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| Home Front Economy |
| The Other American Auto Industry |
| 2008-12-14 |
| The auto production numbers in the South are staggering. A dozen years ago, Alabama produced zero cars. Now it turns out 750,000 annually at Mercedes, Honda, and Hyundai plants. Three years after Mercedes opened its SUV factory near Tuscaloosa in 1996, it doubled the size and output. A Honda plant halfway between Birmingham and Atlanta went on line in 2001, and the next year the company spent $450 million to expand it, adding 2,000 more workers. |
| Posted by:tipper |
| #18 Among other mistakes, the UAW and assorted supporters are blowing it with the north/south-anti-Corker comments. Honda is all over Ohio, and just opened a big plant in Indiana. Subaru is also in Indiana, and Toyota is in KY. There are a lot of well-employed, productive and profitable voters amongst them who will question why the govt. is biased toward their competition. |
| Posted by: Halliburton - Mysterious Conspiracy Division 2008-12-14 23:36 |
#17 Here's reality:For a 14th consecutive year, Lexus ranks highest in vehicle dependability, improving by 25 problems per 100 vehicles since 2007 to achieve a score of 120 PP100. Following in the top five rankings are Mercury, Cadillac, Toyota and Acura, respectively. You may not like the design, fit and finish may not be as good as the best, and they don't score as high on the 90 day initial quality measure. But 3 years in, they are dependable vehicles. Mercedes? Below average. But you deal with whatever reality suits you. |
| Posted by: Nimble Spemble 2008-12-14 18:36 |
| #16 for those claiming design superiority , I offer the Honda Element, plastic-clad POS |
| Posted by: Frank G 2008-12-14 18:16 |
| #15 Bankruptcy and restructuring is the only way out for the Big 3. The UAW has finally killed the goose that laid the golden egg. It will be reborn, but not the way it once was. The labor agreements will be rationalized, the dealer network will be cut by at least 35%, and the shareholders will lose everything. After restructuring, however, GM and Ford will be back as real competitors to the transplants. The big questions are who is going to pay for the retirees, widows and orphans of the UAW? I suspect it's going to be a shared expense: we taxpayers will pay what is going to be paid of a much-diminished payout to those retirees, widows and orphans. Moral of the story? There are two of them. First, trees don't grow to the sky. The UAW lost sight of that in the 60's and never regained perspective. Their insane labor agreements killed the Big 3. Second, if you are in some place other than government (and probably there if you have the chance) and have the option to take a lump-sum pension, GRAB IT AND RUN LIKE A SCALDED DOG! Put it in FDIC-insured CDs. It may not make as much of a return but twenty years from now you'll still have it, as opposed to what poor bastards like the United Airlines and Big 3 workers got for their retirements from the Pension Guarantee folks. |
| Posted by: Jolutch Mussolini7800 2008-12-14 17:38 |
| #14 I drive a Saturn Outlook, and I love it. And I work in an ancillary industry to the auto industry...racing ya'll (a Toyota team). Haha. OS hit the nail on the head, and no it wasn't the quality remark, quality is surprising close. But don't confuse build quality with building ugly shit! No the big difference is how their processes and plants are engineered to allow changing of production at much lower cost. It costs GM a boatload of $$ and time to switch production lines. Plus they don't have those insane legacy costs. If the UAW doesn't go the Big 3 will never be able to compete. Another thing that Congress doesn't realize, it takes a long time to develop a new automobile. Outside of the straight up engineering and design, you have a battery of government regulations/testing to meet. |
| Posted by: AllahHateMe 2008-12-14 16:11 |
| #13 I know it's an out-of-the-box concept, but how about.... LETTING THE MARKET and the CONSUMER DECIDE? |
| Posted by: Besoeker 2008-12-14 16:00 |
| #12 Chevy quality cannot touch Honda or Toyota. And the plants at Honda can change over to different models "on a dime", because of better processes, robotics and the workers themselves. Nothey they are doign that Detroit coudlnt do, if they coudl bust the loaded cost of the unions, and break loose from the wwork rules, giving engineers a free hand in setting up the factories (free from management foot-dragging as well). Chevy needs to restructure - and Chapter 11 is the way to go to get a truly clean slate. The feds rols should be to provide DIP financing durign the BK. The airlines all do it, and have come out of CH 11 as functioning entities. Or how about this: Have Honda buy Chevy out of CH 11. |
| Posted by: OldSpook 2008-12-14 15:56 |
| #11 We all know why the big three have failed, and Woozle Elmeter has restated it well today. The problem at the core is the big three would tell the UAW "if we don't do things differently we will fail" and the UAW said "we don't care so long as we a paid." Now the taxpayers will be the enablers of this extraordinary moral hazard: we will pay even though they should fail. Going forward why would any union ever make a concession if they know they will be paid regardless? What management team would reform if they know they can't fail? In very short order every U.S. business may operate at the same level as your local DMV. |
| Posted by: regular joe 2008-12-14 15:08 |
| #10 There's a reason that MB etc. don't sell their low end cars here. Anyone seen an A3 or A4 around? |
| Posted by: AlanC 2008-12-14 14:52 |
| #9 I can't speak authoritatively, but from what I recall of German labour regulations, I am quite sure that the burdened labour costs for Mercedes and BMW are at least as high as for the Big 3. When we were over there, Mr. Wife received a letter one day, warning that if he did not immediately stop going in to the office on weekends and staying late during the week, he would be called up before the labour council. |
| Posted by: trailing wife 2008-12-14 14:20 |
| #8 Comparing a Mercedes to an explorer is apples to oranges. My explorer ran 200k with only oil and tire changes, oh and a battery. The cost to operate was minimal compared to a Mercedes. It never broke down on me. As a utility vehicle it outperformed Mercedes in cost and maintenance, hands down. Was it cool or classy? Nope,but it was dependable, and served its purpose. I had a chance to view the Toyota factory in Lexington. It was a non-union shop. It was profitable. The UAW was constantly in the area trying to get them to go union. What I took away from the experience was that we "Americans" build great automobiles. Be it a GM, Ford, Toyota, or BMW, our workers can make a fine auto. The issue I came away was the unions have the industry so divided that until both, union and industry are allowed to fail and restart under new rules the big three will never stand in the market. |
| Posted by: 49 Pan 2008-12-14 13:10 |
| #7 so a Mercedes is poorly made compared to a Ford Explorer, you are an idiot. |
| Posted by: reality check 2008-12-14 12:07 |
| #6 The main problems the Big 3 have is : 1) Damn retirees won't die. They have more retirees than workers. The cost of these retirees is extremely high. 2)Overhead costs. That's the cost of state/federal taxes, salaries of executives, cost of existing facilities and their upkeep. If you look at the labor costs being tossed around, the $73/hr cost is the burdened cost. Only $28/hr is direct labor cost. The remainder is overhead costs. The majority, obviously. 3) Union labor rules. Lack of flexibility. The learned rule that one should only do the minimum that the job rules require. The quality of domestic producers is on par or exceeding, excepting Chrysler, anything built by the others, either here or overseas. That's also another issue. A vehicle, with any care and regular maintenance, can easily last 20 years. So it is primarily the desire to have a different vehicle that generates sales of factory new vehicles. The extremely high cost of new vehicles vs. average annual earnings dampens or extinguishes that desire. |
| Posted by: Woozle Elmeter 2700 2008-12-14 11:24 |
| #5 This was a very helpful article for me in a, er, discussion, yeah, that's it, discussion with a friend last night at a dinner party. Americans can build fine cars, we do it every day in these transplant factories in the South. We could do at the Big 3 as well if only the work rules and the antagonism were fixed. |
| Posted by: Steve White 2008-12-14 11:02 |
| #4 Check your spelling first, reality. Then check Mercedes quality vs Americans. Not so hot. |
| Posted by: Nimble Spemble 2008-12-14 10:59 |
| #3 Honda, Mercedes : QUALITY GM,Ford,Crystler : CRAP |
| Posted by: reality check 2008-12-14 10:39 |
| #2 They and others like them are located (correct me if I am wrong) in Right to Work states. |
| Posted by: Besoeker 2008-12-14 10:26 |
| #1 A parallel, profitable auto industry. Interesting. I would be taking a long hard look at how they do business if I were the big 3. |
| Posted by: bigjim-ky 2008-12-14 10:22 |