Poor Managent

[TexasAxMan]

No union at Honda.

I agree with a free market, but you cannot have 2000 employees negotiating their wage based upon individual performance. In a manufacturing plant, union or not, the wages are autocratically set.

Honda pays you 30k USD, limited benefits, no pension, then kisses you goodbye in the 20th month. You cannot negotiate a higher wage based upon your assembly abilities.

Right or wrong, GM is saddled with a much higher debt based upon stronger wages and benefits derived from years of union contracts.

The final downward spiral for GM will most likely end up in one of two scenarios.

    1- Bankruptcy followed by fiscal reorganization whereby a new, lean,

        unencumbered GM surfaces.

       

    2- Continued layoffs and plant closures, resulting in a company that barely

        resembles the automotive giant we've come to know.

Its a global environment where competition comes from every continent. I hope that The General can survive, but it won't happen by simply introducing popular cars. Those days are long gone, as GM is saddled with 2 decades of previous debt to manage.

Tough decisions ... and no one should take joy in GM's troubles, as the snowball effect in our economy is tremendous.

Why can't 2000 employees negotiate their own wages? That way you keep the performers (which I don't mind making $27.50/hr), and you get rid of the dregs that suck up wages and don't perform. You can't tell me GM doesn't have the HR resources to handle this.

I'd like to know the source of the 20 month rumor.

GM can whine all it wants about being "saddled" with a higher responsibility, it won't do any good on Wall St., and that's where it counts most, like it or not.

Oh, I should add that I too hope the General can survive. I've rarely purchased a foreign car and don't want to start.

[caddypete]

"Why can't 2000 employees negotiate their own wages? That way you keep the performers (which I don't mind making $27.50/hr), and you get rid of the dregs that suck up wages and don't perform. You can't tell me GM doesn't have the HR resources to handle this."

I agree you have too many people protected by union contract, when you have plenty of hard working people that would gladly take those wages and work hard for them especially knowing they don't perform there is someone kicking down the door for thier job and if next year they don't get a raise because the company did poorly,they will still be showing up at work for last years wages

[JimD]

The fundamental problem is becoming obscured in the fog of details. ABC Corporation is producing more widgets than are being purchased. In the short term (2 to 5 years), ABC Corp. executive management must, should, and will produce fewer widgets. Which means ABC Corp. will require fewer employees to design, manufacture, and assemble widgets.

If ABC Corp. executive management (they are employees also) fails to negotiate a reduction of production and fixed costs, ABC Corp. executive management will be fired by the corporate Board of Directors.

And what motivates the Board of Directors to hire and fire these executives? PROFIT. Who gives the Board of Directors this authority? The owners of ABC Corp.

Maybe ABC Corp. is producing the wrong shape, size, or color of widgets. Maybe ABC Corp. is hindered by long term contracts negotiated during a time when ABC Corp. was selling more widgets. That was then, this is now. Executive management is hired to correct the problem and manage the company affairs in a profitable fashion.

Point fingers at labor or management or Toyota until the sun appears to rise in the west. When the profit, or potential for profit, goes away, the owners of ABC Corp. will sell their shares and invest in DEF Corp. And ABC Corp. will cease to exist (along with all the jobs, bennies, local tax revenues, etc., etc.).

Key words = profit potential.

[tjtjwdad]

Like it or not ... JimD hit it right on the head. P-R-O-F-I-T-S or as I said ... the almighty dollar.

This board went through this discussion back in the summer and the end result is: currently, the playing field isn't level. As time goes on it will be, but until then the traditional car manufacturers are afloat with one arm tied behind their back.

Question is; how do they get out from underneath it?

1. Through attrition but that'll take a while.

2. File for bankruptcy or re-organization and let the taxpayer pick up the pensions promised to all of these folks years ago.

Perhaps there are others but the one option that is unspeakable is to stick it to those who have, or, are about to retire.

Any suggestions!

One other thing, on 10-12 per hour wages I would find it hard to live off of that and a new car, GM or what have you would be the furthermost thing from my mind.

Happy Thanksgiving to all!

Jim

[caddypete]

The solution to this is to sell GM, let whoever takes it over honor all past negotated contracts with retired employees and renegotiate new terms for employees.Past employees did their job and are entitlted to what they earned, they were well paid and the company made money meaning they did thier job.But a company has no value when it cannot operate in the black and is doomed.Chrysler came back strong after it was ready to fold.If GM could put more of it's money into turning the company around then trying to meet payroll, It would become a world giant again.If GM told the suppliers lower our prices by 10%, or the other choice is lower what we buy from you 100% I think they would take the first choice.If you told the employees take a 10% cut in wages and pay half of the benifits you chose to take or take a 100% cut in pay and benifits I believe that they would take the first choice also.That alone would probably put GM into profit.Then they could work on research and development without worrying about capital.Then when they are back on track they can work on raises for employees,When the employees realize the company has to make money before they start handing it out to the employees unlike the union getting you a raise no matter how the company does, they will make every effort to make sure your GM car is the best car you can buy for your money like it used to be.

[tjtjwdad]

Good point(s)!

I understand that if a company goes under then their retirement plan is probabley as usefull as used "Charman".

As far as re-negoating retirements, not sure how GM operates but my guess is they have a 401K type of system as opposed to a retirement program like the government (hopefully, for their sake they have).

Jim

[KHE]

If GM told the suppliers lower our prices by 10%, or the other choice is lower what we buy from you 100% I think they would take the first choice.

Having worked for a GM supplier for many years, if given the choice that you outline, as a member of management, I would choose the latter choice... There is not enough margin to reduce by 10% and still make a profit...

[ted tcb]

TexasMan

I'm the source of the 20 month contract "rumour" at Honda Canada's plant 1 & 2 in Alliston, Ontario.

I cannot speak for the US plants, but in Canada, Honda has not hired a single full time assembly line person in over twelve months. You are presented with the option of a 3 mo., 7 mo., then final 10 month contract. You are asked if you fully understand that this is a contract, non- full time position with no future employment option.

Can you negotiate? Can pigs fly? They will just pass you by for the next willing participant. The waiting room is full of young people who will work for 20 months @ $17/hr Cdn, then apply at Wendy's at the end of the term.

My source? A human resource coordinator for Honda Canada ... not a rumour!

My confirmation source ... the assistant plant mgr at a social gathering this past summer... he said its painful to watch good young resources being let go due to the end of their tenure, to be replaced by rookies, all in the name of wage caps and lower payroll burden (less CDN CPP, UIC, and EHT health benefits on the lower contract hourly wage).

I'm in favour of GM downsizing, I've never been in a union, and I'm not taking sides.

My point is the playing field isn't currently level, and it never will be unless GM scales back its' fixed expenses.

[BodybyFisher]

This is not as scientific and complex as all of the discussion above. Hell its not even close.. BUT!!!! Tonight I went out for a drink with a friend... We happen to start talking to a 22 year old college student that has been in the US for 6 months.

He says, America makes good cars! Unprompted, he said, the Cadillac is very popular and Chinese people love it. He said me?, I like a Japanese car, it uses less petrol.....

Its perception folks, we have said it before.

[Regis]

A little observation from an Asian point of view. First let me say I'm Korean (still looking for one of those Made in Korea t-shirts for a gag) and here's the way I and some other Asians see it.

I have two Thai friends that love my sts and ask me about it frequently. They comment on the size to power ratio and styling. The one bought a VW bug because he liked the styling and it's small size. He lives downtown and parking is tight. Definitely not Cadillac friendly parking.

I know this very successful Korean couple and their kids. They own a Mercedes and a Chevy mini van. They take the mini van every week to NYC for business supplies. That's a long haul evey week and the Mrs is always quick to point out how reliable the Chevy is. This is a couple that can afford to buy most any vehicle. No Honda's or Lexus so far.

Next is a Laos student I know. She drives a GM compact. I was kidding with her, " What!....no Honda.....no Asian car???" She retorted "I'm not buying one of those over hyped cars!......besides I live here, not over there...."

Lastly I'd like to share a scary statement made by this intelligent Chinese student I befriended some time ago. I asked her if she was going to stay after she finished with school. She looked me dead straight in the eyes and stated " We're here to learn the American education and system, then we're going to take their money." "They don't know what they have.....they've never been without..... it'll be easy." Talk about snapping my head back. See Asians will confide in other Asians things they wouldn't normally share. Pretty scary eh?

I think perception is indeed our problem. And those that keep feeding that negative perception are just as bad if not worse.

[jschunke]

Perception is exactly the key. American

cars are state of the art, today. The

small Cobalt is even getting good reviews.

The question is whether they can change the

direction of the perception ship soon enough.

When I was in grad school studying EE, it

was eye opening how many Chineese students

there were. Get a top quality education and leave.

Half probably don't even know who Thomas

Jefferson was. How we allow this is amazing,

especially at public universities.

[BodybyFisher]

On the lines of what Kger2 said, the person I met from china said, American's are lazy, they don't know what they have!

[DADCAD]

Iseems to me that "NAFTA, CAFTA and SCREWYA" (don't mean to offend) mean pretty much the same.

Jim

NAFTA... the gift that keeps giving and giving...I'm out of the manufacturing/production business for good because of that fine peice of work...

[mike5514]

I have stayed away from this site by choice but this morning I thought I would take a look, first thing I thought is im not getting involved. But of course Im not very bright sooooooooooo. You all have some valid points but you might be pouring water around the fire and not on it. I have always been a buy american guy I worked for a american company and you might have purchased my product and in turn I might have purchased yours. But I have not been able to hold to that policy. Example, wallmart a while back I needed metal cutters there was a set of three made in china but wait right next to it was one (only) made in usa for the same price. I was happy with my good fortune and bought the USA one. What im trying to say it is hard to find made in usa I/we have lost that battle. There is one battle left if we dont win this one we are in danger of losing the war. Its the american automobile industry once its gone it wont come back. We can blame unions, management, or the gov. but I think the problem is the consumer they just dont know what they have.Mike P.S. I miss his postings too.

[JasonA]

One thing I noticed, while at my in-laws for Thanksgiving, is the effect of "group think" in larger metropolitian areas. A few people start to buy Japanese cars, others see them on the road, more people start to buy them, etc.

If you go out into middle America, you can pretty much count the number of Japanese cars you see in any given DAY on one hand. Back home in Fayetteville, it usually takes me both hands to count the number of Jap cars I see at a single stoplight. I thought that was interesting. Where my in-laws live in Pulaski, VA, a small mountain community in the Appalachian mountains of Virginia, the vehicle selection is BY FAR domestic. Dodges, Fords, and GMs wherever you look. Every now and then you'll see a Toyota Tacoma or Nissan truck, but the vast majority are American...and very USED American cars too (proving that despite many city slicker's beliefs, they DO last). The mail car that serves my in-laws looks to be about an '85 Buick Century.

I think it's tough to blame the consumer because there does tend to be such a price difference these days. My parents bought an Acura MDX over a Cadillac SRX because there was such a huge gap in pricing. Even the V6 SRX was a good 10 grand over the MDX. My mother-in-law has an Acura TL. I think the closest domestic competition is the CTS, but the price is really out of the ballpark. The TLs sell in the low-$30s, with a 270-hp V6 engine and sub-6 second 0-60 acceleration. All have leather, sunroofs, etc. I remember doing a price comparison to a comparable CTS and the CTS was at least $5k more expensive. This information, combined with the HUGE domestic sales spikes this summer with the employee price deals, proves that it's very much about price. We need to do what we can to be more price-competitive, but unfortunately, some of the roadblocks seem unmovable.

[JasonA]

Another thing I think interesting is how many people flock to Japanese nameplates, regardless of the actual vehicle they're buying.

The Isuzu Ascender is really a Chevy Trailblazer. The Isuzu i280 is really a Chevy Colorado truck. The new Mitsubishi Raider is really a Dodge Dakota. Right down to the Dodge V8 engine. It's even built in the same Michigan plant! But check out Mitsu's magazine ads: "The only import mid-size with a V8". It's not an IMPORT anything! People will buy it because it's sold as an "import" though. Even Toyota slapped Toyota badges on Chevy Cavaliers and sold them in Japan as Toyota Cavaliers. The Japanese were probably clueless to it.

[epricedright]

Jap cars

[stsjoe]

Scotty (Mike) I said chill, not to start drinking!

[BodybyFisher]

Scotty (Mike) I said chill, not to start drinking!

It was quite a night.... I can't even go out without getting into a discussion about Cadillac...

[TexasAxMan]

ted tcb, I was just asking, not trying to stir anyone up. The reason I called it a rumor is that I have never heard that before and it seems counter productive to me, since you have to train every new hire. I just thought Honda was smarter than that. But if Honda can restaff a car plant every 20 months, there must not be much training involved.

[ted tcb]

ted tcb, I was just asking, not trying to stir anyone up. The reason I called it a rumor is that I have never heard that before and it seems counter productive to me, since you have to train every new hire. I just thought Honda was smarter than that. But if Honda can restaff a car plant every 20 months, there must not be much training involved.

I hear you ... my reply wasn't mean spirited, just factual.

I'm not strong on rumours or speculation, which is why I don't post very often.

Honda is taking the same labour shortcuts which have become prevalent in today's business ... I might do the same if I were in their shoes. Our payroll burden in Canada includes a heavy employer contribution. Part time and temporary contract employees provide a lower level of payroll contribution in terms of provincial health plans and UI benefits, plus the obvious advantage of a much lower hourly wage and minimal company benefits.

It would appear that the days of developing an auto assembly career with high wages our long gone. Bbob's position, last summer, was why shouldn't a hard working, loyal plant worker enjoy a good standard of living? Is their long tenure worth nothing because they lack a 4 year college term? Bbob said he sees these workers every day, working their asses off in highly skilled trades.

$17 per hr. Cdn is about 30k USD annually, except you're dropped in 20 months.

GM Oshawa cannot compete with the lower labour cost to assemble the Civic, 70 miles away. Oshawa just announced the closing of GM's 2nd most efficient plant.

Honda Alliston is looking for more short term contract workers.

To compete, change must occur, however much pain is felt in the short term.

[tjtjwdad]

On the lines of what Kger2 said, the person I met from china said, American's are lazy, they don't know what they have!

I also work with some folks that came over from Vietnam and they certainly echo what some of these same things. Heck, even my folks who went thru the depression as kids say it as well.

[Ranger]

" We're here to learn the American education and system, then we're going to take their money." "They don't know what they have.....they've never been without..... it'll be easy."

This should be front page news and the lead story on every news paper and news program. Sad, true and very scary, but the "sleeping tiger" doesn't see it coming.

[tjtjwdad]

Ranger Posted on Nov 24 2005, 02:56 PM

" We're here to learn the American education and system, then we're going to take their money." "They don't know what they have.....they've never been without..... it'll be easy."

This should be front page news and the lead story on every news paper and news program. Sad, true and very scary, but the "sleeping tiger" doesn't see it coming.

I agree 100%. But with the media we have, especially the print media I think I'd be reading the following headline

" Hell freezes over! SAINTS win the Super Bowl ! "

before one of them would ever think of printing the one you mentioned, which is the whole truth (something that's not to high up on some thems priority list, IMO.

Not intending to start a political debate (nor offend anyone), just callin' it the way I see it.

Jim

[caddypete]

Yeah us americans would read that in the newspaper and jump right on it, Just like we took care of thre gas shortages we have been thru in the last 30 years, we drive past the gas station and see gas is down fifty cents from a month ago and is just barely over 2.00 and start looking for a gas guzzling SUV,somehow we forgot gas used to be under 1.50 and that was high. We have known oil cannot last forever along time ago. every country in the world understands that except us even though we are the most educated, well read country in the world.