It's not GM's duty to save the american standard of living.

When loan companies charge 24% interest to people who can hardly afford to buy a car, it affects standard of living.

When Houses in areas cost 600k where the same exact house would cost 180k in a different area, it affects standard of living.

When Minimum wage does not go up, it affects standard of living.

When property taxes cost someone 250-500 a month it affects standard of living.



Either American companies adapt and make the most of the situation, buy integrating foreign labor with US labor, or just go all the way foreign labor, or they stick with just American labor. While Toyota and Honda keep hiring people at 20 an hour that used to work for GM at 40 an hour.

Is 20 an hour bad? No. Is 40 an hour bad? No. Not when the company can afford it by lowering costs in other ways.

I see you seem to have a problem with me.

Every line I write seems to get a response from you. If you are gung ho all american all the way, good for you. The problem is people, and companies always put Themselves and america first. When people start thinking and acting globally, things will fall into place.

Maybe if GM started offering better cars (which they are constantly doing) and were able to lower the prices to be more competitive than their competitors while making better profits, they'd be able to sell more, therefore making higher profits and being able to hire more people.

Maybe they could even start selling new cars in Africa where there used to be just plains and very poor people, where they put in a couple of factories.

Maybe they could sell more cars in China if they were a little more competitively priced, and some of the people there actually worked at a GM plant.... Kind of like the small town effect, but on a global scale.

 

Nobody in America wants to work with them. Time to start looking elsewhere. If they keep paying 10,000 dollars for parts where toyota gets the same amount of parts for 6000, there is a problem, you can't keep doing that and compete. Period. There is just no way to do it.

Again, the cost of high labor. So should GM bankrupt itself in an attempt to keep the American Factory alive?

You completely missed the point here. If they could develop platforms for a fraction of the cost that it costs GM to develop them, that would save billions of dollars alone. Then the same deal with Subaru, and other companies. Kind of like how the GTO came over here from Holden and sold in extremely low numbers for an American product, but outsold Au units, and made profits. Do you think GM could have developed the same vehicle from scratch and engineered and designed and built it in the US with US parts? No way. The scale that the US auto makers are on to make a buck would have made that impossible. I am saying use everything in the company to it's advantage like that.

They have to lower costs in other areas. The only way to lower labor rates is to lower labor pay and benefits. This should be done to a certain extent, but it can only go so far. They really need to find out how they can do things more cost effectively, and do it.

Decreasing labor force means you have less people making less cars, the ratio still works out the same. But there is still X amount of capital you need to make per vehicle, to pay off health care costs, retirees, etc, less vehicles means this goes up on each vehicle. If they only cut down labor, and make less cars and cut no other costs, this alone will make the loss per vehicle greater. This will bring bad things about much faster for GM.


If GM could develop a new vehicle with a new platform for say 1/10th the cost, and could lower the cost of parts by 40%, they could drop prices while increasing profits. If GM announced the new Camaro was coming out, but would start off under 16k for a leather clad V6 powered entry level coupe with 18 inch wheels and 30 mpgs, do you think it would raise any eyebrows? Now how about if GM was geared to make 4k per car? What if the Cobalt went down to 9k in base form, and 15k for the SS? How do you think that would stand up to the Civic Coupe? Also, if GM stood to make a few thousand off each and could do so on less than 20k units a year, and could develop more cars for less money, do you think they would have a slim line up? Do you think they would settle for less than 5 cars and a few SUVs in every division? How about the ability of a brand to develop it's own platform?

What I am talking about is a way for GM to take advantage of low labor, and make the very best possible out of the given situation. If the only thing you can see is outsourcing, then this conversation is over. There is a difference between outsourcing intelligently and effectively and just trying to get cut throat prices at any cost (including human lives) by going with third world country factories that will make that 100 dollar part for 20 bucks even if they kill 15 people a year in their factory. THe people there are still starving, the Value of the dollar only gets weakened, and it elps no one but the company. My suggestion is to build up low income areas with Factories and good wages, then stores will come, they could even end up buying American goods, who knows.

 

I don't have a problem with you, I just don't think you have a complete understanding of the situation. Toyota is getting the same parts from the same suppliers (with the same factories) as GM does. They get lower prices because they develop long term relationships and share information. The more information they share, the more accuate they can do things like project volumes and schedule production over the long term. All of this increases efficiency and saves money.

GM takes the "you'll build it for me for this price, or I'll drop you in a second" approach. It doesn't result in lower prices. It results in higher prices (take a look at how many millions of dollars the big 2.5 have funnelled into collins and aikman to keep them running during bankruptcy). It results in bad forecasts. (For example, GM told the supplier of the Envoy's retractable roof that they would sell 100,000 a year. The supplier built AN ENTIRE FACTORY to support this volume. When the car sold something like 25,000 a year, GM said "Sorry, My bad.") This type of approach results in higher prices.

Outsourcing isn't a simple answer. If you've got a boat full of parts from China on the way and find out they are all defective, you've got a BIG problem. Air shipments, quality rework, logistics, and obselescense eat up a lot of the savings. It's actually cheaper to make a lot of parts here because the labor component is so small. However, the US government does a lot of things that "stack the deck" against US based companies and make outsourcing a more compelling option than it would otherwise be. Hell, GM and everybody else is over in China teaching their future competition via joint ventures. Why? Because they have to to compete today.

All I'm saying is that it's a very complex situation and outsourcing isn't part of the solution, it's part of the equation. GM has made a lot of mega stupid decisons and has to make a lot of big changes in the way they do things in order to survive. You are absolutely correct in this regard.

I just hate to see the collapse of the US auto industry and the standard of living along with it.

 

I feel the same way. It is not the solution, but it has to be worked in.

Also, the quality can be there from China, 80% of the goods sold in the US are made there. That is included in paying the right wages, and providing a good environment.

 

We do not need foreign parts suppliers. Just lower waged workers here in the U.S. . Delphi is the posterchild for this example. Their labor costs are ridiculous. Or should I say were ridiculous, because finally something can be done about it.

 

But still when workes in other countries will work for 60 a month, even 10 an hour here is no comparison.

Another way we could free up revenue is less robots and automation.

Stay with me here.......

Lets say our parts that usually cost 10,000 to make altogether for X car can be built in factories spread from South Africa Eastern Europe and Asia can now be had for 5000-6000, and we can use the lower cost of labor to build front suspensions etc into subassemblies, then the cars themselves would be assembled in the US, with less automated machinery and more human interaction. They have figured out how to have high quality and low automation.

So our US workers are still building the cars, not 100% of them, but still doing the final assembly. With the right mix of automation to carry the heavy parts/move things around, but a little more interaction.... a la LS7.

Would you rather lose Delphi and Visteon and so on.... or would you rather lose GM, Ford and the suppliers? Maybe the suppliers will partner with a foreign supplier, do all their engineering here and build all the parts there.

 

I disagree, any corporation is there basically to "serve" or provide a "service", and doesn't "affordable vehicles "help" improve your standard of living?
It's this kind of thinking that has brought US to the brink of colapse today. And it's only based in greed, and selfishness, and a micro-philosophy that can't perceive that we all depend on each other.

What is America??? Answer: "People" not real estate. When companies think globally recently, they think, "How can we exploit the Labor cost differences, manipulate the currency exchange rates, taxes, tarrifs, and for what? To bring American's a lower priced product....Or just to increase the "profit margin", to keep Wallstreet happy...
I have personally seen outsourcing save my company several thousand dollars per unit. Did they offer a lower price per unit to our customers? NO!...they increased the price per unit by an equal margin as the savings..............why???..............ultimatel y, GREED.............................

Automation IS needed, where? Where jobs are too; dangerous, heavy and repetitive for humans to do without injury.

Outsourcing IS acceptable, when? When it is done locally, for things that don't require tight tollerences, special processing, or will affect the overall quality of the finished product.

Again,

 

About the people, not real estate thing.... what are you talking about?
So it's american when GM has engines made in Mexico?

Selfishness? I'm thinking of improving global labor standards and increasing wages globally and setting standards for others to follow, and I am the one thinking selfishly? Selfish is people like you who think America and Americans come before EVERYONE else in the world, and so we should do all we can to keep making many times more money than everyone else. Instead of doing something to stabilize global economics, you want to keep building up the prices of American Labor when nothing is done to prevent other companies from using cut throat labor. Look at Cherry cars. Cars for under 10,000 bucks. Sure they will be crap at first, but so were the cars we saw from Toyota in the late 50s, and early 60s. And Honda's first cars, and Nissan's first cars....... seeing a trend here?

Appearantly I am thinking the entire world needs to work together, and that is bad, yet it is my inability to perceive that we all need to depend on each other..... Other labor has already been brought into the equation. You can't ignore it or take it back out. So you do something to improve it.

We are better than that. We can improve it so kids are not being worked to death in sweat shops.

Affordable cars? Well, Domestic AutoMaker's costs are going up and up, and competitors can make similar cars for less which equals more affordable. So when US labor rates go up and a US made Impalla needs to sell for 5k more than a Camry, what starts selling more?

Reducing the number of 5-50m dollar machines in the US plants can help. I am not a moron, obviously when things can not be moved by a person, they will need assistance. Even this could be done without robotics. I've seen a lot of "machines" that are actually very simple, and make moving things very easy, and precise, without robotics.

You are right, when companies lately think globally, they think "well we can have this part made for 10 cents in China, where it costs 20 dollars to make here...." And no one cares that it is made by 12 year old kids in horrible conditions.

So when I say make safe working conditions, and bring factories to low income areas and and pay them good wages for the area and provide a community based workplace, that is bad?

I am saying GM has the ability to step up to the plate and change things, and improve the company as a whole in doing so. It would also improve foreign perception of the US, making US made goods more attractive.

I am saying they should think globally in a whole new way, and show how it should be done. Hire and train workers and put them to work in a safe and clean environment. And if they usually make 300 a year (which is the case in many areas around the world) pay them 100 a month. Also help set up community centers and grocery stores.

So when GM is spending half it's resources that it normally spends on parts, it has money to spend elsewhere, ie training US workers for new work that they will need them to do.

People like you who think of America 1st and only, are the problem. America as a stand alone empire is over.

What do you think is going to happen? Is the government going to limit importing of foreign vehicles?

Why not figure out what the problem is, and work with it and make it work to your advantage, instead of beating your head against it.

If you saw a National Geographic mag with pictures of Workers who all looked american, wearing safety gear and standing at an assembly line in a very well lit clean factory, and found out it was in Ethiopia, where the average worker owns his own home and buys Goods from all over the world, including America, do you think that would be a bad thing? Then if you saw pictures of the same spot where the factory now stands, 10 years earlier and it was just dirt with people half dressed walkign around looking 1/2 dead, what would you think?

Sure it might cause some job losses now in the US, but both GM and Ford are talking huge cuts in labor, because of slowing numbers. So wouldn't you rather see them improving and gearing up to grow US workforce and Global sales?

So instead they should just keep on the same track, using incredibly expensive labor for every aspect of the car, and keep letting foreign competitors us cheap foreign labor to make parts, and sometimes vehicles?

They are even using cheaper US labor. But GM can't lower pay, and can't fire current workers to hire lower paid ones. So they need to do whatever they can to improve things and improve the business.

 

Again, what are they expecting the US to limit imports, or should they impose labor restrictions on other countries?

Uneven playing field? Union workers have gotten everything they wanted for years. Things are becoming global, time to adapt. Guess what you are not bargaining your way out of this one.

Yes the crisis is bigger than we think. American Labor is Unaffordable to US auto makers, and the unions are trying to talk to congress about it.

In order to level the playing field, US labor rates need to go down. But you seem very pro-union yourself so you can estimate the chances of the UAW accepting this.

 

Who buys those cars now? Mostly people with investment income, not union workers.

Look, I'm an old-style leftie, but face reality. High wage manufacturing ("Fordism") is basically dead in this country except for automotive. At this point, you're talking about what, a million jobs in an economy with 150 million? The battle's already been lost, and now that China's opened up it's going to stay lost. Yeah, we're heading towards a wonderful have/have-not future, but how many people the Big Three fires or hires isn't really going to make any difference in the big picture.

 

The issue goes more beyond the UAW and their high labor rates. Most other countries offer some form of government health care program. US companies provide thier employees healthcare and end up shouldered with enormous healthcare and legacy cost, which only they bare.

Countries such as china have very low labor health and safety standards and aren't interested in raising them because there is an ample supply of new workers to replace the old. Even if you went there and started your own factory and tried to do these things like you suggest, you'd get your butt kicked by the other companies that didn't.

Other countries do things like subsidize or provide electricity, land and resources. They also take action to devalue their currency (yuan?) and don't protect intellectual property rights (Cherry copied a Chevy pretty much down to the nuts and bolts and got a way with it).

There's a lot more to this than just these highlights. Just saying companies should outsource everything is shortsighted. No company is individually responsible, but the indifferent US Government should at least try to make sure that the playing field is level beyond saying the tariffs are equal. Once all the high paying manufacturing jobs are gone and all we have left is intellectual property and investment income that will eventually be taxed away, it's over.

As someone around here said "Welcome to the race to the bottom."

 

No, you wouldn't. You'd be celebrated and loved by the employees and they would demand better working conditions. Facotry workers are not endless in China. Yes, they have no standards, so you show them what it is like to have them. Imagine if you gave a 1920's US factory worker safe clothes, clean working conditions, safe working conditions, and good pay. People back then made a few dollars a day. I'm not saying break the bank paying these people and making state of the art factories. Provide a better work environment than they have anywhere else, and pay well by their standards, and you will have a dedicated loyal workforce. As it is, they have huge turnover rates because working conditions are so horrible. This is one reason why some places have horrible quality, new workers all the time.

Short Sighted? Guess I should just throw the towel in like you huh? Instead of taking what is already part of the deal, and working with it and making it work to the best of our ability, just forget it because outsourcing is shortighted? Well this conversation is done then, because you have missed everything but the word outsource.
Yeah, well I will keep looking for ways to adapt instead of whining and crying that things are changing. you just keep going to the bottom.

 

See, that's where we differ in opinion. IMHO, outsourcing everything and just "incorporating here" is basically the same thing as shutting the doors.

That concludes my comments in this thread.

 

this just begged for a reply.

I actually said use MORE US labor to do final assembly, and use foreign parts made in GM run or owned factories.

I didn't say just incorporate here. I actually said Use lower labor rates in other countries to lower parts content cost, and keep and increase US labor. SO I am completely convinced you have not read anything past the word Outsource. If so, then you didn't understand it.

Yes, I did agree that current Outsourcing is bad, and it needs to change.

The way I laid out to do things lowers the cost to build the cars while keeping US employees. Pretty stupid huh?

 

I know you know, when one says "America", not North America, they mean the United States...
And since you didn't understand...I said that "the comment that it's NOT GM's job to improve the standard of living here", itself is based on greed, shortsightedness and selfishness...which has caused the problems we have today..
No, not GM, it goes MUCH HIGHER, of which the IMF is at the top of.
We (U.S.of A.) have been manipulated by a select few since the turn of the century, if not since thier foundation of "La Merika". Schoolastic History fairs not much better than Greek Mythology. Real history and real wars seldom makes it into the history books. But recently has been coming to light in this information age.
Fixing the World IS beyond GM, fixing the U.S.A. is not. They are woven into the fabric of our economy so massively, that it used to be said, "What's good for GM, is good for America". (again meaning the U.S.A.)
Certainly a prosperous US, benefits the rest of the world. Many of those remote poor locations you mention, rely heavily on our tourism, a very profitable industry.
If you think tearing this country down will benefit other countries, then how much has Mexico helped us...they are poor. Or Africa??
...You can't crawl into quicksand and pull someone else out...You must be on FIRM ground yourself first, then you have the strength and footing to help them....(if you understand)
I think we are basically wanting the same thing, just not seeing eye to eye on how to achieve it.
Yes, I am UAW, I also know that without my, so called, high wage ($23something/hour) plants like Toyota would pay about the same as Taco Bell. Because of their(our) fight to keep higher standards in labor, the majority of the country benefits...that's bad?

Human rights, like repect in the workplace(hours and safety), and a decent wage and healthcare for our families, is the basic mission statement.

Human rights MUST come first, before Civil rights, as our constitution confirms, "certain unalienable rights", and it MUST be upheld GLOBALLY, no polluting this planet with reckless abandon, no slave or prison labor for profit, no wage slavery, and definitely no child labor...all the things that attract companies to 3rd world countries to some degree.
Right now companies get tax breaks for setting up in other countries, low to no tarrifs, combined with paying poverty level wages, WHY would anyone NOT move? That's where the "playing field" must be leveled. Making cost closer to the same, to make it there, as here, and the expolitation would end.

I don't know how else to say it, I'm not a gifted speaker, as some here...so I'll digress this thread on this. But I know, If I ran GM, in all truth, it would probably be worse in more ways than better. GM needs help, Govt help, not running it, but leveling the field.