There are very big auto unions for Honda and Toyota in Japan. You are right about the USA factories though. They have a huge cost advantage as they screw over american factory workers and the american automobile competition. Toyota and Honda also has fewer and larger dealerships. Ford and GM have excess dealerships that they can't close down. They have been offering buyout packages to underperforming dealerships for a few years. It was slow going until this year. Now many dealers are losing money and agreeing to sell out.
probably one of the reasons they are exporting the jobs to the USA, then bragging out their cars are made here. Ford will basically have to export all the jobs to china (which has already started) so the Unions are just killing themselves and might kill GM along with them.
www.autoextremist.com "After the smoke clears, it's time for America, Inc. By now it should be obvious to even the most casual observers that the domestic automobile industry is on the verge of total collapse. Already reeling from the gas spike earlier in the year and the subsequent decimation of the light truck and SUV markets, the national financial and credit crisis has conspired to cut the amount of survival time for two of the three domestic automobile makers from years to just months, leaving General Motors and the Cerberus-owned Chrysler LLC on the brink of bankruptcy. And it has also finally become obvious to even the most jaded anti-Detroit zealots in Washington and around the country that a collapse of the domestic automobile industry would be a cataclysmic event with devastating and far-reaching consequences that would threaten to shake this country's economic future to its core. The urgency of this looming economic disaster - which initially was just a sideshow compared to the national and international financial crisis - is now on the front burner for this country's decision makers, and is one of the prime topics in the presidential race too. It is clear that GM is in direct talks with the White House about receiving an early injection of money - from either the $25 billion already promised to the Detroit 3 or the $700 billion financial institution bailout package - in order to ease the financial blow to employees and dealers as a result of its acquisition of Chrysler from Cerberus. And that agreement may in fact have already been made. The alternative? There is no good alternative. If GM were able to acquire Chrysler (although the financial wherewithal for GM to do it completely on its own just isn't there) straight up, the immediate cessation of most of Chrysler's operations and the brutal dismissal of 90 percent of its employees - not to mention the utter devastation to thousands of dealers across the nation - would plunge this country toward economic disaster on top of an already deepening recession. The point of no return. Free-market theorizing aside, we have long since passed the point of no return in this matter. If this country allows one of its key manufacturing pillars to slip into insolvency, it would set-off a dark chain of events that would reach into every sector of the economy and would not only devastate the states where Detroit has its manufacturing and parts facilities, but it would affect every state of the union too. There are still some out there who don't believe this "Detroit thing" will have anything to do with their lives or livelihoods, of course. It's hard for some people to understand that because Detroit and Michigan ("The Flyover State") are viewed as relics from an ancient country no one remembers anymore, even though 1 in 14 jobs in the U.S. are still either directly or indirectly dependent on the domestic automobile industry. I really don't know how else I could possibly present those figures in order to get through to people out there that they should care deeply about what's going on in Detroit and Washington right now, because it's real and it will affect you, no matter where you are, or how flush your circumstances are. Even though I am absolutely convinced that the idea of GM acquiring Chrysler is fraught with opportunities for abject failure on a grand scale, the White House will make the decision that a managed dissolution of Chrysler over time under GM's stewardship would be preferable than an immediate corporate blow-up. But let's move beyond that for a moment. Let's operate under the assumption that with government assistance GM does take over Chrysler. Now what? Critics are quick to point out that Detroit can't continue to do business as usual and that accountability and some measure of performance deliverables have to be built into the "strings" of any loan package. And I say fine to all of that, except I must point out the reality that it hasn't been "business as usual" here and that Detroit has been racing to revamp its product offerings for going on five years now (lead time is not a concept that people outside this business find easy to understand). A wildly naïve "whatever" consumerist mindset. But I am really much more concerned about the negative and wildly naïve attitude that has been allowed to fester in and around Washington and across the country of late, the attitude that suggests that our manufacturing base and this country's ability to make things somehow doesn't matter in this brave new consumer nation that the U.S. has become in the 21st century. It's the same attitude that suggests - if not outright promotes - the idea that we can exist in some alternative consumerist universe of our own creation, a Starbucks Nation of "whatever" consumers who don't really care where whatever it is we're coveting comes from as long as its here, now and c-h-e-a-p. This is the same attitude that has left this country ill-prepared for the burgeoning realities of this global world we're living in. And this "whatever" posture that has become far too commonplace in our nation, and the idea that this will all workout somehow - because it always has - is not only beyond scary, it's just flat-out wrong. America at a crossroads. I've said this before and I will say it again: This nation is at a crossroads. Our idyllic, textbook, free-market notions and our "Aw, shucks, we just want you to play nice with us like we play nice with you" Jimmy Stewart-like attitude that we continue to try to foist off on jaded nation-state competitors that just don't care are simply obsolete in this new global economy we live in. Other nations have taken advantage of Uncle Sam's quaint view of the world for years, to the point where they must privately refer to us as "Uncle Sap." We've allowed other nations to come into this country virtually unimpeded, and showered them with lavish, long-term tax breaks and incentives for good measure. Yes, jobs were created, but now we're waking up to the fact that American-owned manufacturing strongholds are fewer in number because our manufacturing base has been slowly but surely eroded from within. Just a few examples? We allowed Japanese automobile manufacturers to dump vehicles in this market - vehicles that carried none of our American workers' health care or pension overhead burdens of any kind - for years while the Japanese government did everything in their power to keep American made vehicles from being sold over there. We also watched as "Japan, Inc." willfully and consistently manipulated the yen in their homegrown automakers' favor - to the point that Toyota was making millions of dollars every quarter just on currency manipulation alone - while our own government shrugged their shoulders and mustered little or no protest, saying "Gee, we wish you guys wouldn't do that," or some such nonsense. Where did all of this leave the Detroit automakers? The manufacturing powerhouse that forged this nation's middle class and once powered the "Arsenal of Democracy" in WWII? The companies that allowed millions of people to make a decent living, send kids to college, and allow communities big and small across this nation to thrive for the better part of 100 years? Broke down and busted on the side of the road, that's where. Make no mistake, Detroit was more than culpable for their predicament, that has already been well-documented by me and others ad nauseam. But trying to compete with Japanese vehicles that started out with a $3,000 cost advantage before they even hit the dealership lots while paying for health care and pension funding that grew exponentially with each passing model year was a debilitating, no-win game for Detroit. And now that game is well and truly over. The time is now for "America, Inc." After the smoke clears, the dust settles and the hand-wringing and political posturing stops over this Detroit bailout, this country will be faced with some difficult choices going forward. Do we want to continue to compete in this brutally competitive global economy with hat in hand and shuffling feet, hoping countries treat us nice and with respect? Or do we wake-up, smell the coffee and realize that these countries are only in it for the money - our money - and they will do everything in their power to get their hands on it, even if it means turning us into a nation of consumer zombies with little left to stand on other than our revolving plastic. If we want to shore-up this nation and we want to get this country back on track, then we're going to not only have to make some difficult sacrifices, we're going to have start playing tough in this new global marketplace. And that means that the gloves will have to come off in Washington. This country needs to start thinking in terms of "America, Inc." and that means first and foremost rebuilding our manufacturing base and supporting our American companies - no matter what sector they're competing in - because to not do so in this global economy borders on the criminal. The reality about all of this is that countries from all over the globe love to do business here, and they love to do so for a reason. And that reason is because we don't ask them to sacrifice much to come over and set-up shop here. As a matter of fact, we make it real easy for them. Twenty-five years of tax break incentives? Sure, why the hell not! Free land? Come on down! The bottom line is that this type of total economic acquiesence on the part of our government - at the national and local level - will have to change, and dramatically so too. Don't agree with a "bailout" or "loan" for Detroit? Then what if every foreign auto manufacturer - whether they have plants here or not - had to pay anywhere from $250 to $1500 per vehicle sold (on a sliding scale) to do business here? (Because no matter how much they say that they've created jobs in the states they operate in and that they shouldn't be penalized for doing so, at the end of the day their profits return to their home countries, not here. And to pretend otherwise is to have your head in the sand.) And then what if that money went directly into a fund to help support American workers' pensions or an education fund for their families? The idea that in this global economy our free-market policies will be accepted and embraced and that everyone will play nice with us because we want to play nice with them is simply absurd and woefully out of touch. America must change its ways if we are to survive as a global leader, economic and otherwise. The bottom line in this discussion is that we have a multitude of problems in this country that will take time, sacrifice, hard work and collective effort to solve. And we're only going to be able to do that if we're unified as a nation, and we compete in the global marketplace as "America, Inc." Thanks for listening, see you next Wednesday." Pretty much what I've thought about this whole deal. Other countries (in this case Japan/Germany) convince us (the consumer and the government) that our own products are garbage and that they don't particularly want them, all the while using the same argument to sell THEIR cars here and pass them as superior. And who buys it? The American consumer. Funny that Buick and Cadillac have better reliability ratings than Toyota, Honda, Acura, Benz and BMW and are on par with Lexus. But when do you read about that in Consumer Reports? Never because you just hear them b****ing about how their Malibu is short one cupholder or some crap to the Camry, thus making it an inferior car even though it trounces it in ever other category imagineable. I think it's about time this country stands up for itself.
Part 2.... November 12, 2008 Tick, tick, tick... By Peter M. De Lorenzo Detroit. So it has come down to this for General Motors: 100 years of living, breathing American industrial and social history is on the precipice of total disaster, with the once-glittering corporate icon facing certain collapse if some sort of government financial aid package is not put together in the next 60 days. Think about that for a moment. The company that basically powered this nation through a century of progress and helped this country muster the strength to fight world wars - while contributing immeasurably to the fabric of America and the development of our vast middle class - is on the verge of filing bankruptcy. Unbeknownst to the legions of people out there in “fractured” America, the ones who fill the Internet with bile and who project such a level of viciousness and unbridled glee at the thought of the collapse of our domestic automobile industry as if it were – amazingly enough - some warped opportunity for celebration, there are countless towns, big and small, scattered all across this nation that have grown up with GM as their main employer and the main source of income for thousands of American families. I am absolutely convinced that the people who hate “Detroit” and want it to implode have not even the faintest of clues as to what it really means if it were allowed to happen. To those instant experts out there who are reveling at the thought of a major part of our country’s industrial fabric collapsing, I say be careful what you wish for - because if GM is allowed to fail, it will take the entire domestic auto industry down with it - meaning thousands of suppliers and dealers in towns making up a cross-section of America will go under too. For the record, there are around14,000 domestic-oriented dealers in the U.S. employing approximately 740,000 people with a payroll of around $35 billion – that’s billion with a “B.” But that’s just the dealer side of the equation. When you add in the suppliers and all of the associated businesses that either directly or indirectly depend on Detroit for their livelihoods, we’re talking almost three million people who would be out of work in a matter of just a few months, adding up to a $150 billion loss in personal income. Let’s take California, for instance. Judging by our reader mail, there seems to be a large contingent of people out there who adamantly believe that “Detroit deserves to die” etc., etc., and that whatever happens “won’t affect me.” But GM and the domestic auto industry’s collapse will most definitely affect Californians as well. NUMMI, a joint operation between GM and Toyota (the Toyota Corolla, Toyota Tacoma and Pontiac Vibe are built there) and the only San Francisco Bay Area car factory, is already reducing shifts and may even shut down its Tacoma pickup truck line due to the burgeoning economic slowdown. One of our readers who understands the ramifications of a domestic industry collapse passed this interesting local news report along about NUMMI, which said, "There are tens of thousands of additional jobs on the line besides the 5,000 at NUMMI. There are over 1,000 suppliers in California that provide parts. They in turn employ 50,000 people." That’s just one factory. Now multiply that by the staggering totals involved if GM - which has 22 stamping plants and 26 powertrain plants in North America on top of its assembly facilities - and the rest of the domestic automobile industry is allowed to fail. The tentacles of this kind of cataclysmic disaster would spread throughout the nation like a virus that could not be contained. I really don’t know why it’s so easy for people out there to dismiss the collapse of the domestic automobile industry as being some minor event that won’t affect them in the least, because each person who is part of that figure of three million represents a real family and real human story, all across this nation. It’s the mom and pop diners, stores and peripheral neighborhood businesses that depend on the workers who toil at these factories and plants for their livelihoods too. There are towns all across America that would simply dry up and blow away if the local GM or supplier plant shut down. That’s not an exaggeration, that’s a simple fact. I have been vilified of late by numerous critics for shifting my commentary to a more political tone over this election year, but I don’t offer any apologies. This country is not only in the throes of a financial crisis, it’s in the throes of a fundamental identity crisis as well. We as a nation have been lulled into thinking that things will work out and that any unpleasantness headed our way will be mere speed bumps on our journey to becoming a state of perpetual consumer bliss. Well, it just doesn’t work that way, folks. We live in a global economy that isn’t big on history or what we as a nation once did or stood for. We have to compete, or else we will arrive at a point when our national future will transition from being one of destiny to one being dictated to us by a unsavory set of circumstances and interests not in line in the least with our hopes, our dreams or our thinking. In order to compete in this global economy we have to get smarter in our schools and with our educational policies. A high school graduation rate of 50-60 percent should be anathema in our inner cities instead of too often the rule. Remedial classes for kids entering college (who are not able to handle freshman classes) should become a thing of the past. And our teachers need to be compensated realistically and properly so more of our brightest people can sign up to help shape our kids’ futures. Even though we as a nation don’t seem to have the stomach for hard work and sacrifice any longer - hell, I’m not sure those words and their meanings are even in the lexicon of vast swaths of our population - we must get tougher in the midst of this global economy, and we have to steel ourselves for the kind of battles we’ll face. And that means shoring up our manufacturing and supporting our homegrown industries that are so intertwined with communities all across this still great nation. It also means that President elect Obama will not only be President of the United States, he will have to be CEO of America, Inc. too. And America Inc. not only needs to be rebuilt, it needs to be fortified with new determination because there are far too many talented and creative people in this nation who can do extraordinary things and we need to make the idea – the idea that we can innovate, create, build and manufacture things that are the envy of the world - cool again, and take pride in doing so as well. In short, this nation needs a wake-up call. Anyone who thinks this country will not be thrown into a full-blown depression if the domestic automobile industry is allowed to fail is simply kidding themselves. We are facing a perfect storm of events that could spell disaster if we as a nation don’t act and act fast. And it would take years for this country to recover too. As I’ve said repeatedly the time for all of the idyllic, “let the free market run its course” hand-wringing is over. It’s far too late for that. This country’s leadership needs to get these loans to GM and the rest of the domestic automobile industry in the next 60 days, or life as we’ve come to know it in this country – and I mean every part of this country – not just here in the Motor City, will be severely and unequivocally altered. That tick, tick, tick you hear? It's the time running out on the future of America. Let’s hope that what needs to get done will in fact get done, before it's too late. Thanks for listening.
I get so tired of hearing these union arguments. Unions didn't force American companies to tie their futures to SUV's, trucks, Suburbans, and Hummers. Unions didn't stop car companies from creating more fuel efficient vehicles. Unions aren't responsible for the fact that the US is the only industrialized power that doesn't have universal healthcare. Unions aren't responsible for the shortsighted leadership of these companies that were completely unprepared for the inevitable rise in gas prices. Unions bargain for their benefits. If car companies have given too much to unions then it's the leadership of those companies that are at fault, not the unions. Put the blame where it really belongs.
well then it belongs with the government that give the unions to much leverage. You bring up universal healthcare but provide no explanation how Toyota pays 50% less to employees on average than does Ford.
Unions have fought for the right to bargain collectively. Companies that go out of business because their unions account for too much money in benefits are companies with terrible leadership that should go out of business. I'd like to see where you're citing this 50% less figure but it's true, Toyota probably pays less to its employees because they have a younger, less experienced work force and they're better at bargaining with their unions ie, they have much better leardership. Plus, I have read that it costs $2,000 in health care for every car that an American car company manufactures. That's a $2k advantage that a car company from a country with universal health care has over an American car company.
What do they do if the government does not allow them to lockout the union? The union can strike but the company cannot lock them out and are forced to agree to crappy deals. The government is giving an unfair advantage to the unions did you even read the post? Unions are great and did wonderful things for our country but when you give them to much of a advantage it is a problem.
Good Article I would chop it up differently. Chevy-GMC (the trucks are exactly the same), Pontiac -Saturn (appealing to the younger customers), Cadillac I'd drop Buick, no one will miss buick like no one misses oldsmobile i'd drop Saab, who the hell drives Saab over BMW/Audi/Mercedes/Lexus ? http://www.time.com/time/business/article/0,8599,1858702-2,00.html In Schrager's view, GM is a strategic failure. It can manufacture high-quality cars, but it neither makes the right kind nor markets them effectively. He'd bust the company up into three independent firms: Chevy, Buick-Pontiac-GMC and Cadillac-Saab-Saturn.
Toyota & Honda are about as American as GM. Toyota and Honda build cars here in the US. Non-American-made North American Chevrolets include the Chevrolet Aveo, Chevrolet HHR, Chevrolet Avalanche, Chevrolet Equinox, Chevrolet Impala, Chevrolet Monte Carlo, Chevrolet Silverado, Chevrolet Suburban and Chevrolet Tahoe.
except all of the highpaying jobs such as design and upper manangment are all in Japan. Just because they have outsource their labor means nothing. Outsource labor is smart, they are ducking the expensive tariffs.
I would like to know if anyone here works for a company that still pays for employee pensions. What company/industry are you working at?
I was pointing out that Universal Health Care isn't the difference. Union vs. non-union labor is painful.
