Delphi's bankruptcy ominous sign for fading auto industry


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NCP24
October 11, 2005, 08:56 AM
Bye-bye auto industry, hello rice burners.

http://www.detnews.com/2005/autosinsider/0510/09/A01-341885.htm


By Bill Vlasic and Brett Clanton

The American auto industry was rocked to its foundation Saturday as Delphi Corp., the world's second-largest parts manufacturer, filed for bankruptcy and laid plans to dramatically downsize its U.S. operations.

It was the seismic event that Detroit's Big Three automakers and their workers, suppliers and investors had anticipated for years, some with dread and others with hope.

At stake is the survival of Delphi, a global giant with 185,000 employees and annual sales of $28 billion, and the wages, benefits and jobs of its 33,000 unionized workers across the United States.

In its Chapter 11 filing in the U.S. Bankruptcy Court in New York, Delphi said a "substantial segment" of its U.S. manufacturing base will be sold off or phased out over the next two years. The company will also move to slash union wages up to 60 percent, cut health care benefits and free itself of pension obligations to tens of thousands of employees inherited when Delphi was spun off from General Motors Corp. in 1999.

With one stroke, Delphi and its chairman, Robert S. "Steve" Miller, altered the course of U.S. automotive history and cast a huge shadow over contract talks in 2007 between the Big Three and the United Auto Workers.

"I think we all understand very well that life is not going to continue the way it has been," Miller told The Detroit News after the filing Saturday. "Things have to change."

Miller said he has assured GM and Delphi's other customers that a wide range of auto parts critical to their assembly plants will continue to be built and shipped on time. He added that Delphi's U.S. work force will be largely unaffected during the first three to six months of the bankruptcy process.

But the bigger issues loom down the road, as Delphi becomes the test case for unraveling decades of financial gains by the UAW to level the competitive playing field with lower-cost parts makers in Mexico, South America and Asia. –

Delphi, Michigan's fourth-largest corporation and No. 63 on the Fortune 500, makes hundreds of auto parts from satellite radios to air bag sensors. While it employs 15,000 workers in the state, Delphi's sprawling global footprint stretches from Brazil to China, with 65,000 workers in Mexico.

None of Delphi's non-U.S. subsidiaries was included in the Chapter 11 filing, and the company said its international operations would not be subject to the supervision of the U.S. bankruptcy court.

But the U.S. parent corporation and its 38 domestic subsidiaries will appear next week for an initial hearing before Judge Arthur Gonzales, who has been assigned the first phase of the case.

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Werewolf
October 11, 2005, 10:07 AM
But the bigger issues loom down the road, as Delphi becomes the test case for unraveling decades of financial gains by the UAW to level the competitive playing field with lower-cost parts makers in Mexico, South America and Asia. The husband of a friend of mine who works at the GM plant in OKC earns $27/hr. All he does is sit on the line and push a button to start a robot welder when a car arrives and again when it is ready to leave. Add in overtime and this guy who can barely read and write is pulling down over $70K/year. That's just WRONG!

boofus
October 11, 2005, 10:18 AM
Good. The free market demands that you pay people what they are worth. When you have artificial constraints like union demands it throws everything off.

Like all parasites, those unions can only survive as long as the host survives. Now the hosts are dying and maybe those leeches will start sucking each other dry.

Crosshair
October 11, 2005, 10:33 AM
People are starting to learn the hard way that no matter what unions say. When it gets tough, you're on you're own. Unionised companies just can't compete. I work at Wal-Mart and I'm happy where I am. Sure I may not get paid as much as I could elsewhere. But I don't have to worry about if I will have a job in 6 months and my scedule is very flexable. It also helps that my work is so good (I mix paint) that people ask for me by name. :) THAT is job security.

Dain Bramage
October 11, 2005, 11:07 AM
My aunt was over for a visit this summer. In true Eastern European fashion she asked me how much I make. When I told her, she said "Bah!", she would "die" on that amount.

She works the counter at a tool room in a Daimler-Chrysler plant. I am an aerospace engineer. She makes $20K more a year than me. :what:

longeyes
October 11, 2005, 11:39 AM
Another example of how an engorged bureaucracy and blind union can ruin what ought to be a cash-cow business. A leaner, meaner Delphi will probably be back. Whether it will be owned by Americans or by Japanese is anyone's guess.

NCP24
October 11, 2005, 11:50 AM
The husband of a friend of mine who works at the GM plant in OKC earns $27/hr. All he does is sit on the line and push a button to start a robot welder when a car arrives and again when it is ready to leave. Add in overtime and this guy who can barely read and write is pulling down over $70K/year. That's just WRONG!
So we should all take lower paying jobs, because we barely read and write or maybe because we aren’t worth as much for whatever reason?

Don’t worry about your friend, because at the rate we're going some foreign person in a far off third world country will be doing “his job” for about twenty cent on the hour.


Another example of how an engorged bureaucracy and blind union can ruin what ought to be a cash-cow business. A leaner, meaner Delphi will probably be back. Whether it will be owned by Americans or by Japanese is anyone's guess.
It’s just a good excuse to move operations somewhere else.

Delphi, Michigan's fourth-largest corporation and No. 63 on the Fortune 500, makes hundreds of auto parts from satellite radios to air bag sensors. While it employs 15,000 workers in the state, Delphi's sprawling global footprint stretches from Brazil to China, with 65,000 workers in Mexico.

None of Delphi's non-U.S. subsidiaries was included in the Chapter 11 filing, and the company said its international operations would not be subject to the supervision of the U.S. bankruptcy court.

Molon Labe
October 11, 2005, 12:29 PM
So we should all take lower paying jobs, because we barely read and write or maybe because we aren’t worth as much for whatever reason?A wage is a price. It is thus determined by supply and demand. Assuming there is competition, and assuming people can be freely hired/fired, a person who makes $5/hour is worth $5/hour, and a person who makes $500/hour is worth $500/hour. As it should be.

Note where I assume "people can be freely hired/fired." Unions don't allow this. We thus end up with a situation where a person worth $5/hour is paid $27/hour.

But we need not worry too much about unions. They will simply price themselves out of the market and disappear. Which is a good thing.

longeyes
October 11, 2005, 12:40 PM
"Delphi, Michigan's fourth-largest corporation and No. 63 on the Fortune 500, makes hundreds of auto parts from satellite radios to air bag sensors. While it employs 15,000 workers in the state, Delphi's sprawling global footprint stretches from Brazil to China, with 65,000 workers in Mexico.

None of Delphi's non-U.S. subsidiaries was included in the Chapter 11 filing, and the company said its international operations would not be subject to the supervision of the U.S. bankruptcy court."

NCP24,

You're right. Just part of the Great Outsourcing of the fin-de-siecle.

I think we are in a historical period where the boons of globalization are counterweighted by some very serious banes.

What's the answer? Yes, we need to get smarter and more competitive, that's true.

But what about the impact of the shorter-term dislocations?

If workers owned all or part of their companies, that might help. It might be smart for workers in potentially affected industries--that could be everybody!--to invest abroad.

Maybe the U.S. gov't should be investing in "emerging markets" and giving the gains back to displaced U.S. workers?

NCP24
October 11, 2005, 01:04 PM
A wage is a price. It is thus determined by supply and demand. Assuming there is competition, and assuming people can be freely hired/fired, a person who makes $5/hour is worth $5/hour, and a person who makes $500/hour is worth $500/hour. As it should be. You’re absolutely right this is the age of global economy. Now just how do you expect your common everyday run of the mill Jane & John doe to compete with Mexico or China’s low wages? I knew there was a good reason why the top ten percent of the population owned approximately 75% of all US wealth and assets.


What's the answer? Yes, we need to get smarter and more competitive, that's true.
But what about the impact of the shorter-term dislocations? Longeyes,

We can do a lot of things to change this such as stomping out greed, securing our borders and immigration reform. As for shorter-term dislocations we should prepare for the worse and hope for the best.

longeyes
October 11, 2005, 01:13 PM
Our edge is in technology, but tech isn't labor-intensive. We will have a problem sustaining the kind of standard of living we now enjoy, in my opinion. I'm not an economist but that's how it looks from here.

Stopping illegal immigration would help, but it won't change the reality that other large nations are industrializing and have much lower wage rates than ours.

We have increasingly becone a consumer rather than a producer nation. If that's the case, and not easily turned around, we should acknowledge the importance of our country as a market for other nations and charge accordingly for the privilege of selling to our consumers. Disperse the "extra" to workers in "disappearing" industries.

In the last couple of years emerging markets have doubled or more in value. Suppose we'd invested our Social Security intake in those markets and given back the profits to American workers? We need to find a way, while we still have the investable capital, to take advantage of the shifts in the global economy in ways that benefit the people most seriously impacted?

(Greenspan's on the way out; I'm available.) :p

boofus
October 11, 2005, 01:15 PM
Hey cry me a river. If you want to earn $80,000 a year with a high school diploma and your only skill is making horse and buggy wheels you are SOL.

Adapt or die, just like the rest of us non-union workers. If brain surgery starts to get too crowded then learn a new trade just like everyone else in the job market.

Effectively all the unions managed to do was temporarily prop up the horse and buggy wheel makers with fat wages and benefits at the cost of the company. Now the company is dead and they expect hand outs from someone else -> you and me.

longeyes
October 11, 2005, 01:20 PM
The lesson to be learned from Delphi isn't delphic, it's all too obvious.

Still, we need more imagination to deal with the globalization problem than we're getting. It's easy for elites used to making six figures a year to tell the bulk of Americans to just ride it out and adjust, but nobody wants to see 25 per cent unemployment or the average wage here slipping to $20K. Can't happen?

Imagination.

NCP24
October 11, 2005, 01:54 PM
In the last couple of years emerging markets have doubled or more in value. Suppose we'd invested our Social Security intake in those markets and given back the profits to American workers? I’m listening, but doesn’t that thought come awful close to socialism and the slippery slope to communism?

Hey cry me a river. If you want to earn $80,000 a year with a high school diploma and your only skill is making horse and buggy wheels you are SOL.

Adapt or die, just like the rest of us non-union workers. If brain surgery starts to get too crowded then learn a new trade just like everyone else in the job market.

Effectively all the unions managed to do was temporarily prop up the horse and buggy wheel makers with fat wages and benefits at the cost of the company. Now the company is dead and they expect hand outs from someone else -> you and me. I’m not advocating the union, just looking out for the little guy. Our country is slowly moving from manufacturing to a service oriented society which leaves us extremely vulnerable to out-side forces. All of this is for one little reason called greed and in the long run it will bite all of us in the behinds. Everyone’s in the food chain and eventually even the doctors lawyers and so fourth will be forced to lower their cost.

You’re absolutely right Adapt or die.

Now the company is deadThe company is not dead they just found cheap labor, it’s the American way.

odysseus
October 11, 2005, 02:01 PM
It is a total failure of the US automaker executive leadership and the UAW union management, and the whole industry model currently in use. If competition does a better job outside the US, then so be it since we have to buy the products.

Essentially I believe in the ability and strength of the people of the US and I think these failures will hopefully open the door to new innovative people and a US auto industry that does need drastic change.

mpthole
October 11, 2005, 02:01 PM
We can do a lot of things to change this such as stomping out greed, Yeah... Good luck. :rolleyes:

I can't really say it any better than the movie Wall Street (http://www.americanrhetoric.com/MovieSpeeches/moviespeechwallstreet.html).

The point is, ladies and gentleman, that greed -- for lack of a better word -- is good.

Greed is right.

Greed works.

Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.

Greed, in all of its forms -- greed for life, for money, for love, knowledge -- has marked the upward surge of mankind.

And greed -- you mark my words -- will not only save Teldar Paper, but that other malfunctioning corporation called the USA.

Cellar Dweller
October 11, 2005, 02:11 PM
Supposedly, unions represent their workers' interests. After the steel industry's collapse, then several major airlines, pensions were dumped on FedGov at a reduced rate of payout.

Why haven't the unions stepped up to get pension funds fully-funded within a defined timeframe? Why must Congress do it for them (after lobbying from "union leadership")? What the heck is the "leadership" doing? As is stands, union members are losing jobs and having pay and benefits reduced anyway, but continue to be in denial, partially due to union "leaders."

There is no such thing as "job security" for ANYONE. There is no such thing as a guaranteed retirement. Unemployment doesn't pay $20+/hr, nor is there overtime. The service industry HATES overtime. A high-school dropout in their 40's or 50's isn't in demand, and good luck getting a replacement job for HALF the old pay, never mind reduced benefits.

There are two choices:
1. Continue in denial and receive a huge shock eventually. Retirees get medical/drug benefits reduced; if the pension is shifted to FedGov the payout is reduced.
2. Negotiate for fully funded pensions, and get them insulated from the company's assets (a pension fund should not be considered or allowed to be used as an asset, since it is simply being "held" for the participants. If I have a friend who is storing his car, firearms or mattress stuffed with money in my house, I cannot use those as collateral in obtaining a loan.) Start saving some of that high pay in an IRA, start saving in treasuries and interest-bearing accounts and even stuffing a mattress is better than nothing.

NCP24
October 11, 2005, 02:16 PM
Well, ladies and gentlemen, we're not here to indulge in fantasy, but in political and economic reality. America, America has become a second-rate power. Its trade deficit and its fiscal deficit are at nightmare proportions. Now, in the days of the free market, when our country was a top industrial power, there was accountability to the stockholder. The Carnegies, the Mellons, the men that built this great industrial empire, made sure of it because it was their money at stake. Today, management has no stake in the company!mpthole Good one!

erik the bold
October 11, 2005, 03:12 PM
As a former :eek: Delphi lead engineer (got out four years ago when the gettin' was good!), from my viewpoint, even though $23-27 per hour is outragous, they have significantly more issues than the ones with the UAW. However, the hourly employees I dealt with in the nine plants on three continents, were all hard working, conscientious, careful, and intelligent. Most had BS/BA degrees, because Delphi would pay for the schooling. Of course, I worked mostly in the out-state plants, in more rural areas away from the festering cesspool called Detroit. Maybe all the fat lazy ones worked there.

Let's start with gross mis-management. :fire: Crappy negotiating with the UAW has bloated their healthcare and sundry compensation to enormous levels. How about nearly $40/hr per employee for insurance, etc...!! They would schedule massive overtime (60+ hours/week) because it was cheaper than hiring more people. Now they want the hourly folks to take a 63% pay cut. Could you survive on that??

Bosses on top of bosses. At one time, I had three direct reports, all at the same level. One of the three, I didn't see for more than two years because of the Y2K scares. Spent all their time in useless meetings which never decided anything. Last project I saw before I left was them paying a machine tool vendor and subs $50 million to develope a pie-in-the-sky process which last I heard, still doesn't work.

Stupid sales agreements with GM. One of the parts I was involved with, was sold to GM for $89.
The part cost $82 to make. (7.9% margin). All of our competitors at the time, had quoted GM $127 for the same part. (35% margin) We made 3500 of these parts a day, 5-6 days a week. Doesn't take an idiot to see that leaving $34 millon on the table is a waste. :what:

Glad I'm out of the auto industry......... :scrutiny:

NCP24
October 11, 2005, 03:28 PM
As a former Delphi lead engineer (got out four years ago when the gettin' was good!), from my viewpoint, even though $23-27 per hour is outrageous You think $23-27 per hour is outrageous and most had BS/BA degrees? Oh yea- do you know how much their counter parts make in Mexico?

f4t9r
October 11, 2005, 03:49 PM
NCP24 You are right !!!!!!!!!!!
the men that built this great industrial empire, made sure of it because it was their money at stake. Today, management has no stake in the company!

Waitone
October 11, 2005, 05:03 PM
Breakeven point of all US corporations will be adjusted down. Delphi is merely the latest entrant into bankrupcy court. Delphi will off load its pension programs on the federales through the PBGC. It was created to give the big boys a way out from under pension obligations. Welcome to the future. The cost of production in the US is out of synchy with production elsewhere. We have to reduce our costs of we will continue to lose industry. Just exactly when the federales will wise up is anyone's guess, but it had better happen.

model 649
October 11, 2005, 05:28 PM
As the wage structure of the various UAW plants is flattened down, the remaining wages in ALL manufacturing plants will follow closely, especially the transplant auto plants. They pay well to keep the union out, but soon they won't need to. I'm no fan of the union, however, our fading standard of living was largely fought for and won through collective bargaining. The forty hour week, paid vacations, health benefits, improved working conditions, pensions, etc. Sure there are and have been abuses, but am I hearing a tinge of jealousy? Many workers live in "right to work" states. As far as I can tell, they are "right to work for less" states, and will become moreso as less and less work is performed there because even if we worked for free, we could not compete with countries like China. Believe it or not. Free trade and globalism have destroyed our economy in terms of manufacturing. God help us if we need to fight another large war, we have a nearly non-existant manufacturing base. Service economy? Would you like fries with that? This once-great economy was built on MANUFACTURING tangible, saleable, goods, and selling them here and abroad. Corporate "leadership" is not interested in "making a living", only in "making a killing", and by any means necessary. Stock price down? Lay off some people! Eventually the foriegn investment that is sustaining us will leave. All that money from Wall street that floats the refinancing will evaporate. The "economy" will collapse like the house of cards it is. Not pretty, but it's already in motion. How many investors will inject money into a company that cannot accurately state it's earnings and must "restate" time and again. Corporate officers are openly looting their companies, would you want to invest? There is no one cause, not unionism, greed, etc. and there is no one solution, however, things are going to get a whole lot worse before they (hopefully in my lifetime) get better. Buy guns, cause you'll likely need them, and don't forget the ammo.

Josh

R.H. Lee
October 11, 2005, 05:30 PM
It IS bigger than just Delphi
"The largest threat to the survival of the automobile industry in the United States are the UAW [Union Auto Workers Union] contract and the legacy costs [of retired employees] on the one hand, and the management team that grew up in a rather cushy era in which they enjoyed market dominance," said Mr. Morici.

That market dominance has steadily eroded during the past two decades as consumers have increasingly turned to products made by Japanese and European producers.

"The judgment of the market place is that Ford and General Motors do not produce cars that people want to buy at a price that will permit them to cover their costs," he added. "They are unable to cover not only their legacy [retiree pensions and health] costs, but their basic costs of production and designing the vehicles."
http://www.voanews.com/english/2005-10-11-voa69.cfm

They're accruing liabilities for future expenses they have no hope of paying. Barring huge concessions from the union, they're on the road to bankruptcy, reorganization and outsourcing.

Standing Wolf
October 11, 2005, 06:32 PM
Like all parasites, those unions can only survive as long as the host survives. Now the hosts are dying and maybe those leeches will start sucking each other dry.

Sucking each other dry? No. I predict they'll run crying and screeching to Uncle Sam, who'll be glad to help them suck us all dry.

Monkeyleg
October 11, 2005, 06:59 PM
Most of the posts here seem to be focusing on the union workers. But there's more to it than that.

My dad, now 88, is living on a guaranteed-benefit pension from his 45 years with GM. From 1958 on, he worked at the plant in Milwaukee that was AC Spark Plug, then Delco, and now Delphi.

And he's been following the GM pension problem for almost as many years.

This bankruptcy with Delphi is just the beginning. The pensions and benefits are killing GM. In many respects, the problem is worse than with Social Security: government can always raise taxes (until the rest of us revolt), but corporations can only respond to overwhelming expenses by going under.

My neighbor across the street works at that Delphi plant. He has one of the nicest homes on the block. He works there as a forklift operator.

I don't offer any solution, not even a question. Just the opinion that we're going to see at least one of the Big Three go under and, with it, my father's pension.

longeyes
October 11, 2005, 07:10 PM
I’m listening, but doesn’t that thought come awful close to socialism and the slippery slope to communism?

Well, right now the .gov isn't investing our SS dollars at all, just moving the walnuts around.

Ideally, people would have their own money to invest, would see the handwriting on the wall, and invest in emerging markets as a hedge against what's going down here.

Rimmer
October 11, 2005, 07:21 PM
Carnegie, JP Morgan, Mellon, Rockefeller, Ford, Firestone… ok, just pick one you remember from your history books…. These guys were not playing with their money anymore than today’s players are. They screwed virtually everyone they could to stuff their own pockets to include their own business partners. The ones that built Libraries and donated huge sums to various charities and art galleries did so in their waning years as though they could make amends for all those that went by the wayside as they were amassing their fortune.
All hired the Pinkerton’s to intervene as strike-busters and people died.

GM owns the pension paper on Delphi and at $25 a share GM won’t be around long enough to pay anyway.

HKGuns
October 11, 2005, 08:18 PM
Unions are complete bad news.

I work for an auto company and boy could I tell you some stories. Tell me that a forklift driver should make over $100K per year? Tell me again he should make that when you walk around a plant and find employees sleeping all over in out of the way places.

The unions are completely out of control and are protecting people who don't deserve jobs. They are overpaid and underworked.

Don't even get me started.

Lets talk about closing plants and having to continue to pay the workers for absolutely NOTHING.

There are many problems in the auto industry and the Unions are the root of most of them.

Poor Quality because of shoddy labor practices.
Inflexible workforce because of shoddy labor practices.
Poor productivity becuase of fat, overpaid, lazy union workers who think you owe them a living.
High wages because of Union Labor contracts.
High healthcare costs because of Union labor contracts. (Salaried have taken their cuts)
High retirement costs. (Which wouldn't be such a big issue if the above were resolved.

That in a nut shell is what is wrong with the auto industry.

Don't even get me started.....See I warned you.

NCP24
October 11, 2005, 08:42 PM
Well, right now the .gov isn't investing our SS dollars at all, just moving the walnuts around.

Ideally, people would have their own money to invest, would see the handwriting on the wall, and invest in emerging markets as a hedge against what's going down hereOk, so you’re talking about the private SS accounts. Heck yea it’s my money I’ll buy into that.

TexasRifleman
October 11, 2005, 08:46 PM
I worked for American Airlines for many years, saw the same thing with unions there. I rolled an office chair across a hall to a conference room to give an extra seat to an overflowing meeting.

For this crime I had a grievance filed against me by the union because I was not a designated "furniture mover".

No sympathy at all for organized labor any more. That went out with Black Lung. They all need to go the same way.

atomchaser
October 12, 2005, 10:04 AM
There is an article in the recent Business Week magazine about how GM is paying some employees to stay home and do nothing. Apparently it was part of the contract with the union that they couldn't just fire them if business went down hill. Stories paints a pretty bleak picture for GM. They made a lot of deals with the devil over the years and he's coming back to collect.

R.H. Lee
October 12, 2005, 10:46 AM
These corporations (Dephi, GM, Ford) made agreements with the unions to pay certain wages and benefits in exchange for the labor of the union members. Union members accepted these promises in good faith and provided that labor, enabling the corporations to make profits, which they then distributed among top management and shareholders.

Now these corporations want to renege, welch on the deal. They want to breach their agreements because they claim they can't 'afford' it (or because labor is cheaper in third world countries) or whatever. They shouldn't be allowed to do this until the assets and resources of all who benefited from the agreements have been tapped to the extent of the gain they received as a result of their promises.

In other words, whatever agreements these corporations want to void, go back to the inception of those agreements. Determine what profits were distributed where, and place claims against them. After that money has been collected and distributed to the lawful recipients, then and only then, allow these corporations the benefit of bankruptcy laws.

JohnBT
October 12, 2005, 11:06 AM
From page D1 of today's Washington Post:

Average Manufacturing Wages and Benefits:

Motor vehicles and parts manufacturing workers(2003):

Delphi Corp. - $65.00 per hour
U.S - $33.61 per hour
Mexico - $3.49 per hour

All manufacturing workers(2003):

U.S. - $21.97
Mexico - $2.48

_________________

Delphi's 2004 revenue = $28.62 billion
Delphi's 2004 loss = ($4.75 billion)

NCP24
October 12, 2005, 11:41 AM
All manufacturing workers(2003):
U.S. - $21.97
Mexico - $2.48Ouch! $2.48 vs $21.97, Nope the US can't compete with those figures. How do they say it- "adapt or die". . . . . . . .

longeyes
October 12, 2005, 02:13 PM
And when a nation gets to this juncture, then what? What does history tell us?

Eliminate competition? (Yeah, I mean war.)

Charge for market access?

Exact a higher price for our technology?

Make the world pay for our "police protection?"

Invest in the competition and disseminate the gains?

Just throwing out possibilities for discussion...

Obviously, we can't match up on an even playing field and if we do nothing the result will be a disastrous decline in the U.S. standard of living.

sumpnz
October 12, 2005, 02:29 PM
In other words, whatever agreements these corporations want to void, go back to the inception of those agreements. Determine what profits were distributed where, and place claims against them. That's about the same arguments people like Al Sharpton use to justify demands for slavery reparations.

Consider this. All union contracts have a given life span. At the end of those contracts either or both parties can choose to not renew them. Once those contracts have expired neither side is bound to the other anymore. If people don't like how the profits were distributed since the first contract was written the only one they can do anything about is the current contract assuming that it has not expired either. Now, if the contracts can be shown to have been violated, then fine, exact appropriate penalties. But don't come crying to me for a bailout otherwise. And don't come crying to me because the people legally profited from those contracts and now want to cut loose as the contract comes to its close.

R.H. Lee
October 12, 2005, 02:39 PM
You missed the point, sumpnz. I referred to voiding existing contracts, not the renewal or negotiation of new ones. If the old contracts called for specific amounts to be paid to retirees, and the union workers relied on that promise, the contract is not fulfilled until the companies pay the retirement benefits. The union workers did their part; they provided the labor. Now the companies must perform under the terms of the contract and pay the retirement benefits. Makes no difference that the contract has since expired, it is not complete until all parties have performed.

Apparently, the auto makers want to welch on the deal, since they made their money on the union workers labor. That money was made on a false pretense. Makes no difference that the union demands were unrealistic, it was a 'free market'. If the companies didn't like the deal, they could have hired other non union workers. They didn't. They made a deal, enjoyed the profits and now don't want to make good on their word. They should forfeit the share of profit they made on a bad faith agreement. They should have either fully funded the pensions or at least accrued for future expenses and taken the reduced profit at the time. They didn't do that either. Why shouldn't they pick up the tab from their ill gotten gains?

odysseus
October 12, 2005, 02:41 PM
If the companies didn't like the deal, they could have hired other non union workers.

..if it were only that simple. :uhoh:

AZ Jeff
October 12, 2005, 02:50 PM
Apparently, the auto makers want to welch on the deal, since they made their money on the union workers labor.
They made the money all right. Then they took the money (including the part that was to be set aside for paying the union workers their retirement earnings), and invested it in ways that resulted in a LOSS of those of those funds.

The real issue here is that the retirement funds should have been set aside and been untouchable (or at least touchable only under the guidance and approval of the union workers.) They were not. Why? Because the union and company did not make it so.

So who's fault is that? The company, who took the funds and invested them, albiet in a loosing proposition? Or the union, who failed to look out for it's constituents best interest, and let those funds be invested poorly?

Sounds like the union did a poor job of guaranteeing the workers got what was negotiated. Isn't that the job of a collective bargaining agent--to insure the workers interests are protected? If so, then the union failed in their primary role.

Keaner
October 12, 2005, 03:03 PM
If the companies didn't like the deal, they could have hired other non union workers.


..if it were only that simple.

I remember from my history class, that it is illegal for a company to dump a union, and hire outside workers, EVEN IF THE CONTRACT IS UP! I may be misremembering, but I am fairly sure that the company by law is basically forced to resign a contract.

feedthehogs
October 12, 2005, 04:09 PM
It was inevitable that the fat, bloated, lworkers system we have had here in America would not last in trying to compete with the growing over seas work force.

It is our culture to ignore a problem, peticularly financial, till the repo man shows up to collect his goods. Some how we feel a money tree will grow from the ground in our yard and bail us out.

It has taken decades to create this bloated carcass and it will take just as long to shed the pounds and lean out the system.

I for one welcome the change. We should see lower prices for items if we shed the fat.

Unfortunatly there will be many casualties along the way which will only add to the problem.
But like always the US will bounce back a slimmer, trimmer, work force.

The thing is who is willing to adapt and who will circle the drain?

rick_reno
October 12, 2005, 04:55 PM
It IS bigger than just Delphi

I see a bailout in Bushkie's future. A corporatist like Bush isn't going to let them sink - not when he's got deficit spending to play with.

R.H. Lee
October 12, 2005, 05:07 PM
I see a bailout in Bushkie's future. A corporatist like Bush isn't going to let them sink - not when he's got deficit spending to play with.
He and the GOP might as well. They've already raped and sodomized their base beyond recall. Maybe they can find enough 'moderate' voters to retain power. I'm done with them.

Ohen Cepel
October 12, 2005, 05:16 PM
Check out the last issue of Forbes.

GM is paying something like 5000 union workers to do pretty much NOTHING. Well, they play cards and do community work, but it's nothing productive for the company. These people get full benifits, insurance, and time towards their pension.

I'm amazed that they have lasted as long as they have. If it wasn't for protective trade policies they would have been gone long ago.

It's sad, I really try to buy American and have as far as cars/motorcycles go. However, at this rate I may not have a choice in a few years.

Another thing to consider is the impact this could have on defense. If we have no auto industry it will hurt defense development of some platforms. Bad enough we don't carry any American small arms now but if we need to buy vehicle parts from China it could be a real issue down the road.

I toured the Baltimore plant years ago when I was in high school and it was still open. Blew my mind how much the janitor got paid! Also, I'm pretty sure that the policy there was to hire 3 people to do the job of 2 (no, I'm not making this up). This allowed for them to have the required number of breaks per hour.

I'll resist taking a shot and the unions at this time. Hard not to though.

miko
October 12, 2005, 06:33 PM
Carnegie, JP Morgan, Mellon, Rockefeller, Ford, Firestone… ok, just pick one you remember from your history books…. These guys were not playing with their money anymore than today’s players are. They screwed virtually everyone they could to stuff their own pockets to include their own business partners. The ones that built Libraries and donated huge sums to various charities and art galleries did so in their waning years as though they could make amends for all those that went by the wayside as they were amassing their fortune.

Total BS. Each of those entered an industry producing tiny quantities of products at outrageous prices, that only the wealthiest could afford - and left it producing millions of those per year at prices that most working people could easily afford – and of much better quality.
Their money and wealth was not used for their consumption and enjoyment – 99% of it was invested in factories producing goods that common people needed.
What’s a few crappy libraries compared to that?


As for Delphi, the Union will have to renegotiate the contract. Since any contract they make will serve as a model for all GM/Ford/Chrysler workers next year, agreeing to 1/3 salary is a suicide for the union management. So they will strike. Which will stop production of GM - and cause it go bankrupt next year, rather than in a few years.

miko

JohnKSa
October 12, 2005, 06:48 PM
It's easy for elites used to making six figures a year to tell the bulk of Americans to just ride it out and adjustWhat about non-elites who don't make six figures telling Americans to ride it out and adjust.

People are going to be paid what they're worth. You can change it for awhile, but not forever--we're seeing exactly what happens when people manage to scrape together enough power (unions) to force someone to pay them more than they're worth. Eventually the company can't compete any longer and must go bankrupt or shuffle jobs to cheaper wage markets.

In the long run it's better if you don't tamper with things by forcing wages to rise and stay abnormally high.

NCP24
October 12, 2005, 08:05 PM
In the long run it's better if you don't tamper with things by forcing wages to rise and stay abnormally highLet me add the American workers need to undercut third world wages to compete.

Barbara
October 12, 2005, 08:27 PM
I think, to a certain extent, this is being seen as something its not.

Delphi is stuck with a lot of legacy costs; they were part of GM, they got spun off, and now are paying huge labor and pension costs. In the meantime, GM beats on them like any other supplier. You can only give so many 3% a year cost downs before you're taping a buck to each part. So, Delphi is getting it from both sides. Labor is killing them..something like $65.00 per hour per worker. Selling first tier to GM is killing them.

The pensions alone are killing them. When they were set up, the plan was that you'd retired at 65 and be polite enough to die by 72 or so. People are just not as cooperative as they used to be about that and now take early retirements and live to be 85.

This allows them to reorganize. If I had to project, I'd say that wages are going to go down. I'm hearing $10-12.00 and they keep their pensions. I think more realistically, $16-17.00 range. Not bad money, either. I think the pensions are going to wind down and eventually, the average Delphi worker will have to plan to live off their 401k plans like all us other folks.

My prediction is $16.00 average hourly wage, full pensions for retired workers and a graduated plan to go to employee-funded retirement plans.

We'll see in a year how close I am. :)

JohnKSa
October 12, 2005, 09:11 PM
Let me add the American workers need to undercut third world wages to compete.That's not true. The companies need to be competitive, but selling products cheaper is NOT the only way to remain competitive. Product features, production innovation, product quality, company costs, product price (and more) all play into the equation.

Obviously, cost matters, and at some point company costs (including employee salaries) will make them non-competitive, but it's simplistic to say that they will have to cut salaries to below third-world levels to remain competitive.

NCP24
October 12, 2005, 09:25 PM
You're right Barbara 15,000 workers in one state is a huge amount, besides chapter 11 is a common strategy used under the given situation. My guess is the company will either operate under chapter 11 for years to come or will go belly up just like some of the steel mills have.

Obviously, cost matters, and at some point company costs (including employee salaries) will make them non-competitive, but it's simplistic to say that they will have to cut salaries to below third-world levels to remain competitive. Not when you consider-Delphi, Michigan's fourth-largest corporation and No. 63 on the Fortune 500, makes hundreds of auto parts from satellite radios to air bag sensors. While it employs 15,000 workers in the state, Delphi's sprawling global footprint stretches from Brazil to China, with 65,000 workers in Mexico.

None of Delphi's non-U.S. subsidiaries was included in the Chapter 11 filing, and the company said its international operations would not be subject to the supervision of the U.S. bankruptcy court. and given that- Average Manufacturing Wages and Benefits:

Motor vehicles and parts manufacturing workers(2003):

Delphi Corp. - $65.00 per hour
U.S - $33.61 per hour
Mexico - $3.49 per hour

All manufacturing workers(2003):

U.S. - $21.97
Mexico - $2.48

_________________

Delphi's 2004 revenue = $28.62 billion
Delphi's 2004 loss = ($4.75 billion) The writings on the wall.

macavada
October 12, 2005, 09:43 PM
Maybe it's because delphi makes parts for GM, and GM cars suck in comparison with most foreign auto makers. The demise of the domestic car makers is rooted in their failure to keep up with the foreign auto makers and develop superior cars based on solid engineering and R&D investment during the years when they were protected by high tariffs that made it difficult for the Japanese and other auto manufacturers to compete.

The problem is with management and their inability to adapt to the changing competitive environment. NAFTA may have staved it off for a bit with opportunity for cheaper labor in Mexico, but that is now fading due to the elimination of tariffs worldwide. Now Mexico can't compete with China, South America, and other less developed nations (yes even less developed than Mexico).

If the domestic automakers had invested in producing better cars, they wouldn't be facing this problem. Other than sportscars and trucks, foreign automakers are beating the US hands down. As SUV's and sportscars have gotten more and more costly to operate (gas) over the last couple of years, their losses have multiplied exponentially.

I own two Fords (2001 and 1998) and a Mazda (1990), and I'll be damned if I'll ever buy another U.S. car again.

Edited to add: How many times have you heard of a foreign auto manufactuer making a cost benefit analysis for product liability lawsuits vs. making a recall on a defective model. Seems like Ford and GM are the ones always getting sued. Maybe if they had their priorities right for being stand-up corporations they would do a little better in the sales department.

JohnKSa
October 12, 2005, 09:54 PM
None of Delphi's non-U.S. subsidiaries was included in the Chapter 11 filing, and the company said its international operations would not be subject to the supervision of the U.S. bankruptcy court. There's the key to it. Sure they employ lots of non-U.S. workers. But that's not the part of the company that's going bankrupt!

And while you can offshore some operations, others aren't easily moved. At some point, shipping partially finished or finished products all over the place will start to eat your lunch.

longeyes
October 12, 2005, 09:55 PM
Interesting thread...

The U.S. spends far more on military than any other nation. Eventually that is going to play into all of these economic equations. Certain things never change.

NCP24
October 12, 2005, 10:10 PM
Maybe it's because delphi makes parts for GM, and GM cars suck in comparison with most foreign auto makers. The demise of the domestic car makers is rooted in their failure to keep up with the foreign auto makers and develop superior cars based on solid engineering and R&D investment during the years when they were protected by high tariffs that made it difficult for the Japanese and other auto manufacturers to compete.

The problem is with management and their inability to adapt to the changing competitive environment. NAFTA may have staved it off for a bit with opportunity for cheaper labor in Mexico, but that is now fading due to the elimination of tariffs worldwide. Now Mexico can't compete with China, South America, and other less developed nations (yes even more developed than Mexico). Ouch you said the word tariffs, anyhow no argument here. From what I understand many of the US companies are now realizing they have made a major mistake by moving south of the border. Lets see how long it takes them to move elsewhere.

The U.S. spends far more on military than any other nation. Eventually that is going to play into all of these economic equations. Certain things never change. Longeyes whats on your mind?

cracked butt
October 12, 2005, 10:19 PM
I talked to my BIL a few weeks ago about this as he works as a software engineer at the Delphi plant at Oak Creek Wisconsin. At that time, the company was hanging by a thread, and he told me that the unions would pretty much need to take steep cuts or they were going to go under. Labor costs, health insurance costs, and pension costs were sinking the domestic operations. He also told me that there were union workers there that were making well into the 6 figure range every year- maintenance workers would sit idle during the regular work week then work 12 to 16 hours a day on weekends to do preventative maintenance while collecting Overtime and double time pay.

He told me that Delphi Europe and Delphi Asia were making money hand over fist, but the domestic operations have been deep in the red for a long time.

Amusetec
October 12, 2005, 10:24 PM
Maybe it is time to start exporting our unions.

NCP24
October 12, 2005, 10:47 PM
He told me that Delphi Europe and Delphi Asia were making money hand over fist, but the domestic operations have been deep in the red for a long time. No supprise here.

The auto supplier, with $28.6 billion in annual revenue the world's No. 1, has struggled in North America due to high material and labor costs and decreased business with U.S. auto makers, which are seeing reduced demand for certain vehicles. Delphi, which posted a $4.75 billion loss in 2004, has been criticized for overly relying on business with domestic auto makers. http://www.daytondailynews.com/business/content/business/daily/0922delphi.html Could other forces be at work here, I mean is it really just the unions fault?

General Motors Corp., faced with shrinking North American market share and evaporating profits, may have no choice but to close more plants and lay off thousands more workers. The automaker is trying to wring cost out of its money-losing North American business, which is saddled excess manufacturing capacity.

In the past 16 months, GM has been forced to shut down various North American assembly plants for 121 weeks because of slow sales and bloated inventories, according to an analysis by The Detroit News.

This week alone, GM temporarily laid off 7,000 workers, joining an estimated 8,500 workers already idled due previous plant closings or permanent production cuts. By contract, GM must pay the workers 95 percent of their pay.

"We know there is more progress possible on getting our manufacturing cost-competitiveness to a world-class level, and getting our capacity footprint and utilization optimized and we are determined to deliver on that objective," GM spokesman Stefan Weinmann said. http://www.detnews.com/2005/autosinsider/0504/28/A01-162446.htm Slow sales and bloated inventories lead to a first ever shut down of various GM plants this year. It seems management prepared for a high sales year and ended up with the opposite- I wonder why.

Maybe it is time to start exporting our unions. Good one! Or may be its time to start importing migrants and their unions.
In July 1995, the 500 workers at the Case Farms poultry processing plant in Morganton, North Carolina voted to have the Laborers International Union of North America represent them. However, there is still no contract. After eight months of bargaining that ended in December 1998, the workers, 90 percent of whom are Hispanic immigrants, rejected a proposed contract on the grounds that it did not offer enough of a wage increase. But wait this is another union topic.

Ryder
October 12, 2005, 10:58 PM
I have a hard time figuring out what is wrong with a union guy making $65 an hour when he handles a half million dollars worth of company profit over that same period of time. If you don't think he's earing his money you've never worked assembly line. Where are they supposed to get the time to spend all this money? Madatory overtime puts a lot of these people in an early grave. They are no better than human robots. They can't pay a lot of people enough to do that.

Don't look at what salaried people make, it'd give you a stroke. Makes hourly workers look like they're on welfare.

JohnKSa
October 12, 2005, 11:26 PM
Half a million in PROFITS in a year? Ok, I'm game. Let's see the math.

Kim
October 12, 2005, 11:47 PM
65.00 an hour. Heck I work as a physician in an ER at times and I get 50.00 an hour. Maybe I wasted those twelve years of school and training past HS for a cheap paying job. Oh well. No wonder the company is going broke. Plus I have to pay my own malpractice and health insurance costs. Man I should have learned to push a button or twist a wrench.

JohnKSa
October 12, 2005, 11:58 PM
Kim,

Doesn't the part about mandatory overtime make your heart bleed?

I'm an electrical engineer--mandatory overtime is just considered part of the job--no one even talks about it. I guess some folks don't realize that when you're a salaried professional, mandatory overtime is almost always UNPAID. I say "almost always" because I have actually been paid for overtime 3 times in the last 15 years...

Oh, and I don't make $65 an hour either. I think I'll tell my boss tomorrow that I'm worth at least $65 because that's what an assembly-line worker makes, and because of the mandatory overtime. :rolleyes:

He doesn't make $65 an hour either--wanna guess what he'll say?

Amusetec
October 12, 2005, 11:58 PM
I have a hard time figuring out what is wrong with a union guy making $65 an hour when he handles a half million dollars worth of company profit over that same period of time. If you don't think he's earing his money you've never worked assembly line. Where are they supposed to get the time to spend all this money? Madatory overtime puts a lot of these people in an early grave. They are no better than human robots. They can't pay a lot of people enough to do that.
I have to disagree with you.
No I do not think he is earning his income. Yes I have worked on a line for over a year with Compaq in the early 80's. I worked for them when the Deskpro first came out that was the Div. I worked. I worked 2nd and would normaly work 10-14 hours a day 5 days a week. and at least 10 on the weekend so I was working 7 days a week. I was a Tech worked on every board on the line. helped with assy. helped with packing. worked the burn in line. Did I make 65 an hour not quite I was only making 13 an hour. This was when Compaq was #1 and I handled well over a mill in profits in a year.
My wife works on a line now she is a machine operator. she knows how to program PM set up universals fujis and other man. and makes no where near that and bad benefits.
When she worked for Compaq (before hp) she worked long hours and did not even make 1/4 of that. benefits where good. but then her job got sent overseas. There are very few places that does this anymore and they all are realy bad sweat shops that do not pay crap and no benifits.
So yes IMHO the unions and union workers are just as greedy as the upper management.
I belive all states should be right to work states. If a company does not like the contract do not approve it. workers go on strike fine, fire them for not showing up and hire more.

AZ Jeff
October 13, 2005, 11:05 AM
I have a hard time figuring out what is wrong with a union guy making $65 an hour ......If you don't think he's earing his money you've never worked assembly line. ........Madatory overtime puts a lot of these people in an early grave. They are no better than human robots. They can't pay a lot of people enough to do that.
Your entire statement is fatally FLAWED by the facts:

There are workers in other countries willing to do the same job for 1/10 (or less) of what we are paying the union worker in the US. The open labor market has spoken--the job the union guy is doing is NOT worth $65 per hour any longer, and there are plenty of people in other countries who are willing and able to do the job for FAR less.

If you think that's unfair/unrealistic/whatever, just dig your heals in, refuse to accept it, and see what happens. The US worker will be unemployed, and the guys in other parts of the global market will be making the parts he used to assemble.

Nippondenso can build engine control parts in Malaysia cheaper than Delphi can build them in Saginaw. It's a sad fact of the "global economy".

Art Eatman
October 13, 2005, 11:15 AM
Generally, from what I've seen on the roads and in the shops, US full-sized trucks are equal to or better than the foreign stuff. (As example, that full-size Toyota pickup is great, but don't use one as your "puller" for a travel trailer. It won't last as well as a more-torque GMC.) With the SUV fad and cheap gas, GM and FoMoCo could do fairly well in spite of their obligations (from back in the 1940s and 1950s) on pension plans and medical insurance.

It hasn't been that "Detroit" could not produce good small cars. They can't equal foreign quality at the same sales price. Can't be done with the fixed overhead that's built into the system. For instance, FoMoCo spends more on employee health insurance than on steel.

One place where the unions have hurt themselves and the US auto industry is the fighting to preserve the numbers of jobs, resisting automation. Toyota leads the world in hours per car; GM and FoMoCo take roughly 14 hours vs. Toyota's 8. Chrysler was around 17, at the time of the Daimler buyout. You can't compete in the marketplace with that sort of built-in handicap.

Art

cracked butt
October 13, 2005, 11:25 AM
I have a hard time figuring out what is wrong with a union guy making $65 an hour when he handles a half million dollars worth of company profit over that same period of time. If you don't think he's earing his money you've never worked assembly line. Where are they supposed to get the time to spend all this money? Madatory overtime puts a lot of these people in an early grave. They are no better than human robots. They can't pay a lot of people enough to do that.

Eh? 65/hr for unskilled labor? rediculous. I make half that, have a chemistry degree, and have gone through for all practical purposes an informal apprenticeship program that takes about 2 years for running a chemical plant. 1/2 million in profits? big deal. Where I work, multimillion dollar batches are run, and even the smallest mistake has big consequences like: explosions, having to dump the entire batch to waste for a large loss of money and time, and the wrath of the FDA. Oh yeah, did I mention that for the $30ish/hour I get paid I'm also responsible for for the safety and training of a handful of reports that I supervise? Mandatory overtime? How many of these union babies are willing to stay an extra hour or two to make sure things are completed correctly, or how many of them voluntarily come in on a weekend for free to make sure that a process that they developed is run correctly the first time through and to give technical direction?

I've worked an assembly line in a union factory to pay my way through college. Every damn one of the union people I worked with wanted to be the first out the door at quitting time, if you needed 5 minutes worth of help to finish an item out, forget it. Consistantly do better than rate in a piecework job? Don't expect to make too many friends at work.

AZ Jeff
October 13, 2005, 11:35 AM
Here's another data point to consider in the measure of union worker competitiveness in the auto industry:

Due to contracts negotiated over the past 50 years, the typical GM and Ford UAW employee pays NO health insurance costs what so ever. This benefit extends past when the worker retires.

Unfortunately,this benefit (and it's cost to the employer) is now dragging down the employers who pay this burden. Independent analysts say, due to these health care and pension benefits, that GM and Ford have a $1500 labor and fringe cost burden PER VEHICLE over that of their competitors.

It's means every time Toyota, Nissan, Honda, etc. builds a vehicle, they get a $1500 profit boost (or selling price decrease) compared to the GM or Ford equivalent vehicle.

If that isn't a motivation for a company to want to negotiate a different wage and benefit package with the UAW, I don't know what would be........

71Commander
October 13, 2005, 01:23 PM
What the workers need to adjust to is a world wide economy and have their wages adjusted acordingly. America can't compete with a global economy that pays it's workers 2.50 /hr.

While we're at it, why not have our country ruled by a global governing body such as the UN.

One world order. :fire: :cuss:

For those of you who think that if the american workers wage is cut , the price of goods will go down, are delusional.

AZ Jeff
October 13, 2005, 02:01 PM
For those of you who think that if the american workers wage is cut , the price of goods will go down, are delusional.
The price of goods certainly won't go down. What MAY happen is the worker will still be employed in his original job, albiet at a lower wage.

The ONLY other alternative is ELMINATION of the job altogether in the US. That would force the US worker to seek a "career change", which is NOT easy for someone used to a certain type of work (and pay) for 15+ years.

longeyes
October 13, 2005, 03:03 PM
There is no way that the U.S., as we know it, is going to ADJUST to the realities of the global economy. That's why I proposed discussing "what next?" in my previous posts. We realize that we are on a dead-end path. Okay, fine, and therefore...? Ideas? I offered some.

Waitone
October 13, 2005, 03:24 PM
There is no way that the U.S., as we know it, is going to ADJUST to the realities of the global economy. That's why I proposed discussing "what next?" in my previous posts. We realize that we are on a dead-end path. Okay, fine, and therefore...? Ideas? I offered some.Gotta sorta differ on your point. Americans can adjust, adapt, overcome, etc. IF WE ARE PERMITTED. The governmental leviathan afixed to our backs will make it impossible to cope. $20 / hour in the US vs $2 / hour in Mexico. All things considered our wage requirements are higher because our breakeven point is forced upward because of the load of our governmental overhead. Pick one number to represent the tax cost of governmental at all levels and you would see something like 35%. Add in indirect costs of government like corporate profits tax, subsidies, mandated benefits and you are looking at an easy 50%.

We will lose the economic war unless government suddenly get smaller. I just don't see it happening. Matter of fact I see US government getting much bigger.

longeyes
October 13, 2005, 04:06 PM
Okay, let's posit NO gov't overhead at all. Pie in the sky but what the hell? We are still faced with a humonguous labor cost differential, the result of the boons of advances in computing, telecomm, and transportation (and maybe the desired spread of capitalist ideas, ironically). One would expect some kind of Great Leveling, and that means a sharply lower standard of living HERE. Our technology will buoy us up, yes, but can technology really work for all strata of American society? The political implications are significant, and we are seeing one result already, the growing polarization of the society into affluent and quasi-Third Worlders as the middle class gets squeezed. A high-tech society can't employ the number of people we have here now at current standards of living.

cracked butt
October 13, 2005, 06:08 PM
There is no way that the U.S., as we know it, is going to ADJUST to the realities of the global economy.

It will adjust, one way or another whether we want it to or not.

Monkeyleg
October 13, 2005, 06:28 PM
Another thing to consider: GM has more retired former employees receiving pensions and health insurance than it does active workers. Again, using my father as an example: he's 88, and still has a few more years. My mother is 87, and will likely live to be 100. And there are many, many others out there just like my folks.

Months back, Rush Limbaugh had the director of the federal agency that insures pensions. This was after some big company went under and its employees lost their pensions. The director said that the amount of money in the agency's account was nowhere near what was necessary if a large corporation went under. And he specifically mentioned GM.

R.H. Lee
October 13, 2005, 07:17 PM
One would expect some kind of Great Leveling, and that means a sharply lower standard of living HERE. I think that's going to be one of the components. As long as we remain a debtor consumer society, we're going to continue to decline as we import crap and export dollars. The current world petro dollar standard helps to a large degree, but even that has limits, especially as the Euro strengthens. We need to start producing something of value.

longeyes
October 13, 2005, 09:29 PM
It will adjust, one way or another whether we want it to or not.

By "adjust" I meant prosper, I meant be America.

I don't believe that this country will permit itself to sink into second-tier status. I think we will go to war first to preserve our advantages.

cracked butt
October 13, 2005, 11:06 PM
I don't believe that this country will permit itself to sink into second-tier status. I think we will go to war first to preserve our advantages.

Sort of like Germany in the 1940s?

Monkeyleg
October 13, 2005, 11:13 PM
"Sort of like Germany in the 1940s?"

Well, that doesn't seem to be working in our wars in Iraq and Afghanistan, does it?

The prosperity we saw in the 1990's had nothing to do with Bill Clinton, but rather with Bill Gates, Steve Jobs, and other leaders in technology.

We'll see further breakthroughs in technology here in the US. The problem is keeping countries like Japan, Korea, China and others from just stealing it and undercutting us on price.

longeyes
October 13, 2005, 11:36 PM
The prosperity we saw in the 1990's had nothing to do with Bill Clinton, but rather with Bill Gates, Steve Jobs, and other leaders in technology.

And you can thank the same guys for the Great Leveling that is taking place. American technology is eliminating jobs here--aka higher productivity--and empowering foreign workers in developing nations (especially in Asia). I'm not saying this is "bad," just part of the process.

Rampant theft of technology is one of the factors I'm talking about when I say war is a possibility--I'm not advocating it, mind, just remarking on human behavior--to maintain our standard of living. We've been paying the defense bill for most of the Western world for decades--one of these days it may strike people at home that we ought to collect the bill.

Germany in the '40s...? You said it, not I...

Monkeyleg
October 14, 2005, 06:39 PM
"And you can thank the same guys for the Great Leveling that is taking place. American technology is eliminating jobs here--aka higher productivity--and empowering foreign workers in developing nations (especially in Asia). I'm not saying this is "bad," just part of the process."

Technological advancement isn't something you can just stop when you feel that your station in life is hunky-dorey. Those that adapt survive, although adaptation isn't always easy.

And, you're right, all of this is part of the process. If I owned a company that produced a labor-intensive product, I'd certainly look for somewhere to get cheap labor. That's why Saturn built their automotive plant in Spring Green, KY back in 1988 or so instead of Kenosha, WI. Our taxes and wages here are far higher than in KY.

A conventional war isn't necessary, nor desirable. The Chinese own enough of our bonds to be able to bring our economy to its knees with a massive selloff.

The US has always succeeded by being ahead of the game, whether it was being the first to mass-produce automobiles or being the pioneer in chip technology.

I don't know what the next technological revolution will be--if I did, I'd be investing in it now--but we'd better find it and right quick.

Barbara
October 14, 2005, 07:38 PM
Carbon nanotubes.

Waitone
October 14, 2005, 07:45 PM
Rampant theft of technology is one of the factors I'm talking about when I say war is a possibility--I'm not advocating it, mind, just remarking on human behavior--to maintain our standard of living. We've been paying the defense bill for most of the Western world for decades--one of these days it may strike people at home that we ought to collect the bill.Actually, the gameplan is to level the standards of living. It would be accomplished via raising the standard of living of those at the bottom of the ladder and lowering the standard of living for those at the top of the ladder. Problem is how do you define the top of the ladder. If you look carefully at what is happening here in the USofA you will see a lowering of the standard of living of the middle class. Whether or not it is good or advisable is not the issue for now. What is of paramount importance in the near future is the standard of living is being reduced without a corresponding drop in the cost of government. We temporarily have a high standard of living because of debt. At some point total debt will become too high for creditors and the party will suddenly end. This goes for personal debt and national debt.

macavada
October 14, 2005, 10:13 PM
Here's an example of what I was alluding to in my previous post.

http://news.yahoo.com/s/ap/20051013/ap_on_bi_ge/prius_recall;_ylt=AhTWy4Wt9hSABOQ6ntkUvYOs0NUE;_ylu=X3oDMTA3ODdxdHBhBHNlYwM5NjQ

HKGuns
October 18, 2005, 10:48 PM
It hasn't been that "Detroit" could not produce good small cars. They can't equal foreign quality at the same sales price. Can't be done with the fixed overhead that's built into the system. For instance, FoMoCo spends more on employee health insurance than on steel.

One place where the unions have hurt themselves and the US auto industry is the fighting to preserve the numbers of jobs, resisting automation. Toyota leads the world in hours per car; GM and FoMoCo take roughly 14 hours vs. Toyota's 8. Chrysler was around 17, at the time of the Daimler buyout. You can't compete in the marketplace with that sort of built-in handicap.


Bingo ART!! You nailed it. Ford Motor sells ALL of its small cars at a loss simply to meet CAFE standards.

ESCORT =LOSS
Focus =LOSS
Fusion =miniscule Profit (Put together in Mexico)

As far as seeing nothing wrong with $65 an hour? Those folks aren't working over a line....They're mowing lawns, sweeping floors, moving boxes, just about anything they want or choose to do. Otherwise they'll file a grievance against you and get paid even more for something they "should" have done. I was written up for carrying a pocket screw driver onto a plant floor. The union was paid a days electrician wages for this "infraction".

Come on, what freaking planet do you live on? Salaried employees DO NOT make that much cash AND they work overtime for NOTHING. You obviously work for a union and are being fed the line by the guys ripping you off. Lets talk about what the folks make who run the unions and how corrupt they are.......

Overtime eh? The company is forced to make them work overtime because they can't afford to hire new employees when you fully load those wages with benefits and consider the future costs of pension benefits and healthcare costs for all the retired workers.

The UAW is out of control and they're starting to realize it.

Oh, and you folks had better hope neither of the domestics goes out of business. The ripple effect in the entire economy will put a lot of YOU out of jobs.

Keep on buying those imports.

stevelyn
October 19, 2005, 12:27 AM
Unions are complete bad news.

I work for an auto company and boy could I tell you some stories. Tell me that a forklift driver should make over $100K per year? Tell me again he should make that when you walk around a plant and find employees sleeping all over in out of the way places.

The unions are completely out of control and are protecting people who don't deserve jobs. They are overpaid and underworked.

Don't even get me started.

Lets talk about closing plants and having to continue to pay the workers for absolutely NOTHING.

There are many problems in the auto industry and the Unions are the root of most of them.

Poor Quality because of shoddy labor practices.
Inflexible workforce because of shoddy labor practices.
Poor productivity becuase of fat, overpaid, lazy union workers who think you owe them a living.
High wages because of Union Labor contracts.
High healthcare costs because of Union labor contracts. (Salaried have taken their cuts)
High retirement costs. (Which wouldn't be such a big issue if the above were resolved.

That in a nut shell is what is wrong with the auto industry.

Don't even get me started.....See I warned you.


I bet they are all courted by the Democratic Party and vote democrat, who in turn take away your gun rights.

Having grown up in the coal fields of WV, I have absolutely nothing good to say about unions. I watched the United Mine Workers strike themselves out jobs and plunging an entire state into a depression. A depression they are just now starting to recover from.
At one time, unions were a necessary evil as that was the only way to improve working conditions. Modern labor laws protect workers from the hazards that the union fought against.
Today unions are criminally, corrupt parasites that destroy their hosts then blame overseas manufacturers for their troubles. I hope they all go Tango Uniform. Only then can a free market make the necessary adjustments between wages and costs of living.

71Commander
October 19, 2005, 04:39 AM
I was written up for carrying a pocket screw driver onto a plant floor. The union was paid a days electrician wages for this "infraction".

WOW!!! Talk about a BS statement. First off I would say you got caught USING the screwdriver. The "written up for carrying" line is just ridiculus. It could never happen.

Secondly, the union gets paid nothing. The person whose job you tried to do while just "carrying"(wink, wink) the screwdriver is the one who got the money.

Joejojoba111
October 19, 2005, 05:19 AM
"Add in overtime and this guy who can barely read and write is pulling down over $70K/year. That's just WRONG!"

I don't think it's wrong in any aspect, moral, legal, injurious, nope nothing wrong. Maybe you're mistaking 'wrongful' with 'envious'.

A big problem with Democracy is that the majority can abuse it's power to drag down those who succeed. Paying taxes is one thing, but considering it wrong that someone has a better-paying job, that's not wrong.

Here's a quick heads-up - a few deacdes ago your dumb blue-collar worker used to be able to support an entire family and own everything outright. And that illiterate man you speak of, he has probably stuck with that company, climbed his way slowly up the ladder. He probably has extensive knowledge of all sorts of operations under him.

And if he had to describe what you do, I bet he could make it sound just as moronic. Sometimes responsibility is easy to ignore when you try to describe things.



"Good. The free market demands that you pay people what they are worth. When you have artificial constraints like union demands it throws everything off."

Lol, you think that the only constraint is unions? you are incorrect. You can easily understand this when you consider the origin of the act of unionizing. And consider who made it so difficult to do, how, and why. Clearly, the person who pays you has a tiny bit of influence in how you are paid.

NCP24
October 19, 2005, 09:07 AM
For instance, FoMoCo spends more on employee health insurance than on steel.

Having grown up in the coal fields of WV, I have absolutely nothing good to say about unions. I watched the United Mine Workers strike themselves out jobs and plunging an entire state into a depression. A depression they are just now starting to recover from. True, the unions have contributed to the downfall of certain industries, however can you guys tell me what foreign countries the steel and coal industry was forced to compete with?

I don't believe that this country will permit itself to sink into second-tier status. I think we will go to war first to preserve our advantages. I agree, but war with China?

China now has the world’s third-largest military budget, he said, behind the United States and Russia. He did not say how large the United States believes China’s military budget is.

Cui responded sharply to Rumsfeld during a question-and-answer session.

“Do you truly believe that China is under no threat by other countries?” Cui asked. “Do you truly believe that the U.S. is threatened by the emergence of China?”

Rumsfeld said he does not think any country threatens China and that the United States does not see China as a threat.

benEzra
October 19, 2005, 09:41 AM
Okay, let's posit NO gov't overhead at all. Pie in the sky but what the hell? We are still faced with a humonguous labor cost differential, the result of the boons of advances in computing, telecomm, and transportation (and maybe the desired spread of capitalist ideas, ironically). One would expect some kind of Great Leveling, and that means a sharply lower standard of living HERE. Our technology will buoy us up, yes, but can technology really work for all strata of American society? The political implications are significant, and we are seeing one result already, the growing polarization of the society into affluent and quasi-Third Worlders as the middle class gets squeezed. A high-tech society can't employ the number of people we have here now at current standards of living.
The thing is, high-wage societies CAN compete with lower-wage societies, IF they produce superior products. Which company has higher average wages, Kia or BMW? Yet BMW is doing fine.

Toyota, Honda, Hyundai, etc. are BUILDING automobile factories in the U.S. and HIRING workers. What are they doing differently? There is a big part of your answer. If GM and Ford started building decent cars, and hadn't dug themselves into paying a button-pusher twice the salary of a nuclear engineer, they'd be fine, globalization or not.

Quality issues have been part of the problem, but IMHO only a small part. I currently drive an '87 Camry that has 231,000 miles on it, and it still runs great. It replaced an '87 Chrysler 5th Avenue that ran like crap after only 80,000 miles, and had massive electrical failures after 100,000. My parents drive an AMERICAN MADE '93 Camry with 210,000 miles on it. Still looks and runs great. My in-laws drive a late-model Ford Contour that is on its last legs with just over 100,000 miles on the clock. J.D. Power says the newest GM's/Fords/Chryslers are much better built, but that's not going to save Ford/GM if they don't start producing better designs.

A big part of the problem is that GM and Ford are only making a few truly competetive products (Chrysler finally seems to be "getting it" a little). The only GM cars that I'd really love to have are Cadillacs (CTS, SLS, or STS) which are fantastic cars but WAY out of my price range thanks to GM's cost structure. (I'd love to have a 'Vette, too, but that's a bit high-profile, WAY out of my reach, and only a 2-seater.) I rented 2003 Chevy Malibu/Lumina/Impala/whatever a while back and it was put together OK, but just a boring design. Give me a more spirited engine, a 5-speed manual, more grip, and less understeer (and ixnay on the blinding high-beam DRL's that you can't turn off), and I might consider it. But in its present form, no way. If someone gave me one, I'd be looking to trade it.

GM has made lots of cars I've lusted after over the years, but the bean-counters always pigeonhole them as "special limited editions" unavailable to we unwashed masses. If the regular Caprice had the styling, fit, and finish of the Impala SS (the V8, rear-drive one) and had that V8 as an engine option, do you think it might have done a little better than the underpowered upside-down bathtub that was the "regular" Caprice? If GM had offered the 3.8 liter turbo as an option for ALL RWD Buick Regals, instead of pigeonholing it in the overpriced Grand National, and upgraded the chassis/suspension to European standards, you think it might have done a little better?

I think GM also handicaps their cars due to their excessive concern over "branding." Pontiac is supposed to be the "performance division," so Chevys can't be too passionate, and apparently can't have manual transmissions if it's bigger than a Cobalt. Cadillac is supposed to be the "luxury division" (and they are indeed good), but that means Chevy's can't be too refined. And since Pontiac is the "excitement division", its cars have to be adolescent-looking; lots of red paint, hulking body cladding, and cheap materials. And mandated corporate "styling cues" hurt styling overall; the Pontiac GTO (potentially a very good car) has to look like an '89 Grand Am or else somebody might not realize it's a Pontiac... Meanwhile, Toyota makes the Corolla and Camry just as good as they possibly can, no holds barred, styles them as they see fit, and if they get good enough to step on Lexus's toes, they'll just have to upgrade the Lexuses...and you don't see Honda handicapping the Civic and Accord because they're scared people might think they're Acuras...

Ford's new Mustang is very appealing (even with a V6), but too much interior noise and only two doors. The Taurus...I used to like Tauruses, before the bean-counters destroyed them. If the Shogun V-6 and 5-speed were still an engine option, I might consider a Taurus (though the styling sucks). The Five Hundred isn't bad, but that's because the chassis is a VOLVO, and 0-60 performance is just slightly better than a front-end loader. At least Volvos are available with performance engines and manual transmissions.

Personally, I think "family" Fords and Chevy's must either be designed by liability lawyers, or by guys who always drive 52 mph in the left lane with their turn signal on. Who says family cars have to be so #@$%! BORING??

I'd love to buy a new car in the next couple of years to replace my Camry. My wish-list criteria are 4 doors, excellent handling, manual transmission, 0-60 under 7 seconds, 30+ mpg highway, refined interior and exterior, good looks, good safety features, and less than $30K. Are there any GM cars that can compete with the new Volvo S40 T5? Not that I've seen...DESPITE high labor costs in Sweden and Belgium (not to mention shipping costs), the Volvo is just a better car all around, and looks better to boot. I look at GM's offerings in that size range, and I see the Saturn Ion (cheaply made, decent engine but unrefined), the Chevy Cobalt (ditto), and the Cadillac CTS (fantastic car but out of my price range, probably due to GM's cost structure).

And Ford? The S40 shares the same platform as the European Ford Focus, as I understand it, but Ford isn't selling that car in the U.S., and if they did the "Americanized" version would probably be filled with cheap gray plastic, severely underpowered, and handle like a waterbed. Sheesh, Ford owns Volvo; why can't they make a small sedan as good as an S40?

http://www.commongroundcommonsense.org/forums/uploads/1114096942/gallery_260_23_38007.jpg

NCP24
October 19, 2005, 10:02 AM
The thing is, high-wage societies CAN compete with lower-wage societies, IF they produce superior products. Which company has higher average wages, Kia or BMW? Yet BMW is doing fine. The BIG 3M out-sources most of their parts to third world countries, sacrificing quality for quantity. A chain is only as strong as its weakest link and in this case parts from China, Korea and Mexico are inferior to Germany or Japan.

benEzra
October 19, 2005, 10:24 AM
The BIG 3M out-sources most of their parts to third world countries, sacrificing quality for quantity. A chain is only as strong as its weakest link and in this case parts from China, Korea and Mexico are inferior to Germany or Japan.
My point is, Germany and Japan are high-wage countries, yet their quality and efficiency are such that the price difference is not enough to undercut the higher quality.

If your choice is between cheaply made Korean products and high-quality U.S. products, there is still a strong business case for buying the U.S. product despite the higher price, especially when you factor in shipping costs. But if the Korean product is pretty good and the U.S. product is mediocre, then outsourcing gets tempting. And if bad management, union greed, and silly turf wars (machinists aren't allowed to drive themselves, Teamsters aren't allowed to enter the factory, button pusher gets twice the salary of a nuclear engineer) raise the cost of the U.S. product enough, the quality-for-the-money quotient begins to look very unfavorable.

The outsourcing of electronics to Japanese suppliers in the '70's and early '80's wasn't done because the Japanese products were so much cheaper at that time, but because the American suppliers got complacent and stopped striving for quality and true efficiency. For example, the switchover to Japanese memory chips finally occurred when a major computer OEM did some tests and found that the best U.S.-made memory chips had three times the failure rate of the worst Japanese producer. So they outsourced.

As I mentioned before, Toyota, Hyundai, and Honda are building vehicles IN THE UNITED STATES and spanking GM and Ford. The differences are manufacturing efficiency (U.S.-made Toyotas are far cheaper to build than U.S.-made Chevrolets, largely due to bad management/labor decisions on GM's part) and quality/desirability of the product, as I pointed out above (Chevrolet sedans would have been very competitive ten years ago, but come across as boring and obsolete now). And even if perfectly built with perfect parts, the current Chevy Malibu is still a boring, underperforming, and undesirable design.

And to use the Volvo example, the S40 T5 is built in a high-wage, high-overhead, high-tax country and has to be SHIPPED here (big $$$), and it is still more car for the money than you can get from GM and Ford. The problem isn't U.S. wages vs. Third World wages, it's GM and Ford product design and cost structure decisions versus those of the other companies that are kicking their butts.

NCP24
October 19, 2005, 11:57 AM
My point is, Germany and Japan are high-wage countries, yet their quality and efficiency are such that the price difference is not enough to undercut the higher quality. Exactly and once upon a time the BIG 3M produced a quality American made vehicle.

The outsourcing of electronics to Japanese suppliers in the '70's and early '80's wasn't done because the Japanese products were so much cheaper at that time, but because the American suppliers got complacent and stopped striving to be the best I was thinking more on the lines of steel and coke, but yea during the '80's the American Government/ large business thought it was time to start outsourcing manufacturing jobs to low-wage countries.

As I mentioned before, Toyota, Hyundai, and Honda are building vehicles IN THE UNITED STATES and spanking GM and Ford. The differences are manufacturing efficiency (U.S.-made Toyotas are far cheaper to build than U.S.-made Chevrolets, largely due to bad management/labor decisions) and quality/desirability of the product, as I pointed out above. Agreed, they should have never sacrificed quality for quantity produced my cheap third world labor. Once upon a time THE BIG 3M produced a quality American made vehicle, not anymore. By the way, where are the individual components made for the American made “Toyota, Hyundai, and Honda”?

The problem isn't U.S. wages vs. Third World wages. Respectfully disagree, the decision to go postindustrial - globalization was made years ago, just as our current immigration laws were. It all boils down to profit and cheap labor.

Art Eatman
October 19, 2005, 12:05 PM
The cost/wage/outsource thing is nothing new. In 1962, at Dearborn, Michigan, steel from Sweden cost less than steel from Pittsburgh.

One major problem in talking about cars is comparing apples and oranges. Toyota and Nissan are the only proper comparisons against the "Big Three". All are set up for mass production.

Saab, Volvo, Mercedes, BMW, etc. are limited production cars, in terms of numbers per year. Any limited production item can be made to higher standards of quality. Toyota has solved the puzzle of mixing high output with high quality. GM, by and large, hasn't or can't.

But, same for guns, to some extent. Think Purdey...

I recall a Chevy engineer commenting, "Any fool can design a water pump for a Rolls-Royce. You gotta be pretty sharp to design one that will sell for $13.00, exchange." (1962 dollars.)

Social systems evolve over time, and they commonly resist change when times change. Unions are one example. In the Army, consider the "West Point Protective Association". Heck, consider the mechanics of voting! People in general resist change, for the physical and emotional discomfort that naturally ensues. The next step is the blame game. This gets us to, "If you're not part of the solution, you're part of the problem."

For us, then, unions are but a part of the problem. Outsourcing is but a part of the problem. Same for debt or for spoiled-brat lifestyles in changing times...

As usual, the enemy is us.

:), Art

71Commander
October 19, 2005, 12:18 PM
Saab, Volvo, Mercedes, BMW, etc. are limited production cars, in terms of numbers per year. Any limited production item can be made to higher standards of quality. Toyota has solved the puzzle of mixing high output with high quality. GM, by and large, hasn't or can't.


I disagree with this. The Domestic auto companies have made a big gain on the imports in regards to quality improvments, but the American manufacturers have a stigma about quality relating to their cars of the 80's to overcome.



http://www.detnews.com/2005/autosinsider/0506/30/B01-232784.htm

Big 3 quality gains on rivals

Overall industry: Reliability up, but some upscale brands lag

By Ed Garsten / The Detroit News




Top models in key segments


Compact car: Chevrolet Prizm

Entry midsize car: Chevrolet Malibu

Premium midsize car: Buick Century

Full-size car: Buick LeSabre

Entry luxury car: Ford Thunderbird

Midsize luxury car: Lincoln Town Car

Premium luxury car: Lexus LS 430

Sports car: Mazda Miata

Premium sports car: Porsche 911

Midsize pickup: Chevrolet S-10 pickup

Full-size pickup: Cadillac Escalade EXT

Entry SUV: Honda CR-V

Midsize SUV: Toyota 4Runner

Full-size SUV: GMC Yukon/Yukon XL

Entry luxury SUV: Lexus RX 300

Premium luxury SUV: Lexus LX 470

Minivan: Ford Windstar

Source: J.D. Power and Associates




Brand rankings

J.D. Power and Associates on Wednesday released its annual survey of vehicle dependability based on questionnaires sent to owners of 2002 model year vehicles. The list ranks vehicle brands by the problems their owners reported per 100 vehicles.

Brand Problems per 100 vehicles

Lexus 139
Porsche 149
Lincoln 151
Buick 163
Cadillac 175
Infiniti 178
Toyota 194
Mercury 195
Honda 201
Acura 203
BMW 225
Ford 231
Chevrolet 232
Chrysler 235
INDUSTRY AVERAGE 237
Saturn 240
Oldsmobile 242
GMC 245
Pontiac 245
Mazda 252
Hyundai 260
Subaru 260
Volvo 266
Jaguar 268
Dodge 273
Nissan 275
Mitsubishi 278
Mercedes-Benz 283
Saab 286
Jeep 289
Suzuki 292
Audi 312
Daewoo 318
Isuzu 331
Volkswagen 335
Mini 383
Land Rover 395
Kia 397

Source: J.D. Power and Associates.

Related report

J.D. Power press release, top 3 rankings in each vehicle category


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Detroit's automakers are making major gains in long-term vehicle durability with General Motors Corp. and Ford Motor Co. finishing best in a record number of product segments and closing the gap with foreign rivals, according to an industry study released Wednesday.

Almost every automaker made significant strides in J.D. Power and Associates' Vehicle Dependability Study released Wednesday. The industry average improved 12 percent to 2.4 problems per vehicle, from 2.7 problems a year ago, according to the survey, which tracked problems reported by 50,635 original owners of 2002 model year cars and trucks.

The gains by Detroit's automakers show that recent quality improvement efforts are starting to bear fruit. U.S. automakers took the top spot in 12 of 19 vehicle segments, compared with 7 of 17 product categories a year ago.

Toyota Motor Co.'s Lexus division -- with about 1.4 problems per vehicle -- was the highest scoring brand for the 11th consecutive year. But other upscale brands -- Volvo, Mercedes-Benz, Audi, Jaguar and Land Rover -- continue to struggle and score below the industry average.

Long-term quality and reliability are crucial to generating loyal customers and lowering warranty costs for all automakers. J.D. Power said 84 percent of all 2002 models surveyed showed year-over-year improvements in reliability after three years of ownership. And the difference between the top-ranked brand -- Lexus, with 1.39 problems per 2002 model -- and the worst brand -- Kia, with 3.97 problems per model -- narrowed by nearly 17 percent, the company said.

Consumers were polled on 147 attributes and the study found improvements in 74 areas.

"The most improvement came in ride, handling, braking, engine and interior," said Neal Oddes, director of product research and analysis at J.D. Power, referring to the overall industry improvement.

Wind noise, a perennial bugaboo of consumers, was the top complaint, followed by noisy brakes, uneven tire wear, excessive brake dust and vibrating brakes.

For GM, which has struggled to convince consumers its quality problems are behind it, despite gains in initial and long-term quality studies over the past few years, the results are especially heartening.

"Customer perception has lagged reality," said Annette Clayton, GM North America vice president of quality.

"The results are proof of what we've been saying all along, that our quality is good and has improved."

GM models finished on top in eight segments, and the automaker placed 18 vehicles in the top three of the segments surveyed -- the most by any manufacturer.

Winners included the Cadillac Escalade EXT in the light-duty, full-size pickup segment; the Chevrolet Silverado in the heavy-duty, full-size pickup segment; and the Buick Century among premium midsize cars. Chevrolet won in four segments, and was among the brands scoring better than the industry average with 2.3 problems per vehicle, compared to 2.6 in last year's study.

GM's Buick brand placed fourth behind Lexus, Porsche and Ford's Lincoln brand. The only GM brand that lost ground was Saab, with 2.9 problems per vehicle, compared with 2.6 problems per model last year.

Ford, which also is trying to improve quality, had the top vehicles in four segments -- including the Ford Windstar in the minivan segment and the Lincoln Town Car in the mid-luxury car segment.

Ford, Lincoln and Mercury each scored better than the industry average, while Ford's foreign nameplates, such as Jaguar and Land Rover, fell below the benchmark.

Lincoln owners reported 1.5 problems per vehicle, while Mercury owners reported 1.9 problems, and Ford customers reported 2.3 problems per model.

"What we will do is continue to fix and uncover (problems) until we are consistently placed as a leader among all manufacturers," said Deborah Coleman, Ford vice president of global quality.

Toyota, long the company setting the quality benchmark, won in four segments.

Customers reported 1.9 problems per Toyota model, compared with 2.2 in last year's study. At Lexus, owners reported 1.4 problems per vehicle, an improvement over 1.6 problems last year.

DaimlerChrysler AG's Chrysler, Dodge and Jeep brands all improved, with Chrysler scoring just above the industry average with 2.3 problems per vehicle. The Dodge Ram van, now discontinued, and Jeep Liberty were among the top three models in their segments.

The positive showing for Detroit automakers comes at a time when Asian brands, perceived by consumers to produce better quality vehicles, are gaining market share in the United States.

Detroit automakers have seen their grip on the U.S. market slip to 57.4 percent this year from 59.2 percent last year, while Asian automakers have increased their U.S. market share to 36.5 percent from 34.3 percent.

J.D. Powers's Oddes says domestic brands have closed the quality gap in both initial and long-term quality by shoring up design and manufacturing processes, and by listening more closely to consumer feedback.

"Those manufacturers take that information and they design, right at the beginning of a products' lifecycle, not only for short-term quality, but we see that now translating into long-term durability," Oddes said.

GM's Clayton contends there is no difference in quality between the automaker's product lineup and Asian models, saying "the gap is closed."

While still falling below the industry average at 2.6 problems per vehicle, South Korean automaker Hyundai Motor Co. showed the biggest improvement of any brand. In last year's study, Hyundai customers reported 3.8 problems per vehicle.

On a percentage basis, the German Porsche brand, which came in second to Lexus, was the most improved with just 1.5 problems reported per vehicle compared with 2.4 last year.

At the bottom of the list was Kia, with 3.97 problems per vehicle, and Land Rover, with 3.95.

Gains in long-term durability not only improve customer satisfaction, along with vehicle and brand image, it can bolster a vehicle's value.

Data gathered by the Power Information Network, a division of J.D. Power, found that vehicles performing above the industry average in the dependability study typically retain $1,000 more of their value than brands falling below the benchmark.


You can reach Ed Garsten at (313) 223-3217 or egarsten@detnews.com.

benEzra
October 19, 2005, 03:16 PM
Agreed, they should have never sacrificed quality for quantity produced my cheap third world labor. Once upon a time THE BIG 3M produced a quality American made vehicle, not anymore. By the way, where are the individual components made for the American made “Toyota, Hyundai, and Honda”?
Many are made locally (e.g., in the U.S.). I recall when the Hyundai plant went into Alabama, a lot of parts suppliers also went up.

The Toyota Camry now has most of its parts manufactured here in the States, IIRC, unlike the Ford Crown Victoria...

I disagree with this. The Domestic auto companies have made a big gain on the imports in regards to quality improvments, but the American manufacturers have a stigma about quality relating to their cars of the 80's to overcome.
I agree with TennTucker. Detroit's problem today is with obsolete/substandard designs and bad cost structures that encourage same, not so much build quality per se.

The problem as I see it is that Ford and GM both think "family sedan" equates to B-O-R-I-N-G. Lackluster power, poor handling, acres of dull plastic, automatic transmissions only, ho-hum styling, ad nauseaum. Cadillac is doing it right (though they're pricey!), and Chrysler is getting it, too (compare the Charger with the Malibu...). Chevrolet and Ford are not.

The Taurus SHO was once compared to BMW's...the current Taurus invites comparison to Checker cabs, regardless of how good the build quality may be.

NCP24
October 19, 2005, 03:27 PM
Many are made locally (e.g., in the U.S.). I recall when the Hyundai plant went into Alabama, a lot of parts suppliers also went up.

The Toyota Camry now has most of its parts manufactured here in the States, IIRC, unlike the Ford Crown Victoria...Maybe its time GM learns a hard lesson. Americans still have what it takes, we just need to give them a chance.

longeyes
October 19, 2005, 03:33 PM
The outsourcing of electronics to Japanese suppliers in the '70's and early '80's wasn't done because the Japanese products were so much cheaper at that time, but because the American suppliers got complacent and stopped striving to be the best


These issues are complex. The word "dumping" mean anything to you? "Closed markets?" How about foreign government subsidizing their own companies to compete with us? Japan, Inc.? Technology theft? Technology buy-outs? Remember Ampex? And all through this period there were cultural issues dragging down American competitiveness and productivity. Japan has a vastly higher savings rate than the U.S., its citizens live to work, and its executives don't expect to make a hundred times what the average worker makes. As for Germany they increasingly import cheap foreign labor to keep the party alive.

By the way, we are not the only country losing "good jobs" (manufacturing) to outsourcing and cheaper competition. That is a big issue for Japan now. And China itself is seeing business go to even lower-cost suppliers.

There's always a faster gun and a cheaper supplier.

benEzra
October 19, 2005, 03:47 PM
These issues are complex. The word "dumping" mean anything to you? "Closed markets?" How about foreign government subsidizing their own companies to compete with us? Japan, Inc.? Technology theft? Technology buy-outs? Remember Ampex? And all through this period there were cultural issues dragging down American competitiveness and productivity.
Actually, what I was referring to was the vastly lower quality of American memory chips at that time due to Silicon Valley's "ain't-never-done-it-thataway-before" attitude toward statistical process control (remember Deming?), and the resulting shift toward Japanese manufacturers. The Japanese were thinking outside the box; we weren't. The result was vastly higher quality of Japanese chips, since they embraced statistical methods of QC wholeheartedly and American companies then had to play catch-up. More recently, Japanese companies have made a series of bad decisions (billions they spent on "4th generation supercomputers" in the '90's, while we were quietly reinventing the supercomputer ourselves, come to mind...or all the money Japan poured down the maglev drain...)

Japan has a vastly higher savings rate than the U.S., its citizens live to work, and its executives don't expect to make a hundred times what the average worker makes. As for Germany they increasingly import cheap foreign labor to keep the party alive.
Actually, Japanese workers work less per year than we do, and take more vacation time. Americans are statistically the hardest working people of any industrialized country, at least as measured by hours worked.

I was under the impression that most imported labor in Germany was for the less-skilled jobs and service-industry type professions.

Monkeyleg
October 19, 2005, 07:01 PM
The Japanese automakers began outsourcing manufacturing jobs to Africa back in the 1990's. Don't remember particulars as to numbers, but I'm sure that cost some Japanese jobs.

NMshooter
October 19, 2005, 08:10 PM
The Japanese economy is still a bit of a joke, though they seem to have folks convinced that everything is normal, and no, they really are not printing Yen as fast as possible...

They do make very nice vehicles though...

It would not suprise me in the least to find that German auto manufacturers are also propped up by their government.

I suspect the Chinese will cause those two countries similar problems in five years once they have their manufacturers up to speed.

Whether or not there will be large numbers of people able to afford to purchase those vehicles is another question.

The US is still the largest market in the world, if we are not buying enough many countries including China are in a world of hurt.

This is why no one wants the US to go into recession, much less depression.

longeyes
October 19, 2005, 11:32 PM
The US is still the largest market in the world, if we are not buying enough many countries including China are in a world of hurt.


And the way things are going the primary thing we will have to sell is our appetite.

We and the Chinese are economically co-dependent.

HKGuns
October 23, 2005, 09:28 PM
WOW!!! Talk about a BS statement. First off I would say you got caught USING the screwdriver. The "written up for carrying" line is just ridiculus. It could never happen.

Secondly, the union gets paid nothing. The person whose job you tried to do while just "carrying"(wink, wink) the screwdriver is the one who got the money.

No, it is NOT a BS statement. I had it in my shirt pocket. One of those little screw drivers with a clip on it. Believe what you want.

HKGuns
October 23, 2005, 09:39 PM
I agree with TennTucker. Detroit's problem today is with obsolete/substandard designs and bad cost structures that encourage same, not so much build quality per se.

The problem as I see it is that Ford and GM both think "family sedan" equates to B-O-R-I-N-G. Lackluster power, poor handling, acres of dull plastic, automatic transmissions only, ho-hum styling, ad nauseaum. Cadillac is doing it right (though they're pricey!), and Chrysler is getting it, too (compare the Charger with the Malibu...). Chevrolet and Ford are not.

The Taurus SHO was once compared to BMW's...the current Taurus invites comparison to Checker cabs, regardless of how good the build quality may be.


Not 100% correct. There is still the "perception" that the imports are of far higher quality which is a hard one to fix. They are now, in most segments, of marginally better quality or the same, however if half of the US thinks the imports are far better it's up to the domestics to change that image.

There is a lot of boring going on right now....But, they are forced to do that to avoid short product cycles. How many PT cruisers is D-C selling these days? They were hot for a while, but they didn't have a lot of staying power. When you tool up a plant for production you need to milk that investment or make it flexible, which is what most are doing these days so you can run more than one vehicle in the same plant. However, this increases, to some extent, the complexity and quality problem.

As I mentioned before, Toyota, Hyundai, and Honda are building vehicles IN THE UNITED STATES and spanking GM and Ford. The differences are manufacturing efficiency (U.S.-made Toyotas are far cheaper to build than U.S.-made Chevrolets, largely due to bad management/labor decisions on GM's part) and quality/desirability of the product, as I pointed out above (Chevrolet sedans would have been very competitive ten years ago, but come across as boring and obsolete now). And even if perfectly built with perfect parts, the current Chevy Malibu is still a boring, underperforming, and undesirable design.

All built with NON UNION labor, no legacy healthcare/retiree costs and 80% of their parts are off shore sourced.

sumpnz
October 23, 2005, 11:24 PM
All built with NON UNION labor, no legacy healthcare/retiree costsYou say that like its a bad thing. Actually that is the whole point benEzra was trying to make.
and 80% of their parts are off shore sourced.And, except perhaps for the big trucks/SUV's, that is different from the Big 3, how?

Art Eatman
October 24, 2005, 12:52 AM
TennTucker, for a given sales price, you can only build so much car. I don't care whether you're talking quality or "features". Think back to what I said about build time in hours per car, for one thing. If you can't change this because of some aspect of a union contract, then what?

For instance, there is a FoMoCo plant at Dearborn which makes the front sub-frame assemblies to which are mounted the front suspensions and front end sheet metal. These are welded. The contract calls for workers being paid by the number of subfreames produced: Piece work. Back when the deal was set up, these were hand-welded. Now, there's a lot of automation in the setup jigs and welding equipment and the time per unit is dramatically reduced. Still, paid for piecework. The AVERAGE take-home pay, per year, for employees at that plant is (per the Time Magazine article) some $106,000 per year. Plus finges and retirement.

When the only way to reduce your costs is outsourcing, you outsource. When you still can't compete in terms of hours, your output can't meet the opposition's quality or features for a given price for the particular niche.

Among other little items about wage competition is the fact that while Germany is a high-paid work force, their tax rate is some 40% of earned income--which is in part how/why the corporations pay less for medical coverage and can to some degree deal with the mandated shorter work weeks and lengthier vactions. (What's commonly not mentioned about all this "free" medical care is that a German ambulance driver has to radio around to find out what hospital has its emergency room open for business.)

Just a few point to show that it's a far more complex problem than most folks figure...

Art

Monkeyleg
October 24, 2005, 01:00 AM
The AVERAGE take-home pay, per year, for employees at that plant is (per the Time Magazine article) some $106,000 per year. Plus finges and retirement.

Art, how do I go about getting one of these jobs? I've never made that much money in my entire life, and I've worked so many 80 to 100-hour weeks that I've lost count.

HKGuns
October 24, 2005, 06:09 AM
You say that like its a bad thing. Actually that is the whole point benEzra was trying to make.
And, except perhaps for the big trucks/SUV's, that is different from the Big 3, how?

Hmmmmmmm, lets see. 75% of Ford parts are purchased through Visteon and the other major supplier is Delphi. Both American companies last I heard.

Do you have anything to add?

HKGuns
October 24, 2005, 06:15 AM
Art, how do I go about getting one of these jobs? I've never made that much money in my entire life, and I've worked so many 80 to 100-hour weeks that I've lost count.

That is an interesting question and another problem with the UAW. The UAW also takes care of its own. Get to know one of the UAW rep's and he'll hook you up. Not easy, unless you know someone to get one of these highly paid, low skilled labor jobs. The newest workers don't get paid that much. One of the contract concessions of the last UAW agreement was that newer workers were "initially" on a lower wage rate. I don't recall the time frame, but the first three years sticks in my mind for some reason.

sumpnz
October 24, 2005, 11:19 AM
75% of Ford parts are purchased through Visteon and the other major supplier is Delphi. Both American companies last I heard.
Well, I don't necessarially know about Visteon (though I'd imagine they're similar to Delphi in this respect), but Delphi has more employees overseas than in the USA. In their banckruptcy filing they even mentioned that the foreign units would not be a part of the filing. THat tells me that they're shifting even more work overseas. Tell me again how all their parts are "American".

Art Eatman
October 24, 2005, 11:27 AM
The best way to get into a union local is to have a relative who's already there. No idea if it's changed, but it used to be that getting to know somebody important in a local and dickering over a price could get you in...

Art

benEzra
October 24, 2005, 11:44 AM
Not 100% correct. There is still the "perception" that the imports are of far higher quality which is a hard one to fix. They are now, in most segments, of marginally better quality or the same, however if half of the US thinks the imports are far better it's up to the domestics to change that image.
It's not build quality that turns me off from GM/Ford now; it's design quality. Cadillac is putting out a lot of really good designs, and pared-down Cadillacs sans leather interiors/nav systems/etc. would be very attractive to those of us who can't afford a $45,000 car. BUT, Chevrolet's aren't pared-down Cadillacs, they are warmed-over designs with no passion or imagination. And for a variety of reasons related to branding, I think GM is particularly susceptible to this, but Ford does it too.

I'm sure the Chevy Malibu is a well-built car; the last one I drove certainly was. But it is not a sedan that interests most people who like cars. It doesn't cost any more to tool up to produce an appealing car than to produce an unappealing car...

There is a lot of boring going on right now....But, they are forced to do that to avoid short product cycles. How many PT cruisers is D-C selling these days? They were hot for a while, but they didn't have a lot of staying power. When you tool up a plant for production you need to milk that investment or make it flexible, which is what most are doing these days so you can run more than one vehicle in the same plant. However, this increases, to some extent, the complexity and quality problem.
GM and Ford are using much longer product cycles than the competition (case in point, the Toyota Corolla was completely redesigned 5 or 7 times during the life of the Chevrolet Cavalier, IIRC), and it may be that their labor issues and Byzantine production systems have a lot to do with this.

The sad thing is, even many NEW designs from GM and Ford are boring. The Ford Five Hundred is a very nice car (based on a Volvo chassis, actually, and looks good), except the highest performance version is 0.6 second slower to 60 and 0.5 second slower in the quarter than a 2-year-old Honda Odyssey minivan...

When I was in college, my dream car was a Ford Taurus SHO. Ford doesn't make any driver's sedans anymore, and neither does Chevrolet...

Art Eatman
October 24, 2005, 12:20 PM
benEzra, I certainly can relate to your view about "exciting". Problem is, it's relative. I'm an old hot-rodder/racer, and my notion of excitement begins around 125 to 150. So, today's overpriced stuff is of no interest. Aside from $$$, the styling just doesn't grab me at all.

"Boring" cars are just fine for an aging population. Trouble is, us Old Farts aren't interested in repeat-buying often enough to support those producers.

I'm pretty highly impressed with my full-size GMC pickemup: It's very comfortable on the highway and if I halfway behave myself it gets 20 mpg-- which ain't bad for a 4,500-pound barn-door. And it's a trailer-puller which can double as a four-wheeled motel.

But I wish I still had my Chev-Healey. :D

Art

HKGuns
October 25, 2005, 07:35 PM
When I was in college, my dream car was a Ford Taurus SHO. Ford doesn't make any driver's sedans anymore, and neither does Chevrolet...

I guess you've not driven the Lincoln LS. It will blow most BMW's out of the water in the handling department. Silly thing is we don't market it much at all. If there ever were a true drivers car the LS is it.

http://www.lincoln.com/lincolnls/img/main_ext_5.jpg

Are you forgetting the new Mustang? Granted not a sedan, but truly a drivers car. Even the new Fusion is a sweet handling car. I think you'll find most of Ford's newer models are all european inspired driver's cars.

http://www.mustangworld.com/ourpics/News/select48/dscn48716ov.jpg

http://media.automotive.com/evox/stilllib/ford/fusion/2006/4sa/46.jpg

Well, I don't necessarially know about Visteon (though I'd imagine they're similar to Delphi in this respect), but Delphi has more employees overseas than in the USA. In their banckruptcy filing they even mentioned that the foreign units would not be a part of the filing. THat tells me that they're shifting even more work overseas. Tell me again how all their parts are "American".

Don't go there....it matters very little where the parts are made. What matters is where the profits flow. Visteon profits flow into the US economy and banking system.

AZ Jeff
October 25, 2005, 07:39 PM
....it matters very little where the parts are made. What matters is where the profits flow. Visteon profits flow into the US economy and banking system.
Amen to that. Lot's of people get all enamored with the fact that Toyota and Nissan make cars in the US. That's great, but.............

1. the major components (high dollar value items) such as the engine and trans still come from Japan
2. the PROFITS go BACK to Japan

I prefer to support my fellow engineers in the US when I buy a vehicle. I KNOW if I buy a Ford, GM, or Chrysler domestic built product, the MAJORITY of the design and development work for the product was done here by my peers.

sumpnz
October 25, 2005, 08:12 PM
I prefer to support my fellow engineers in the US when I buy a vehicle. I KNOW if I buy a Ford, GM, or Chrysler domestic built product, the MAJORITY of the design and development work for the product was done here by my peers.You know, although I am an engineer, I've never understood that mentality. Why the heck should you buy my crappy product when Igor or Shinji, or Pablo is making a much better product for not a whole lot more and possibly less cost (or even if it's not quite as good it's at a much, much lower cost)? How is that helping me to design a better system, or my company to do a better job at controlling costs. If I design a better system at a lower cost than anyone else, then you should by my system. If I'm more expensive than my competitors, but the quality is the same or worse, what possible motiviation should you have to buy my system. Even if I am able to produce a system cheaper than "them" but the quality is substantially worse to the point that its ultimatly a better deal to buy from them, why should you buy from me?

Atticus
October 25, 2005, 08:49 PM
From page D1 of today's Washington Post:

Average Manufacturing Wages and Benefits:

Motor vehicles and parts manufacturing workers(2003):

Delphi Corp. - $65.00 per hour
U.S - $33.61 per hour
Mexico - $3.49 per hour

All manufacturing workers(2003): U.S. - $21.97
Mexico - $2.48



I'm suprised by all the attention paid to the Mexican wages. That unfair comparison could be made to any business. But other types of US businesses are paying fair wages here in the US and doing well.
A fifty year long union scam has finally drained the cash cow... plain and simple.

Delphi's problem is here not there:

All manufacturing workers(2003): U.S. - $21.97

Delphi Corp. - $65.00 per hour

benEzra
October 26, 2005, 02:25 PM
I guess you've not driven the Lincoln LS. It will blow most BMW's out of the water in the handling department. Silly thing is we don't market it much at all. If there ever were a true drivers car the LS is it.
That car is very appealing; I can't imagine why it's not marketed more aggressively...looks like a good competitor to the Cadillac CTS and such. Can you get a manual transmission with it?

Now that you mention it, I do recall reading an article about it a year or so ago.

Are you forgetting the new Mustang? Granted not a sedan, but truly a drivers car.
No, I love the new Mustang; I mentioned it a few posts ago as a shining example that Ford can get it right. If it only had 4 doors (and probably a bit more sound insulation)...I have 2 kids so a 4-door is a must. I think once our kids are older, my wife will probably be looking at a V-6 Mustang in that nifty blue color, with a 5- or 6-speed...

Even the new Fusion is a sweet handling car. I think you'll find most of Ford's newer models are all european inspired driver's cars.
Looks like Ford is turning it around, then. Though I'd want a manual transmission with the V-6, and it doesn't look like you can get that combination at the moment? Or give me a turbo on the 4-cylinder version...

Speaking of turbos...I mentioned the Taurus SHO. I forgot, I actually had two Ford "dream cars" as a teenager and while in college; the other was the Thunderbird turbo coupe, with the 2.3-liter turbo 4 and a 5-speed manual. I drove a family friend's '87 once and fell in love with it. (I never understood why the next Thunderbird was more of a fancy Crown Vic.) The SHO would be more practical w/kids, though.

HKGuns
October 26, 2005, 06:59 PM
No, I love the new Mustang; I mentioned it a few posts ago as a shining example that Ford can get it right. If it only had 4 doors (and probably a bit more sound insulation)...I have 2 kids so a 4-door is a must. I think once our kids are older, my wife will probably be looking at a V-6 Mustang in that nifty blue color, with a 5- or 6-speed...


Yeah my kids limit my choices as well. Which is why I drive the LS. We dropped the manual tranny on it because we weren't selling enough with a manual to justify keeping it around.

Speaking of turbos...I mentioned the Taurus SHO. I forgot, I actually had two Ford "dream cars" as a teenager and while in college; the other was the Thunderbird turbo coupe, with the 2.3-liter turbo 4 and a 5-speed manual. I drove a family friend's '87 once and fell in love with it. (I never understood why the next Thunderbird was more of a fancy Crown Vic.) The SHO would be more practical w/kids, though.

Yeah the T-bird was adrift for a while, but the new one took it back to its roots. Its based on the LS platform and it is a real screamer with the V8. It will likely come back at some point in similar fashion to what the present T-bird is.....a really good car if a bit pricey. Manual tranny's are really difficult to keep in the product when you only sell them to niche customers. Its purely a cost decision. In a perfect world you'd be able to get a manual tranny in anything. For my driving habits I'd loathe a manual. I can live with an auto trans, I love the driving dynamics more than the shifting.

Barbara
October 26, 2005, 07:33 PM
The parts come from Delphi and Visteon, who buy them from second and then third tier suppliers, many of whom are in China and other developing nations.

AZ Jeff
October 27, 2005, 11:00 AM
You know, although I am an engineer, I've never understood that mentality. Why the heck should you buy my crappy product when Igor or Shinji, or Pablo is making a much better product for not a whole lot more and possibly less cost (or even if it's not quite as good it's at a much, much lower cost)? How is that helping me to design a better system, or my company to do a better job at controlling costs. If I design a better system at a lower cost than anyone else, then you should by my system. If I'm more expensive than my competitors, but the quality is the same or worse, what possible motiviation should you have to buy my system. Even if I am able to produce a system cheaper than "them" but the quality is substantially worse to the point that its ultimatly a better deal to buy from them, why should you buy from me?
I guess your side of this arguement depends on an assumption I don't completely agree with: That competitive products made overseas are always superior. While there ARE cases of that, in the auto industry, the quality/value of cards designed in Japan, versus those designed in the US, is for the most part equal.

Waitone
October 27, 2005, 11:22 AM
I sell industrial products to industries like the automotive aftermarket and aerospace. In both cases quality programs illustrated with certifications like ISO and QS are a necessary qualifier to participation. In the US, no qualification results in no business. We are told it is a way to reduce costs and the cost of quality to the enduser. Gotta have quality programs and certs.

Then the outsourcing craze began. Those companies driving the quality programs in the US curiously went silent when sourcing overseas. Yes in some cases programs were implemented and demanded but in a number of highly visible cases quality programs and certs were simply dropped. So as a supplier of US manufacturers I was faced with trying to compete with my quality certs and programs against competitors with drastically reduced costs and no requirements to maintain quality programs. When asked if it reasonable business calculations to do so, I was told price overrules quality. We've discussed on this very thread some of the companies who are conducting business in this manner. Other companies are some of the largest industrial companies in both the US and world, names you would instantly recognize. These attitudes qualify as irrational and in my experience will suffer logical and business consequences.

sumpnz
October 27, 2005, 01:20 PM
I guess your side of this arguement depends on an assumption I don't completely agree with: That competitive products made overseas are always superior. While there ARE cases of that, in the auto industry, the quality/value of cards designed in Japan, versus those designed in the US, is for the most part equal.I think you're reading something into my words that is not there. I never said that overseas companies are always superior. I said that if they are superior and the cost is the same or less (note this includes lifetime cost, not just initial purchase) then they should be the ones winning the competition for customers. If any company's product is more costly than the competition's it has to be better by enough of a margin to justify that expense.

It just so happens that in terms of cars, at least the ones that have substantial appeal to me, there is very little to recommend FoMoCo, GM, or Chrylser over Toyota, Honda, Subaru, or even Kia. E.g. Take mini-vans. I've never known anyone who's had a good experience with a Town & Country. I've also heard a lot more bad than good about the Winstar (now FreeStar). OTOH I've heard little but good things about the Odessey and Cienna, and the Sedona is getting really positive reviews. Just in general I've not known hardly any people who had Big 3 cars that have made it anywhere even close to 200k miles, esp. with relatively few problems. I've known plenty of Honda and Toyota owners that have made it to 250k miles with very little more than just the regular PM.

Molon Labe
October 27, 2005, 01:50 PM
And this is relevant to firearms because... :confused:

NCP24
October 27, 2005, 02:20 PM
And this is relevant to firearms because Globalization will eventually weaken the American economy leaving us vulnerable to foreign trade sanctions and coercion, not to mention a threat to national security. How is this relevant to firearms? International gun control, what else!

Delphi's bankruptcy is just a small piece of a larger puzzle.

HKGuns
October 27, 2005, 06:40 PM
Its relative to life. With a moderator contributing I think its ok.

atek3
January 18, 2006, 04:21 AM
Globalization will eventually weaken the American economy leaving us vulnerable to foreign trade sanctions and coercion, not to mention a threat to national security. How is this relevant to firearms? International gun control, what else!

And we have a winner... that is one crazy argument.

Let me get this straight, americans buying high quality low cost goods from abroad causes weak US economy... still with me... which causes other countries to put up tariffs against us... still with me... which causes international gun control... ohh now I get your arguement, A causes B, and B causes C, therefore buying goods from abroad causes gun control following the transitive logic of NCP24.

Lol.

atek3

benEzra
January 19, 2006, 09:04 AM
DARN IT DARN IT DARN IT!!!!

The transmission on my wife's American-made Plymouth Voyager just screwed up at 115,000 miles (A670, 3-speed with lockup TQ). The van's Mitsubishi-made engine is still going strong, but the van just likes to stay in first gear. :banghead:

So my wife is now commuting our son to Duke and Wake Forest (5 hr round trip) once or twice a week in my 19-year-old Toyota with 235,000 miles on it...and no worries about it breaking down...

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