I wouldn't say that....nearly 190,000 jobs at stake.

 

Exactly. There has to be an effect if work is shipped to a "low-labor-cost market", where the employees can't buy the product they make.

I've said it before, I'll say it again - Henry Ford had the right idea for a long-term, sustainable economy.

 

But that would mean the people at the top of the company would be slightly less rich.

 

yes, but those companies would indeed hire a great number of those people to fill the orders left by delphi's void.

of course, they won't have a 5,000 employee strong job bank ... which is probably one of the many reasons they'd be cheaper

 

 

(Two of) Henry Ford's philosophies was to price the product so 'everyman' could buy it and pay 'everyman' so they could afford it. Simlply, empower the folks to buy the products they 're building.

Pretty unique thinking for an anti-semitic who employed the most blacks in his factories.

 

 

I talked to a retired GM worker friend this morning about the whole Delphi ordeal. He figured that GM would be in much the same position in his lifetime yet. To add to it, seeing how he is GM retired, he (as well as many others) has something to lose if it does happen.

Sure hope that doen't happen, or this country is in for a rude awakening.

 

...and strangely enough...at $12 an hour, they wouldn't be buying big profit making SUV's from GM.

BTW, did you know the job bank's original purpose was to make the big 3 think of labor as more of a fixed cost than a total variable cost, so the workers wouldn't have to undergo a constant cycle of hirings and firings? I don't think GM or the UAW foresaw the steady market share declines GM is facing now, which is why they have a gigantic jobs bank.

Whoever signed the contract should have put in a provision preventing the jobs bank from growing past a certain point. Or something.

 

USA: GM ultimatum to workers: agree health care cuts or we could make 'em anyway

14 Oct 2005
Source: just-auto.com editorial team

General Motors wants workers to agree to cuts in its $US5.6 billion annual US health-care costs in the next few days, or GM could cut them unilaterally, the Wall Street Journal reported on Friday, citing people familiar with the matter.

According to Reuters, United Auto Workers vice president Richard Shoemaker, the union's top negotiator at GM, said in an interview with the newspaper that the union and GM are continuing talks over health-care costs and related issues. Shoemaker reportedly declined to discuss details of the talks or any deadlines, but said both sides acknowledged that talks must be concluded soon.

GM officials wouldn't discuss details of the company's proposals, the paper said.

Reuters noted that union officials have said GM management is seeking cuts of $1 billion a year and changes in retiree plans that could slash $20 billion from GM's retiree health-care obligations. GM could argue it isn't obliged by the contract to provide the same benefits to retirees as to active workers, the paper reportedly said.

http://www.just-auto.com/news_detail...t=49644&dm=yes

 

The time where "Made in America" meant something is no more. Manufacturers are now able to make a equal or higher quality product with less educated workers(whether here or in a foreign country). Look no further than Toyota's "Tundra" assembly plant in San Antonio. None of the workers hired are part of a union, they're paid $10-12 an hour(vs.$27+ for a UAW employee), and yet they turn out a higher quality product. All thanks to technology that has reduced what was once considered a "skilled" job into one anyone can do.

I think the real reason profit continues to dive is A) Americans continue to lose trust in American made products and switch to more reliable imports. The loss of trust(and therefor sales) isnt occurring in states where the vehicles are manufactured(Where 99% of the cars driven are still American) Its occuring in states further South and West. Where peoples employment has little influence on what they purchase. Landmark Chevrolet in Houston claims to be the #1 selling Chevy dealer in the U.S., yet more than 50% of the cars on the road down here werent designed in America. What does that say about Chevrolets sales elsewhere? and B) GM is forced to sell a product at a lower price than the foreign competition despite it costing them substantially more to build it. Is this possibly why we have cars that are made from cheaper materials, and have less appealing designs? Add in the fact that the overall quality is lower on American made vehicles(as well as a lower American sentiment toward them), and what benefit does GM have to continue to make products here at that cost?

I think certain areas up North are going to be hit hard. Why? Those certain areas are far too dependant on manufacturing jobs that pay FAR more than the market says they should be paid. If those plants shutdown, or the workers are forced to leave over shrinking pay, theres not a market available to absorb them.

 

Actually, "assembly" was never considered a skilled job. The pay was good because of the demands of the job, but basically anyone could still do the job. Still, I wouldn't ever take an assembly job making $12 an hour unless there was a short path to much more money. There are lots of other far easier $12 jobs out there.

 

In the next 10 years you'll find out that it means a lot more than you thought it did. As manufacturers go under you'll find foreign products getting more and more expensive and you with not enough money to buy them. Of course over the very long run that will create demand for domestic products, but by then the damage will be done.

You know this for a fact? Funny, the guy I talk to who works for Toyota gets paid $22 per hour - a few dollars less than a UAW employee. And studies show that productivity of their workers is similar to union workers. The problem for Toyota employees is they get far fewer benefits and they can be fired at any time for making a mistake. Still, initial quality is excellent at domestic plants which means the problem is in the quality of the components. And yes, the unions will have to do something about the cost of benefits.

I agree. The problem for domestics is the way they conduct business. Product quality cannot take a back seat to anything. And for God's sake, a WARRANTY should be seen as one year of free repairs after a purchase - not an excuse to argue with the customer about what's not covered.

 

I'm sorry, but there is nothing here that is remotely true. Go out and read a contemporary macroeconomics book -your arguement is sure to be in there ... and it will be RIPPED apart. The exit of an inefficient domestic producer won't magically make competition between the surviving producers, foreign or domestic, disappear. Foreign products won't get more expensive - the opposite is true, real [inflation adj. prices] will continue to trend down. Think I'm wrong? Name ONE example that backs up your theory. Shouldn't be hard, seeing as the US has lost countless manufacturing sectors to foreign producers (and if you read that macroecon book, you'll realize this is a GOOD thing for the USA). Toothbrushes? TVs? Now that we don't make'em in the states anymore, those foreign producers are really sticking it to us

 

Well actually yes, I have taken macro and microeconomics. And I've never met an economist who ever said anything that actually came true. Economics is the philosphy of the economy and I've never known a philosopher who wasn't full of ****. There are several examples of developed countries (England, Canada) that went through long-term recessions in their economies that saw forced restructuring of the manufacturing sector.

I think that you may be reading me wrong though. If say, Ford and GM were to go under and Toyota and Honda were to own the world auto market, chances are they would eventually become pricey as the US buck became worthless due the simple fact that more money is leaving the country to pay for cars (and other manufactured products) than comes in. That gives you inflation on foreign products and makes domestic products cheaper; then it becomes less expensive to manufacture domestically again because everyone's out of a job, gets paid less and products can be made at home more cheaply. That's what happens when the social engineers (encouraged by mindless economists) are left out of it.

Face it, GM and Ford are considered make-loss companies (to use true economist terminology) by their upper execs. They know they're fighting a losing battle slowly but surely. Can it be turned around? Yes, but not without some serious attitude changes and I don't see that happening.