I wrote a paper on GM's situation recently for a class, and thought I'd post a little bit of my introduction...

Your thoughts? Do you agree or disagree with me?

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"The most important single central fact about a free market is that no exchange takes place unless both parties benefit."
- Milton Friedman

"The quickest way of ending a war is to lose it."
- George Orwell

I would agree 100%.
You are absolutely correct in that labor compensation MUST be in tune with the companies margins made from that labor.
A company must have the ability to adjust labor costs during downturns in the business.
The UAW has very effectively removed that ability from GM. Somewhere along the way the UAW's philosophy went from seeking fair wages, improved safety measures for it;s members to nothing more than creating a labor force hell bent on "entitleism".
As I said in a previous thread - GM spends nearly $2 million dollars every business day on healthcare...for retirees only. Of the over 600,000 people that GM gives compensation to...only 39% are employed. That is an impossible expense to overcome in comparison to competition.

management stupid, UAW raping everyone... yeah, thats about it.

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Socialism doesn't create a rising tide that lifts all boats. It drains the lake and teaches the boat riders not to help themselves by rowing.

Jesus loves you, allah wants you dead

"Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others."

Ayn Rand

GM has been making cars in this country for over 100 years, something that can't be said for Honda, or Toyota. America is also the only industrialized country which doesn't provide universal health care. A burden companies like Honda, and Toyota don't have to bear in their own country. The overall cost of employee benefits for Honda, and Toyota are going to be drastically lower than GM's mainly because they haven't been manufacturing cars in the country as long as GM has, and they don't have to deal with health care costs in their own country.

If we would get of our asses and pass universal health care, that extreme burden would be lifted from American companies.

As long as American companies, like GM, have to foot the bill for employee health care costs, they will never be able to compete on a level playing field with its foreign competitors, unless you get the UAW to provide health care for its own union members (hmm, now that's a thought).

Maybe foreign car manufacturers should be taxed to make up the difference to have parity in the market? But why should foreign companies have to pay for American workers' benefits, just because we don't establish universal health care?

I remember when a cheap car meant a Datsun, Honda, or Toyota, now, it means a Chevy. But where many believe GM has failed to keep up with the rest of the world, they still manage to trade the top spot in global sales with Toyota (which is only a recent development). And the last time I checked the Corvette kicks ass on the race track.

I don't believe that it's so much an issue of GM modernizing itself to keep pace with the rest of the world, as much as it is this country's inability to modernize to keep pace with the rest of the world.

In 2004 the United States ranked 29th in infant mortality. 29th! That's just unacceptable; and has nothing to do with GM or the UAW.

Sure we can demand that our car companies build more efficient, and alternative fuel vehicles, but unless we can address the increasing burden that health care benefits are placing upon American companies, we will fall further behind the rest of the world.

IMHO

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"Shake off all the fears of servile prejudices, under which weak minds are servilely crouched. Fix reason firmly in her seat, and call on her tribunal for every fact, every opinion. Question with boldness even the existence of a God; because, if there be one, he must more approve of the homage of reason than that of blindfolded fear."

-Thomas Jefferson

You correctly observe that compensation for the workers on the line is not tied in any way to their performance/productivity. You should also note that the same holds true for GM's management, who draw handsome salaries and are rewarded with lavish bonuses, even when the company is losing money. There has been no incentive for management to insist upon quality, no reward for excellent performance, just a "reward" for being there.

If the company's management and supervisors knew that their own compensation would be adversely affected by poor performance, they might be motivated to deal more effectively with the problems which have dragged the company down. American manufacturing was once the envy of the world; it is no coincidence that in those happier days American management also set the planetary standard.

Good workers will respond to good leadership. Where there is no good leadership, no good workers will be found.

General Motors was formed early in the automotive business cycle, and it quickly dominated the market and took over the top spot from Ford, by innovation, it introduced the electric starter (no more crank start), power steering, power brakes, automatic transmission, sealed beam headlights, and at one point had to stop innovating in order to allow it's competition to survive, because it did not want to be the only automotive company in the US and be broken up by government.
It produced automobiles for an oil producing and exporting nation, which meant that it produced automobiles for a country with dirt cheap gasoline. While the rest of the world, Europe and Japan competed on fuel economy, the US market was dominated by power and style. Little foreign cars formed a niche market in the US, but the US market was the worlds richest, and the cars it demanded were not suited to petroleum importing countries with their high gas taxes.
Because the US had a system of company provided health care and pensions as a vestige of WWII wage and price controls, the company had to take on these costs, which it could afford to do in the environment of the time.
Now it finds itself in a petroleum importing nation, which has changed the market to make foreign made cars more desirable, and because of our health care situation, new factories built by foreign companies have far lower health care costs, their work forces are younger and they pay substantially lower premiums, and they have no retirees.
American auto makers and American manufacturers in general are saddled with high health care burdens which make them uncompetitive in a global market where socialized health care and government pensions are the rule.
You can whine about the UAW, but it's the health care system and the pension system in the US which is unfavorable to manufacturing, especially to older firms with older workforces and retirees.

The free market solution is to let these firms and US manufacturing disappear, along with US wealth and power in the world.
Eventually the US will be forced to accept these social measures, but until it does, jobs will leave the country for more business friendly places, where health care and pension costs are not borne by employers.

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“ The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”

Adam Smith , The Wealth of Nations 1776

"We have always known that heedless self-interest was bad morals; we know now that it is bad economics"
FDR's second Inaugural Address

720,000+ people being paid and benefits provided for, 80,000 actually working.

Whats wrong with this picture ?

__________________
Socialism doesn't create a rising tide that lifts all boats. It drains the lake and teaches the boat riders not to help themselves by rowing.

Jesus loves you, allah wants you dead

"Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others."

Ayn Rand

Poor resource management.

Maybe if we're going to pay workers who aren't currently working, they should be handed a shovel and put to work cleaning up the Gulf Coast.

__________________
"Shake off all the fears of servile prejudices, under which weak minds are servilely crouched. Fix reason firmly in her seat, and call on her tribunal for every fact, every opinion. Question with boldness even the existence of a God; because, if there be one, he must more approve of the homage of reason than that of blindfolded fear."

-Thomas Jefferson

And who do you think will pick up the slack? The poor? Not under American socialism, where the big earners (like the auto companies) pay the taxes.I agree. We need to remove special government protection for unions and let companies offer any terms they want...ones below some "minimum wage" and ones that don't have to include health benefits.Then why post it here? Anyway, what does infant mortality rate have to do with hurting this situation? If workers have more dead kids, they will have fewer expenses since kids cost a lot of cash.Efficient AND use alternative fuel? Can you point some out?We do need to address them...by getting rid of special protections for unions.

So ho, now I see, I wondered why the conservatives have been all so willing to cut their own throats.

But now it becomes clear, the Randian paradise, workers returned to the 19thc status, working with no health care below minimum wage, while the fat cats continue to pull down billions in bonuses. What's next, 12 hour days 7 days a week, or wait, no, let's employ that cash draining child, little fingers don't even jam the machinery.

Like who's going to BUY the goddam car when we all don't make enough to eat and it still costs 50g I dunno, maybe Joe da plummer, or your doctor, not that anyone will be able to afford either one

Fortunately, most people in the country are not governed in everything they do by an irrational hatred of anyone who makes less money than them, and have managed to vote these assholes out of power before they could put their plan through, however, that was just barely, and may have been too late.

In which case we'll just have to rely on the tried and true methods other countries have used since time immemorial to rid themselves of an oppressive oligarchy. Messy, yes, but effective and puts the lesson home, don't treat people like machinery unless you want to have them jam you into it.

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Alizee Jacotay, the reason god invented hips

Only if they want to. Employment contracts need to be signed by the employee, too.Again, if people want to do that, they should be free to do so. If you are self-employed, you already can work as much as you want. You are undermining your own argument. If nobody buys their cars because of the corps's actions, then why would the corps do it when they know they would be harming themselves? I thought corp leaders were governed by greed. Tried and true? You mean like over here, where unions get special rights, and we still have companies making shitty cars and begging for government welfare? People will always be treated like machinery. Just because you have a minimum wage doesn't change that. They will still pay as little as possible and screw over as many people as financially beneficial to themselves. Laws don't make people nice.

The real problem is that american cars are percieved to be untrustworthy by most americans. If you place an american car and a japanese car next to eachother and ask people to choose one they are going to choose the japanese car because they percieve it as being more reliable. Get the engineer's asses in line and prove to the average american that american cars are just as durable or more durable then their competitors and you will see a spike in sales

Ahoy Eagle7!

i read yer introduction matey, and found you raised some interestin' points.

i do not agree, though, that GM be in trouble due to respondin' slowly...i think they be in trouble for respondin' poorly. the unravelin' of the american auto industry has taken place over decades...a death by a thousand cuts.

also, "GM's static power structures based upon legitimate and coercive authority", met their match when faced with the fearsome collective bargaining might 'o the UAW and in the process, gave away too much in cradle to grave legacy costs.

to be honest, i don't know who to blame here. labor is always goin' to seek the top dollar it can get from its employees. this be true in any profession that i know of. its management's job not to cave and sign a deal that may bankrupt the company. aye?

and finally...
with the exception 'o the Taurus (Ford), american auto manufacturers haven't made a car that americans have wanted to purchase in more than two decades. fer this, i blame the folks at the top 'o the totem pole.

you ended yer introduction with this statement...
with this, i agree entirely, matey.

*salutes*

-MeadHallPirate

I don't know if we should be comparing American and Japanese, but rather brand to brand. I doubt that all Japanese brands are more reliable than all American brands. And if you're going to prove that, doesn't it have to be true first?

Fact is, Unions are needed less and less, because modern American workplaces can't be run efficiently on sweatshop labor. Look at the nonunion Toyota, for example. All of their workers make good livings, WAY above minimum wages ($40/hr including benefits), with only High School Diplomas.

It seems quite obvious to me that the success of nonunion companies in producing great products while paying fair wages demonstrates how Unions are becoming irrelevant. The Randian paradise you describe is full of Toyota plants, not Wal-Marts. BIG difference.

__________________
"The most important single central fact about a free market is that no exchange takes place unless both parties benefit."
- Milton Friedman

"The quickest way of ending a war is to lose it."
- George Orwell