CarSPIN Editorial: UAW Has Kept American Cars Down

[TurboDan]

Comments are welcome...

http://www.carspin.net/content/articles/ua...rial_051005.php

[Why?]

Good read. The unions really are wrecking GM and Ford.  

[CaMIRO]

I enjoyed the read, but I fear you've set yourself a difficult task and a case that cannot be proven in the short space to which you restricted your piece. Permit me a few thoughts.

I do suspect that the union has played a role in the difficulties currently experienced by Detroit. However, the story is much longer and more involved than the media has given it credit for being.

The history of unions is an important one, and I'd refer you to Harry Bennett. I found a brief article on him, here, but it fails to explain why the union became necessary. Any of the centennial books on Ford do a solid job of the subject. If old Henry had known what was going on, perhaps things might have been different.

The old Ford Tempo was one of the worst cars ever (although Toyota's period Corollas run it close) and yet, when the head gaskets began failing at 110,000 miles, why were the unions forced to make the cuts? What happened to the people who designed the head gaskets? As I recall, kicked upstairs.

From these two points alone, it would appear that things are rarely as black-and-white as the strategy of blaming the unions for the Big Three's problems.

Consider, too, that Henry Ford has sometimes been called a communist, rather than a capitalist, for his plan to permit his workforce to buy the car they built within a month and a half of having built it. The communist analogy stretches to styling, too; the Model T lasted far, far too long, reminiscent of Trabants and Wartburgs forty years later. Henry Ford was convinced that it was all the car anyone would ever need. That idea almost bankrupted Ford (1927).

Again, one might have thought that communism and capitalism were worlds apart - that there are solid arguments for both sides of Henry Ford's work (and this is not meant as an insult, by either side, as far as I can tell) again calls for further analysis than the peripheral media has bothered to attempt.

Since the comments of UAW people are used to prove the case, let me add that the UAW employees I know consistently state that they work at "Ford's" - i.e: at the company of the Fords. I'm not aware of anyone that "barely even feels they are working for Ford or GM."

As for the G6, I doubt that anyone could have built a car that out-slaloms (every test I've seen) its current Camcord competition ten years ago. I could go further with this, but it's a single statement in your piece, so I'll do the same.

On the other hand, you make no mention of the fact that the Japanese have kaizen-ned their models forward, taking 50% of the old Accord (for instance) for each new one (MIT's famous Machine that Changed the World report will confirm this). Is this innovation?

In that vein, what Japanese R&D would you cite in the same period as you criticize the lack of American R&D?

Moreover, why is the creation of vehicles such as the Ford Explorer (under Bob Lutz himself) not considered innovative? The Japanese missed the minivan explosion, and they missed the mainstreaming of the SUV. Kaizen, you see, is hardly the most innovative of strategies.

In that vein, why does no one ever mention that Lexus kicked itself into reverse in the mid-90s with expedient vehicles such as the LX450? Until 2005, Lexus had not had a new car in almost four years! Had the media beat on them for this, do you think it might have affected their brand image?

There is no "pilfering" of Mazda and Volvo platforms at Ford, any more than Toyota is "pilfering" American labor; rather, there is global integration of the kind that was (correctly) deemed necessary by the late Sir Alex J. Trotman, Ford Motor Company chairman & CEO from 1993-1998. The Mondeo was the result at the time, and now they have learned enough to go further.

Moreover, "pilfering" is inaccurate in the parts-content sense, too; the second-generation Focus, which underpins the Mazda3, derives from the first generation Focus, which was wholly designed at Ford with the full intention of transferring technology to Mazda.

GM and Ford are global companies. This is the mission that Bob Lutz has ahead of him: to get people within the company to realize this, rather than placate the media by creating a string of one-hit wonders and retiring without leaving a mechanism in place to continue them.

Incidentally, while Bob Lutz used to drive a Saab 9-5 wagon, I do not believe this is the case today, nor that it illustrates a reticence toward American cars as much as support of GM's struggling Swedish brand.

Again, I enjoyed the read and appreciate the effort, but I do think that some of the conclusions within are debatable.

[BMWDave]

Good read!

[ifcar]

"Ford has resorted to pilfering Mazda and Volvo platforms for their vehicles because of the lack of R&D resources for their own brands."

That strikes me as an Andrew Kear comment. Mazda and Volvo are divisions of Ford Motor Company, which they paid quite a lot for. You wouldn't say that Ford "pilfered" the LS platform from Lincoln to make the Thunderbird, for example, or any of many other variations of platform sharing.

Otherwise a good read.  

[crv16]

"Unfortunately, the future does not look bright. While a GM or Ford bankruptcy restructuring would allow the union to finally be broken, the union most likely would negotiate before such a drastic event."


Hmmm, not so sure about this.  Unions in this country have a long history of going down with the ship.  There is immense pressure on unions today, with declining enrollment, to maintain a hard stance.  Think about it - if they offer significant concessions now, that reduces the influence the have in the future.

The true impact unions have had on this country might never be known.  How many manufacturing companies with union employees simply relocate overseas rather than try to negotiate an agreement with unions?  

[L. ed foote]

Moreover, why is the creation of vehicles such as the Ford Explorer (under Bob Lutz himself) not considered innovative? The Japanese missed the minivan explosion, and they missed the mainstreaming of the SUV. Kaizen, you see, is hardly the most innovative of strategies.

Wow, haven't heard kaizen since my management classes in the early 90's...

Anyway, isn't Kaizen more about refinement, as opposed to innovation?

[SJ_GTI]

I think the editorial makes some good points, but I don't agree wholeheartily.

I do think unions need to start making some concessions. I don't think it needs to be anything drastic like getting paid ToyoHondissan type wages, but something like getting the same health plan as all white-collar worker's get would be a start.

That being said, it really is up to management to turn GM around. These guys really do get paid millions od dollars to lead the company. Instead of fighting with the union they need to come up with creative ways to work with the union.

[CaMIRO]

Moreover, why is the creation of vehicles such as the Ford Explorer (under Bob Lutz himself) not considered innovative? The Japanese missed the minivan explosion, and they missed the mainstreaming of the SUV. Kaizen, you see, is hardly the most innovative of strategies.

Wow, haven't heard kaizen since my management classes in the early 90's...

Anyway, isn't Kaizen more about refinement, as opposed to innovation?

I tend to reference kaizen frequently, partly because much of my information comes from colleagues and professors at the nearby, strategy-heavy U of M Business School (one of the profs, Dr. Jeffrey Liker, has written among the best books ever on Toyota: The Toyota Way), and partly because I believe that kaizen is much misunderstood.

It is indeed "more about refinement, as opposed to innovation." Some would argue that this is entirely part of the problem.  

Why did the Japanese miss the minivan ('80s) and SUV ('90s) segments? Does kaizen support changes in packaging? Why is the RL a 4,000lb, front-heavy car?

The reason I bring this up here is because the Big Three are claimed (in the editorial) to be lacking in innovation - yet no mention is made of the fact that 50% of each new Honda Accord is rooted in the old (as per MIT's Machine that Changed the World report).


More to the point of this thread, why have the Japanese plants in the U.S. not been forced to unionize, and what does the history of Ford plants - back when Toyota was about to embark on making tinned food and asking to visit the Rouge plant - have to do with it?

I enjoyed the read, but things are more complicated than blaming the UAW might suggest them to be.

[L. ed foote]

Why did the Japanese miss the minivan ('80s) and SUV ('90s) segments?

Too busy building Miatas, and other cool sports cars?  :D  

[CaMIRO]

Why did the Japanese miss the minivan ('80s) and SUV ('90s) segments?

Too busy building Miatas, and other cool sports cars?

Is that your answer - that resources which could have been diverted to minivans and SUVs were put into low-volume (Miata somewhat apart) sports cars - or is it an effort to dispute my statement?

Miata was a wonderful car, but an exception to the rule. Kaizen had little to do with its all-new rear-wheel-drive platform. I doubt, too, that Tom Matano (Father of the Miata), along with Bob Hall, would have been caught dead working on a minivan project...  B)

... although I do believe that his previous project was a pickup truck (either him, or Hall - I forget which).

Don't underestimate the involvement of MANA (Mazda North America) in the Miata project, either - see article: 2006 Miata to turn heads, if not rotors.

[crv16]

I do think unions need to start making some concessions. I don't think it needs to be anything drastic like getting paid ToyoHondissan type wages, but something like getting the same health plan as all white-collar worker's get would be a start.

Toy/Hon/Nis workers get paid similar wages to those offered by the Big 3.

According to a web site advocating unionizing (!!) Toyota plants:

"As of the second quarter of 2003, a UAW-represented assembler earns $25.63 per hour of straight time.  As of 9/29/03, Toyota?s base rate is $23.86."

This compares to average manufacturing wage of $15.65/hr (http://www.epinet.org/content.cfm/webfeatures_snapshots_07162004).

The concessions the unions need to make are not wages so much as job security (having to pay workers when they're not working) and health care.

[NomisR]

"Ford has resorted to pilfering Mazda and Volvo platforms for their vehicles because of the lack of R&D resources for their own brands."

That strikes me as an Andrew Kear comment. Mazda and Volvo are divisions of Ford Motor Company, which they paid quite a lot for. You wouldn't say that Ford "pilfered" the LS platform from Lincoln to make the Thunderbird, for example, or any of many other variations of platform sharing.

Otherwise a good read.

divisions?  I'm not aware that Mazda and Volvo and completely owned by Ford.  Not exactly sure about Volvo but definately not Mazda

[ifcar]

"Ford has resorted to pilfering Mazda and Volvo platforms for their vehicles because of the lack of R&D resources for their own brands."

That strikes me as an Andrew Kear comment. Mazda and Volvo are divisions of Ford Motor Company, which they paid quite a lot for. You wouldn't say that Ford "pilfered" the LS platform from Lincoln to make the Thunderbird, for example, or any of many other variations of platform sharing.

Otherwise a good read.

divisions?  I'm not aware that Mazda and Volvo and completely owned by Ford.  Not exactly sure about Volvo but definately not Mazda

I am almost certain that Volvo is wholly owned, and Ford has a controlling share in Mazda.

[ifcar]

Miata was a wonderful car, but an exception to the rule. Kaizen had little to do with its all-new rear-wheel-drive platform. I doubt, too, that Tom Matano (Father of the Miata), along with Bob Hall, would have been caught dead working on a minivan project...

Not the same people, but the pseudo-minivan (it would could also be considered a crossover/SUV today because of its lack of a sliding door and AWD option, so that covers SUV in there as well) MPV came out at around the same time as the Miata, I assume their developments at least overlapped.  

[TurboDan]

Ford owns a 30% stake in Mazda, IIRC.

[NomisR]

Ford owns a 30% stake in Mazda, IIRC.

What he said... you need one of those I'm with idiot smilies.

[ifcar]

Ford owns a 30% stake in Mazda, IIRC.

What he said... you need one of those I'm with idiot smilies.

30% IS a controlling share.  <_<  

[Catman]

As a union member I'm going to say this, Dan is way more right than wrong.  Unions have turned from worker protection to worker greed.  I laugh every time I attend a union meeting, everything is gimme, gimme, gimme.  There is absolutely no concern over whether we actually "deserve" what we're asking for but rather it's what we're "entitled".  In the past when I've suggested that we actually take on some initiatives to gain some leverage in bargaining, I'm laughed at.  "My god man, what are you suggesting, that we do work?" The goal is to do as little as possible and get the most money and benefits possible.  The attitude is usually one of "They can afford it".  What I have especially found entertaining is the ideology that seniority is the all encompassing qualification of worth, regardless whether you actually do anything productive or not.  Productive workers are often driven to burnout because contracts prevent managers from levying any sanction against the marginal employee who does nothing more than show up for work.  

And the most important aspect of what's wrong with union shops is that there is very little connection between pay and quality/productive work.  If the big three want to survive they need to reel in their unions.  If that means bankruptcy than so be it.  I can tell you that the unions will drive those companies into the ground sooner than later.

[dave998]

Moreover, why is the creation of vehicles such as the Ford Explorer (under Bob Lutz himself) not considered innovative? The Japanese missed the minivan explosion, and they missed the mainstreaming of the SUV. Kaizen, you see, is hardly the most innovative of strategies.

Wow, haven't heard kaizen since my management classes in the early 90's...

Anyway, isn't Kaizen more about refinement, as opposed to innovation?

I tend to reference kaizen frequently, partly because much of my information comes from colleagues and professors at the nearby, strategy-heavy U of M Business School (one of the profs, Dr. Jeffrey Liker, has written among the best books ever on Toyota: The Toyota Way), and partly because I believe that kaizen is much misunderstood.

It is indeed "more about refinement, as opposed to innovation." Some would argue that this is entirely part of the problem.  

Why did the Japanese miss the minivan ('80s) and SUV ('90s) segments? Does kaizen support changes in packaging? Why is the RL a 4,000lb, front-heavy car?

The reason I bring this up here is because the Big Three are claimed (in the editorial) to be lacking in innovation - yet no mention is made of the fact that 50% of each new Honda Accord is rooted in the old (as per MIT's Machine that Changed the World report).


More to the point of this thread, why have the Japanese plants in the U.S. not been forced to unionize, and what does the history of Ford plants - back when Toyota was about to embark on making tinned food and asking to visit the Rouge plant - have to do with it?

I enjoyed the read, but things are more complicated than blaming the UAW might suggest them to be.

The japanese and espically Honda tend to be reactionary competitiors that stay true to their strongholds and continue to improve on each generation and not repeating those mistakes over time. When a new segment is formed they wait till the market is developed and see what works and what doesnt before joining.  

[dave998]

"Ford has resorted to pilfering Mazda and Volvo platforms for their vehicles because of the lack of R&D resources for their own brands."

That strikes me as an Andrew Kear comment. Mazda and Volvo are divisions of Ford Motor Company, which they paid quite a lot for. You wouldn't say that Ford "pilfered" the LS platform from Lincoln to make the Thunderbird, for example, or any of many other variations of platform sharing.

Otherwise a good read.

divisions?  I'm not aware that Mazda and Volvo and completely owned by Ford.  Not exactly sure about Volvo but definately not Mazda

I am almost certain that Volvo is wholly owned, and Ford has a controlling share in Mazda.

Mazda still has some leverage in what it does, more so then Volvo, but yes Volvo Car is owned by Ford and I believe another company bought Volvo Truck.

[ifcar]

"Ford has resorted to pilfering Mazda and Volvo platforms for their vehicles because of the lack of R&D resources for their own brands."

That strikes me as an Andrew Kear comment. Mazda and Volvo are divisions of Ford Motor Company, which they paid quite a lot for. You wouldn't say that Ford "pilfered" the LS platform from Lincoln to make the Thunderbird, for example, or any of many other variations of platform sharing.

Otherwise a good read.

divisions?  I'm not aware that Mazda and Volvo and completely owned by Ford.  Not exactly sure about Volvo but definately not Mazda

I am almost certain that Volvo is wholly owned, and Ford has a controlling share in Mazda.

Mazda still has some leverage in what it does, more so then Volvo, but yes Volvo Car is owned by Ford and I believe another company bought Volvo Truck.

Volvo Truck is now working with Mack, I believe.

[Why?]

First thing, unions were important, their funtionality is limited at best now. Ford started the company, he can run it any way he wants to.

Hey, I think the Japanese method works rather well. Best small car, oh its Japanese. Bets Midsize, Japanese. Luxury, well, not any American product, that's for sure. Either German or Japanese. Minivan, Japanese, Sports car, more debateable, obviously. Car Based SUV, Japanese. Trucks and Truck Based SUV's are the only thing the american companies do well. And even then the Japanese also have very good entries.

The Japanese are in the middle of the SUV craze. Heck, they STARTED the car based SUV trend. And minivans, the Odessey has been the best for a very long time. Maybe the Japanese method works. While the American method doesn't seem to, at least at this point in history.

The Explorer is a good SUV. But one vehicle doesn't make or break a company.

The only way the American Car companies have a chance at competing with Foreigners is to lower costs. The Union is the largest cost they pay.

[thewizard16]

I agree with the article, but I have a question to someone who posted earlier. The said that they didn't think they needed to go to the wages of Toyota, Nissan, and Honda, that'd be too drastic. I know UAW workers make a ridiculous amount of money for standard manufacturing jobs requiring no college experience (anyone who disagrees, let me know, and I'll start comparing them to jobs requiring a lot more education), but how much exactly do the workers for the other automakers make? I've never actually seen anyone post figures for them, they just always say it's less, or if you're a UAW troll, they refer to it as "slave wages", which I'm sure is not the case. I had a friend who went for a conference about new strategies using Kaizen at the Georgetown plant for Toyota, and she was not only impressed with the plant, but at how much happier the employees seemed than the workers she had seen on other lines. Also, their attendance records were far superior. When she asked about that, a manager told her that one of their rewards for perfect attendance is being entered in a drawing for a new car. I think I'd probably be more likely to show up (if I weren't sick) for a chance at a new car than a chance at a plaque or certificate. Anyway, I got off topic, I just wanted to know how much the Toyota, Nissan, and Honda workers make.

[Why?]

I do think unions need to start making some concessions. I don't think it needs to be anything drastic like getting paid ToyoHondissan type wages, but something like getting the same health plan as all white-collar worker's get would be a start.

Toy/Hon/Nis workers get paid similar wages to those offered by the Big 3.

According to a web site advocating unionizing (!!) Toyota plants:

"As of the second quarter of 2003, a UAW-represented assembler earns $25.63 per hour of straight time.  As of 9/29/03, Toyota?s base rate is $23.86."

This compares to average manufacturing wage of $15.65/hr (http://www.epinet.org/content.cfm/webfeatures_snapshots_07162004).

The concessions the unions need to make are not wages so much as job security (having to pay workers when they're not working) and health care.

Here you go.

[Lebowski]

I do think unions need to start making some concessions. I don't think it needs to be anything drastic like getting paid ToyoHondissan type wages, but something like getting the same health plan as all white-collar worker's get would be a start.

Toy/Hon/Nis workers get paid similar wages to those offered by the Big 3.

According to a web site advocating unionizing (!!) Toyota plants:

"As of the second quarter of 2003, a UAW-represented assembler earns $25.63 per hour of straight time.  As of 9/29/03, Toyota?s base rate is $23.86."

This compares to average manufacturing wage of $15.65/hr (http://www.epinet.org/content.cfm/webfeatures_snapshots_07162004).

The concessions the unions need to make are not wages so much as job security (having to pay workers when they're not working) and health care.

Those figures look spot on from what I've seen (although admittedly I'm not too sure about Toyota/honda/nissan wages).

I read recently, that UAW tier 1 wages are about $26/hr, but benefits amount to a whopping $39/hr.  That amounts to about $65/hr, or $135k a year assuming 40 hours/week, for wages and benefits combined.

It's not really the artificially high union wages that kill the domestic automakers, it's 1) the benefit costs, 2) the inability to lay off employees when production falls below capacity, and 3) the general inefficiency created (more on that below).

Catman's post was really good, in terms of explaining item #3.  It's common sense that when people don't have an incentive to work hard, they aren't going to work hard!  How many people here would come in to work and bust your ass every day if you knew that you wouldn't be fired for laziness and you wouldn't be promoted for hard work.  What's the point?  It creates a general sense of entitlement:

"The goal is to do as little as possible and get the most money and benefits possible. The attitude is usually one of 'They can afford it'. "

BTW, this is my first post on carspin, good to see you guys got this up and running.  Thanks for putting in all the effort.  I'll try to be (slightly) less of an asshole under my new sig.

[Catman]

BTW, this is my first post on carspin, good to see you guys got this up and running.  Thanks for putting in all the effort.  I'll try to be (slightly) less of an asshole under my new sig.

LOL  

[mazda6er]

BTW, this is my first post on carspin, good to see you guys got this up and running.  Thanks for putting in all the effort.  I'll try to be (slightly) less of an asshole under my new sig.

LOL

I was wondering when he was coming over. We needed a financial "genius"!  :D  

[Lebowski]

BTW, this is my first post on carspin, good to see you guys got this up and running.? Thanks for putting in all the effort.? I'll try to be (slightly) less of an asshole under my new sig.

LOL

I was wondering when he was coming over. We needed a financial "genius"!  :D

Is that sarcasm I detect?    

Oh well, good to know I was missed    

[dazzleman]

I find myself in broad general agreement with what both Turbo Dan and Catman have written.

Unions are, at best, a necessary evil.  The union mentality is to make it impossible to reward good performers, or punish poor performers.  This has an incalculable effect in discouraging innovation and ingenuity, and encouraging sloth, and that translates into lower quality products.

Aside from the flunkee mentality that unions promote, there is also the issue that union work rules limiting flexibility translate into higher costs.  The higher costs imposed by the unions, in relation to competitors, means that the US automakers must reduce quality in order to stay competitive on price.

And let's face it -- Detroit is not producing a lot of inspiring cars these days.  It's no accident that the auto industry in the US is growing in the south, where the political climate is less union-friendly, and workers are voting against unions there.

I recognize that management in the Big 3 has been less than inspiring much of the time.  The difference between this problem and the union problem is that bad management can get swept away and replaced, while one would have to move heaven and earth to get rid of the unions and the stultifying effect that they have had on the industry.