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Thread: The American Auto Industry Story-Funny but sad and true

  1. #1
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    The American Auto Industry Story-Funny but sad and true

    A Japanese car company and an American company decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race.
    On the big day, the Japanese won by a mile.
    The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.
    Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 7 people steering and 2 people rowing.
    Feeling a deeper study was in order; American management hired a consulting company and paid them a large amount of money for a second opinion.
    They advised, of course, that too many people were steering the boat, while not enough people were rowing.
    Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 2 area steering superintendents and 1 assistant superintendent steering manager.
    They also implemented a new performance system that would give the 2 people rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners and free pens for the rowers. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses. The pension program was trimmed to 'equal the competition' and some of the resultant savings were channeled into morale boosting programs and teamwork posters.
    The next year the Japanese won by two miles.
    Humiliated, the American management laid-off one rower, halted development of a new canoe, sold all the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses.
    The next year, try as he might, the lone designated rower was unable to even finish the race, so he was laid off for unacceptable performance, all canoe equipment was sold and the next year's racing team was out-sourced.
    Sadly, this was the end of the American in the race.

  2. #2
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    Here's something else to think about: American automakers have spent the last thirty years moving all its factories out of the US , claiming they can't make money paying American wages.
    Japanese car makers have spent the last thirty years building plants inside the US.
    The last quarter's results: Toyota maked 4 billion in profits while Ford racked up 9 billion in losses. Ford folks are still scratching their heads, and collecting bonuses.
    IF THIS WEREN'T SO TRUE IT MIGHT BE FUNNY

  3. #3
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    The news in Canada yesterday was that Toyota opened a new plant in Woodstock Ontario, 1,200 new jobs, 1.1 billion dollar investment (that's Canadian $, it works out to about $25.67 US ).

    Of course the same newscast also indicated that GM was laying off more workers 200km away in Oshawa Ontario.

    I'm certanly not much of a business expert, however if Toyota and Honda are doing OK in Ontario, and the "Big Three" aren't, it must be self inflicted on the part of GM/Ford/Chrysler.

    I certainly feel for the workers of the Big Three, however now might be the time for some of them to start working for Toyota and Honda in Ontario.


    regards, Rod.

  4. #4
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    The issue facing US car manufacturers is very complex.

    Outside of the US, many "foreign" company retirees benefit from nationalized health insurance. I doubt some of the "up and coming" countries (e.g. Korea) even offer benefits to retirees. Here in the US, foreign companies have only been here a relatively short time and so don't have as many retirees. The 'Detroit 3' (as they're now called) have far more retirees that have, by contract, benefits such as pensions and health care.

    I saw one estimate that anywhere from $1000 to $1500 of the price of every new GM vehicle went to the health benefits of just retirees.

    There are also complications in rules imposed on them - they cannot, for instance, bring small/fuel efficient vehicles manufactured overseas back into the US.

    Sadly, the "canoe" story above is most likely relevant and only makes matters worse. I wonder how many "steering supervisors" and "steering supereintendents" are in a typical US auto plant.
    I wondered why the baseball was getting bigger....then it hit me.

  5. #5
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    Guys,
    hate to break up your bashing with a dose of reality, but - the Harbour Report which judges plants based on efficiency has placed Chrysler plants on a par, or slightly better than Toyota for the last two years. GM and Ford are not far behind.
    It is legacy costs that are killing the big 3 - pensions and health care. People are living MUCH longer than they used to (not that that is a bad thing) and money that was set aside previously was insufficient for the reality of longer lives.
    Note that almost all of the foreign plants, while paying competitive wages, do NOT promise lifetime benefits such as pensions and health care, discounts on vehicles, etc.
    The plants are now lean, they used to be overstaffed, but that ended about 10 years ago. They aint perfect, but they are a lot better than they used to be.
    Sorry, but you punched my buttons.
    Mike
    From the workshop under the staircase, Clinton Township, MI
    Semper Audere!

  6. #6
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    A word of warning before this thread gets too far along....we all know the rules. Let's keep this civil.
    Thanks & Happy Wood Chips,
    Dennis -
    Get the Benefits of Being an SMC Contributor..!
    ....DEBT is nothing more than yesterday's spending taken from tomorrow's income.

  7. #7
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    Like Mike,I'm a fellow Michigander

    I grew up in the shadows of Fischer body #1 in Flint, Michigan; home of the famous sit down strike that led to recognition of the union that eventually became the UAW. I have many close relatives and friends that are or were GM employees;not only blue collar,but management people too. I've witnessed up close and personally the havoc that has occurred with the demise of the American automobile industry. IMHO, the problems of this industry can be blamed on several things: !] an incredible lack of foresight caused by the hubris of the Big 3 management. While Toyota, Honda, Kia,etc. were making money on smaller fuel efficient cars,the big 3 pushed F250's and Suburbans because of the higher profit margins. 2] an incredible lack of foresight and hubris by US consumers in thinking cheap gas would always be available and the need to show social status by the size of vehicle we[yes,me included] drove. Again IMHO,the current low gas prices we are seeing today won't last.3] A sometimes unfair perception of inferior quality of Big 3 vehicles.4] The huge burden[as Mike alluded to] of retirement benefits for former employees,and excessive hourly compensation for assembly and production workers AND management alike.5] Our good old bought and paid for US government that changed CAFE standards to accomodate pressure from mgt.and UAW alike to keep the gas guzzling status quo .

    There's much blame to be thrown around,and regardless of which direction one wants to throw it,I believe that it would be catastrophic to our economy to not give the automakers public funded help in this dire hour of need. It seems at the least, incongruous that we throw half or three quarters of a trillion bucks at the Citibank and Wall Street silk ties with virtually no accountability, while Dowd , Frank,and crew grill the Big 3 execs for wanting 34 billion. Wall Street shafted us twice, first by careless management of our hard earned retirement savings and investments and again by NOT using the bailout money we gave them to free up much needed credit lines. We as a nation may be able to survive economically the tyranny we've endured at Wall Street's hands, but I don't think we will survive economically the loss of hundreds of thousands of jobs if the auto industry goes belly up.

    As a relatively newcomer here, I hope I have not crossed any lines of forum decorum, but as an off topic forum, I'm thinking,perhaps incorrectly that opinions would be welcomed and taken as ,well, opinions, open to discussion and agreement or disagreement.

  8. #8
    Once again - Rewind to the late 70's early 80's.

    All I read and all I watch is exactly what happened back then.

    OH the big three can't compete with the foriegn companies, Americans can make the right types of cars, Americans make gas guzzling cars that fall apart when you drive them off the lot on the way to fill up the tank.

    Then what happened?

    American car companies responded with vehicles that performed as well as the foriegn vehicles for the next 25 to 30 years.

    No dought - We will again... We will figure this out.

    Thats what makes America GREAT!


    God Bless America.

    FYI-Oil just dropped $10 A barrel, they say gas may drop to $1 per gallon
    and Honda just dropped their formula one racing sponsorship.$300 million per year due to lower profits.
    Last edited by Matt Ocel; 12-05-2008 at 7:59 PM.

  9. #9
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    As a 35 year tradesman of Ford Motor, I made good money for sure, but it is nothing compared to what the automakers pay for outside companies to come into a plant. $60-$120 per hour.
    Now that the automakers have gotten rid of most of their trades people through retirements, guess what. They're paying these outside companies to do the work at 2-4 times what we trades people were paid.
    That is just plain stupid.
    People say auto workers make too much money. Now you know what a load of nonsense that is, don't you?
    Last edited by Rob Russell; 12-05-2008 at 8:54 PM. Reason: remove profanity
    Never, under any circumstances, consume a laxative and sleeping pill, on the same night

  10. #10
    Quote Originally Posted by Axl Myk View Post
    As a 35 year tradesman of Ford Motor, I made good money for sure, but it is nothing compared to what the automakers pay for outside companies to come into a plant. $60-$120 per hour.
    Now that the automakers have gotten rid of most of their trades people through retirements, guess what. They're paying these outside companies to do the work at 2-4 times what we trades people were paid.
    That is just plain stupid.
    People say auto workers make too much money. Now you know what a load of nonsense that is, don't you?
    Ford motor Company in St. Paul MN is hiring full time labor at 15.00 per hour, no benifits.
    Last edited by Rob Russell; 12-05-2008 at 8:54 PM.

  11. #11

    Wink

    Lets keep in mind several things here. First of all, the current financial catastrophe has been caused by several bad decision by both the financial industry and consumers alike. The big problems that ALL car manufacturers are going through are the result of many of us not taking out another loan to buy another new car, me included. We are all part of the problem. Since we are concerned for our jobs we are reducing our spending which is making companies like the Big 3 having huge issues and it will ultimately drive some big companies out of business. I was chastised for buying my 4-Runner in 2004 because it wasn't American. I almost bought an explorer then but ALL new Explorers were having severe vibration problems caused by out of balance drive shafts. Instead of fixing the problem once and for all Ford did not do a good job of handling it and it cost them a sale. It was my first foreign car and now that I have had it for almost 5 years I would buy it again. It has yet to go into the shop because it was broken. I have NOT been that lucky with ANY of my previous American made cars. In severe times the companies that make the bold moves will survive, the ones that don't will go under. At this time the ONLY one of the Big 3 I have confidence that it will survive is Ford.

    Ok I am off of my soap box.

    Bryan

  12. #12
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    Quote Originally Posted by Bryan Rocker View Post
    I have NOT been that lucky with ANY of my previous American made cars.

    LOL, I've never had what I would consider good luck with any vehicle I've owned. That being French made, Japanese, German, and spuedo American (Jap drivetrain, American body), or strictly American. They all suck. The Japanese build the best bikes though, cheap, reliable, and they perform. Quick Harley Davidson joke: 93% of all HD's are still on the road, 7% actually made it home.

  13. #13
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    3 Beefs:

    When you are promising retirement benefits, put aside the money as you go, and don't rely on future profits.

    Do not under-estimate American innovation. We can build just about anything we put our minds to.

    We can build strong, durable, beautiful fuel efficient cars. So let's do it. GM should stop saying "we can't" and just do it!
    Veni Vidi Vendi Vente! I came, I saw, I bought a large coffee!

  14. #14
    Agreed, just look at what country has the 2 best jet engine manufactures in the WORLD, GE and Pratt and Whitney. Its time for GM decide whether they are going to make a future or fold up their tent and go home......

  15. #15
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    We could "out innovate" the rest of the world when we had the best educational system in the world producing the engineers to do it. That isn't the case any more. Our engineering schools are dominated by non-americans, since they are the best performers in math and physics. Much of that talent leaves the US after graduation.

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