Tuesday, November 18, 2008

Need for Change in American Carmanufacturing

Thanks to Barbara Baty.

Good Letter in Today's Paper: Need for Change in American Carmanufacturing

In the typical arrogant fashion of GM brass, their resident idiot clueless CEO the other day was telling everyone how it was gonna be with this bailout. He was cocky and arrogant and you'd think that nothing at all bad had occurred under his leadership. I agree with one of the oped writers: If they give the BIG 3 bailouts, there should be a condition that the executives and the boards of directors should all be fired and replaced by autonomous innovative leaders with real insight, integrity, objectivity, and honesty. I mean, what we're really talking about here is saving a 100-year old industry with millions of jobs and which affects many many millions of others. We're talking about saving the backbone of the great American middle class in this country! You simply cannot heal a sick mind with a sick mind. Thirty years of failure and LACK of innovation or even slightly [not] "getting it" is why the Big 3 are in the toilet while other car companies have moved operation here and, in comparison, are thriving! What's it gonna take?

American carmakers need to pop the hood if they want a bailout
Saturday, November 15, 2008 3:16 AM

Before the government begins extending taxpayer-funded loans to General Motors, Chrysler and Ford, I would make the following suggestions and observations.

First, they must assess the cost of human capital. Why is it that almost every major world auto manufacturer is now building cars in the United States, but for some reason GM, Ford and Chrysler cannot seem to get it right?

Before doling out taxpayer-funded loans to the U.S. auto industry, our government should be demanding that management and labor conduct an exhaustive wage-and-benefits cost study of the foreign manufacturers' U.S. work force.

Clearly a market wage-and-benefit package has been set by the foreign manufacturers building and designing cars and parts in the U.S.

If GM, Ford and Chrysler's union wage-and-benefit costs are significantly higher than their international peers making cars here in the U.S., the chance of them ever effectively competing in the auto marketplace and repaying their taxpayer-funded loans is somewhere between slim and none. This wage-and-benefit analysis should start with the chief executive officers and finish with the people on the third shift sweeping the plant floors.

Management and labor must realize that their collective futures depend on comparable wage-and-benefit programs.

Second, the auto consumer lacks confidence in the U.S. automakers' products. Toyota and Honda are examples of automakers that have earned the trust of two generations of consumers by churning out low-maintenance, high-quality, high-resale-value cars and trucks.

The consumer must feel confident in the quality and dependability of GM, Ford and Chrysler. In order to begin rebuilding trust, the three U.S. automakers should offer at no cost to every purchaser a seven-year, 100,000-mile bumper-to-bumper warranty.

If they ever want to think about being the "Big Three" again, they must make it clear to the consumer that they are both confident in and committed to the quality of their products and that they are willing to stand behind those products over the long term.

Finally, all three of these automakers should consider simplifying their product lineups. Toyota has Lexus on the high end, Honda has Acura, and Nissan has Infiniti. Why is it that GM has Chevy, Pontiac, Buick, Saturn, Saab, Cadillac, Hummer and GMC? Does Ford Motor need Ford, Volvo, Lincoln and Mercury? Does Chrysler need the Dodge, Jeep and Chrysler brands?

Is it just me or doesn't it seem odd that Chevy and Pontiac, both GM brands, compete against one another? Is there that big a difference between a Ford and a Mercury? And if there is a difference, should there really be one?

Why not focus marketing efforts on a base line of cars and one luxury line of cars?

Coming from a large family with a dozen aunts and uncles and more than 30 first cousins, I can tell you with certainty that most all of them have lost confidence in the Big Three.

They have lost confidence because over the past 20-plus years, they have had repeated bad experiences, including high maintenance, 80,000-mile engine and transmission blow-ups and low resale value, with all three of the U.S. automakers and finally heeded the advice of friends and other family members and bought foreign.

But now, even the foreign is not so foreign. Honda is in Ohio and Indiana. Toyota is in Kentucky. Mitsubishi is in Indiana. BMW is in South Carolina with other offices in New Jersey and California. Mercedes-Benz owns plants in Cleveland, Detroit, North Carolina, Oregon and Alabama. Nissan is in Mississippi and Tennessee. Volkswagen is on the way. The list goes on and on.

American workers and engineers can build and design exceptional cars and trucks. That is precisely why most every world manufacturer builds cars, trucks and parts right here in the good old U.S.A.

However, when these same workers and engineers are stuck in the poor management and labor models of the U.S. auto manufacturers, they fail miserably. These three companies must go through a rapid and fundamental restructuring in order to regain competitiveness if they are to qualify for taxpayers' loans.


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