# The Big 3 automakers' plan **URL:** \ **Category:** Great Debates\ **Created:** [December 3, 2008, 12:16am UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427 "2008-12-03T00:16:49Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![Sinaijon](https://avatars.discourse-cdn.com/v4/letter/s/dc4da7/32.png) [@Sinaijon](https://boards.straightdope.com/u/Sinaijon)\ **Post date:** [December 4, 2008, 7:38pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/61 "2008-12-04T19:38:08Z")
Just to clarify, when I meant incompetent in the labor department, I meant that as inefficient, not necessarily making bad cars, which is a reputation earned int he 80’s and not necessarily today. ---
**Author:** ![Keweenaw](https://avatars.discourse-cdn.com/v4/letter/k/da6949/32.png) [@Keweenaw](https://boards.straightdope.com/u/Keweenaw)\ **Post date:** [December 4, 2008, 8:02pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/62 "2008-12-04T20:02:52Z")
> [@Sinaijon](#): > > Just to clarify, when I meant incompetent in the labor department, I meant that as inefficient, not necessarily making bad cars, which is a reputation earned int he 80’s and not necessarily today. They appear to be efficient according the the [Harbour Report](http://www.oliverwyman.com/content_images/OW_EN_Automotive_Press_2008_HarbourChart08.pdf) [Article on auto maker efficiency. (pdf)](http://www.anh.com/ANHSnews/customer-files/UAWUnionLaborisMoreEfficient.pdf) [QUOTE=Detroit Free Press] The Harbour Report showed that Toyota Motor Corp. was No. 1 in manufacturing efficiency in North America, taking just 29.93 labor hours to produce one vehicle. That includes not only assembly, but parts stamping and building of engines and transmissions. Detroit’s automakers trail Toyota on that overall number, with 32.36 hours for GM, 32.90 for Chrysler and 35.10 for Ford. But in the 12 categories allowing head-to-head comparisons, union plants were usually tops. UAW or CAW plants were the most efficient in all but one of those categories. And although Toyota had the best overall number on a corporate basis – largely due to its much more efficient stamping, engine and transmission plants – none of Toyota’s nonunion assembly plants in North America won a top spot. The one Toyota plant that did top its segment was New United Motor Manufacturing Inc., in Fremont, Calif., which is a joint venture between Toyota and General Motors. UAW Local 2244 represents workers there, so that plant counts as a union victory. The only two nonunion plant wins in North America were at Honda factories. [/QUOTE] ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [December 4, 2008, 8:05pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/63 "2008-12-04T20:05:36Z")
The fundamental problem is the short term view of auto makers. The execs get a huge salary and bonus by giving good numbers to the board on a yearly basis. If they have a profitable year they have to decide whether to invest in retooling for future products or to show big profits. Tooling for future products will result in a smaller bonus and salary. So guess what they have done. I believe in Japan a percentage has to be earmarked for future products. We do not and will not plan for a future until it is too late. It is a systemic flaw. ---
**Author:** ![Leaper](https://avatars.discourse-cdn.com/v4/letter/l/4bbf92/32.png) [@Leaper](https://boards.straightdope.com/u/Leaper)\ **Post date:** [December 4, 2008, 8:31pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/64 "2008-12-04T20:31:07Z")
From [here](http://money.cnn.com/2008/12/04/news/companies/senate_hearing/index.htm?cnn=yes): > [@](#): > > Mark Zandi, chief economist of Moody’s [Economy.com](http://Economy.com), joined the CEOs in urging passage of the loan package. He said the economy is too vulnerable at this moment to weather the damage that would be caused by a failure of one or more of the companies. > > … > > But he said that even if the Big Three were to get $125 billion in loans and default on them, that would be cheaper for the federal government than the cost that automaker bankruptcies would cause since a failure could lead to lost tax revenue, increased Medicaid and unemployment payments. > > “It’s not a close call,” he said about the cost of a bankruptcy. “It’s not even in the same universe. A bankruptcy at this point in time would cataclysmic for the economy.” Is this a reason to support the bailout? If not, why not? What would be the bailout weary/fiscal conservative argument against this point? ---
**Author:** ![treis](https://avatars.discourse-cdn.com/v4/letter/t/bc79bd/32.png) [@treis](https://boards.straightdope.com/u/treis)\ **Post date:** [December 4, 2008, 8:36pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/65 "2008-12-04T20:36:38Z")
> [@Keweenaw](#): > > They appear to be efficient according the the [Harbour Report](http://www.oliverwyman.com/content_images/OW_EN_Automotive_Press_2008_HarbourChart08.pdf) > > [Article on auto maker efficiency. (pdf)](http://www.anh.com/ANHSnews/customer-files/UAWUnionLaborisMoreEfficient.pdf) I’d be interested to see a little bit more explanation of where the union comparisons are coming from. Everything I’ve heard shows that foreign manufacturers, which are largerly non-union, use much less labor to assemble their cars. ---
**Author:** ![treis](https://avatars.discourse-cdn.com/v4/letter/t/bc79bd/32.png) [@treis](https://boards.straightdope.com/u/treis)\ **Post date:** [December 4, 2008, 8:40pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/66 "2008-12-04T20:40:25Z")
> [@Leaper](#): > > From [here](http://money.cnn.com/2008/12/04/news/companies/senate_hearing/index.htm?cnn=yes): > > Is this a reason to support the bailout? If not, why not? What would be the bailout weary/fiscal conservative argument against this point? I think the problem most people have with the bailout is that GM, Ford, and Chrysler have been unprofitable for a rather long time now. Even when the economy was humming along fine, they were shedding cash. The fundamental question is what is going to be different in 5 years that will make these companies profitable. In my mind, all that bailout will do is put off the day of reckoning for a couple of years at best. Bankruptcy is the only way that these companies will have the freedom to completely change the way they do business. Right now, they are sandbagged by dealership and union issues that prevent the necessary reorganization. If we get those two issues out of the way, I would be much less opposed to a bailout. ---
**Author:** ![LouisB](https://avatars.discourse-cdn.com/v4/letter/l/dfb087/32.png) [@LouisB](https://boards.straightdope.com/u/LouisB)\ **Post date:** [December 4, 2008, 8:53pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/67 "2008-12-04T20:53:44Z")
> [@tagos](#): > > As these people have been actively destroying their businesses I really don’t think you’ve thought this through. > > The first condition should be that all the senior managers and directors, the people who have fucked up so badly (banks as well as the big three) should be dismissed without compensation - explicitly sacked - for gross negligence. > > Until that time anything that keeps them from having time to fuck things up further is a good thing. However right you may be, pissing about a goddamn private aircraft is nothing but a bid for attention by opportunistic congress critters. ---
**Author:** ![Tuckerfan](https://avatars.discourse-cdn.com/v4/letter/t/eada6e/32.png) [@Tuckerfan](https://boards.straightdope.com/u/Tuckerfan)\ **Post date:** [December 4, 2008, 9:06pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/68 "2008-12-04T21:06:26Z")
> [@treis](#): > > I’d be interested to see a little bit more explanation of where the union comparisons are coming from. Everything I’ve heard shows that foreign manufacturers, which are largerly non-union, use much less labor to assemble their cars. The foreign car builders also use subcontractors _in the assembly plant_, so someone like Nissan might have fewer employees, but they’ve got a comparable number of people in the plant, working on the cars. > [@treis](#): > > I think the problem most people have with the bailout is that GM, Ford, and Chrysler have been unprofitable for a rather long time now. Even when the economy was humming along fine, they were shedding cash. The fundamental question is what is going to be different in 5 years that will make these companies profitable. In my mind, all that bailout will do is put off the day of reckoning for a couple of years at best. Bankruptcy is the only way that these companies will have the freedom to completely change the way they do business. Right now, they are sandbagged by dealership and union issues that prevent the necessary reorganization. If we get those two issues out of the way, I would be much less opposed to a bailout. According to an NPR story, what the governments bailout of Chrysler in the 1970s did was essentially bankruptcy, but they just didn’t call it that. ---
**Author:** ![The\_Flying\_Dutchman](https://avatars.discourse-cdn.com/v4/letter/t/9fc348/32.png) [@The\_Flying\_Dutchman](https://boards.straightdope.com/u/The_Flying_Dutchman)\ **Post date:** [December 4, 2008, 9:14pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/69 "2008-12-04T21:14:08Z")
> [@Tuckerfan](#): > > The foreign car builders also use subcontractors _in the assembly plant_, so someone like Nissan might have fewer employees, but they’ve got a comparable number of people in the plant, working on the cars. So are you saying the 2.5 labor hour advantage that Toyota has over GM isn’t valid ? If so, I need a cite for that. ---
**Author:** ![Tuckerfan](https://avatars.discourse-cdn.com/v4/letter/t/eada6e/32.png) [@Tuckerfan](https://boards.straightdope.com/u/Tuckerfan)\ **Post date:** [December 4, 2008, 9:21pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/70 "2008-12-04T21:21:40Z")
> [@The\_Flying\_Dutchman](#): > > So are you saying the 2.5 labor hour advantage that Toyota has over GM isn’t valid ? > > If so, I need a cite for that. I don’t know how the numbers are factored in the original claim, if they include the subcontractors or not. As for the use of subcontractors in Japanese plants, you can do a search on these boards and find the threads where I mention working for them in the Nissan plant in Smyrna, TN. ---
**Author:** ![treis](https://avatars.discourse-cdn.com/v4/letter/t/bc79bd/32.png) [@treis](https://boards.straightdope.com/u/treis)\ **Post date:** [December 4, 2008, 9:25pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/71 "2008-12-04T21:25:08Z")
I can’t believe they’d miss something as obvious as that in any reputable analysis. ---
**Author:** ![Tuckerfan](https://avatars.discourse-cdn.com/v4/letter/t/eada6e/32.png) [@Tuckerfan](https://boards.straightdope.com/u/Tuckerfan)\ **Post date:** [December 4, 2008, 9:30pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/72 "2008-12-04T21:30:16Z")
> [@treis](#): > > I can’t believe they’d miss something as obvious as that in any reputable analysis. But how are the numbers reported and recorded and who pulled the statistics? I’ve heard some of the same statistics bandied about as you have, but I have no idea what the source for the original data was or how it was compiled. ---
**Author:** ![treis](https://avatars.discourse-cdn.com/v4/letter/t/bc79bd/32.png) [@treis](https://boards.straightdope.com/u/treis)\ **Post date:** [December 4, 2008, 9:40pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/73 "2008-12-04T21:40:02Z")
> [@Tuckerfan](#): > > According to an NPR story, what the governments bailout of Chrysler in the 1970s did was essentially bankruptcy, but they just didn’t call it that. Chrysler didn’t undergo the major reorganization GM needs. GM needs to cut legacy costs, slash it’s work force, get rid of a lot of its brands, and close a bunch of factories. I don’t see the political will to force that on GM, and the only way it will happen is if there is absolutely no other choice. ---
**Author:** ![Sinaijon](https://avatars.discourse-cdn.com/v4/letter/s/dc4da7/32.png) [@Sinaijon](https://boards.straightdope.com/u/Sinaijon)\ **Post date:** [December 4, 2008, 9:42pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/74 "2008-12-04T21:42:31Z")
> [@Keweenaw](#): > > They appear to be efficient They might be _fast_, but they use many more workers per car than toyota, for example… [http://www.npr.org/news/specials/gmvstoyota/](http://www.npr.org/news/specials/gmvstoyota/) Interesting enough, they seem to be more streamlined white colar wise, than Toyota… (on a per car basis) ---
**Author:** ![haymarketmartyr](https://avatars.discourse-cdn.com/v4/letter/h/35a633/32.png) [@haymarketmartyr](https://boards.straightdope.com/u/haymarketmartyr)\ **Post date:** [December 4, 2008, 9:43pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/75 "2008-12-04T21:43:02Z")
Last night I had a hard time getting to sleep so I went online and started reading the plan submitted to Congress by the AIG insurance company to get that $100 billion in direct money. I must confess that it was pretty dry reading with all those charts, graphs and diagrams and all those really detailed plans for how they were going to spend each and every dollar and how it would benefit the public. After 200 pages I feel asleep. ---
**Author:** ![Leaper](https://avatars.discourse-cdn.com/v4/letter/l/4bbf92/32.png) [@Leaper](https://boards.straightdope.com/u/Leaper)\ **Post date:** [December 5, 2008, 12:42am UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/76 "2008-12-05T00:42:45Z")
> [@treis](#): > > I think the problem most people have with the bailout is that GM, Ford, and Chrysler have been unprofitable for a rather long time now. Even when the economy was humming along fine, they were shedding cash. The fundamental question is what is going to be different in 5 years that will make these companies profitable. In my mind, all that bailout will do is put off the day of reckoning for a couple of years at best. Bankruptcy is the only way that these companies will have the freedom to completely change the way they do business. Right now, they are sandbagged by dealership and union issues that prevent the necessary reorganization. If we get those two issues out of the way, I would be much less opposed to a bailout. Yes, but my point was, if you believe that analyst’s view of things, wouldn’t it be better to support them now, and let them go bankrupt when the economy is better? Especially since, in the interim, there’s the chance (small, but non-zero) that they could turn themselves around? IOW, what’s the benefit of (again, if you believe the analyst) letting the economy crash/go into depression just to be ideologically pure? ---
**Author:** ![treis](https://avatars.discourse-cdn.com/v4/letter/t/bc79bd/32.png) [@treis](https://boards.straightdope.com/u/treis)\ **Post date:** [December 5, 2008, 3:11am UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/77 "2008-12-05T03:11:46Z")
> [@Leaper](#): > > Yes, but my point was, if you believe that analyst’s view of things, wouldn’t it be better to support them now, and let them go bankrupt when the economy is better? Especially since, in the interim, there’s the chance (small, but non-zero) that they could turn themselves around? IOW, what’s the benefit of (again, if you believe the analyst) letting the economy crash/go into depression just to be ideologically pure? There’s also the matter of not pissing away 30 billion dollars. ---
**Author:** ![Throatwarbler\_Mangrove](https://avatars.discourse-cdn.com/v4/letter/t/8c91f0/32.png) [@Throatwarbler\_Mangrove](https://boards.straightdope.com/u/Throatwarbler_Mangrove)\ **Post date:** [December 5, 2008, 4:29am UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/78 "2008-12-05T04:29:50Z")
> [@](#): > > Here are fleet mileage numbers and recent sales losses/gains by fleet. I can’t figure out what the source of most of those numbers are, whether the sales are monthly YoY, or annual. Nor do I see the supposed correlation that the blogger is seeing. **Sinaijon** is perfectly correct. Last month pickup trucks still outsold small cars, albeit not by much. The best selling cars in Europe and Japan, i.e. VW Golf/Rabit and Honda Fit, barely sell at all in the US by comparison and are are not much more than curiosities. If there was a profitable market for small fuel efficient/diesel cars in North America, the car makers, including the Big 3, would sell them here - they (well, maybe except Chrysler) all have them in foreign markets like Europe and Japan. There isn’t, so they won’t. That hasn’t changed. ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [December 5, 2008, 5:16am UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/79 "2008-12-05T05:16:29Z")
Americans don’t want fuel-efficient vehicles. We want gas at $1.00/gallon and have trucks and SUVs. Is it the big 3’s fault for simply catering to consumer demand? Is it their fault that we allowed oil speculators to drive the price of gasoline to above 4 bucks a gallon this summer? Is it also their fault that the economy is so bad that only 11 people can get auto loans? So much bitching was done about CEOs flying in private jets, that no attention was paid to the 100 billion (with a B) health care fund that the automakers have for retired workers. They pay 71 bucks an hour in wages for guys with a high school education. It’s ridiculous. But this time they drove to Washington in hybrid cars. That makes it all better. ---
**Author:** ![Duckster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/duckster/32/1244_2.png) [@Duckster](https://boards.straightdope.com/u/Duckster)\ **Post date:** [December 5, 2008, 5:29am UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/80 "2008-12-05T05:29:19Z")
> [@jtgain](#): > > They pay 71 bucks an hour in wages for guys with a high school education. It’s ridiculous. Keith Olbermann found this number to be (deliberately) inaccurate. > [@](#): > > But our winner, Andrew Ross Sorkin and “The New York Times.” There are far worse transgressors, it’s even been done on this network in the morning, afternoon and the evening. But he started it. Mr. Sorkin was the one who wrote, quote, “At General Motors, the average worker is paid $70 an hour including health care and pension costs.” This has been picked up by Charles Krauthammer and Newt Gingrich and every facts optional conservative and sadly a lot of effort optional liberals and independents. > > And it’s bull crap. It’s a way to come up with a big outlandish sexy number and a way blame the workers in the union for the disaster in Detroit. **The Center for Automotive Research said that the average hourly wage at GM, Chrysler and Ford last year was not $70 an hour, but $28 an hour.** Where does that crazy figure of $70 come from? If you take all the hourly wages the Big Three are paying their employees and add the health benefits they get and you add in their pensions and you add in what the companies pay in health care to their retired workers and you add in the pensions they pay to retired workers and you add in the money they pay to the surviving spouses of the dead retired workers, you take that big number and then you divide it by the number of hours actually worked by just the active auto industry employees, your answer is then 70. > > It’s like asking what is the average salary of everyone in the United States. Then you add in the Social Security check being sent to anybody who is retired but then you only divide it by the number of active workers. It’s mathematically and intellectually dishonest. The guys who are spending this Thanksgiving in Detroit in dread of their jobs vanishing before Christmas are making $28 an hour, maybe $38 with benefits and pension. Now they are also getting this $70 an hour crap thrown at them. **All thanks to Andrew Ross Sorkin and “The New York Times.” Today’s worst persons in the worlds.** Source: [http://www.msnbc.msn.com/id/28002772/](http://www.msnbc.msn.com/id/28002772/) [Previous page](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427.md?page=3) [Next page](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427.md?page=5)