November 17, 2008 5:46PM
Why the Automakers are a Mess
By Cheryl Casone
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Take a look at this chart, I found it from a Professor at Harvard’s blog after someone mentioned him to me moments ago. The chart shows you why American auto companies are struggling, and Asian automakers are faring better. (they have problems also, but not to the extent our companies do.) He is a Professor at Harvard, Greg Mankiw, and he posted this chart courtesy of another professor, who is based in Flint, Michigan of all places.
Cost Differences
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I have talked with a Detroit worker and he says that he does not see anywhere near $70 plus per hour in his salary and benefits. What are they putting into this figure?
I worked for GM for 26 years. Since the day I started working we were told that we had to cut the cost of our product or the factory would be closed or shut down. Every year we met that demand. I dare say that the money that we cut off those products were not passed on to the consumer, but were pocketed by the top people at the head of the company. Some of those making million dollar bonuses every year. The working man still was told that we had to cut the cost every year or else. We met every demand. I think that somebody needs to check out the top guys, shure they make big decisions, but they also make millions of dollars. The problem possibly could be that all those bonuses kept adding up and somebody just didn’t stay on top of their job. Just and opinion
Bottom line is the autocompanies along wqith the union created a “false economy” that can never be sustained as it is. When workers earn wages that are much higher than the value of the skills, knowledge and abilities on worth the open market, it’s a false economy and destined to crash.
The UAW certainly does not bear the bulk of blame. Check your history. Henry Ford was an extreme racist who took advantage of his work force to further his ideals. As a result, the workers finally organized and created unions. The management of the Detroit 3 are the problem and deserve the bulk of blame.
The Japanese and Korean automakers simply have a superior system. From Conception to production, they simply do it better.
Good Luck Detroit.