Tuesday, November 18, 2008

Auto Makers: Telling It Like It Is?

General Motors has published a full-page ad in most of today’s newspapers, promising dire results for the rest of us if their demands for a piece of the Federal Bailout Pie are not met.

The ad is entitled “Telling it Like it Is,” with a six-degrees of separation angle explaining one in ten Americans are employed in endeavors related to the automobile industry…and if the Big Three are allowed to succumb to their own poor management, other suppliers, stores, restaurants and hot dog vendors will go the way of the Edsel.

Let me tell you how it is, GM, Ford, and Chrysler:
You’re fat.
You need to get a grip on reality.
People don’t want to buy what you’ve been telling us we want.

We don’t want vehicles that come with their own zipcodes, and require a signature loan to fill up. Okay, that’s excessive hyperbole, but this is not:

Total compensation per hour for the big-three carmakers is $73.20. That’s a 52% differential from Toyota’s $48/hour compensation, which includes wages and health and retirement benefits. What's the difference? Toyota's factories aren't shackled to the UAW.

In fact, the oversized UAW-driven pay package for Detroit is 132% higher than that of the entire manufacturing sector of the U.S., which comes in at $31.59/hour.
You tell me where the problem is.

To allow the U.S. Automobile manufacturing sector to implode would be devastating, no doubt. But the Big Three—and the unions who are sucking them dry—are going to have to show substantive changes in the way they operate and by whom they are managed.

Come to think of it, that’s what we’re all having to do to survive right now.
So why should Detroit get any special favors from the rest of us?

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