Big 3

[c.y.c.l.o.n.e.s]

The Big 3's problems can be summed up with three letters, UAW.

If they didn't have to pay their employees $90 an hour, the would be able to survive this tough economy.

We have decided our next vehicle will come from non-UAW labor.

I won't blame it ALL on the UAW, but I read recently that if GM spent $18,000 building a car, Toyota could build that exact same car for under $15,000. Or, to put it another way, Toyota can spend at least $3,000 extra on quality and features for every car they build and still sell them at the same price point as GM. Impossible to compete in those conditions.

 

[usedcarguy]

I won't blame it ALL on the UAW, but I read recently that if GM spent $18,000 building a car, Toyota could build that exact same car for under $15,000. Or, to put it another way, Toyota can spend at least $3,000 extra on quality and features for every car they build and still sell them at the same price point as GM. Impossible to compete in those conditions.

The companies are just as guilty as the UAW from the standpoint that they signed the labor contracts.

 

[Cyclonepride]

It's sad, but the chips have to fall where they may. If they are no longer viable businesses, then they have to restructure.

 

[jumbopackage]

The union isn't helping matters but they've had crap management for YEARS. They are completely unable to compete in the marketplace because they have not anticipated problems before they arise. How long did it take them to create a car that is competitive with the Camry that was the nationwide best seller for how many years? I mean it's idoicy at so many levels. Unfortunately we poured tens of billions into a loser earlier this year.

That being said, the union has also saddled the Big 3 with legacy costs that make them unable to compete. Toyota can put a lot more money into quality parts and engineering at the same price point for a vehicle because they aren't paying into legacy compensation funds and paying for people to sit on their hands and do nothing ala the jobs bank. There's no possible way, really, that you can compete when you're paying that much more than the other guy for labor.

They are in trouble, it looks like GM at least will go down. It is a sad day, but honestly the quality of cars they make is just not as good as the competition, especially with the price. However, losing our manufacturing base of our country is not a good thing for the long-term future of our country.... I read an article by Ben Stein on this subject a few months back and he made some good points on the importance of keeping America's ability to manufacture strong.

One of the posters on here has to be exaggerating though on $90 an hour, they do get paid extremely well for their work but they don't all make $170K a year working on the line. I'd always head they make like 80-100K a year which is still a helluva lot.

GM's Labor costs are around $90/hr. The workers actually get paid roughly in the $35/hr range, which is still good coin, and competitive with non-union manufacturers. The other $55/hr go to paying for things like health care for retirees, pension funds and job banks.

I disagree on the quality comment. They've mades some good strides. Cadillac will compete with anyone. The Corvette, Arcadia, Saturn Aura, and any of their pickup trucks are all competive vehicles in their segement.

The problem is they have a fair number of dogs too. Pontiac should have been dumped 10 years ago. That and they have a higher breakeven point than most competiors.

SOME of Cadillac's models (aka the CTS) can compete with anyone. There are still plenty of models that are nothing more than upscale medicore GM products. My mom's 4 year old Deville has been an exercise in typical GM issues with powertrain, interior build quality and stuff you just shouldn't have go wrong.

The Corvette is largely garbage. The build quality is crap, and it's thorougly medicore in every regard. The ZR1 is a different story, but that car also starts upwards of 100k.

 

[jumbopackage]

The companies are just as guilty as the UAW from the standpoint that they signed the labor contracts.

Granted, but they had no other choice but to deal with the unions. They would simply not be able to build cars otherwise. The unions had big enough pockets and enough friends in government that the automakers had no choice but to deal with them, and there was only so much negotiating power they had.

The unions began giving concessions ONLY when they realized that there was no way they could sell a competitive product without doing so.

I won't blame the unions for looking out for their members - that's their job after all. But I don't want to hear complaining coming from their unemployed masses when they realize the consequences of the terms of their contracts in the "good years".

 

[yCy]

GM stopped providing health care for retirees beginning January 1 this year.