Could this be why the Auto Makers are failing in the USA?

source:
info.detnews.com...

It seems the assembly operations may not be in the US much longer.
Now, the big 3 as well as Toyota and others assemble in the US. But the Ford plant in the video (link above) may be a tell tail sign on the future, most likely without a union.

reply to post by imd12c4funn


Thanks for the post

things have sure changed over the years.


Agreed the unions were great back in the day when there were no laws for workers but that has all changed with new laws and regulations now it's just for $$$$

I think the unions have outlived their usefulness now it's just a drag.

I read someplace some workers make as much as $71 an hour on the assembly line AND THEY wonder why the US cant compete with foreign cars.

The auto manufacturers are NOT COMPLETELY STUPID
Good post

Great post, bubbaloo!!!

I'm a Labour Relations Manager in a Tier 1 automotive supplier organization.

While labour costs, benefits and the like are definitely a concern, it is exactly the problem spelled out by the reporter in the video that precludes us from being competitive . . . the lack of the ability of all workplace partners to be innovative enough to see that the greater good can be realized once you think outside of the box and accept that things must change.

Unfortunately, everybody's protecting their own fifedom, and it is only to their own detriment.

Star and a Flag for ya!!!

What I don't understand is why GM need a bailout when they're making money from the new Russian plant?

"Despite a fall in global sales of 11 percent for the first nine months of the year, GM has moved into first place among foreign manufacturers in Russia, where its sales rose by 44 percent over the same period, almost double the 23 percent growth across the country's automotive industry."

SOURCE

If their sales rose by 44 percent can't they bail themselves out by lending money from the Russian plant to the US one?

I'm not being sarcastic - I am genuinly interested in the answer, if anyone knows. Thanks.

Edit to add source link

[edit on 2-12-2008 by Maya00a]

Edit spelling

[edit on 2-12-2008 by Maya00a]

i thought the auto-makers opperated plants on close proximity to the location in which they sell the auto's because they are difficult and expencive to transport.

do you guys think toyota doesn't have any plants in japan? you guys think it's a good idea for ford to make everything in the US an transport it to their markets? you think the added costs would benefit sales?

PIEMAN: Toyota doesn't have any plants in JApan because land is at such a premium. It's cost them too much to have a plant of home soil. That's why their "injenious" plan worked so great. Open plants in their greatest consumer market. VW did the same hing with the Bug plant (moving it to Mexico where the were more bought Bugs than any other nation).

Interesting news and it's curious I haven't seen this mentioned on regular news channels yet. These new styles of factories, espcially in areas such as Brazil also suggsts a bond with the area for what they have to offer besides space and more freedom.

New factories such as these may or may not pay for themselves in a given amount of time depending on the economy and the politics of the region.

Eventually, it would be hopeful these cost savings are noticed on the sticker price of these same cars as well. All of these cost factors need to be considered. So, this experiment is really a huge gamble for Ford.

Competition in other parts of the world also suggest the need to bring their overhead costs down, rather than what we simply see as a way to make more profits by supposedly exporting them back into the U.S.A.

Unions have made a strong impression on how we build cars and exactly why less (people) is more and less for unions who have apparently outgrown their usefulness.

reply to post by Jkd Up

Toyota has fifteen plants in Japan, twelve of which are located in Toyota city, the other three in Kyushu, Hokkaido and northern Honshu. The 12 plants in Toyota divide the production of parts and automobile assembly as follows:

Automobile assembly: Honsha, Motomachi, Takaoka, Tsutsumi, and Tahara plants
Engine and engine related assembly: Kamigo and Shimoyama plants
Casting drive trains, engines etc: Miyoshi, Myochi, Kinu-ura and Teiho plants
Electronics: the Hirose plant

link

yeah that's right, toyota city.


EDIT: there is also a list of ford factories worldwide on wikipedia, many of them are in operation for 40 years plus. here's a link

[edit on 2/12/08 by pieman]

Does anyone have any data on what GM pays to the retired folks today and what the projections are? You would think that someone would project that. The unions keep that stuff buried.

Here is the latest on the situation:
news.yahoo.com...

Notable excerpt:

Under consideration were the possibility of scrapping a much-maligned jobs bank in which laid-off workers keep receiving most of their pay and postponing the automakers' payments into a multibillion-dollar union-administered health care fund.

That's quite generous policy, unimaginable to those who fought hard to legalize the unions many years ago. But it puts enormous financial pressure on the company thus diminishing the financial margin reserved for surviving economic downturns.

If the history is to repeat itself, then the automakers get the financial support they need on the second try. The Congress let Paulson ask twice before he got what he wanted.

If the history is to repeat itself, then the automakers would ask for additional support later, because the original $700-billion bailout wasn't enough to fix things.

I hope that the Big 3 execs have a specific plan with a good chance of putting things on the right track. "We are too big to fail" may not work all the time.

But in case the US auto industry goes belly up, woudn't it mean a huge trade deficit? Americans depend on car tranportation more than anyone else.



[edit on 12/3/2008 by stander]

reply to post by Jkd Up


What? No plants in Japan? Toyota has loads of plants in Japan. It can do so because it is so lean, I worked at their British plant at Burnaston, Derbyshire making Corolla and Avensis. The production rates are just insanely efficient, they can build in high wage economies because of this. Just don't belong to a Union and expect to work hard. These factories are an example to us all especially the lazy unionised socialist lay abouts.

PS I've always wanted to visit the Nissan Sunderland plant, it's the most efficient in Europe!

it makes a lot of sense to build cars close to where the will be shipped to more so if labour is cheaper and the government is willing to allow certain concessions.

Take South Africa for Example

VW factory
Nissan / Fiat Factory
BMW Factory
Ford / Mazda Factory
Merc Factory
GM Factory
Toyota Factory

oddly enough at least 50% of what is manufactured is exported to the US and Europe

reply to post by lyndonl

Yeah SA is a really hot place to produce, but it has its drawbacks too. You commented on how many cars are exported to Europe which is true, while there's been much criticism here on how the standards of Mercedes have fallen since production was switched to SA for the cheaper right hand drive models. I read recently that VW had decided to cancel SA production of its new Golf and return it to Germany much of which is exported to Asia.
On a side note (it may be ending any month now) they still make the original early eighties Golf (think you call it Rabbit) in SA, wow it's worth a visit just to rent a new one from Avis for the week!

it might be worth importing them, the original golf is a far better car than the newer ones. actually, that's true of most of the late 80's/early 90's cars.

To hear the media tell it, arrogant corporate chiefs failed to foresee the demand for small, fuel-efficient cars and made gas-guzzling road-hog SUVs no one wanted, while the clever, far-sighted Japanese, Germans and Koreans prepared and built for the future.

I dissent. What killed Detroit was Washington, the government of the United States, politicians, journalists and muckrakers who have long harbored a deep animus against the manufacturing class that ran the smokestack industries that won World War II.

As far back as the 1950s, an intellectual elite that produces mostly methane had its knives out for the auto industry of which Ike’s treasury secretary, ex-GM chief Charles Wilson, had boasted, “What’s good for America is good for General Motors, and vice versa.”

“Engine Charlie” was relentlessly mocked, even in Al Capp’s L’il Abner cartoon strip, where a bloviating “General Bullmoose” had as his motto, “What’s good for Bullmoose is good for America!”

How did Big Government do in the U.S. auto industry?

Washington imposed a minimum wage higher than the average wage in war-devastated Germany and Japan. The Feds ordered that U.S. plants be made the healthiest and safest worksites in the world, creating OSHA to see to it. It enacted civil rights laws to ensure the labor force reflected our diversity. Environmental laws came next, to ensure U.S. factories became the most pollution-free on earth.

It then clamped fuel efficiency standards on the entire U.S. car fleet.

Next, Washington imposed a corporate tax rate of 35 percent, raking off another 15 percent of autoworkers’ wages in Social Security payroll taxes

State governments imposed income and sales taxes, and local governments property taxes to subsidize services and schools.

The United Auto Workers struck repeatedly to win the highest wages and most generous benefits on earth — vacations, holidays, work breaks, health care, pensions — for workers and their families, and retirees.

Now there is nothing wrong with making U.S. plants the cleanest and safest on earth or having U.S. autoworkers the highest-paid wage earners.

That is the dream, what we all wanted for America.

And under the 14th Amendment, GM, Ford and Chrysler had to obey the same U.S. laws and pay at the same tax rates. Outside the United States, however, there was and is no equality of standards or taxes.

Thus when America was thrust into the Global Economy, GM and Ford had to compete with cars made overseas in factories in postwar Japan and Germany, then Korea, where health and safety standards were much lower, wages were a fraction of those paid U.S. workers, and taxes were and are often forgiven on exports to the United States.

All three nations built “export-driven” economies.

The Beetle and early Japanese imports were made in factories where wages were far beneath U.S. wages and working conditions would have gotten U.S. auto executives sent to prison.

The competition was manifestly unfair, like forcing Secretariat to carry 100 pounds in his saddlebags in the Derby.

Japan, China and South Korea do not believe in free trade as we understand it. To us, they are our “trading partners.” To them, the relationship is not like that of Evans & Novak or Fred Astaire and Ginger Rogers. It is not even like the Redskins and Cowboys. For the Cowboys only want to defeat the Redskins. They do not want to put their franchise out of business and end the competition — as the Japanese did to our TV industry by dumping Sonys here until they killed it.

While we think the Global Economy is about what is best for the consumer, they think about what is best for the nation.

Like Alexander Hamilton, they understand that manufacturing is the key to national power. And they manipulate currencies, grant tax rebates to their exporters and thieve our technology to win. Last year, as trade expert Bill Hawkins writes, South Korea exported 700,000 cars to us, while importing 5,000 cars from us.

That’s Asia’s idea of free trade.

How has this Global Economy profited or prospered America?

In the 1950s, we made all our own toys, clothes, shoes, bikes, furniture, motorcycles, cars, cameras, telephones, TVs, etc. You name it. We made it.

Are we better off now that these things are made by foreigners? Are we better off now that we have ceased to be self-sufficient? Are we better off now that the real wages of our workers and median income of our families no longer grow as they once did? Are we better off now that manufacturing, for the first time in U.S. history, employs fewer workers than government?

We no longer build commercial ships. We have but one airplane company, and it outsources. China produces our computers. And if GM goes Chapter 11, America will soon be out of the auto business.

Our politicians and pundits may not understand what is going on. Historians will have no problem explaining the decline and fall of the Americans.

Originally posted by Sillyfool
Does anyone have any data on what GM pays to the retired folks today and what the projections are? You would think that someone would project that. The unions keep that stuff buried.

Most of the money comes from the Union Pension Fund that the workers and GM put money into. The only problem is GM hasn't put their share in for years so it makes it look like the funds cost BILLIONS of dollars. Well it does if you don't pay your bill for years the interest is added just like the banks would do to you and I.

mikell

reply to post by SailorinAZ


An amazingly, well-thought, bang-on post.

Probably one of the best I've seen on ATS.

What a mess! You know, what keeps comming to my mind is that I have been wondering for years why the US automakers continued to make large SUV's and such! Also, why the employees made soooo much money an hour! It blows my mind! And you know the government was aware then as much as they are now. GREED! That is the word of the day.

reply to post by SailorinAZ

In the UK we lost nearly all our manufacturing base, the French and Germans still produce lots of cars and cars owned by them not the Japanese. In the UK it's like our government couldn't give a damn about manufacturing, they are so up the City of Londons you know what, City wants big profits for the Corps like Tesco, Marks, Asda (Walmart to you guys) and looks the other way as our own companies have no hope of competing with slave wage economies.
What Government doesn't get is the old communities involved in manufacturing often going back centuries have been destroyed overnight, leading to big problems in society, violence and drugs everywhere in traditional communities, no hope of future, just joke jobs and dole.
Free trade lol, what a joke, where's the level playing field?

This hasn't exactly happened overnight. Unfortunately, year after year, the American car industry has historically been slow to adapt to the changing marketplace originally due to lack of competition.

When I was young. My Mom bought a new Red 1966 VW Beetle and in the 1960's Americans used to laugh at all import cars, because they were small and underpowered. My Mom who's always been frugal used to laugh at them because for $2. in gas, with gas at around $.30/gallon she could drive her Beetle all WEEK !
These cars due to their efficiency,relibility and low price became immensely popular and as the longest running production car were still being built in Mexico up until a few years ago.

I've mentioned this before. The US threw out the person, W Edwards Deming who was instrumental in the productivity gains and quality methods learned in WWII when we had to convert all of our auto industry to building war products efficiently.

We also had to assure quality because we couldn't expect to win a war if our planes, tanks and trucks were constantly breaking down.

After WWII, the American auto industry kicked out W Edwards Deming whom had told them that by focusing on quality instead of short term profits they would never have to worry about profitability, for the cars would sell themselves. But senior Management in the US Auto industry, looking at the Quarterly profits took the cost cutting approach instead.

Where did Deming go in the early 1950's ...Japan.

So all in all looking at the video of FORD's new "Revolutionary" factory, this is actually what the Japanese have been implementing for decades now and why they've been gaining market share. It used to be called "Just in time Manufacturing", a revolutionary concept to American manufacturing.

Just-in-time (JIT) is an inventory strategy implemented to improve the return on investment of a business by reducing in-process inventory and its associated carrying costs. In order to achieve JIT the process must have signals of what is going on elsewhere within the process.

Which is why the Japanese worked closely with their suppliers who were an integral part of the overall manufacturing process. They also had better control of quality as a result.

Also, notice how they have thrown out the traditional managers walking around in white shirts and ties. Instead everyone wears the same coveralls/uniform, yet another recommendation of Deming.
By eliminating the strata in the workforce, a more cohesive team can be built resulting in better sharing of ideas and improvements in productivity and quality vs the old shop foreman fear based system.

Looking at the is video is comical in a way looking at the year as its almost 2009 and looking at what the Big 3 are begging for.
This FORD plant in Brazil , you're right the UAW wouldn't stand for it , and is exactly why it's not in Michigan. But everything that they're doing here is exactly what W Edwards Deming had told them back in the 1940's.
If they'd only have listened .... we wouldn't be learning this from the Japanese when the originator of most if not all of these concepts was an American.