On The Automakers: Dump The Unions And Then We Can Talk Bailouts
This is from a letter Michelle Malkin received:
Dear Michelle,
Thank you for taking the time to read my comments. I worked in the Automotive Industry for most of my career as a supplier to GM, Ford, Chrysler, Honda of America, Toyota, Nissan, and BMW.
You were exactly right with your comments on Fox & Friends this morning. The UAW has handcuffed GM, Ford, and Chrysler with unreasonable and unrealistic burdens. Their balance sheets will never improve until they shed this weight.
There is another aspect affecting their business and is not being talked about in the media very much.
Having dealt directly with all current domestic automobile manufacturers, there is a distinct difference in how the Big 3 do business with their suppliers as compared to Honda, Toyota, and other foreign automotive assemblers. Toyota, Honda, and Nissan in particular want to make sure they are entering a partnership that insures financial success to all parties.
GM’s business practices generally lead to no profit, tremendous oversight by their internal supplier quality watchdogs, who demand unrealistic expectations, and extremely slow payment in the reimbursement of tooling costs to start new programs. It is not unusual to see reimbursement for tooling costs years after the program has started.
Their business practices are not a tax payer problem, but a terrible management problem. It was a noble idea for the Federal Government to lend them $25 billion to help. It is now known 4 X’s that amount will not cure the root cause of the problem., but only buy them 4 X’s the amount of time.
When a cancer is identified inside a person, it is immediately removed if possible. The Big 3 has a cancer that needs to be removed. It doesn’t take a rocket scientist to understand why they cannot compete profitability. They have parity on supply costs, materials, and energy with Honda and Toyota. So why can’t they compete? It is clearly the cost of labor.
A few years ago I was in Warren Assembly, in Warren, County, Michigan. Two plants side by side make the Ford Focus and the Ford Expedition. As you drive from Dearborne to Warren County, every abandoned shopping center parking lot was full of vehicles. A friend of mine was then the HR Manager for Ford Truck and I asked him why they were still building.
His answer astounded me. UAW Labor is paid company wages whether they work or not. America has to wake up concerning this. Until we can get organizations like the UAW to understand the only missing ingredient to creating a level playing field is getting the cost of labor to a realistic level, domestic car makers will never be successful.
There are plenty of people that will gladly take the job at non union wages..
November 14, 2008 - 12:28 AM on November 14th, 2008
I can tell you this about the UAW, until the big three go completely into bankruptcy, they will never get adequate relief from having to deal with the UAW. The UAW drove Colt’s firearms into bankruptcy (the gunsmiths at Colt’s were UAW members) by refusing to allow Colt’s to modernize by installing CNC milling machines that would’ve allowed the company to produce a higher quantity of products thereby reducing per unit manufacturing costs. Because this would cost the loss of a few machinist positions, the UAW blocked every attempt to make the upgrade. Instead, Colt’s found themselves unable to compete because of price and unable to expand to meet demands for more modern designs. Yes, as long as the UAW and other unions can control industry, we are doomed. They would rather cripple a company than do what is best for everyone. GM, and Ford should both file for bankruptcy and divest themselves of their union legacy obligations. Another option would be for Ford and GM to split themselves into domestic and overseas divisions and move the hq for the overseas division overseas. It would save the companies a fortune in taxes and then they could simply start closing their north american plants until the union cries uncle.