History never repeats itself (just old men) but sometimes there are close
parallels. I fear your politicians will subsidize rather than bite the
bullet same as ours.
So far as I understand it the bullet in question is the $2000 per car the
big 3 pay in benefits (health and pensions) to their existing and former
work forces. These costs are not incurred by the transplant companies like
BMW Toyota et al. So they either have to be negotiated away. Or the
companies go to Chapter 11 in which case they are automatically released
from those obligations.
Regards
Mike
-----Original Message-----
From: TechNet [mailto:[log in to unmask]] On Behalf Of Bev Christian
Sent: Saturday, November 22, 2008 5:47 PM
To: [log in to unmask]
Subject: Re: [TN] A Modern Parable
Inge,
Read an interesting article in the last couple of days. It was comparing the
U s car situation with what happened to the British car industry. There when
things got bad they amalgamated them all into British Leyland, things
continued to deteriorate, the Brit gov pumped in umpteen millions of
taxpayers money, the company needed yet more, then the Brit public said
enough is enough and it was sold off picemeal - Jaguar, Rover, Austin minis,
etc. They are now owned by the Germans, Chinese and Indians, but cars are
still being made in England. Are we about to repeat history?
Bev
----- Original Message -----
From: TechNet <[log in to unmask]>
To: [log in to unmask] <[log in to unmask]>
Sent: Sat Nov 22 12:39:03 2008
Subject: Re: [TN] A Modern Parable
GM and Ford reminds of a big boa constrictor which swallowed an entire cow
and is hence so heavy, slow and immobile, that it can do nothing when the
big caterpillar comes roaring, Let's hope that the later runs out of
petrol, and that the former will finally wake up after a long digestion,
also that he learnt that it's far better to eat many small portions and
remain fast and strong. I have a feeling that the roles will shift. If the
japanese appetite goes on like today, THEY will be the big fat one and will
not be fast enough to run when a new scenario suddenly forms. What this
could be, I've no idea, but maybe the american car makers at that time have
the best conditions of the two.
(Myself, I don't like Toyota cars. They are good, no doubt, but they are
too 'plasty' and reminds more of large scale Dinky Toys than real cars.).
Yesterday, I saw a one hour movie about Ronald Reagan. Wow! I mean N/S RR. I
would like to spend one day onboard that carrier. Not to see nuclear
weapons, guns and missiles, but to see the engines, the steam catapults, the
large elevators, the kitchens, see the enormous radar equipments, see how
5,000 people can live on a boat etc. Just wonder if NG are planning another
one, because Ronald Reagan was designed 20 years ago. She (he?) is built for
working another 30 years. The cost was 20 billions USD. It's all crazy of
course, but I can't help being speechless when I see such creations.
Inge
----- Original Message -----
From: "Ian Hanna" <[log in to unmask]>
To: <[log in to unmask]>
Sent: Friday, November 21, 2008 1:17 PM
Subject: Re: [TN] A Modern Parable
Why not assume that the car companies themselves are designed and built
with attention to design detail and quality of execution that
corresponds to their respective vehicles...perhaps a more robust design
is in order
-----Original Message-----
From: TechNet [mailto:[log in to unmask]] On Behalf Of Syed Ahmad
Sent: Friday, November 21, 2008 3:56 PM
To: [log in to unmask]
Subject: Re: [TN] A Modern Parable
Mitt Romney wrote in yesterday's NYT about the $2k extra labor cost. But
why the US automakers cannot compete in the cars which they build
offshore with equivalent Japanese cars built on-shore?
Should $2k make much difference anyhow when people on the street are
sold on monthly payment and not on the price of the vehicle?
American automakers have the advantage that many Americans buy
American-made otherwise their sales could be even lower.
Someone on NPR was saying that Japanese have much less number of dealers
so they can weather ups and downs better.
25 billion can buy 1 million $25k autos and 2 million $12k autos. Any
number in between the two should cover all employees of IPC members
companies and their friends. Only thing we need is a private jet for the
TechNet webmaster to go to DC and lobby.
-----Original Message-----
From: TechNet [mailto:[log in to unmask]] On Behalf Of Pete Houwen
Sent: Friday, November 21, 2008 12:03 PM
To: [log in to unmask]
Subject: Re: [TN] A Modern Parable
It goes beyond the UAW for sure, but an interesting number:
Hourly North American labor cost, GM: $81
Hourly North American labor cost, Toyota: $35
There's about $2K extra in every GM (Ford, Chrysler) car for labor. All
else
being equal, consumers will spend $2K less. So, Detroit needs to cut
corners,
and still sell small cars at a loss just to compete, meaining they need
to sell
more high margin SUVs (still at that disadvantage with more cut corners)
to
make up for it. So some of those poor decisions and lowered quality are
effectively a matter of unmanageable labor costs.
And considering you can't incentivize the workers by firing the bad ones
and
promoting the good ones, all you have are inspirational posters.
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