Thoughts on the bailout...

[dcarrb]

I agree that rank-and-file employees had better get ready to give on this matter, but for decades Detroit products have lagged behind imports in customer satisfaction surveys. This is old news. Quality and brand loyalty (and bullheaded resistance to change even with Japanese brands showing the way) as an impact on sales are the issues here, not just labor costs, as much as the brass would have us believe otherwise.

dcb

[lhopp77]

Originally Posted by dcarrb

I agree that rank-and-file employees had better get ready to give on this matter, but for decades Detroit products have lagged behind imports in customer satisfaction surveys. This is old news. Quality and brand loyalty (and bullheaded resistance to change even with Japanese brands showing the way) as an impact on sales are the issues here, not just labor costs, as much as the brass would have us believe otherwise.

dcb

True for the most part, but Ford in has reached quality parity with Toyota, so things are looking up in the quality area.

I do agree, as you seem to point out, that quality is also very much a labor function. Dedication and loyalty serve to motivate and create pride in worksmanship and overall quality. Its such a shame that at an average total GM labor cost of $74 per hour produces lesser quality than the Toyota $45 per hour total cost. (American worker costs for both--not comparing US vs Jap costs)

Of course this just highlights the problems with overly strong unions---longevity rules big time over qualification.

Lee

[dcarrb]

While I've never been a fan of unions, I think in this case they're too easy a target. The guys who actually build the cars, and what they're paid, are the least of the problem. They just build what they're told.

I've also read that Ford is putting out a decent product these days. Could be that's why they're in better shape than GM and Chrysler. Hopefully it won't take too long for them to restore loyalty in the brand.

dcb

[1986nate]

Basically what happened was the unions actually were too greedy and at the time all of the plants for the big 3 were all located in the US. So there were a lot of workers to provide for all of the retirees and so the automakers agreed to the outrageously generous contracts thinking "hey, we can easily afford to give them all of this". Well then they started to ship more jobs overseas and didn't have enough here in the states to cover the contracted costs. That is why these steps were put in place to slowly have the union start covering benefits until they eventually took them over completely.

To be honest the big 3 should probably be the big 2. Maybe even just one company but I think 2 would work alright. Look at things this way. Chrysler is basically screwed no matter what. They have absolutely no foreign marketplace with any products whatsoever. On the other hand GM has a large market in Europe, Australia, and decent sized market in Asia-namely China. Ford as well has a solid footprint in Europe and as stated in previous posts there product is seemingly becoming better. Also Ford is the only one of the 3 that can actually survive without any extra loan or bailout if they absolutely had to. (btw-I hate Ford so don't think I'm biased)

The big problem seems to be the reliability and build quality of American cars. For years, Chrysler has had problems with their front wheel drive transmissions in the Caravan and Intrepids and have known about it. Yet, they did not bother to develop and put in place a more reliable one. They simply have kept basically the same transmission for over 15 years because they knew that most of them would be able to survive the drivetrain warranty period and not much longer. GM has the huge problem of way too many SUVs all competing against themselves as well as having 4 cars that are identical other than the name on the trunk and badge on the hood. Their build quality has been really low in the last 10 years as well. Using cheap parts and low quality materials. They have started to change that now with some of the new models like the new Malibu and the Pontiac G8.

Also just to note, car manufacturers in other countries have been asking the governments about possible loans as well. It is not only a problem here. Foreign auto makers sales are way down across the board as well. People just don't have as much money to spend and banks just are not willing to give out money in the form of loans right now.

Just adding info-feel free to criticize anything I say and sorry for such a long post.

-Nate