Men's Clothing Forums banner
1 - 20 of 25 Posts

·
Registered
Joined
·
278 Posts
Three words: Blame the Unions.
By the highest estimates labor is 10% of the costs of the Big Three. Even if all labor worked for $0 the companies would still be inefficient and lose money. It's not labor's fault.

I was looking at GM's management structure the other day (for a research paper I may write). They have no centralized buying or management. For instance, every one of their plants has its own procurement department and managers, health care managers, etc. If they lost all of those departments and management and had one centralized procurement center they could capitalize on huge economies of scale.

Labor is not the problem. Bloated infrastructure, management, and outdated procedures is. But conservatives hate organized labor and see this as a good opportunity to try and bust it.
 

·
Registered
Joined
·
915 Posts
I was looking at GM's management structure the other day (for a research paper I may write). They have no centralized buying or management.
That's an odd statement, since my wife is one of the people in charge of global procurement for plant floor systems at General Motors.

They standardize on as much equipment as it makes sense to. Not everything can be sourced globally, however. It's difficult shipping 20' tall 16-ton presses everywhere there's a GM plant.
 

·
Registered
Joined
·
278 Posts
That's an odd statement, since my wife is one of the people in charge of global procurement for plant floor systems at General Motors.

They standardize on as much equipment as it makes sense to. Not everything can be sourced globally, however. It's difficult shipping 20' tall 16-ton presses everywhere there's a GM plant.
I was not referring to manufacturing equipment but rather consumables. If GM wants to buy shifter knobs, Plant 1 buys their own shifter knobs from Manufacturer ! and uses them in Vehicle X while Plant 2 buys their own shifter knobs from Manufacturer # and uses them in Vehicle Y. Instead of using a centralized procurement structure to source and buy all shifter knobs from one or two sources and capitalizing on HUGE economies of scale, GM does it all crazy like. Now multiply that over a large number of departments and managers (health care, travel, HR, etc.) and you come up with huge redundancies and inefficiencies.

Toyota does this but in a different way. Instead of having a centralized procurement system to source all of a particular part from one or two manufacturers, Toyota ONLY buys from two manufacturers (for the most part). For instance, Nippon Denso provides approximately 1/2 of all the parts Toyota buys. Thus, no matter what part of Toyota is buying the part, Nippon knows it is going to provide A LOT of that and other parts and prices the one currently being sourced accordingly.
 

·
Registered
Joined
·
1,937 Posts
Labor

Gentlemen

I disagree like most of you. Several senators did not want to do this at all. One of the reasons, is the pay these guys get. And "total" labor is more than 10 percent. Approaching 20-25 percent. This is why the unions do not want to make a pay adjustment, at this time.
I dread their eventual demise my friends. All will fail, except Ford?
Later
 

·
Registered
Joined
·
915 Posts
Instead of using a centralized procurement structure to source and buy all shifter knobs from one or two sources and capitalizing on HUGE economies of scale, GM does it all crazy like.
GM single-sources some common components, and gives factories leeway to buy some of their own components, usually commodity parts (fasteners, tubes, etc...) All purchases still get type-approved by engineering, as do suppliers. Some parts don't make sense to single-source, and some parts are risky to rely on one supplier for.

Toyota buys a lot of parts from Denso because Denso IS Toyota. Denso Nippon can adjust the cost of the parts sold to Toyota NA so the American holding company that owns Toyota NA doesn't post a profit, keeping corporate taxes lower, and the bulk of the profits going back to the parent company in Japan.

It's *very* difficult comparing the business models of foreign and domestic car companies, the dynamics are totally different. For instance, Toyota owns a big chunk of a large bank in Japan (MUFJ). If they need an injection of liquidity, the bank can ask for funds from the central bank, then transfer the funds to Toyota at a very low interest rate. This gets them around WTO rules on governmental subsidies.
 

·
Registered
Joined
·
3,297 Posts
Three words: Blame the Unions.
I agree, but with a slight twist:

Unions are doing what unions have, are and will always do; try to squeeze management for the highest rate of pay for the minimal work performed.

I blame state governments for allowing these ridiculous union protection laws. Why do you think foreign makers are flocking and doing well in the south? They are right to work states. Government needs to get out of the business of intervening between labor and employers and let the two hash it out. Unionized labor needs to compete with non-union labor the same way as businesses have to compete against one another.
 

·
Registered
Joined
·
5,152 Posts
Union meatpackers used to make a decent living. Recently one of the biggest kosher packing plants got busted for violating the most fundamental human rights of it's employees- now all illegal aliens.
Chew on that super sized slap in the face to the american worker. It,like most everything else is probably price fixed within the industry claiming open competition.
 

·
Registered
Joined
·
373 Posts
Evans On The Economy -- Can GM Survive?
"Twenty-five years ago, Lee Iacocca told Chrysler union workers that he had plenty of jobs at $17 an hour, but none at $20 per hour. The figures are higher now, but the same logic suggests that GM has plenty of jobs at $30 an hour (including fringe benefits) but none at $40 an hour. Bankruptcy would not necessarily cause a loss of jobs. It might even result in more jobs at wages that would become competitive in world markets. Remaining high-priced union workers might also get the idea that they will keep their "good jobs at good wages" only if their companies can remain competitive. And that could mean more jobs for everyone."
https://www.industryweek.com/ReadArticle.aspx?ArticleID=10317

Let Detroit Go Bankrupt -- By Mitt Romney
"First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.
That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota's Avalon. Of course the Avalon feels like a better product - it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.

Second, management as is must go. New faces should be recruited from unrelated industries - from companies widely respected for excellence in marketing, innovation, creativity and labor relations.

The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, "Getting more and more pay for less and less work is a dead-end street."
https://www.nytimes.com/2008/11/19/opinion/19romney.html?_r=3&hp=&pagewanted=print&oref=slogin

 
1 - 20 of 25 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top