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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: michael97123 who wrote (437077)	11/28/2008 10:29:21 AM
From: i-node	Read Replies (1) \| Respond to of 1573850

You say unions aren't the problem, but then go on to speak about unskilled workers making, effectively, 150K/y. The number of dealerships has little to do with it. The "cost" of a dealership to GM Corporate is nil. Dealerships pay for EVERYTHING. There could conceivably be some savings by dropping unpopular lines like Buick, however, these decisions are made based on incremental margin analysis and I suspect GM has done its homework on this subject and determined that those lines, while perhaps not profitable, contribute to defraying fixed costs and are being kept active for that reason. People should keep in mind that TM has Toyota, Lexus, and Scion in the USA and THEY don't feel the need to drop any of those. This is a complicated problem and without access to the operational details it is hard to know what all enters into a solution. But it is apparent that unions have to be the starting point because they are far and away the biggest component of the problem. Your own remarks ought to make that clear. A GM plant requires nearly 50% more people just to keep the doors open versus an American Toyota plant. This is due solely to unions allowing workers to be paid for not working and standing in the way of modernization. And it is, undoubtedly, also the source of some of the QC issues.

To: michael97123 who wrote (437077)	12/1/2008 6:35:30 PM
From: Joe NYC	2 Recommendations Read Replies (3) \| Respond to of 1573850

michael, Unions arent the problem, what is is that union wages have given others the competitive edge. Isn't that a contradictory sentence? Of course, there is the management side that, capitulation after capitulation to the unions allowed the situation to reach the current crisis. The union labor (un)productivity is what drives the product Big 3 produce. If you start with uncompetitive labor cost, you have to retreat to higher and higher niches, where the margins are high enough so that you can get away with an uncompetitive labor force. What aided the Big 3 was there was a big appetite on part of US consumers for these niche product (minivans, SUVs, trucks etc.) and what might have remained a niche turned into mainstream - postponing the day of reckoning for the Big 3... Joe