How the UAW helped kill hybrids, small cars and GM
Partners or enemiesMy father spent his working years in a union. My wife is in a union. I don't hate unions, but over the years, I've always wondered how workers and companies could be expected to succeed when the workers and companies habitually acted as if they were in battle against each other.
In terms of the auto industry, I've long been interested in the principle of kaizen, which is so pervasive in Toyota's auto business. This philosophy of continuous improvement has enabled Toyota to develop more reliable automobiles more quickly than their US counterparts. And it has represented the antithesis of the UAW.
According to a fascinating Newsweek piece, this adversarial relationship killed GM's early '80's interest in developing a new kind of car company focused on small cars - even hybrid cars - that could compete with the Japanese, while creating a new relationship between the UAW and GM partially based on incentives and success. This was to be the future and the salvation of GM. It was called Saturn.
The original idea didn't survive, but the reasons for its failure were not just limited to corporate ineptitude, but the stubborn, refuse-to-adapt-to-the-future UAW mentality. However, had the original intent of Saturn succeeded, according to Newsweek, many analysts speculate the US auto industry wouldn't just be free from the tentacles of bankruptcy, but far more successful and fuel efficient.
Labels: bailout, GM, Hybrid Vehicles, UAW
posted by Dahcredyns at
10:52 AM
15 Comments:
Its a simplistic view of a very complex issue involving an equal share of lack of foresight and greed by both the UAW and management thru my eyes.
I agree harmonious relationships between labor and management do work best, however the union could never gotten off the ground had it not been for the flat out stubborn refusal to work with the laborers in the first place on issue after issue.
For years and years GM has failed to make any substantial profits and every year kept loosing market shares, yet its board members are reelected over and over and over, even in the face of blatant mismanagement, greed, laziness and 'giving America what we tell it to have' mentality, rather than asking the public over and over 'what do you need and want' like the Japanese do every 6 months in survey after survey.
Article should read "How Management and the UAW killed GM".
I normally would still hold out hope but once China gets rolling in 2 years here, we wont even need this discussion, as there will be no need or demand for US automakers when China and India will produce quality hybrid and diesel vehicles for about 60% of what we do now.
Well, I wasn't trying to imply that the UAW killed GM, just how they helped, which is in stark contrast to what you hear from Ron G and other labor leaders. They regularly accept NO responsibility (they've only made concessions to save jobs), yet I think they are key to the success of the US auto industry - but not in the way they've done business in the past.
Still, in regards to GM, GM has been growing its business quite well outside of the US. It's creating profitability in the US that had been hard.
Thus, I would argue that lack of US success has been because of a mismanaged relationship with the UAW that has included not just bad corporate management, but bad Union leadership.
I'm not against the Union, but I think just as the auto industry needs better leadership, so does the UAW.
Put more blame on GM's board. That's fine, but the UAW also has a responsibility, and accepting that responsibility might be the key to Big 3 viability.
yea Unions are for sure as prone to corruption and greed as any executive as proven time and again every 6 months on news- for both entities. I agree lifetime free medical and paid time off when plants shut down, etc is totally nonviable in todays competitive world.
I believe controlled bankruptcy is the KEY for healthy turnaround at GM and even the new President at GM is totally aware of that fact. Bye Bye most of UAW's 20+ yr perks and hello, to a totally green competitive exciting i HOPE new GM, a company i HOPE i will be proud to buy from :)
i'm hoping right there along with you.
Uh...before you get all enamored with Toyota you might want to read the following....
http://www.detnews.com/apps/pbcs.dll/article?AID=2009904080384
And there is a fair bit of independent facts available from groups like jd power and the harbour report that belie your premise. Those surveys show the top quality plants in the u.s. are pretty much all uaw plants...not the toyota, honda or bmw plants that I'm sure you probably think. That's not to say the UAW is innocent any more than some of the poor management decisions made at GM. However, it is just as wrong to blindly assume everything toyota does is magic. You would do well to note that in recent years it is toyota who has led the way in product recalls and the outgoing ceo who was just replaced on more than one occasion said toyota was having real quality problems as they rapidly expanded their global production and moved into more complex vehicles like the big suv's. Sad to say that when it comes to GM and Toyota there are wrong-headed perception problems both ways.
I've followed JD Power, Consumer Reports, etc. data for years now. I think it is you that needs to take off the blinders.
In recent years US automakers, especially Ford, have caught up to Japanese automakers like Toyota in quality and in production line time, but it took DECADES for this to happen.
DECADES!
You don't think that had an effect on the difficulties of achieving North American profitability? You don't think the UAW's overly burdensome contract had any effect on decades of inferior product and inefficient vehicle line production?
The facts supporting my case are not just objective, they are overwhelming.
There is a reason FORD used to stand for Fix Or Repair Daily, and every major auto CEO has admitted to these past mistakes many times.
no offense but the owner of this blog is an idiot, uaw has no say in vehicle models, they represent the companys employees to make sure they dont get screwed. If you actually ever worked in a plant you would know its a requirement becuase the company can and will screw you every chance they get and are constantly looking to get one over on you, and despite popular belief of uaw workers having it easy, remember the line does not stop for you, if you stop it your probably loosing your job especially now, not to mention walk out of one of those plants one day and blow your nose or cough into a napkin and look at it and see the crap that comes out. even if you dont get hurt by any machinery there simply being inside and breathing is constantly destroying your body. on a final note, hybrid cars...... frankly i wish someone would destroy this whole idea say you want it for the sake of the environment if you drive on the highway alot the vehicle only really puts out about 15% less emissions(the numbers actually released are wildly exaggerated since 90% of the time during the city the engine isnt even running and they take the average of city and highway hell for emissions test on the vehicle, 35 mph, the engine is only running 1200 rpms to charge the battery) now think about this.... the batterys are roughly 8 times the size of a normal car battery, they are ac-alternating current, between 240-440 volts depending on manufacturer and between 140-220 amps, as opposed to 12v dc-direct current of a normal vehicle. thats more power then 9/10 peoples homes and since its ac the battery isnt servicable(it can kill you as opposed to the only danger of a dc battery being acid burns, try servicing a ac battery and you will get electrocuted) so you have a 400lb battery that cant be serviced to recycle that sits in a junkyard somewhere or gets buried with several others of its kind....... next to harness all this power requires larger diameter wire, causeing more copper ore to be mined and more polution to the environment from the manufacturing of this into usable wire, in the end a hybrid dosnt decrease polution it only displace's it(mayby even increases it but i dont have exact numbers so i wont comment on which it is). finally lets look at it as a economical position, the vehicle gets roughly 20% better mpg, the average family spends 1200 a year on fuel so they now spend 960 the vehicles cost an average of $4000 more then a none hybrid model(some are more some are less thats an average)even if you keep the vehicle 7 years thats $571 more then a non hybrid, now factor in that after the warrenty expires( after the first 3 years your gona be lucky to get the expensive stuff covered on the warrenty, trust me ive worked at several dealerships, the average cost of ownership is 20% higher the average cost of ownership per year of a non hybrid vehicle is $815 after the warrenty expires(the first 3 years is the only thing that matters the stuff covered under the other 7 years on the "10 year warrenty" dont break/rarly break, so the hybrid would be 978. now figure in the cost of the battery $3000-$5000 each, plus you have to have it replaced by a dealership since its so dangerous so figure in $3500-$6000 depending on what the labor rate is. the warranty is still only 7 years like a normal battery and its not a "we pay it all" so if it only last 4 years your paying for over half the battery. so your looking at a average of $2015 per year in costs for a non hybrid vehicle or average of 2509 for a hybrid plus the fear of if the battery goes its going to costs you roughly 15 times what a non hybrid would cost. oh yah by the way have i mentioned if you leave your headlights or something on and your battery dies your kinda screwed? yah a normal car cant jump you since it use's much different types of electricity not to mention 9/10 dealerships dont even have a battery charger for hybrids, so unless you have something up your sleeve and manage to somehow get a little bit of a charge in the battery. also dont try jumping a hybrid with a regular car.... you will cause a short and electrocute yourself or cause an explosion. on a final note i have nothing against trying to improve fuel economy or alternative fuels(hell e85 is amazing and to those people who say "but it uses 15% more energy to make one gallon of e85 then it produces" remember this may be true but it only require 50% more energy to make 10 gallons of e85 over 1 gallon so the more you make the less energy required not to mention most facility's producing it generate 60% of there power from solar energy) im just not fond of car companys using "gimicks" to sell cars since thats all hybrids are
"yea Unions are for sure as prone to corruption and greed as any executive as proven time and again every 6 months on news- for both entities. I agree lifetime free medical and paid time off when plants shut down, etc is totally nonviable in todays competitive world.
I believe controlled bankruptcy is the KEY for healthy turnaround at GM and even the new President at GM is totally aware of that fact. Bye Bye most of UAW's 20+ yr perks and hello, to a totally green competitive exciting i HOPE new GM, a company i HOPE i will be proud to buy from :)"
just to add a bit there is no paid time off when the plants are on shutdown(at least not for ford) when the plants on shutdown you are permitted to use a week of your vacation for that or simply collect unemployment, and as i said in my previous post(if it gets allowed to be posted) theres so many fumes and dust and debris in the plant the lifetime healthcare is a must for them to avoid lawsuits(hell they have materials in there that if they leak on you cloths and you dont know and use one of the chemicle baths within 10 minutes you will be dead in 72 hours, or how about Isocyanate which if your in paint is unavoidable and cause's asthema in people who dont have it and causes respiratory system shutdown in people that do have it? and trust me its everywhere even in places no where near where its getting sprayed) not to mention if gm does declare beankruptcy they have said they will close there doors, people arnt going to buy from a company that has to declare bankruptcy not to mention they wont have workers since the average wage for workers will be 9 dollars an hour..... i can work at mcdonalds for that no offense =/(9 dollars an hour is the average wage offered by nissan honda an all the other manufacturers except toyota. however they all offer free or highly discounted healthcare to save themselves from lawsuits for occupational hazards(and by discounted i mean 10-15 bucks a week for a family which is nothing) the pensions and such is all that will be effected which is bs, work you entire life for a company to make money and then they say "Screw you"? even if gm dosnt close its doors it will have new labor contracts. union 101, they where formed by employees saying "We would like this" big three"no" workers"then we wont work" big three "we will fire you" workers" ok well we all arnt working until you give us what we want" big three shortly after "oh shit" granted this all happend over a long period of time thats the jist of it, unions hold power becuase the companys dont want a strike, fomoco looses 10k a minute when one plant is shutdown, they cant afford that hence the reluctantly work with unions so even if gm declares bankruptcy its only a brief relief of the union.
"Blogger Dahcredyns said...
I've followed JD Power, Consumer Reports, etc. data for years now. I think it is you that needs to take off the blinders.
In recent years US automakers, especially Ford, have caught up to Japanese automakers like Toyota in quality and in production line time, but it took DECADES for this to happen.
DECADES!
You don't think that had an effect on the difficulties of achieving North American profitability? You don't think the UAW's overly burdensome contract had any effect on decades of inferior product and inefficient vehicle line production?
The facts supporting my case are not just objective, they are overwhelming.
There is a reason FORD used to stand for Fix Or Repair Daily, and every major auto CEO has admitted to these past mistakes many times."
ill agree with you on this the japanese where useful for making the domestics increase quality and efficiency but now the president needs to think about the us and not care about foreign automakers...... they need to make a extra tax for foreign based auto makers to help the us industry and also make a big tax on domestics for importing things in from canada and mexico..... this worked in the 80's and 90's(not taxs but there where much more plants here and alot more jobs in the us and thats what we need to be concerned about is our people not other contries people) frankly i dont care about the global market but only those here. i would rather my son eat then an african, japanese, german, or any other contry. nothing against em just my family comes frist =/
a guy who doesn't know-
an idiot, hmmm? whatever.
the facts speak for themselves, just because the facts don't support your case doesn't mean i'm an idiot.
you've contradicted yourself numerous times. you've been completely wrong multiple times, so move along.
there hasn't been a jobs bank in the UAW? Are you fricken kidding me? Do you watch the news? That UAW program was ended under recent contract negotiations with GM. so you obviously don't know what you're talking about.
in terms of the UAW helping kill product, i didn't say it, i QUOTED the fricken source that talked about how the UAW limited the ability of GM in Saturn to develop cheap small cars. for instance, the UAW demanded that suppliers have union contracts even if there products were more expensive and inferior to a competitor. that resulted in more expensive small cars that were inferior in reliability.
That's a fuckin fact. you are WRONG. Do some damn research.
even worse, you advocate protectionist ideas that have been proven to be counterproductive. how can we be protectionist against china, for instance, when they own so much of our debt?
do you know what the most popular car is in China, the fricken future of auto industry?
a Buick.
So, yeah, let's be protectionist and kill GM's chances to make a lot of money selling cars in China. Great idea.
GM doesn't make any money in the US. it loses billions. take away markets like China and GM has no future.
please. if you want to call me an idiot you have to present a more compelling case with facts and evidence not just your opinions. you're only making yourself sound like an idiot.
lol have you even looked at general motors vehicle lineup? better yet take a look at the at the 2007 saturn ion(last year they made it) and a 2007 year cobalt. the saturn ion is about $1300 more, guess what dumb ass thats the same exact car there is no difference with the exception of the "cobalt", "saturn", and w/e the model designation may be for it badges. but im guessing the uaw force gm to make it more expensive right? how about you compare the saturn sky to the pontiac solstice? oh shit look at that, with the same equipment the sky is roughly $2000 more hmmmmmm. yah gotta be the uaw's fault, if you wanna look at whos fault it is look at the fucking tree hugger useless idiots, emissions equipment adds $2500-4000 to a vehicles cost(not fuel injection thats a wonderful thing but catalitic converters, evap systems, extra o2 sensors, air pumps) that would drop the base price of say a chevy aveo down to $9500, and really it dosnt hurt the environment nearly as bad as people think, livestock alone in the united states produce more greenhouse gas's then every vehicle on the planet, that dosnt figure in woodland creatures, pets or humans dont believe me go look it up im done finding shit for people who are too stupid or too lazy to look, if oyu really wanna help the environment make everything run on e85 the extra cost for this is roughly $100 and even with no emissions equipment the vehicle would still produce less emissions, plus the fact that the average price of e85 in the us is 40% less then gasoline which conteracts the 30% increased fuel use and you still save money. also back in the 70's and 80's before gm had plants and was selling vehicles all over the world(basically when they where first trying it out) where they in trouble? no, why? oh shit its becuase the majority of the united states had good jobs! holy shit how does that happen? when all the plants where in the U.S. it ment that there workers could afford more stuff so in addition to them buying a more expensive gm vehicle, they could afford more expensive stuff/more stuff at other places such as stores and eating out exc. this allowed those workers to be payed more/allowed more jobs to be present, this increased the liklyhood of gm selling vehicles. every one job here in the U.S. that gm eliminates could potentially cause up to 10 jobs to be lost throughout the economy, the problem started when the executives started getting greedy and wanted to send plants to other countrys such as canada and mexico and importing the vehicles in since they can get labor much cheaper(particularly in mexico)and the number of jobs lost/pay increase's slowing down cost them more vehicle sales then the money saved in this process provided. your basically saying that uaw's labor contracts are killing the contry but by what you say i suppose hi wire electricians shouldnt get payed $95 an hour and have excellent payed for benefits? the amount of pay is for the danger level of the job, in a plant where loosing focus for 1 second could cost you or someone else there life the amount of pay they recieve is deserved just like how people in paint get more money then those in chassis since there are more dangers present. you also saying they dont need to get such excellent benefits but i guess really good health insurance isnt deserved for shortening your lifespan to help a company make money huh? i work at a plant(granted im a subcontractor so i dont make as much) but since starting ive had to increase the frequency of breathing treatments from 1x a day to 3x a day and have to carry my nebulizer with me at work, and i only work in chassis its not even possible for me to work in paint all the time becuase it would more then likly cost me my life from the fumes. not to mention have you actually checked ford recent sales? yah gm and chrysler are hurting but ford made a profit of $100 million but no they loose billions in the us......
and wtf are you talking about a job bank for? the job bank is to keep track of people who are laid off and help them get back to work, regardless if its in that plant or another. it also lets people with high senority switch to a different job position in the company when a spot becomes available so idk wtf your talking about i never made any mention of the job bank. and china owns most of the U.S. debt but so what? that dosnt mean we have to give them our automotive market create a tax so that the cost of one of there vehicles to sell here would be the same as a domestic vehicle to allow the domestics to compete, plus actually look at shit why dont you anything made by gm in the past 5-6 years is just as high quality as anything japanese people just still have the mentality that "domestics are crap" and its not true(with the exception of cadillac those things always seem to need fixed but its mostly that dam northstar engine) hell it would be preferable for a tax on foreign owned car compants to make there cars more expensive then domestics to try and boost there sales and provide them the opportunity to sell more cars, hate to say it and sound like a heartless bastard but screw other countries i wanna feed my family not some japanese or chinese family
and how many decades did it take GM to catch up with Toyota and Honda to make quality small cars? and UAW contracting had nothing to do with that?
it's so obvious. are you really that stubborn and provincial?
btw-
i hate using words like idiot and provincial. so, i apologize, even though you started the name calling. anyway, for what its worth, i apologize.
still, back to the point, i never said the UAW caused GM's problems. I stated that the UAW "helped" cause some of GM's problems.
And they did. That's a fact. It's not an attack on you, GM or the UAW, but if we're going to correct this mess, those that have been making bad decisions need to accept accountability.
is the corporate board at GM most responsible? without doubt. more important, i'm not blaming UAW workers, I'm blaming UAW management. i absolutely believe in the capabilities of the American worker, but I don't believe in GM's corporate board and I haven't believed in UAW leadership.
and i think the UAW's leadership and its effect on the US auto industry speaks for itself, and so do many on both sides of the aisle.
well i appoligize as well, i guess i get a little carried away sometimes. tbh gm management needs to quit being stubborn and work with the uaw. gm pays the same as toyota and they have the same benefits packages yet the big difference is toyota only has something like $100 in legacy costs per vehicle compared to gms roughly $2000. the uaw tryed to help with this by taking over half the cost of pensions and healthcare(like they did with ford) and gm refused claiming "that wont work for us" not sure how an extra $1000 per vehicle manufactured dosnt help save money =/
i don't disagree with that.
still, many of these concessions were made under the gun. i think that UAW leadership could have been more proactive throughout history, and in the future they will have to be.
of course, without better corporate management, it really won't matter what the UAW does in the future. the auto world is moving way too fast right now.
when warren buffett believes that BYD, the chinese automaker, could be even bigger than Toyota in just another decade, you know competition in the auto world is only going to become more intense and cut-throat. scary.
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