Hey there, I'm new. So I says to myself, I says why not start a new thread for post #1?

GM's Secret Success - NY Times Op-Ed
http://www.nytimes.com/2009/01/03/op...prod=permalink

Not sure if anyone else has seen this but I thought it was an interesting opinion not often heard in the media these days.

"Mr. Wagoner has presided over the most sweeping transformation of G.M. since the 1920s. These moves have largely succeeded and by 2010 should strip $5,000 from the cost of every G.M. vehicle."

What do you think? Should all the executives of the big 3 be fired if/when they need more money? Who is to blame here?

There really should be an option that says something like "a little bit of everybody" because I see it as a combination of it all. First off with the auto makers and market analysts being too slow on analyzing the market demands and building the cars we wanted only several years after we wanted them, as well as focusing too much of their resources on large vehicles while ignoring the growing small car market until it was too late. Also for their uninspired interiors and use of cheap materials, something that has been commonplace within the US car industry for as long as there has been a US car industry but not necessarily a good thing. ( I for one like interiors that don't rattle and feel like some effort was actually put into them, not some injection-molded hunk of rattly plastic that falls apart and feels cheap). I don't know if I'd fire all of the Big 3 CEOs, maybe the GM CEO for building crappy cars for so long and not paying attention to demands but Ford is holding their own rather well and are bringing over a lot of their European models now that they got the hint that quality is what we really want. As for Chrysler their CEO was pretty much shoved there to try to safe the company only a year ago and they're only sucking as hard as they are because they were sucking hard to begin with, they are just the kings of the crappy interior and big bulky cars so I hope they turn that around. I'll give them another 2 years before I call for their CEO to get the can.
Also the UAW as a union, not necessarily the workers though they do play a part, should take a lot of blame for continually asking for pay increases and benefits going far and beyond what is the standard in other industries. People ask why so many US manufacturers build cars in Canada and Mexico, it's because labor prices are so much lower there, and those labor prices do translated directly to the price of the car, something Auto Companies do try to keep to a minimum. I have no problem with the auto workers being paid at least decently, but some of the stuff such as unemployment pay totaling to just over 2/3rds of their prior wage if they are let go, as well as high benefits and low health premiums does take a huge toll on the manufacturers and are a major reason why the "Big 3" are ran out of cash as fast as they did.
In terms of the Government I agree there should be some regulations, but how the US goverment is going about it I don't entirely agree with. For example with emissions regulations and fuel economy together there have been cars in Europe for years and years that get well over 50mpg, but a lot of them can't be sold in the US because they are Diesels and don't pass the US NOx and PM regulations, yet with that said the US CAFE requirements are calling for all auto manufacturers to have a fleet mpg of 35. If emissions regulations were relaxed and more diesels could be brought in then this could be achieved much easier. Audi, VW, Mercedes, and BMW all have diesels for sale in the US but they are all clean diesels, a system which costs more and thus makes the cars more expensive and less likely to sell in as large of numbers as diesels in Europe. I don't exactly agree with MPG requirements anyway, I understand that Oil is running out and is at a premium, but that should translate in the prices of Oil itself ideally, in which case those who are willing to get 12mpg and pay $7 a gallon like most places in Europe then it's their money and can blow it how they like, those who want more than that can get a smaller car or take the bus.
As for the media they only tell us what people are paying them to tell us, so they're just doing their job. I don't blame them as much as I do other sectors so I wouldn't hold them as much at fault I suppose, people just need to learn to do their own research and take everything the media says with a grain of salt. Easier said than done though I suppose.

**edit** I just realized exactly how long that ended up being, sorry about that guys. I won't hate you if you don't read it all

__________________
2001 Chevrolet Monte Carlo SuperSport

You forgot a option "ALL THE ABOVE"

The US auto industry downfall was a combination of pretty much all the people in the list. There was a thread a few weeks ago about the buyout that went over most of this but mesarius was pretty spot on.

OH and welcome to the forum!

NY Times.

Only kidding. But from a very honest standpoint, the UAW is to blame, along with a faltering economy.

__________________
2003 Ford Mustang SVT Cobra
4.6L DOHC V8 - 6 speed manual
520rwhp - 525rwtq at 16psi on stock blower
2002 Ford Mustang GT
4.6L V8 - 5 speed manual

I think Wagoner has done a lot for GM. I would really say the unions are primarily at fault, though I agree that it is "all of the above".

why what have the unions done wrong?

All of the groups are certainly to blame, but an 'all of the above' option is just too easy.

I think you have to point most of the fingers at those at the helm of these companies, but not just the current ones. They have been making terrible decisions for years, like penny pinching on simple things (like a $11 part that would stop Ford Pintos from exploding and killing people), to losing their competitive advantage in the marketplace just to appease the UAW and the short-sightedness of the shareholders. People have been sounding the alarm for awhile now for the Big 3 and the current management have done their best to turn things around, but what a big hole to crawl out of...

The UAW is at fault for not realizing that if GM, Ford or Chrysler go down all of their members will be out of a job.

Although I am not in favor of the government mandating fuel economy standards because the consumer will buy what the consumer demands, I think their part is quite limited in the matter. If they took a more protectionist stance, we'd all be whining as consumers that we have to pay more for imports.

I don't agree that the media had no fault in persuading consumers that U.S. automakers are despicable while making Toyota out to be the greatest thing since sliced bread (would have made a different, more modern analogy but I'm not sure if its acceptable here). Toyota became the #1 automaker not just by selling a niche automobile like the Prius but by selling the same full size trucks and SUVs that GM was making and having little regard for their employees, some working in sweat shop like conditions.

I agree with what you are saying for the most part. The American car companies could get away with poor quality for years (Pinto etc) but as of the 90's it became a whole new ballgame with the higher quality, more reliable Japanese cars emerging. The big three have taken too much time trying to catch up, and it's killing them. That along with the unions/retirees. It's a huge problem, but what they can do? Either go bankrupt or screw over all of their employees/retirees...

I think all are valid points, but I think that the auto makers and the Unions are not the real problem here. Sure, it didn't help that expenses had been going up, but that will happen with inflation, always has. I think the root of the problem has nothing to do with the auto industry, it has to do with the consumers. For the past oh I don't know, maybe ten years or so (probably more now that I think about it), people have been charging up there credit cards and then being unable to pay for the charges. Why do you think there have been all these bankruptcy commercials lately? A while back I learned that the average American has something like a negative (-) income of $1000 per year. No one cared about just charging big item purchases. This inevitably caught up, and caused the banks to go under.

I am fairly sure most of you guys already know why the banks went under.

And now that the banks have stopped giving money out, people are no longer buying cars, they just can't afford it.

I guess what I am really trying to say is that the big 3 might not have been making the "best" cars for the current economy, but that is not the real problem. People would still buy those cars except for the fact that getting a loan today is a hell of a lot tougher than even just 7 months ago.

By the way, welcome to the site.

What I'm about to say is all opinion based on factual evidence:

Unions are a mobocracy. Instead of really caring about the greater good, they selfishly care about their own paychecks, and not what's best for everyone. The UAW acts as a political machine, and with talk of killing the secret ballot, it will truly be a mob again. GM employees make pretty much double than that of an American employee of BMW, Mercedes-Benz, or Toyota. A UAW member will say that's not true, and that they only make $38/hr instead of $72/hr. Not true, with their all their massive benefits, they in fact make $72/hr. GM barely makes money on it's cars because the cost of production is so high. It's not because American car companies bulid trucks and SUVs, (F-150 and Silverado were number 1 and 2 in sales in 08 out of all cars/trucks) it's because their employees demand an absurd amount of pay.

Not only all of the above, but Unions go on strikes more than they work (exaggeration but somewhat legitimate). Have you ever seen a bunch of strikers stand outside a factory? Instead of working like they should be, they're out there demanding benefits that no one can afford to give them. Every see Union construction work? One guy is actually working, while the rest literally sit there and watch him.. yup.. that's union work for you.

Unions had a place in the 1920s and 30s when physical working conditions were bad. Modern American factories and workplaces are all inspected and are fine places to work at, thus IMO, rendering Unions completely useless. Unions starve companies of any capital they earn, and thus, make the company look bad. Unions need to go, but unfortunately, unless U.S. automakers reorganize under different names (very unlikely), the Wagnor Act of 1931, yes, 1931, will tie them down to Unions forever.

__________________
2003 Ford Mustang SVT Cobra
4.6L DOHC V8 - 6 speed manual
520rwhp - 525rwtq at 16psi on stock blower
2002 Ford Mustang GT
4.6L V8 - 5 speed manual

On that poll up top, there are three answers to the "at fault" question:

The Government (CAFE, Environmentalists, Progressivism that should've been over in the 40s)

The UAW.. as explained above.

The American Media. The media has a ridiculous effect on people's minds, and they are yet another political machine that pushes an agenda rather than the real news and facts.

__________________
2003 Ford Mustang SVT Cobra
4.6L DOHC V8 - 6 speed manual
520rwhp - 525rwtq at 16psi on stock blower
2002 Ford Mustang GT
4.6L V8 - 5 speed manual

i agree... i know this person who is waiting for this supposed 350 mile to the gallon car to come out.. so instead of buying the fusion he was going to buy he isn't buying anything.. (this info he found was on the web..) i think its false info... i also see alot of japenese car companies on my news channel being shown what great cars they are but never any USA cars....

First, I am an 11 year U.A.W. worker at the Kokomo, In Transmission Plant,so Im sure many people will see my veiws as biased. I am also a automotive nut,I love cars. There are many problems in the auto industry. First problem as I see it is the lack of passion in top management. If you look back in history at the heyday of the Big Three (back when what was good for GM was good for America) you will find that almost all the top executives lived cars. What do John Z. DeLorean,Dale Smith,John Beltz,Lee Iacooca, or Pete Estes all have in common? Passion for cars! They all started out very low on the totum pole and worked there way to the top over 20-30 years! After working with the same company for a long time, you devolope a sense of pride, you want to see the company do well. Look no further than Chrysler current CEO. He was head of Home Depot before working in the auto business. How does selling 2x4's and building supplies prepare you for running a auto company? It doesnt! All that matters is the pursute of the all-mighty dollar!( remember the GM-Chrysler merger talks a few months ago?)
Second problem is no concern for the well being of the company. I have read that Rick Wageneer makes more money per year than the entire board of directors for Toyota! If you are compensated for running the company in the ground, where is the incentive for making decesion that are best for the long term?My opinion is, if the company makes a profit, you are worthy of a performance bonus. I dont receive a profit-sharing check if Chrysler doesnt make a profit, why should managment?
The media also is to blame. Everyday in the papers you read how the U.A.W. are overcompensated compared to the transplant automakers. Truth is we dont make much more per hr than Toyota or Honda workers. The big difference in hourly compensation is the "legacy costs". The Big Three have more retirees because they have been here long before the forerign cars! I have high hopes that the American automakers can survive long enough for the forighn carmakers start complaining about paying pensions and benefits for there retirees! The media also reports how domestic carmaker's build to many "gas guzzler" SUV and trucks. Why do you think there were so many of those vehicles to choose from? Becuase thats what people wanted to buy! When gas was cheap, nobody wanted small cars. Gas gets expensive, suddenly small economy cars became popular. If there was no market for trucks and suv, do you really beleive Toyota & Nisson would have spent billions to devolope there own big vehicles?
I could go on like this for hours, but hopfully some people out in readerland will stop and think about how things have gotten to where there are today. It didnt hapen overnight, and wont be solved quickly either.

I agree on the lack of passion for the most part. The head of Ford drives a Lexus, therefore the head of Ford is a complete idiot. True. However, all the people you mentioned didn't get very far. When I see enthusiasts rise to the top, I think of the race car drivers like Steve Saleen, (Jack?) Roush, Ron Fellows.. etc.

When you're talking about getting a bonus when the company does well, by the same logic, shouldn't you get a serious pay cut when it's not doing well? I don't think that would be good. Also, in the early years when GM, Ford, and Chrysler were thriving, they could afford to pay unions pretty much whatever because it wasn't worth it for people to go on strike if you could pay them. I understand your pain when looking at the salaries of other people.. but having said that, upper management is not easy.. the guy isn't sitting in the corner office all day. On top of that, even if he put his entire salary back into the company, it wouldn't make a difference.. serious debt is serious debt.. $5 million doesnt do anything when you're in the business of billions. But check your source on that fact about Rick Wagnor.

I agree with you on the basis of trucks and SUVs. The media, on the whole, is incredibly biased and stupid. Trucks and SUVs are incredibly useful vehicles, hence their being at the #1 and #2 spots for best sellers.

I feel for the Big 3 a lot.. but when you have big problems.. you need big solutions. People are always pointing the finger at management (in lots of things). Most of the time, they're right.. but some of the time, companies crumble from the bottom up. I hope that doesn't happen with Ford and GM.

__________________
2003 Ford Mustang SVT Cobra
4.6L DOHC V8 - 6 speed manual
520rwhp - 525rwtq at 16psi on stock blower
2002 Ford Mustang GT
4.6L V8 - 5 speed manual

Huh? Didnt rise very far in their field? Lee Iaccoca graduated from college,and started out sweeping floors and worked his way to the vice-presidency at Ford(father of the Mustang), left Ford and became president of Chrysler. John DeLorean (the father of the GTO) was head of Pontiac Engineering,left Pontiac for Chevrolet, (played a important part of the Monte Carlo). Pete Estes was Ceo of General Motors during the heyday of GM. John Beltz & Dale Smith was head of Oldmobile during the years when Olds could due no wrong. Pretty good credentials if you ask me!
When Henry Ford was getting started, he did the unthinkable and started paying his workers $5.00 a day. He didnt do this out of the kindness of his heart, he did it so his workers could afford to buy the product that they were building! Basically, he created the middle class. Now today people bitch about what the U.A.W. pays. The last contract between the Big Three and the UAW states that all new hires will make about half what they would have made before. Who will have the money to buy a $30,000 car or truck on $15 an hour? Not many poeple I know! Short term gain, long term loss.
I'll admit that I dont know for a fact if Rick Wagneer makes more than the Toyota board of directors. That is what I was told. My point is if your bonus and compesation is not performance related, where is the incetive to do what is best for the company? Bob Nardelli went before Congress to ask for loans to keep Chrysler from going under. Why didnt Cerberus use some of its own assets to keep the company going? Because they have no passion for the auto industry! When Diamler sold its share of Chrysler to Cerebrus, I pretty sure all they saw was dollar signs! Now that there is no money in the auto business, suddenly Cerebrus didnt want to be in the auto business? What did they think they were buying?!
One fact that I'm very sure is accurate is that labor and "legacy costs" amount to roughly 10% of the total cost of a vehicle. So, why is labor the first place people look to explain the high cost of todays cars?
Im also very aware of the fact that being a CEO is not all fun and games. The point I was trying to make is that todays sense of entitlement is VERY different from what was acceptable in the past. I have no problem with top management getting large bonuses and stock options, but ONLY if the company does well. Part of the conditions of the goverment loans was that the UAW makes concessions. Fine, but make sure the sacrifices are shared by all. Dont ask me to tightnen my belt while Wall Street puts another notch in theirs! (Remember AIG?)
As I said before, I could go on for hours, but I think have vented enough for now.