kidding me!?? What business can afford to pay that? The UAW workers deserve to be out of jobs if they pull stunts like that.

[Pete'sWife]

And astute observers could tell the make of car from the sound of the engine.

Today, all the engines are the same, and they don't make a sound.

Blech!

[sittnick]

forever killing the the Chrysler brand image as an "elite" upscale car.

LOL!! Ever hear of the "K-Car?"

The cheap K-Cars (Aries and Reliant) were Dodge/Plymouth only. The original K-Car no more hurt the Chrysler division than the Vega and Pinto hurt Cadillac and Lincoln.

[redgolum]

They haven't done a damn thing with their pick-up trucks the last few years.

GM can't afford to retool. The margin on their cars is very small, after all the health care costs and the ultra cheap financing stuff is factored in.

The CEO admits that GM is now a financing and health care providing company, that builds cars as a side business.

[palmer]

SO you suspect no bias against GM on my part, do know that my Grandfather(rest his soul) retired out of the Janesville Wisconsin plant after three decades of service.

My uncle just retired from Ford. He did the minimal amount of work that was required, contributed nothing to the company and retired on a fat and mostly unearned pension. He still hated Ford management in the same way that welfare recipients hate the government that gives them the handout, always complaining, etc. Socialism always leads to crap mainly because the workers are given incentives to be lazy and uncreative. In fact union contracts specifically disallow hard work and creative ideas.

[Brilliant]

Like I said, the UAW wants management that they can control. They don't care if it's good or bad, so long as they can control it. And that generally means it'll be bad.

I also point out to you that the UAW is big on forcing unnecessary workers onto management. And then management figures, "Well, we don't need this many workers, and we can't sell enough Trailblazers to keep them busy, so let's create a new kind of Trailblazer, and maybe we can sell a few more of them."

[BlueStateDepression]

Well at least you did admit you didn't read it when you claim it is a pro Union 'rant'. See actually, if what I suggest in the 'rant' was done there would be no need for a union at all. Too bad you decided to judge it without even reading it. Oh and the aircraft section was NON union work.

[RightWinger]

Perhaps GM should design and build vehicles that are in comparable quality to Honda and Toyota.

You got that right.

I only buy Camrys, Accords or Maximas (mostly used 2-3 yrs).