2 problems with this.

1. The boards of directors of the major companies are the same cats. The CEO of one company is frequently on the Board of Directors of MINIMUM 3 more major corporations. Pretty much all of 'em do the same thing. So what you wind up with is this club that takes turns voting each other huge salaries, regardless of past or present performance of the company. And if they do get canned, the get a big ol fat seperation check. For an easy example, check out the performance of the Union Pacific Railroad over the last 11 years. Same CEO, stock price at best stagnant, and frequently pathetic, 3, count 'em 3, meltdowns in service that impact very nearly every person in the country when you figure out goods and coal provided to utilities and stores, and the same CEO presided over all of this.

2. As far as the part of a CEO taking a hit in the pocket book when his company lost money, when has that EVER happened? Keeping with the UP theme, Dick Davidson got raises every year, and HUGE stock options with really low option prices. For running the nations largest railroad into the ground not once, not twice, but three times.

 

GM has nobody to blame but themselves. They forgot the customer. If they would build a good product that customers want at a descent price they wouldn't be in this position. But when bean counters and marketers run the company and not engineers obviously we know what happens. Crappy designs, cost cutting measures that reduces the quality of the product.
I'm a firm believer of letting the engineers do their job and keep the bean counters and marketers under a tight noose. The end product may cost a little more, but the quality will be much better.

MikeyB

 

Lower wage labor isn't all it is cracked up to be.

I know a company that had a plant in Minnesota and one down in the a southern state. Wages down south were less than in Minnesota. The MN plant had a less than 10% reject rate while the plant in the south was around 30%.

Management decided to close one plant. They closed the plant in Minnesota because it was cheaper to operate the plant in the southern state even with a 30% reject rate.

Brian Elfert

 

My bro-in-law worked for the GM plant in the San Fernando valley
[So.CA] for 20+ years until it closed a few years back.

Lots of stories about the "floaters" that wandered around doing
nothing, etc.

But main problem with unions (I was a member of 3) is the union
folks who are more interested in putting bucks in their pockets
than equitable agreements between the union and mgmt.

The Supermarket strike here in CA is a prime example. Workers
shot themselves in both feet - ultimately sold out the new-hires.
Went without pay for long time, many went to other lines of work.
The union bosses NEVER missed a paycheck!

Years ago I was a member of (then called) Retail Clerks in L.A.
You were supposed to go to a union meeting when you joined -
although not enforced. A guy I worked with wanted to go, so
we did. Moderator announces that there's a motion on the floor
to give the union head a 10K annual salary increase, looking for
a second for the motion.
[Should point out that the workers were making about 8K a year
then, and the boss was already at 35K]
The guy I was with sticks his hand up, moderator points to him,
expecting the "second". Guy with me asks: "Why does Mr. X need
such a large raise" - or something to that effect!

Thought we would be executed! Nope - moderator never missed a beat,
ignored my friend - got the second [instantly]. Boss got his raise!
We did get lots of nasty looks though - but I'm sure they just figured
it was a couple of smart-*** kids.
JC

 

Agree...I have also been associated with three unions. Teamsters, CWA and Food Processors. Unfortunatly, I have also been in close contact with reps from the Teamsters and CWA. What a buntch of high rolling windbags. JMHO
(one of them is my brother-in-law)

A similiar fiasco happened to the General Tel guys in Cali several years ago. Lost their butts, and many of them their jobs.

 

ive been very close to unions all my life.ive been involved with teamsters and mine workers.in case some of you dont know,union officials are elected,not appointed.if you dont like the results of whats happening,vote them down.if you think you can do better,campaign and run for office.simple as that......its not up to the officials to decide whether or not to take what the company offers,its up to you.you vote on contracts.....some union labor is great,some is not.it really comes down to pride i think.i believe a good,hard working,honest man with alot of pride in himself is going to be an asset,whether he is union or not........but if a man is truly trying to better himself and his life for his family,and is being honest with himself in what he deserves from his company,then strikes for it,,,theres no lower life than a scab willing to cross lines to take his job.this same scab might be willing to take the job for lesser pay now,but in a few years,when he hasnt been given any raises,and has no benefits,has nobody to complain to but himself,as he has cut his own throat and empowered the company with his actions......in a perfect world,companies and employees alike would be fair with each other,and there would be no problems,but this will never happen.................bama

 

I have worked union for many years.. I work for the local Natural Gas company and work pretty hard all day for my paycheck...

The Company for many years has tried and tried to put Tempoary part time workers in lieu of full time union workers. About 5 years ago they put many part time workers into Jobs answering phones, working at payment offices and reading meters. They worked for the same wage but were given no benifits and when they reached a spcified amount of hours they were let go because if they continued to work they would then have to be made regular employees.

With that incentive (knowing they would loose thier job a specified time) their productivity was 50% to 60% of a union worker. When they came close to that time when they would be terminated many had on the job injuries and then went on workmans comp.

The temp employees that answer the phones are not allowed to handle "emergency calls" such as gas leaks. If they receive a call of this nature they put the person on hold until a regular employee can answer the call..

I guess what it comes down to is if you give a good wage you get better quality workmanship. Everything I do, every weld I make I bury at the end of the day.. My name is also on that weld and that line until it is taken out of service. Do you want a responsible person making a fair wage putting in and maintaining the gas lines on your property or a tempoary worker that will lose his job in a few months and never has to answer to his workmanship a few years down the line???

I know that there are a few that are protected by the unions and don't do squat but those are a few individuals of a many that go out there and do a good job every day..

Gerry

 

I have seen both sides of the union issue, and I believe it comes down to the values and concience of the individual. I never worked a day in a union shop, but I know there are good men there too, but then when living in the Detroit area a buddy snuck me in for a tour at the River Rouge plant. Makes ya wonder about the quality of the product when you see hypodermic needles on the floor!
As to the crisis at GM, I personally think some of the problem may be with SOME of their products, but I think the underlying problems center around the fact that in the fat times (a LONG time ago) they agreed to unrealistic contracts that gave the workers just about anything they wanted, and now they are sinking under the burden of these stupid contracts. There is a reason that GM is referred to as the worlds largest NON-PROFIT healthcare provider. Factor in the No Man Fired clause, and you have a guaranteed losing situation. Paying a man the same amount if he works or not doesn't fly when there are hungry competitors who are not tied to these "Legacy Charges". I am told GM is indirectly the largest buyer of Viagra! Between their pension plan and healthcare costs, there is something like $1500 profit sucked off of every vehicle built! I have made good money shorting GM stock. Where I messed up was turning chicken and covering my short position (bailing out) in the upper $20s. Ohh well, could be worse.....could be Kirk Kirkorian who owns some 30,000,000 shares at around $31/share. Sounds like a brilliant way to leave the ranks of the richest men in the world!

 

I followed a new Cobalt yesterday on my way home. Not a bad looking generic rental car with cues taken from the Neon if that's your fancy. But the muffler? People notice the muffler if you can see it from up high in a large pickup from behind. It stands out like a sore thumb. Is it a heat shield or is that the muffler all wrinkled and about as cheap looking as it gets. It's only a muffler? It's out there big as life and people spend hundred of dollars for a polished muffler. We do and we can't even see it without climbing under the truck. Little details that give the impression of quality or junk. Bad move GM management on a tiny detail with big impact. The Trailblazer is almost as bad. Wife said it looks like the back end is falling out. Her Durango's spare and muffler are hidden. Much nicer look.
The local auto parts store uses Colorados. It looks like it's been rear ended right off the showroom. And the front end is hidious. In work trim it's hard to imagine it ever passed the drawing board. Ugly doesn't sell except to fleets and diehard loyalists.
Yes there are some unions that bully the companies. I don't agree with that either. But there's nothing rediculous about a decent living wage and benefits. A good CEO is worth a decent income. But while the CEO and E board is the brains of the company, the workforce is the backbone. Without either, the company will fail. Both are important. Middle management is nothing but fat and cholesterol. Most companies have too much fat and not enough backbone. GM is lacking brains, has too much fat and the backbone has arthritis. And GM is looking for Eckerd's for aspirin.

 

I have noticed some blame the unions, some blame the market.

Does anyone remember the technology crash of 2000 or so? too many companies rely on their stock price to determine how well a company is doing.

Right now, the oil services company I work for is making a nice load of money, our CEO is a genious (and in the top 10 bonuses in Houston). When the oil market tanks again, it will be him that is blamed for the investors not being happy and selling off their stock.

What I think GM and other auto makers need to be concerned with is that they are building durable goods. They cannot expect consistantly higher vehicle volume sales. With intrest low, everyone upgraded to new vehicles. now there are a lot of nice used vehicles on lots not moving and auto companies trying to continue to sell. Basically, the market is flooded with new vehicles and nice used vehicles. The buy here/pay here, put anyone in a car dealers now have vehicles that are 5 or 6 years old, versus 10 to 15 years old that they had a few years back.

 

Call it official,
GM to lay-off 30,000 workers and close down 12 plants by 07. You know GM just did'nt get it, they failed to listen to the average Joe. I recall back in 1999 when I bought a new Surburban, I have very little complaints about it, with the one exception of its weak rear end. Needless to say when I was in the market for a more durable vehicle to meet my need I looked at Chevy first. I wanted a 2500 Suburban with the diesel (duramax/ali). Of cousre, Chevy had not made one since the mid 90's. And the plans for one was'nt being put into motion until maybe late 06, 07 or 08 due to the tranny and frame issue that kept the two from mating. I would at every chance I could get comment on every questioner that they were failing to meet the need of the average Joe and how they had focused their product line to overly expensive vehicles (corvette, Caddies and 50k plus SUV's) All I got back in return to my comments were "We appreciate you taking time out to answer our questioner and that in the future we hope that a vehicle GM will be your next vehicle of choice". ***!!!!!!!. Maybe they misunderstood me and what I was saying to them . Still wanting to be loyal to a brand nearly all my family has grown up with, I was left looking at the trucks. I soon found out how proud of their trucks they are. They then gave me no choice but to look else where. I also got very up set with their "well if you don't buy it someone else will atttitude". Carma's a bi$(h aint it. Now they are doing everything they can to basically give away vehicle and they cant.

 

Look at Hilti... Their tools are engineered to do something in particular very well. It cost X dollars to build the product, add a little for profit, etc. They don't even advertize much. Their products speak for themselves.

GM designed crap no one wanted, let the accountants decide how to build it and what do they have now? Fugly, poorly built cars that they have to have a gimmick to get people to buy...

 

When GM put accountants in charge of the company, they lost thier competetive edge. Accountants don't compete and they're not car guys. To them, GM was building good vehicles. How many accountants do you know that want a 400 hp, 6spd hot rod? Every one I've met drives a 4cyl POS FWD. When gas went over $3/gallon, the local paper was talking about how some people who's cars recommend premium, were filling with 87 octane. The guy they used in the article owned a Volvo (they are all turbo'd and recommend 91 octane). He said it saved him $3 a tankfull to run 87, and didn't notice any difference. He was an accountant.
I also agree they rode the SUV and trucks money train, without developing a decent car. I grew up a die-hard Chevy guy. I own 2: a '68 Camaro and an '87 1/2 ton.(I put stuff in the bed that I don't want in my '05 Dodge).

 

The same critiques for GM can be said for Ford and Daimler-Chrysler as well. And so, here are my "non-objective" critiques...

What do they have? Ford probably has the best options, but that's because Ford has the best management- the Ford Focus was a good car, and the new Ford Fusion looks good as well. The Taurus is descent, or so I've felt from the one's I've rented. The Crown Victoria is the best example of "CAR" in America, built like they were 30 years ago with decent power. The 500 is a bit of a failure I think; it doesn't compete in the "quasi-luxory" market as well as European imports do. The Ford Mustang is still as popular as ever, too. While we don't like them, Ford trucks are good "trucks" and are selling like hotcakes. F-150's are a dime a dozen. Ford seems to have good, quality, typically-for-them conservative designs. The base-line car company.

Then we move on to more radical Daimler-Chrysler. First of all, the Town & Country has the mini-van market tied up. Like anybody still prefers minivans over SUV's. They have some more radical designs, like the PT Cruiser, 300, Magnum and the new Charger, which is infringing on the Mustang. Their cars all seem to be selling good, even though I haven't ridden or driven many. But for the most part they seem good. Their more traditional cars, the Sebring, Stratus and Neon, cannot compete with their European and Japanese rivals, but I can see why DC doesn't want to admit defeat on that plane just quite yet. Overall DC seems to be catering to the more "hip" crowd, an inventive, varied, unique line up. And DC's always been like that.

And then we move on to GM, and I have no clue what they're doing. Their cars are the Cavalier (which cannot compete with any Jap car even on any level), the Sunfire (which is a rebadged Cavalier), the Saturn ION and Cavalier(which are two horrible failures to cater to ricers), the Pontiac G-6, Grand Am and GTO (all of which of descent cars but boring as all get out), and the Chevy Monte Carlo (which is branded as a driver's car and is supposed to compete with the Mustang, but doesn't.) Their 4-door cars are the Cadillacs, which are good cars but overpriced compared to the European imports (but they do have some kick in them), 5! different models of Buicks (Century, LaCrosse, Lucerne, LeSabre and Park Avenue, all of which cater to the same market), 4-door versions of their 2-door failures, the Chevy Impala (which, having driven one, I must say is the stupidest designed car of all time), and a Malibu Maxx (which probably fits some market in some little county in Iowa). The GM list is basically a really convluted and redundant mish-mashing of poorly-designed vehicles.

I guess I'll attribute GM's ineptitude in that they have so many different models. Where Ford has 10 cars, GM has 40. I mean, come on GM. You guys are blowing it.

And that was my totally accurate roundup of the three auto-companies.

 

We see the same logic everywhere...the contractor yells he ain't makin' no money while the help scrape by on dirt wages. (he lives in a mansion) The "DOD" is trying to reduce Bennie's of it's workers calling 'em communists for resisting. The average auto worked loses 22 weeks of employment every five years due to model change over, low sales, poor economy...average that out with the wages taking into account how much it costs to refinance everything like your house and vehicles so you don't lose them during down time and paying personal loans off with high interest rates for the same reason...sounds fair to me too...