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  • UAW Won't Let Detroit Make Competitively Priced Cars

    Even as the Detroit automakers are asking Congress for a taxpayer bailout, the Detroit News reports that Ford Motor Co. is operating highly automated, highly integrated, and highly profitable auto plants — in Brazil. They employ state of the art technology and techniques to produce high-quality vehicles:

    This state-of-the-art manufacturing complex in the northeastern Brazilian state of Bahia is not only the centerpiece of Ford’s Brazilian turnaround plan, it is also one of the most advanced automobile plants in the world. It is more automated than many of Ford’s U.S. factories, and leaner and more flexible than any other Ford facility. It can produce five different vehicle platforms at the same time and on the same line. …

    At Camaçari, more than two dozen suppliers operate right inside the Ford complex, in many cases producing components alongside Ford’s main production line. Having those supplier operations on-site allows Ford to take the concept of just-in-time manufacturing to a whole new level. Inventories are kept to a bare minimum, or dispensed with entirely. Components such as dashboard assemblies flow directly into the main Ford assembly line at the precise point and time they are needed. …

    The system also helps with quality. If there is a problem with a part, it is a simple matter for Ford engineers to trace it to its source and work with the supplier to correct it.

    However, plants like this won’t be coming to the United States any time soon. Why? The United Auto Workers.

    The UAW has been heavily criticized for its role in driving the Detroit automakers to the brink of bankruptcy, mostly for the $70 an hour that active workers earn in wages and benefits. Active and retiree health benefits alone add $1,200 to the cost of each vehicle GM produces.

    But excessive wages and benefits are not the only way the UAW has hurt the once-mighty Big Three. The UAW has also saddled them with complex work rules that allow only certain workers to do certain tasks, and no one else. Ford’s master contract with the UAW is more than 2,200 pages long and weighs more than 22 pounds. Those work rules prevent the Big Three from opening any integrated and competitive plants like this in the United States any time soon:

    Ford sources said it is the sort of plant the company wants in the United States, were it not for the United Auto Workers, which has historically opposed such extensive supplier integration on the factory floor.

    Bailing out the Detroit automakers would only subsidize failure. Detroit knows how to make competitively priced cars efficiently. The United Auto Workers simply won’t let them.

    Posted in Economics [slideshow_deploy]

    15 Responses to UAW Won't Let Detroit Make Competitively Priced Cars

    1. J Man, USA says:

      The auto companies could easily build plants like this in the USA. It is just a matter of them wanting to invest in US manufacturing. The cars made in Brazil are not even sold in our country. It is also a newer plant. Most of the plants in the US are old and would need a complete redo to the point that it is more cost effective to build a new plant to match the one in brazil. I also saw the video of how the plant in Brazil operates. Most of the workers in the plant were not Ford employees. They were employed by the suppliers. Every time one of the companies retool a plant for a new car the suppliers are doing more of this type of work, it is just being doe offsite ant the suppliers location.

    2. John, Michigan says:

      "Active and retiree health benefits alone add $1,200 to the cost of each vehicle GM produces."

      One more reason to support a universal health plan for this country.

      There are some misleading numbers in this post. The $70+ per hour includes all legacy retiree benefits. It is not the cost per hour of active workers. That cost is within $10 per hour of non-union auto plants. Based on that cost difference for labor, the cost difference in the price of a $30,000 car would be $600. Not exactly a deal breaker.

      "Active and retiree health benefits alone add $1,200 to the cost of each vehicle GM produces."

      Does that statement imply there should be no benefits for active or retired employees? Are they to be thrown on the slag heap after they retire? Do the foreign auto companies not provide benefits for their employees? Oh, that's right. Japan, China, Korea, in fact all competitive countries, have universal health care. The foreign corporations don't have to add that to their cost structure. How convenient.

    3. Peggy Pharmer @ Sac, says:

      Congress should start by taking a decrese in salary! We must start cutting taking steps to get our country back being competative and bring jobs back here, not give more jobs to other low paying employees. We have gone way overboad in letting the unions destroy our competitiveness

      and forcing jobs to be sent overseas??

      Unions have stayed corrupt, uncompromising and not thinking of the employees welfare but lining their own pockets with their power??

      The National Education Assoc. is another example of being dictatorial

      with employees money. Education is a disaster with them in control. They need to be elliminated. They are the largest most powerful with the most money of all the unions. Unions buy their way into government tollerance!!

      Give large amount of money to ones who they can control and put them into office?? Unions should not be allowed to give campain money with employees money or approval?

      This would be a good start…

      Being dumbed down "We the People are taught to rely on the ones who take advantage of them?

      People will have to be taught again how to LOVE THEIR COUNTRY and put RESPECT BACK INTO OUT LIVES…Not HATE..

      Thank you for letting me make comments…

    4. Pingback: The UAW: An Unsurmountable Obstacle to Competitiveness « Jane Q. Republican

    5. Jon, NJ says:

      let the government govern, let the market place including the crooks like Madoff (he wouldn't last a minute apart from "government" like the SEC) establish what the market will look like. If it is without the UAW so be it. If it is without Lehman Bros. so be it. If it is without Sharper Image, so be it. Ford, and others with true entrepreneurial skills like most of us Americans will get it right. Small government and incentives will get it right.

    6. Mark Mueller, Arizon says:

      In response to John from Michigan; You suggest Universal Health Care as a possible solution. Why should an inefficient program like that be foisted upon ALL Americans in the hope it makes the unionized auto workers more competitive. You also mention the $1200 legacy costs per vehicle. How do those costs compare to other workers legacy costs in other, more efficient industries?

    7. Bob Russell says:

      Suggestion: Replace the money to be paid for pensions and health benefits with the amount of special stock issue that will pay for those things, and give it to the employee.

      While similar to printing money, it will give incentive for the employees to work efficiently to drive up the price of the stock, increasing their dividends. Let them be the ones to get rid of the work rules — and they will, if it is affecting their revenue stream.

      The employees are the ones who know where the product can be produced more efficiently, and they will stay on management's back to get it done. No one should care very much if they are working for the big company or for the supplier — except the union meisters.

      Everybody benefits, and the taxpayer will bless them all.

    8. Bob Russell, Texas says:

      Suggestion: Replace the money to be paid for pensions and health benefits with the amount of special stock issue that will pay for those things, and give it to the employee.

      While similar to printing money, it will give incentive for the employees to work efficiently to drive up the price of the stock, increasing their dividends. Let them get rid of the work rules — and they will, if it is affecting their revenue stream. The employees are the ones who know where the product can be produced more efficiently, and they will stay on management's back to get it done.

      Everybody benefits, and the taxpayer will bless them all.

    9. Edward, Indiana says:

      General Motors workers (GM and UAW together) make up 10% of the cost of doing bussiness. UAW is around 5% the Cost. Why is it then that the politicians are fooling the public into believing that the UAW is the biggest problem. The UAW has given consesions on healthcare, wages, retiree benefits, educational benefits. GM legacy cost has been taken over from the UAW through VEBA. New hires are hired at $14 hour with benefits added to under $28 hour. Toyota's hourly wage is $30. Employees at Toyota also get huge bonuses every year. UAW give up bonuses and pay increases to help GM in sept of 07 contract.

      What people don't understand is that GM will waste money then blame it on the UAW. They will hire outside contractors to come in and do onsite construction jobs while the UAW fights to do the jobs with there own man power. After the jobs are complete the UAW skilled trades dept. has to practically redue what the contractors got millions to do. On one of many instances GM bought a $450,000 rail and sold it 1 month later for $50,000. This stuff happens all the time. If you still do not beleive look at the GM Doriville assemby plant. From 2000 -2004 they were Arbins report winners for quality in the minivan division. 4 years stait, wow. Then in late 2004 they had a model change. The new minivan looked just like the old one, come on now who is going to by a van that looks like a van from 1996. At first glace the workforce at the plant said "Looks like they want to close us down." GM management order non conforming parts for the vans and when quility went down they blamed it on the UAW. 1 1/2 years later they announced that the plant was going to close. GM BILT A VAN THAT THEY KNEW NO ONE WOULD WANT…WHY??? They take money from north american operations and invest in other countries, period.. Thats the problem not the UAW. 1.6B to Mex ,448M Thai, 500M Russia and thats just the begining. Take a look at how much of Toyota bussiness GM has. Please America do the research and don't be brianwashed, you should embrace the UAW with open arms, they are the ones really fighting for America.

      National Heathcare is the right thing! If you are going to bash it you better do the research. Companies open jobs in countries where they do not have to pay healthcare cost. It's that simple. And to top that off, National Heathcare is a great idea. Everybody should have help, rich or poor that is good for humanity. This National heathcare system consept actually does work, contrary to Americas popular believe. To see the benefits of it do the research on the counties that have, not just Canada. Rent "Sicko" if you can put up with the drama of Mike Myers. Research..Research..Research!!! That is the only way to intellegently make a decision. Do not believe anything you are told, don't even beleive me!!! Just do the RESEARCH!!!!!

    10. Tom McKinney, Dunwoo says:

      What is the annual retirement annuity of a UAW retiree after 30 years of service? Please email me: mckinneyt@bellsouth.net

      Tom McKinney

      Dunwoody, Georgia


    11. Spiritof76, New Hamp says:

      If UAW is so great as some posters claim, why doesn't then any foreign car manufacturer open plants in Michigan? The truth is UAW and closed shop of Michigan.

      The wages and benefits are only one aspect of the union problem. The most insidious aspect is the so called work rules. I have worked with manufacturing union workers in a large and high tech. industry. I can very clearly say that if we get 4 hours worth of work in a 8-hour shift it is a great achievement. That company slowly over the many years reduced work scope at that plant and moved them to a non-union plant in the south. The work ethics of the southerners (at least the ones that I came in contact with) is outstanding. The unions have killed the manufacturing jobs in this country,particularly in the northern states.

      Management at the big three is not something to write about either. They are bloated, arrogant and incompetent.

      Solution- let them go bankrupt. Reorganize and let the unions know that either they comply with the work efficiency requirements or have the plants close down.

      Another non starter- socialized health care. Just look at Canada. A lot of Canadians show up in the US because they can not get the treatment there under the socialized medicine. In England some cancer patients get turned away because they are not emergency cases yet!

      Make health care another commodity and eliminate all middlemen and bureaucrats, private or government. We all need food and we get them at the local grocery stores directly. We don't buy food insurance!

      Finally, take down the Corporate tax rate to more like the rest of the world. The tax burden in Russia is far less compared to the US! Eliminate the capital gains and savings taxes. In short, down size the government as our founding fathers intended. You will witness an economic miracle.

    12. Barb -mn says:

      Of course UAW doesn't want competitively priced cars in Detroit. Detroit may build their success again and spoil the government set-up. They're all connected.

    13. Pingback: When Will the Unions be Fired? | Just Politics..?

    14. Pingback: Will GM Spend Taxpayer Bailout Money on Overseas Operations? - Page 2 - Political Wrinkles

    15. Pingback: James Hoffa Says Unions Fight for Middle Class

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