Who's fault is it?

[bomelia]

I for one am trying to be very careful here. I realize that some folks here may be union members. So I do not want to insult anyone. At some point, you have to take a good step back to get some perspective on this. The auto industries collapsed for a number of reasons. Union issues are among the top reasons, but so was bad management. When the government got into the mix and started regulating corporations, a distortion in the free market system occured. Many understood this, but accepted it as needed. Unions are a distortion in the free market system, but again, many accepted them as needed. Over time new rules, more regulation, and more union power continued to distort the system. Like a frog being boiled slowly in water, everyone got used to it and even began to conform to it. The culture changed in management. When someone rose through the ranks to become a powerful part of management, then you have union mentality in the management ranks. Eventually, neither could exist without the other. Each became the other's means to an end... and those ends were not always in the best interest of the industry. Management became worried about funding pension plans (that could not possibly be funded unless someone ran a Ponzi scheme) instead of figuring out how to build better cars and anticpate the market direction. Eventually, it all collapsed just like a Ponzi scheme. This it what happens in a true democracy. And this is why representive type governing is better (be it management vs employees or some kind of government). When the masses can figure out how to vote themselves a pay raise from the general fund, its game over.



Mike

[VRM]

Actually Mike,
The reason is much simpler than that.

A few decades ago GM sold 4 time as many cars as they sold last year. If they had continued to sell that many cars (with the same profit) they would not be in this mess.
The reasons for not selling as many cars are pretty simple also.
Poor design - blame designers, managers.
Poor quality - Blame workers, designers, managers.
Poor dealers - Blame dealers, managers for not enforcing sales standards and encouraging arrogance.
Overall competition - Blame everybody for letting Japan get the upper hand.

And I congratulate Japan for doing a great job of decimating their competition.

GM, however, decided that they could run their business as though they were still selling 40 million cars. Blame management for that. The unions thought they could still get the kinds of benefits from a company selling 40 million cars. Blame the unions, too.

It was a Ponzi scheme - and it would be fine as long as they were selling the right number of cars.

Steve

[Sharroll Celby]

The GOOD use of a union is that a productive worker could not get fired on the illegal whim of the "boss", just because the boss didnt like that worker, or the boss wanted to hire their son/cousin/son of a friend etc etc etc.

The BAD use of a union was to not let unproductive workers be fired for "lack of production", per se.

I think that workers, union and others, should get their wages based on productivity and profit of the company. At what rate is open for discussion.

[VRM]

Originally Posted by Sharroll Celby

The GOOD use of a union is that a productive worker could not get fired on the illegal whim of the "boss", just because the boss didnt like that worker, or the boss wanted to hire their son/cousin/son of a friend etc etc etc.

The BAD use of a union was to not let unproductive workers be fired for "lack of production", per se.

I think that workers, union and others, should get their wages based on productivity and profit of the company. At what rate is open for discussion.

Yep - I worked with way too many union guys at phone companies who thought all they had to do was show up.

Managers need to get their wages based on productivity, profit, and a multiplier of the employees salaries. I agree with Ford - you should pay your workers enough to be able to buy your product.

Steve

[Sharroll Celby]

I imagine that a factory owner hired people he knew and trusted to be his workers. He paid a competitive wage, and the workers planned to stay and work hard with that same company until retirement. The owner knew the worker's plans, and paid them their wages (with the occasional raise), knowing that a happy worker was a productive worker. Everybody gained in this situation.

[bomelia]

Celby,

The mentality of people you are talking about is beyond my understanding. To me, that is just plain gross, and if those people populate (dominate) the auto industry, then it is time to shut them down. If, however, what you are talking about is the exception, rather than the rule (as I suspect), then there is no need for unions today.

Steve, its a terrible circle, is it not? Pay them more so they can afford the product, then raise the price so they can get paid more to buy the product.

Mike

[fsstnotch]

It's just an observation but i didn't see Ford take ANY handout money and there have not been any rumors of their bankruptcy.... Why do you think this is?

I'd guess better management/planning?

[Sharroll Celby]

Originally Posted by bomelia

Celby,

The mentality of people you are talking about is beyond my understanding. To me, that is just plain gross, and if those people populate (dominate) the auto industry, then it is time to shut them down. If, however, what you are talking about is the exception, rather than the rule (as I suspect), then there is no need for unions today.

Steve, its a terrible circle, is it not? Pay them more so they can afford the product, then raise the price so they can get paid more to buy the product.

Mike

WHICH people are you referring to?

[bomelia]

Both. Re: your first post in this thread.

[bomelia]

Originally Posted by fsstnotch

It's just an observation but i didn't see Ford take ANY handout money and there have not been any rumors of their bankruptcy.... Why do you think this is?

I'd guess better management/planning?

Yes. Plenty of stories about this on the web. But even they will find bottom eventually. It could be that the plan all along was to have one "healthy" company pay for the others. OK, that is WAY too conspiritorial for me.

Mike

[VRM]

Originally Posted by bomelia

Celby,

Steve, its a terrible circle, is it not? Pay them more so they can afford the product, then raise the price so they can get paid more to buy the product.

Mike

Well, it worked for Ford (and it is actually more complex than that).

Ford dropped the price of his product significantly - this allowed more customers the means to afford his product and he was able to take advantage of the economy of scale. Ford was then able to hire the best workers, and further increase his productivity. The ones didn't make the cut then had to learn how to be more productive in order to compete in the workforce.

Japan did the same thing to the US when they first entered the market.

Steve

[427sharpe]

The only way Ford can stay competitive now is by UAW redrawing their contract voluntarily to get in line with Chrysler/GM. And how will Ford Pay? Only way I see is to follow the lead and give them +/-20% of company for benefits/health costs. And STILL Ford would have to address the debt issue. Maybe now would be a good time to renegotiate with bond holders. Offer them 30 cents on the $ and stock conversion as opposed to BoBo's 21 cents and the door and see what happens.

[Jamo]

Ford negotiated a "most favored nations clause" in its last round with the UAW. If the GM/Chrysler contracts survive the bankruptcies, and the UAW lowers the cost of performing under those contracts for the Obama/Italian cartel, then Ford will obtain pretty much the same decreases.

Nothing new...MFNs are commonplace in highly unionized industries. this should assplain to you why one of the automakers would always take the lead in negotiations with the UAW...the parties in the first negotiations set the deal, and then local issues are negotiated.

[bomelia]

That was then, this is now. Today (well, in healthier times) auto workers were allowed to buy cars at a price so good that they could drive it for one year, sell it, and never get upside down in it... even make a little profit which was then used to buy another car. Essentially, they drove the cars for free. The auto companies tried to take advantage of this by selling to the public the same way... but when everybody is doing it, it doesn't quite work out. And even then, I doubt the public was getting the same price.

I actually thought that was an excellent idea.

Mike

Originally Posted by VRM

Well, it worked for Ford (and it is actually more complex than that).

Ford dropped the price of his product significantly - this allowed more customers the means to afford his product and he was able to take advantage of the economy of scale. Ford was then able to hire the best workers, and further increase his productivity. The ones didn't make the cut then had to learn how to be more productive in order to compete in the workforce.

Japan did the same thing to the US when they first entered the market.

Steve

[Wayne Maybury]

Take a look at what investors think.

http://www.bloomberg.com/apps/news?p...d=a_vZ7JsMlHkE

I like the part at the end where it says that Ford doesn't have an unlimited checkbook and GM will not be allowed to fail.

Wayne

[Ron61]

Wayne,

GM will not be allowed to fail.



With our Govt. involved in the running GM I wouldn't bet to heavily on that. And now that the UAW owns part of GM, will they strike against themselves for more pay and benefits?

Ron

[SPF2245]

I think Ford has survived for a couple simple reasons. First, they bought Mazda, took their chassis, modern drivelines, and began selling re-bodied versions here. Next, Ford was good about securing large lines of credit before all went bad. Ford has done well to keep their line improving, they don't max out the life cycle of each product as often as GM does. Ford is more willing to take a product (recently) and keep making small changes to keep it's appeal. It appears they've learned from the mistakes they made with the Explorer and Taurus and have begun to make enough changes to appeal to new buyers.
Last, Ford isn't quite the giant GM is. GM is so large and exposed itself to so much risk (numerous brands, too many common products competing against eachother, huge credit firms, ect) to survive in the current economy.

[Wayne Maybury]

Ron

Basically the article is saying that GM won't fail because the gov't will just keep on pumping $$$$$ into it, not because the company is going to be run properly.

I have to wonder how long Ford is going to be able to continue to compete considering that GM is receiving billions of dollars from the government. That sure seems like unfair competition to me. I assume that Ford (and the other car companies) have their legal departments taking a long hard look at this from the unfair competition angle.

Wayne

[Ron61]

Wayne,

Sooner or later the Govt. won't be able to keep dumping billions of dollars into anything. He already has the printing presses almost worn out and China and other countries that own billions of dollars worth of stuff in this country will put a stop to that. Right now he is acting like a dumb teen ager that suddenly got all the money he could imagine and don't know what to do so he runs all over the world and prints and spends money at an unbelievable rate.

Ron

[joe g]

THINK AMTRAC the government bought out the railroads in the 70's and said soon it would make money and they have spent BILLIONS every year propping it up. GM/OBAMA motors will NEVER be privately owned again and will get BILLIONS proping it up also.
WE ARE SCREWED when the government ownes the 5 largest banks, the LARGERST insurance company in THE world and now GM. Remmeber how VOLKSWAGON got started by HITLER as the peoples car- GM is not far away from that. NEXT ITS MEDICAL CARE
joeg