Wow...blaming the UAW for the collapse of the big three? Sure the union was bargaining for increases in wages...that's what unions are for.
At the same time corporate profit continued to go up. Executive salaries continued to go up. Management salaries continued to go up. Labor only wanted their fair share.
You have a valid point. Management at the Big 3 was complacent and arrogant. Through the 1950's and into the 1960's the American auto-consuming public didn't know any better, as they hadn't been presented with any alternative products. In the late 50's VW began to get a toehold in the US market (barely). My grandfather was a farm extension agent and owned a chicken hatchery in Michigan in the 1950's and I remember he owned one of the early VW microbuses. The first Toyotas began appearing sometime in the 1960's but really didn't take hold until, as you note, the Arab oil embargo at the conclusion of the Yom Kippur war in 1973. When people started having to line up for gas, a few of them began to rethink the idea of 4,000 pound BarcaCruisers that got 12 miles to the gallon. Yet, the Big 3 still didn't get it. Their attempts to create small cars in the late 1960s and early 1970s were laughable. How many aluminium block Vegas do you see on the road anymore? How many Pintos, with their exploding gas tanks.
The big three was a very profitable business. Then along came the cheap imports from Japan. But calling these vehicles "cheap" only refered to the price. The cars were very well designed. They were designed completely through the manufacturing process. It was the Japanese that pioneered advance manufacturing processes and the use of robotics.
Agreed.
The real cause of the decay of the American auto industry was complacency within management and engineering. Labor was just doing what they were told to do, they way they were told to do it. It was management that was asleep at the wheel. Hell the Japanese proved that, and then they came here to America and operated profitable auto manufacturing using American Labor.
Yes, Orca, management was asleep at the switch (let's not smear that great band, Asleep at the Wheel with references to US Auto management). They didn't anticipate the threat from overseas and when they did get the first glimmerings that the golden days of American auto manufacturing were over, they reacted poorly, even stupidly.
That said, some of the blame goes to organized labor. At a time when the industry was faced with strong competition from overseas, the unions continued to insist on sweet contract renewals that made the industry uncompetitive. As I noted in my post yesterday, for many in SE Michigan and elsewhere where there was a Ford, GM or Chrysler plant, the prospect of a job with one of the Big 3 translated into a decent, dependable income and good retirement (even if the job itself was mind-numbing).
There was antagonism between labor and management, due, I believe, to problems on both sides. I believe this resulted in a lack of desire on the part of the people who built the cars to build a quality product. I've talked to people who, as a joke, would regularly leave coke bottles inside doors, where they'd rattle and bump around. It did nothing to enhance the image of the manufacturer, but was a little protest on the part of the worker and a little jab back at what was at the time a management with blinders on.
Certainly cost of labor was a contributing factor in the demise of the big three. Japanese labor was cheaper. But the whole industrial culture in Japan was very oppressive to the Japanese worker. Many worked 10 to 12 hours a day...7 days a week. And they did this for less money than the typical GM worker. This same work ethic went right to the top, with management doing the same long hours.
The result was a better auto for less money. It was not a result of Labor prices alone. It was the result of efficiencies in the entire business.
Let's face it, Japan had, and continues to have, a markedly different culture of work than the U.S. Curiously, the culture that gave people a job for life, is changing and people aren't assured of staying with the same company from the beginning to end of their careers.
No wonder the Koreans are making inroads. Kias and Hyundais used to be laughable (Hyundai bought Kia after Kia ran into trouble financially, and then Hyundai ended up in bankruptcy). As I understand it, they've made strides in terms of quality and offer some of the best warranty coverage around. I'm starting to see more and more Korean cars on the road.
Another factor was that the Japanese cars were more fuel efficient as well. When the oil crunch came in the 70's, the Japanese cars were getting twice the mileage of American cars. As sales went down, the American manufacturers continued to produce big gas guzzling cars. American consumers turned to the smaller more efficient Japanese cars in droves. The market share for the big three plummeted...all the while they kept on doing things the same old way...like lemmings heading off a cliff.
Yup. Agreed.
In short it was not the UAW that killed Detroit. It was the big three management that killed an industry. It pisses me off that you are so glib about American labor. Americans continue to be one of the most productive workers in the world. You have it all wrong about the UAW. Your story about Unions killing the auto industry in America is not true.
As noted above, it was both management and labor that killed the goose that laid the golden egg. Management has tried to improve, but IMO still doesn't get it. Have you followed the quality problems Ford has had in recent years? Chrysler makes products noted for transmission problems (I owned one). Just yesterday on Car Talk, Tom and Ray warned a woman away from a Jeep Cherokee she was yearning for. Why is it that in 2004, the US auto industry is still struggling with quality issues?
But now as manufacturing techniques have matured, they can be exported anywhere in the world. Then if management and engineering is on a par country to country, factory to factory, Labor does become a factor. Quality in modern manufacturing can be held to high standards. But should we simply move all our manufacturing ability to foreign countries where people are so poor that they will work all day for five dollars? Their kids have no education, they have no health care. They live in shacks and shanties.
See Korea, above.
What do you suggest? Bring the manufacturing base back to the United States, pay them $25/hour and a basic car will cost $35,000? Buy an Infiniti G35 for $35,000 or a Chevy Monte Carlo for the same price? That's not much of a choice and the buyers won't go for it.
Matter of fact, the Japanese companies have been quite successful in manufacturing quality cars in the United States. Toyota, Honda and Nissan all have plants here.
Is this what we want to bring to the world? Turning poor workers the world over into slaves, while corporate profits soar?
I'm not an economist and don't pretend to have a solution.
The global economy is changing. Some are benefiting, some are not. Again, what do you suggest? |
