Letters to the Editor
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Labor is maybe
8% of the total production cost of a car. Perhaps if Detroit focused on vehicles people want can afford they'd be in better shape. My mechanic claims he tried to commit insurance fraud by parking his 8mpg Dodge RAM in the ghetto with the keys in the ignition. Not even the homies wanted it. But hey, the Ford dealer near my house has a lot FILLED with BRAND NEW F-450's that's right, four-50. Yours for only $70,000 and at that price do you really care that they get maybe 7-9mpg?
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The horse was out of the barn
When the Japanese started making fuel efficient cars after the 1973 oil embargo. Since then, eveything that Detroit has done has just been stupid, stupid, stupid.
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Failure all the way around
Ok...I see this as a failure of managment and labor. Labor costs exceeded normal expectations and managment failed to foresee movement of the market and to invest in research and development.
There is sufficient blame to go around. Now the Federal Government didn't have to come up with a medical insurance plan or even force manufacturers to work on R&D. The market is obviously now showing them the error of their ways.
Now, this is NOT to say that the Big Three cannot pull this out...but it's going to cost them because they didn't do their homework and didn't invest in R&D like they should have.
Will this hurt the unions? Absolutely...but it will also hurt the company. But perhaps this NEEDS to happen...people get used to the nice bubble they are in and lose their motivation to compete and then, as it should, it all falls down around them. Maybe this will get BOTH managment and labor off their dead butts and make them go back to work.
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SUV Mystery
I wonder if someone on this thread can explain to me the Great SUV Mystery. How in the world did Detroit sell monstrously-oversized vehicles to one, two and three-person households throughout America? I live in the city, I navigate my Corolla within parades of these houses on wheels. I go to the suburbs, same thing, only doubly.
I'm aware of the obvious smart marketing -- selling imagined status and "adventure" and alleged superior safety (I have not seen any real evidence of this), but how did such a truly huge number of Americans buy into this? Seriously, how can so many of us be so dumb?
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Maybe I'm a fool...
but I'm piling my IRA/retirement money into Ford. Supposedly the 'worst' off of the Big 3. Well, this is how I see it: The morons at the top of GM and Chrysler (ok, well the new guy at Chrysler seems like a potentially capable person... potentially) have never done a damn useful thing except order people around. On the other hand, Ford (after being run by morons) had the brains to go get an engineer. I figure at least one American car manufacturer will survive. I'm going to bet on the guy who already turned one American manufacturing giant around and has a boat load of technical knowledge too. America will never beat china or india on price, but if American companies period have a chance in hell at surviving, it has to engineer an innovative or at least desirable product. What better way to do that then get an executive that is also an engineer.
Then again, maybe it is wishful thinking that my father (who works at Ford) won't lose his job. Plus, I'm an engineer so I'm biased there too.
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The UAW's lack of vision
Let's not let industrial labor organizations off the hook quite so fast. Historically, while unions have by no means been the most racist institutions in America they have most definitely been closer to the tail end of the curve than the nose in terms of integration and racial progress.
That has done them huge injury in the past, and it's been their fault. I know, auto workers are not the most broadly or liberally educated people on earth, but you emphatically do not need to be well-educated to be open-minded, let alone self-interested.
Now, in the age of globalization, the total lack of an ingrained, institutionalized perspective beyond the borders of the US is no longer merely crippling but has become fatal.
It's worth noting that, by contrast, the SEIU is thriving. For one thing of course blue-collar service work is much harder to export. But for another, the union has adopted a strategy that centers on solidarity, not defensive retrenchment. When they struck all across Boston a few years ago, management folded in under a day.
A generation ago, even a few years ago as Andrew Leonard documents, the UAW could have been a powerful and persuasive voice in support of design-intensive manufacturing in America and industrial labor solidarity abroad. It was neither, and union workers have only their own parochiality and maleducation to blame for that.
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@quiet tune
Why are we so stupid? Malcolm Gladwell answered this question quite thoroughly a few years back in this article, originally published in the New Yorker:
http://www.gladwell.com/2004/2004_01_12_a_suv.html
In short? Our biology makes us stupid. Check out the article. Detroit did the typical corporate thing. It used what amounted to trickery to sell a ridiculous vehicle to ridiculous humans, and the result is what we see.
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The new most powerful labor force in America
The prison guard unions. Read today's LA Times to see just how powerful they are in California. Powerful enough to ignore the state legislature, the governer and the federal courts and thwart all attempts to reform the state's crisis-ridden prison system.
The truth of the global economy is that the U.S. is never, ever again going to be competitive as a manufacturer of cheap cars, either globally or in the United States.
But we're still the number one country in the world when it comes to incarceration. We're still the global leaders in prison economy.
You see these small towns that have lost their manufacturing base to globalization, and the town leaders are hoping that the construction of a new prison is going to save them.
That's a strange kind of vampire economy but it's the one we're living in right now.