I am not TriShield v. new UAW contract

Discussion in 'OT Driven' started by Mjolnir, Sep 28, 2007.

  1. Mjolnir

    Mjolnir WHM6D > *

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    http://www.thetruthaboutcars.com/?p=5532


    General Motors Death Watch 148: You Can’t Fix Stupid


    By Robert Farago
    September 27, 2007


    Clearly, nothing about the United Auto Workers (UAW) proposed contract with GM is clear. Until we see the precise details, the agreement's ramifications are unknown and unknowable. And just as the UAW withheld the fine print on their new contract with bankrupt auto parts maker Delphi until just before the ratification vote– denying members sufficient time to consider its implications– don't expect any contract-related revelations until the eleventh hour. Meanwhile, you'd expect the media to hang fire. Yeah right.
    "For GM, deal is a game changer" proclaims the Globe and Mail. "GM Labor Deal Ushers In New Era for Auto Industry" the Wall Street Journal advises. "Deal gives GM cash to build better cars" predicts The Detroit Free Press. Scanning these Pollyanna prognostications, the Freep provides the greatest insight. Not because I believe a word of Mark Phelan's thesis. Because I don't.


    I reckon the UAW's new contract will not deliver one dime of short-term savings to GM.
    If anything, it will add to their overheads (e.g. the interest on the money paying for the union-controlled VEBA health care superfund). This has been the pattern: plant closures and union buyouts that transfer costs from now to later. Why would this new deal be any different? As Frank Williams pointed-out, the contract calls for a "targeted special attrition program" for "non-core workers."


    But let's assume Phelan's giant leap of faith is correct and [for reasons I can't possibly fathom] this new contract reduces GM's labor costs by $2k per car produced (presuming GM's output hasn't declined further since he wrote the piece). Is the scribe right to suggest that GM would– sorry, "will" use the extra cash to build better cars and, thus, return to glory? In a word, no.​


    In any discussion about GM's future, you have to consider the unavoidable truism that you can't fix stupid.
    Building a down market Caddy is stupid. Selling two different versions of the same CUV in the same dealership (Buick Enclave, GMC Acadia) is absurd. Rebadging a Chevy Trailblazer as a SAAB 9-7x is dumb. Sticking a $65k Corvette next to a $13k Aveo in a Chevy showroom is idiotic. Building a Corvette-engined folding hardtop pickup truck (SSR) is seriously misguided. Letting the Pontiac Grand Prix rot on the vine for a decade is asinine. Selling better Buicks in China than the US is ridiculous. And so on.


    Now you could posit that these mistakes are somehow cost-related. And you'd be wrong. An extra $2k lavished on any of these vehicles would not have corrected the underlying strategic blunders that led to their realization. As Phelan himself points out, the fact that GM could sell the new, improved Cadillac CTS for the same price as the previous model puts paid to the "we don't have enough money to build competitive models" argument.


    We've spoken before about the all-conquering corrosiveness of GM's multi-divisional corporate culture. The automaker is a labyrinth of beancounters and middle managers whose interdepartmental skills make Kafka's nightmarish bureaucracy seem like a well-run America's Cup team. It's important to realize that this kind of diseased corporate culture spends resources with all the efficiency and effectiveness of a government agency.


    When I moved to the UK, the Labor party had the same answer for every problem: more money. When they assumed power, they raised taxes and spent the money. And… nothing. Anyone who holds the belief that an extra billion or two or five pumped into GM's stultified product development process will be a "game changer" is sorely mistaken. The money would– sorry, "will" disappear down the same rat hole that currently swallows GM's development cash and produces substandard, bone-headed products.


    Fortunately, not all journalists are lining-up at the GM water cooler to drink the company's Kool-Aid. Like many TTAC commentators, some news outlets are pointing out that GM CEO Rick Wagoner's post-strike comment– "This agreement helps us close the fundamental competitive gaps that exist in our business"– finally puts his ass on the line. By his own admission, Wagoner can no longer point to labor costs as the weights around GM's ankles preventing it from running with (ahead of?) the Toyotas, Hondas and Nissans of the world.


    Yes, well, there's still Japanese currency manipulation, the mortgage crisis, a general economic downturn and all the other excuses the company has been trotting-out since GM found itself having to explain why its indeterminate turnaround plan has failed to gain traction. Look for more of the same.


    Well exactly. GM's new union contract– if ratified– will not save the automaker from its fundamental weaknesses. Going forward, in 2008, GM will be in for a long, tough slog, warmed only by its own cash conflagration. During this time, GM's labor costs will not come down dramatically, its health costs will not be reined in and its Hail Mary products won't save its soul.​
     
  2. BigT

    BigT LSX Crew

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    no trishield no care
     
  3. MercenaryForHire

    MercenaryForHire only you know the real truth

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    You're not TriShield.
     
  4. Nader_D

    Nader_D HAHAHEHHUH ---- POOOHhHhHHCHhh! OT Supporter

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    You are not TriShield
     
  5. BigBronco

    BigBronco OT Supporter

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    You are not TriSheild
     
  6. Formz

    Formz Hipster Santa OT Supporter

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    Trishield you are not.
     
  7. fooz

    fooz Guest

    You are not TriSheild
     
  8. stradivarius

    stradivarius OT Supporter

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    Lets get the record straight..
    The story would be flipped if GM would stop making such a SHITTY product.
     
  9. neonwheels

    neonwheels New Member

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    Cliffs?
     
  10. Yeahdoug

    Yeahdoug OT Supporter

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    You wish you were Trishield.
     
  11. fooz

    fooz Guest

    He's not TriSheild
     
  12. TriShield

    TriShield Super Moderator® Super Moderator

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  13. Formz

    Formz Hipster Santa OT Supporter

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    You ARE TriShield. :naughty:
     
  14. Mjolnir

    Mjolnir WHM6D > *

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    The new contract doesn't fix anything, because you can't fix stupid.

    Stupid = Chevy SSR, Caddy BLR, Chinese Buicks v American Buicks, Pontiac Grand Prix going 10 years without a redesign, etc.
     
  15. MercenaryForHire

    MercenaryForHire only you know the real truth

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    And now the thread can begin.
     
  16. Mjolnir

    Mjolnir WHM6D > *

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    Yes I do.

    The helemt is sexy, and I want a 6.0 GTO.
     
  17. MercenaryForHire

    MercenaryForHire only you know the real truth

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    But they all tested so well with the focus groups! :hsugh:

    Each carmaker should just register an account on OT and post their upcoming vehicles here to get public opinion.

    <Chevrolet> LSX CREW, check out the new Blue Devil Corvette
    <Ford> Dropping the V6 Mustang model, QQ more Light Speed
    <Honda> New S2000 has 300hp, IBstillnotorque
    <Mazda> Updated Mazdaspeed Miata v.No I'm Not Gay
    <VW> BOYS!!!! CHECK OUT THE NEW EOS!
     
  18. Mjolnir

    Mjolnir WHM6D > *

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    I've suggested that before too.

    I know you and I aren't the only people to have done so either.

    Seriously- you have an "anonymous" forum with a decent cross section of the american populace, and most of us are dying to share an opinion.

    Some polls here (Fazle's Bateman ban comes to mind) get a couple of thousand responses which should be enough to satisfy the stats geeks.

    There can't be many cheaper ways to get a solid opinion on a new product than spending 5 bucks a month and posting it here.
     

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