Articles in the New York Times (Detroit Goes From Gloom to Economic Bright Spot), and the Economist (GM prepares its getaway), praise GM's recovery, but the truth is, GM chose to retreat, rather than to fight to recover lost ground in terms of market share, salaries, or wages. In other words, they favored shareholders and executives over hourly workers, the people who actually earn the profits GM is so eager to brag about.
The auto industry shed 330,000 US jobs since 2008. And how many did they shed back in the eighties and nineties? And how many supplier jobs were lost that aren’t counted here?. I live in the suburbs of Detroit, and I can drive for miles past shuttered tool and die shops, and manufacturing plants. You can't swing a dead cat without hitting a guy who had a well paid, skilled union job, and now he’s retired at fifty, or swinging a hammer for a living with no benefits. And these are the guys who actually know how to build things. Their fathers and grandfathers built our manufacturing base, and without their skills we’ll never re-build it. And if we don’t rebuild it, we’ll never have a real rebound in our economy that yields broad prosperity. We’ll just continue to get what we’ve been getting, a narrowing band of wealth at the top, and vast legions of un- or under-employed, under-skilled poor.
And now the big three brag they trimmed wages (starting wage in an American UAW plant is around $14). Adjusted for inflation, I bet that's less than the $5 a day Henry Ford offered workers when he reasoned that employees won't be consumers if you don't pay them a decent, livable wage.
The new CEO, GM board member, Dan Akerson, has worked recently for the Carlyle Group, the bottom feeding private equity firm that has spent the last twenty years burying US manufacturing firms in debt, and then selling off the firm's assets (asset stripping) for pennies on the dollar, to yield healthy profits for Carlyle's well-heeled, capitalized investors, and a decimated manufacturing base for the rest of us. What sort of future for GM's domestic employment does that portend?
So what does the average, hourly-wage, taxpayer get for their bailout of GM? More competition for fewer jobs at a lower wage. And who gains besides shareholders and executives? A skeleton crew of engineering and management staff who glance over their shoulders every day, with the grim expectation that their job has been outsourced to someone in India earning 1/100 as much.
Showing posts with label auto industry. Show all posts
Showing posts with label auto industry. Show all posts
Saturday, August 14, 2010
Monday, March 30, 2009
Give the Big Three A Break
Give the Big Three A Break
I happen to have the good fortune of being a homeowner in the Detroit suburbs and former employee of an automotive supplier. I quit that job four years ago disgusted by the hyper-conservative (by conservative I mean eager to preserve the status quo, not necessarily politically conservative), hyper-cautious, cowardly decision-making practices that inevitably prevail (I managed a small electronics engineering group). Automakers always want to stick with whatever makes money today, and never want to take a chance on what might be profitable tomorrow. And they are relentlessly (mindlessly?) focused on cutting production costs at the expense of investing in innovation. I had smart, hard-working engineers in my group who were eager to attack tough problems. But they hardly ever got the chance because my bosses just wanted to wring every dollar they could out of the products we already had and offer nothing new even when our customers (Ford, GM, Chrysler, Audi, VW, etc.) specifically asked for it. We perpetually tried to re-sell the customer a product that wasn't up to the customer's demands by repackaging and "repositioning" it -- that is telling the customer the product was something it wasn't. So we spent a lot of time tweaking superficial details instead of getting in front of the real problem that confronted us: an aging product line.
A lot of smart talent was wasted because it was underutilized even when we had the money to act. Now the money is gone, and most of the talent that could leave did. What's left are those that couldn't get out (not necessarily because they're incompetent, though some are, but perhaps their families are settled here and they didn't want to bail on the devil they knew in exchange for one elsewhere they didn't know; or maybe their homes are "underwater" and moving is no longer an option).
I remember visits to the assembly lines where our products were used, and sometimes failed. I would accompany engineers on troubleshooting missions. The people I encountered on the assembly lines worked hard -- physically hard -- often in a noisy, rank environment. Many were older than I, and looked a lot more tired. But they were always eager to help us geek engineers get our product working, even if it meant added work and inconvenience for them. And they didn't do it because someone told them to. They smiled and offered to help, and they offered useful suggestions for how to make the product better and in turn improve the quality of their product. They care about what rolls off the line, I have no doubt about that. They earn their pay, and they earn the profits that pay much larger salaries to others, too. Standing next to a cacophonous testing bay where cars slid every thirty seconds onto rollers and were accelerated to 70 m.p.h., surrounded by eye-watering smoke from burning rubber, I realized pretty soon where the money came from for my cushy salary. The line workers always knew it, yet they never seemed to make that an issue, they just wanted to keep working. (And this wasn't considered a tough place to work, try slamming heavy, unwieldy dashboard assemblies into place all day.)
So, while my group spun its wheels making cosmetic changes on an outdated product, and assembly line workers busted their humps three shifts a day, management followed the quick buck doing the same thing my engineering group did: repackage and reposition. They produced the gas guzzling SUV's that indulgent consumers awash in credit demanded. There never seemed to be a plan for what to do if gas prices suddenly spiked and consumers decided they preferred something less profligate. And we all knew gas prices would spike.
And then gas prices did spike and I thought, "Hallelujah!" Detroit's finally going to start selling their little cars. And there was a brief blast of enthusiasm for them. Until the economic crisis kicked in and sales dropped 30%, 40%, 50% compared to just a year ago (WSJ: Auto Sales).
Well, the assembly line workers didn't induce the economic crisis; neither did the engineers. Sure, the Big Three would have been in trouble if gas prices remained high, but they would have bumbled their way along as they always have. They would have contracted, as they have been for years, but they wouldn't have gone over a cliff. It was not the Big Three that suddenly did themselves in (although executive incompetence was slowly dragging them down) it was a bunch of criminally greedy bankers and securities traders that sent us all over a cliff. But the criminally greedy bankers are not the ones crashing on the rocks. And to add further insult to injury, unions -- the only thing that ever moved working stiff living standards in a positive direction -- are being demonized. In the past, union wages might have gotten out of hand for some workers who could rack up a lot of overtime, but those are exceptions, and management -- hungry for for quick profits -- often made incremental wage concessions to unions while at the same time outsourcing thousands of their jobs (see UAW Timeline). Pensions got out of hand because management and politicians (bankrolled by management) wouldn't support Walter P. Reuther's plan to consolidate and nationalize pensions so younger workers would subsidize older ones. I agree union negotiators sometimes overreached, but it was while they watched executives overreach several orders of magnitude more severely. Still, unions are not, and never were the problem with American industry. It's greedy incompetent, lazy, parasitic executives that sold us out for a quick buck and brought American hope for future prosperity to its knees. more...
I happen to have the good fortune of being a homeowner in the Detroit suburbs and former employee of an automotive supplier. I quit that job four years ago disgusted by the hyper-conservative (by conservative I mean eager to preserve the status quo, not necessarily politically conservative), hyper-cautious, cowardly decision-making practices that inevitably prevail (I managed a small electronics engineering group). Automakers always want to stick with whatever makes money today, and never want to take a chance on what might be profitable tomorrow. And they are relentlessly (mindlessly?) focused on cutting production costs at the expense of investing in innovation. I had smart, hard-working engineers in my group who were eager to attack tough problems. But they hardly ever got the chance because my bosses just wanted to wring every dollar they could out of the products we already had and offer nothing new even when our customers (Ford, GM, Chrysler, Audi, VW, etc.) specifically asked for it. We perpetually tried to re-sell the customer a product that wasn't up to the customer's demands by repackaging and "repositioning" it -- that is telling the customer the product was something it wasn't. So we spent a lot of time tweaking superficial details instead of getting in front of the real problem that confronted us: an aging product line.
A lot of smart talent was wasted because it was underutilized even when we had the money to act. Now the money is gone, and most of the talent that could leave did. What's left are those that couldn't get out (not necessarily because they're incompetent, though some are, but perhaps their families are settled here and they didn't want to bail on the devil they knew in exchange for one elsewhere they didn't know; or maybe their homes are "underwater" and moving is no longer an option).
I remember visits to the assembly lines where our products were used, and sometimes failed. I would accompany engineers on troubleshooting missions. The people I encountered on the assembly lines worked hard -- physically hard -- often in a noisy, rank environment. Many were older than I, and looked a lot more tired. But they were always eager to help us geek engineers get our product working, even if it meant added work and inconvenience for them. And they didn't do it because someone told them to. They smiled and offered to help, and they offered useful suggestions for how to make the product better and in turn improve the quality of their product. They care about what rolls off the line, I have no doubt about that. They earn their pay, and they earn the profits that pay much larger salaries to others, too. Standing next to a cacophonous testing bay where cars slid every thirty seconds onto rollers and were accelerated to 70 m.p.h., surrounded by eye-watering smoke from burning rubber, I realized pretty soon where the money came from for my cushy salary. The line workers always knew it, yet they never seemed to make that an issue, they just wanted to keep working. (And this wasn't considered a tough place to work, try slamming heavy, unwieldy dashboard assemblies into place all day.)
So, while my group spun its wheels making cosmetic changes on an outdated product, and assembly line workers busted their humps three shifts a day, management followed the quick buck doing the same thing my engineering group did: repackage and reposition. They produced the gas guzzling SUV's that indulgent consumers awash in credit demanded. There never seemed to be a plan for what to do if gas prices suddenly spiked and consumers decided they preferred something less profligate. And we all knew gas prices would spike.
And then gas prices did spike and I thought, "Hallelujah!" Detroit's finally going to start selling their little cars. And there was a brief blast of enthusiasm for them. Until the economic crisis kicked in and sales dropped 30%, 40%, 50% compared to just a year ago (WSJ: Auto Sales).
Well, the assembly line workers didn't induce the economic crisis; neither did the engineers. Sure, the Big Three would have been in trouble if gas prices remained high, but they would have bumbled their way along as they always have. They would have contracted, as they have been for years, but they wouldn't have gone over a cliff. It was not the Big Three that suddenly did themselves in (although executive incompetence was slowly dragging them down) it was a bunch of criminally greedy bankers and securities traders that sent us all over a cliff. But the criminally greedy bankers are not the ones crashing on the rocks. And to add further insult to injury, unions -- the only thing that ever moved working stiff living standards in a positive direction -- are being demonized. In the past, union wages might have gotten out of hand for some workers who could rack up a lot of overtime, but those are exceptions, and management -- hungry for for quick profits -- often made incremental wage concessions to unions while at the same time outsourcing thousands of their jobs (see UAW Timeline). Pensions got out of hand because management and politicians (bankrolled by management) wouldn't support Walter P. Reuther's plan to consolidate and nationalize pensions so younger workers would subsidize older ones. I agree union negotiators sometimes overreached, but it was while they watched executives overreach several orders of magnitude more severely. Still, unions are not, and never were the problem with American industry. It's greedy incompetent, lazy, parasitic executives that sold us out for a quick buck and brought American hope for future prosperity to its knees. more...
Friday, December 5, 2008
Auto Industry Bailouts
A letter that I sent to the New York Times and my representatives in Congress:
Re: New York Times
”Back on Capitol Hill, Auto Executives Still Find Skeptics “
By DAVID M. HERSZENHORN and BILL VLASIC
Published: December 4, 2008
It is unfortunate that Congress and, according to polls, the rest of the nation are willing to let the auto industry wither and die. Of course, the execs have mismanaged the business. That’s what American business has done for the last forty years in the pursuit of unrealistic short-term profits. The tragedy is that the execs will, as always, walk away with piles of cash to sustain them while they search for new prey to bleed dry. It’s the assembly line crews I worry about. I live in Detroit (well, one mile north) and I worked in the automotive industry (engineering & management) long enough to understand the hyper-conservative, me-first attitude of management that prevents the great ideas of engineering peons from becoming great products. But if you visit an assembly plant, you will meet men and women who work hard every day -- I mean with their arms, legs, and backs -- and know the manufacturing process as well as anyone and are eager to help wayward engineers find answers.
When I visited plants, the thought I always came away with is that my cushy salary was carried on the backs of these folks. Assembly line workers procured union benefits through long and violent battles with management. Perhaps union leaders overreached, but to let the auto industry wither and further undercut unions would roll American labor relations back to the brutal first days of the industrial revolution.
There are lots of ways the engineers and assembly line workers could be productive, Congress just needs to be imaginative. Detroit is a vast repository of industrial know-how, a national asset we can not afford to lose. Save the auto industry today, and if they still can’t sell cars tomorrow, put these smart people to work building the windmills, photovoltaics, and public transportation of the future. We put a man on the moon; we can put men and women to work building a sustainable and proud future for this country.
more...
A letter that I sent to the New York Times and my representatives in Congress:
Re: New York Times
”Back on Capitol Hill, Auto Executives Still Find Skeptics “
By DAVID M. HERSZENHORN and BILL VLASIC
Published: December 4, 2008
It is unfortunate that Congress and, according to polls, the rest of the nation are willing to let the auto industry wither and die. Of course, the execs have mismanaged the business. That’s what American business has done for the last forty years in the pursuit of unrealistic short-term profits. The tragedy is that the execs will, as always, walk away with piles of cash to sustain them while they search for new prey to bleed dry. It’s the assembly line crews I worry about. I live in Detroit (well, one mile north) and I worked in the automotive industry (engineering & management) long enough to understand the hyper-conservative, me-first attitude of management that prevents the great ideas of engineering peons from becoming great products. But if you visit an assembly plant, you will meet men and women who work hard every day -- I mean with their arms, legs, and backs -- and know the manufacturing process as well as anyone and are eager to help wayward engineers find answers.
When I visited plants, the thought I always came away with is that my cushy salary was carried on the backs of these folks. Assembly line workers procured union benefits through long and violent battles with management. Perhaps union leaders overreached, but to let the auto industry wither and further undercut unions would roll American labor relations back to the brutal first days of the industrial revolution.
There are lots of ways the engineers and assembly line workers could be productive, Congress just needs to be imaginative. Detroit is a vast repository of industrial know-how, a national asset we can not afford to lose. Save the auto industry today, and if they still can’t sell cars tomorrow, put these smart people to work building the windmills, photovoltaics, and public transportation of the future. We put a man on the moon; we can put men and women to work building a sustainable and proud future for this country.
more...
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