Vicious Rants of an Angry Yellow Man

I read recently that GM is closing 12 plants and cutting 30,000 jobs. Also, it appears that Toyota will surpass GM as the leading auto maker in the world in another year. Being originally from Detroit I feel rather sad that this is going to happen so soon. It is, however, an expected development. Both management and the unions are to be blamed for this.

For many years there was not much global competition in the auto industry so GM and other auto companies could name their prices. The union could also demand wages that were much higher than expected given the skill of the work involved. This is no longer the case and hasn't been since Japan became a strong competitor more than 25 years ago. Detroit responded somewhat to the challenge and the quality of work has improved over the years. It is not enough, however. The quality of U.S. cars is still not as good as many of the imports. The managements and the workers must share the blame for this. Better quality control must be put in place by management and be followed by the workers. As for the cost of making the cars, the unions must give a lot more concessions or they will lose more jobs. The management is also making way too much money. Executives in our industries, including the auto industry, make much more money than executives in other countries. If executives get bonuses when the company is doing well, then they should get huge pay cuts when the company is doing poorly. I never hear the president of GM or any other company cut their own wages or stocks when they lay off workers. They are responsible for leading the company into red ink so why are they not suffering for this. If GM loses its top position to Toyota, then the president of GM should make less money than the president of Toyota. I don't see that coming.

There is complaint from management that pension cost for retirees are hurting the company because foreign companies have less retirees. Well, that is no excuse because the money for the pensions should have been put away when the workers were stilling working. There are actuaries who can do this type of calculation. Money should have been put away years ago and not now. Good management would not have let this happen. Negotiation for wage concession and a defined contribution plan for health care should begin as soon as possible. I don't see that coming.

Beyond help from the union which is absolutely necessary, the management has to be more creative. SUVs may be making lots of money for automakers now, but I think eventually energy efficient cars will be the determining factor whether a company survive in the future. GM had the electric car years ago but is not making them anymore. Honda has a hydrogen powered car being tested now. Where is our technology? Instead of hiring lobbysts to block stricter government standard for fuel efficiency, GM and other domestic automakers should spend more money to exceed those standards before the Japanese and Europeans are able to do it. Pay for the best engineers instead of the best PR people. We have to think more long term or we will be in more trouble. Just think, China is not making many cars now but I am sure she will be. Can you imagine the competition then?