The right to work...Death of the Big Three

[4X4]

Originally Posted by browna

http://www.thestar.com/Business/article/529734

Probably because GM sells almost twice the number of vehicles in Canada then does Toyota, a over 1/5th of the total cars sold in Canada in 2008.

...combined sales of its Toyota- and Lexus-branded cars and trucks were ahead 9.4 per cent to 15,843 units from 14,484 in October 2007.
"Toyota came in at second place again this month and now are building a strong lead year-to-date over both Ford and Chrysler for the No. 2 spot," DesRosiers said.
"This would be a first. Chrysler on rare occasions have beaten Ford for the No. 2 position but never has an import nameplate OEM come in second in the Canadian market."
Chrysler's Canadian sales rose 1.5 per cent in October while Honda Canada sales of Honda and Acura-branded vehicles increased by about 0.7 per cent.
In contrast to Toyota's numbers, General Motors' industry-leading volume (including the Saab brand) was nearly twice as big at 28,220 vehicles sold in Canada in October, but that was down 6.1 per cent from a year earlier. GM's share of the Canadian market for the first 10 months of 2008 was 21.9 per cent.

Hmm. Well I guess they grew out of demand. Now they're going to have to figure out a way to shrink under demand.

[HOZ]

[redforever]

Originally Posted by mrdeeds

I'm no believer in corporate welfare, but this will have a crater effect in the Canadian economy. I am not in favour of a bailout per se, but tax incentives for more eco-friendly auto manufacturing and investment in retraining would be a start. The downfall of the Big Three is their own hubris in not investing more in international sales and reliance on the North American market.

I wonder what would have happened if a 1990 Senate bill that was defeated by 3 votes had passed.

http://washingtonindependent.com/123...-protectionism

I guess the other side

And most of them would love to do that and are not allowed to because of circumstances totally beyond their control.

For instance, KIA. Those vehicles are readily available in North America. but do you think there are reciprocal agreements to sell our cars in South Korea?

Not for very many vehicles at all. And most of that has nothing to do with the automakers in Canada. Instead, it is USA foreign policy.

You think the States is going to put emphasis on selling US vehicles in Korea? or on having a military presence there?

[Calgaryborn]

I've talked to a guy who retired out of GM a couple years back. It seems the Auto companies did the same as our federal governments. They offered pension plans without backing them with capital. In any contract negotiation you have trade offs. You might trade a bigger raise for a floating Stat or get an extra sick day for less guaranteed hours of work. GM and the other two gain concessions in other areas by offering a very lucrative pension plan to their employees. Now they are having to pay out and more retire every year. The foreign competition doesn't have this huge drag. I don't know how they could fix the situation.

[GGG]

I think one problem is the assumption that a car that isn't GM, Ford, or Chrysler built in the detroit area is a foreign car. If you look at the cars currently raced in Nascar (Impala, Charger, Fusion and Camry) Only the Camery is made in the USA. The others are built in Canada or Mexico.

Taking a quick perusal of the interent:
http://www.myride.com/industry/toyot...760-page1.html

Toyota now manufactures 10 vehicles in North America: the Avalon, Camry, Corolla, Matrix, Sequoia, Sienna, Solara, Tacoma, Tundra, and Lexus RX330. Production of the Camry Hybrid will begin in the fall of 2006 in Kentucky and the RAV4 in 2008, in Ontario, Canada.

So until Toyota needs a bailout or one of the other foreign automakers building cars in canada and the US needs money the Big 3 shouldn't get any either.

[Bend it like Bourgeois]

Originally Posted by 4X4

edit* I don't know if this post sounds snotty towards you, BLB, I'm being snotty towards GM.

nothing snotty at all - esp since i drive deerfoot and i fear your wrath.

Even if they had a great product, the economics are still screwed. There is no way all 3 are viable, and maybe not even 2.

I don;t see how a bailout can change that.

[Ironhorse]

Originally Posted by Dion

To be fair my 05 Escape has cost me nothing except regular maintinence in oil changes. Not all NA vehicles are lemons and such, one has to do thier research and check the vehicle reliabilty history.

Our '04 Expedition has been pretty much trouble free. And I have some friends that had nothing but problems with their Toyota. Take that for what it's worth.

[Ironhorse]

Originally Posted by 4X4

Seriously, how many GM dealers can you think of off the top of your head in Calgary?

the one in douglasdale, the one at mcleod and 78th, jack carter (which may be the one in douglasdale), the one by the greyhound station, the two in northland mall, the one or two in the auto mall, there's sure to be one in the NE... And Toyota dealers? Um, Heninger, charlesglen, the one by the airport, the one at fish creek... There may be a couple more, but there's certainly less than there are GM dealers and Toyota is the biggest auto company in the world. So... What's up?

I count 6 GM dealers vs. 5 Toyota dealers...

(and I don't even like GM)

[Dion]

Originally Posted by Ironhorse

Our '04 Expedition has been pretty much trouble free. And I have some friends that had nothing but problems with their Toyota. Take that for what it's worth.

My parents have driven Ford and GM all thier life and have never had a major problem with thiers. I just don't buy the generalisation that the big 3 produces crappy vehicles. For sure you're going to find a lemon or 2 but that's common with any manufacturer.

[nfotiu]

The government should let GM run out of money, then step in and facilitate a humane a liquidation as possible. They should try to figure out a way to find a good home at Chrysler or Ford for any product lines that are still profitable. Try to keep at least a chunk of the jobs alive.

Bailing out GM would only hurt the other 2 makers. Why should they have to compete against a subsidized organization? Maybe they're best chance for survival is the elimination of GM.

GMs biggest problem seems to be that they are just a poorly run company. Who cares if their cars are crappy, they are still selling lots of cars. They just aren't making any money selling them. From what I've heard, I'm not sure any levels of sales would propel them to profitability. If there is no opportunity for the company to have operating revenue that exceeds their expenses, why should the government prop them up? I think I've heard they lose $10,000 for every car sold. If so, they aren't even in the realm of ever being profitable, and giving money to them is just welfare to everyone it goes to.

[transplant99]

I say the problem is shared equally between management AND employees...the UAW workers had a good long run afterall, but they simply have priced themselves out of work.

According to Forbes:

Labor cost per hour, wages and benefits for hourly workers, 2006.

Ford: $70.51 ($141,020 per year)

GM: $73.26 ($146,520 per year)

Chrysler: $75.86 ($151,720 per year)

Toyota, Honda, Nissan (in U.S.): $48.00 ($96,000 per year)

Bottom Line: The average UAW worker with a high school degree earns 57.6% more compensation than the average university professor with a Ph.D. (see graph above, click to enlarge), and 52.6% more than the average worker at Toyota, Honda or Nissan.

Ridiculous.

http://mjperry.blogspot.com/2007/07/...of-market.html

[habernac]

isn't Hargrove an advisor for the NHLPA currently? Yikes...

[Cowboy89]

Originally Posted by Vulcan

Well the UAW has been making concessions so I don't see how we can throw all the blame on the workers.
http://www.financialpost.com/story.html?id=964043


Maybe if they built a better product or got better reviews because for the last number of years it's been cool to lambaste N. American cars and from my experience it isn't called for. If we continue to buy only foreign goods, we deserve it when our economy goes in the tank.

Sometimes in life we have to hold our noses and ante up and this bail out is one of those times.

The only 'reasonable' concession for a union to make is to "F off" entirely and stop distorting the labor market prices. That being said, it isn't really anything the unions have done in the recent past that has screwed over the big 3. It was the gold plated pensions that were never funded properly back in the day (Largely attributable to Unionization). It's been a constant cloud over them for 20-30 years.

[browna]

Originally Posted by transplant99

I say the problem is shared equally between management AND employees...the UAW workers had a good long run afterall, but they simply have priced themselves out of work.





Ridiculous.

http://mjperry.blogspot.com/2007/07/...of-market.html

Quite the telling tale. And that was data from before the latest UAW strike of GM late last year/earlier this year. There's earning a decent wage for a decent days work, but that's brutally high for an AVERAGE salary for working in an assembly plant.

Again, you can't just fire these guys when times get rough, you have to buy them out at the same exhorbanant rates, if at all. You may have to pay them to do nothing as GM removes shift from various plants that temporarily close for months at a time, with full benefits.

Pretty clear that the 52% higher UAW labour costs are a large factor killing GM and Ford/Chrysler in comparison to the Japanese counterparts in the US.

[TimSJ]

The health care costs in the US are killing them. I was reading one of our trade papers the other day and GM has something like $4000 in costs on every car built goes towards funding pensions and ongoing health care costs.

Gov't can't afford to let these huys fail. 1 in 7 jobs in the US and 1 in 5 jobs in Canada are a result of the Auto industry. It would cost them a lot more if they all closed up shop.

the Big 3 are all building some decent products now.. You can get a lemon whether it is a $10k Hyundai or a $400k Rolls Royce Phantom(have actually seen 3 phantoms lemon lawed at auctions)

My opinion is that Chrysler will be gone before the end of 2009. I would almost put money on it... Cerbus wants out bad. Export and development Canada is not insuring recievables for chrysler suppliers anymore... Chrysler is the walking dead. I would guess that they will sell pieces of it off to Chery/Geely/Tata or another one of the makers from emerging markets.

Anyway just some inane ramblings from New Brunswick.

[corporatejay]

What I love about this debate (as illustrated by some of the comments in that article) is that people keep espousing capitalist principles to support the workers (they are paid what the market says, someone is worth whatever someone is willing to pay, the american way etc...) all the while neglecting the fact that if the government bails out the big three, that flies directly in the face of the free market.

They have a sharty product that no one wants and ridiculous labour costs. Their competitors even charge more for their products and still outsell them (specifically the civic). I'm all for "saving them" but something needs to be done about their business model, this money needs to come with strings.

[Phanuthier]

What's really annoying is listening to the president of the UAW speak, he is saying the UAW negotiated and agreed on those terms and he doesn't see why the UAW should make any concessions because they agreed on those terms.

I wonder if they realize they are asking for help, and aren't really in a position to negotiate. If it were up to me, I'd let the 3 die. Maybe give Ford or Chrystler a chance, but GM already got its chance in 2003 with a massive bailout.

[Table 5]

What's Lee Coca Cola up to these days? Maybe he wants a job.

[corporatejay]

What's really annoying is listening to the president of the UAW speak, he is saying the UAW negotiated and agreed on those terms and he doesn't see why the UAW should make any concessions because they agreed on those terms.

Okay UAW don't make concessions, and then you'll all be out of jobs because the company will go bankrupt.

[Dion]

Originally Posted by Phanuthier

What's really annoying is listening to the president of the UAW speak, he is saying the UAW negotiated and agreed on those terms and he doesn't see why the UAW should make any concessions because they agreed on those terms.

I wonder if they realize they are asking for help, and aren't really in a position to negotiate. If it were up to me, I'd let the 3 die. Maybe give Ford or Chrystler a chance, but GM already got its chance in 2003 with a massive bailout.

Typical union bullcrap. Bleed the company dry and when the company needs help in form of concessions they say forget it. Let em walk the unemployment line!