Discuss Detroit Archives - Beginning January 2006 Ford's Way Forward Previous Next
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Gannon
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Username: Gannon

Post Number: 5398
Registered: 12-2003
Posted From: 70.200.174.34
Posted on Monday, January 23, 2006 - 12:53 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I couldn't find the thread on this already, I apologize in advance if it has been started.


Here is my old customer and friend Paul Eisenstein's The Car Connection's publishing of Ford's Press Release on the re-alignment.


Biggest deal to me? The last talking point, they will no longer provide earnings 'guidance' to Wall Street. They recognize that this worshipping of monthly and quarterly estimates has caused them to forget what they are truly here for...in the long term.
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Genesyxx
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Username: Genesyxx

Post Number: 412
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Posted From: 209.69.165.10
Posted on Monday, January 23, 2006 - 12:55 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

No thread that I found either, so I'm piggybacking. Story from MSNBC:

http://www.msnbc.msn.com/id/10 946664/
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Merchantgander
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Username: Merchantgander

Post Number: 1490
Registered: 01-2005
Posted From: 150.198.164.127
Posted on Monday, January 23, 2006 - 1:03 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Listening to it right now on AM 760.
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Boshna
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Username: Boshna

Post Number: 114
Registered: 01-2005
Posted From: 141.213.217.188
Posted on Monday, January 23, 2006 - 1:05 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Along the same lines:

http://www.time.com/time/magaz ine/article/0,9171,1151787,00. html?internalid=AOT_h_01-22-20 06_can_this_man_sa
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Mrjoshua
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Username: Mrjoshua

Post Number: 627
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Posted From: 69.209.179.63
Posted on Monday, January 23, 2006 - 2:16 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Rewiring the union mindset...

'Way Forward' Requires
Culture Shift at Ford


By JEFFREY MCCRACKEN
Staff Reporter of THE WALL STREET JOURNAL
January 23, 2006; Page B1

DEARBORN, Mich. At a meeting in early October at Ford Motor Co.'s big design-center showroom here, an employee asked Mark Fields, then fresh in his job as head of the company's North and South American auto operations, if workers should be worried about their pensions.

"Yes, yes, you should," Mr. Fields says he replied. "That's a great motivator."

For Ford workers, the idea that the family-controlled company, still commonly called "Ford's" by longtime employees, might not pay promised pensions is a shocking concept. "I decided this was a chance to get people moving; to get away from the 'this too shall pass' mindset we've had," Mr. Fields says.

As Ford this morning rolls out a sweeping restructuring plan, much attention will be paid to the plants that will be shuttered and the jobs that will be cut. But for Mr. Fields, the 44-year-old executive drafted by company Chairman and Chief Executive Officer William Clay Ford Jr. to lead the company's second big overhaul in four years, the central challenge at Ford is fixing the company's culture, which past and present employees describe with words like "toxic," "cautious," "cliquish," and "hierarchical."



Mr. Fields is in charge of a spiritual re-think within the company, dubbed the "Way Forward," as Ford tries to figure out what it stands for and who its customers are and aren't. A priority will be to protect the company's critical base of truck buyers, while wooing more female customers with new passenger cars and crossover wagons. Ford has even given names to groups of consumers who are now uninterested in its vehicles, such as "Maxed Out," people who attend the hottest concerts and spend more time with friends than family, or "Homesteads," who vacation at home and watch a lot of TV.

Mr. Fields, a New Jersey native with a master's in business from Harvard University, brings an East Coast edge to this quintessentially Midwestern company. A veteran of a successful turnaround effort at Ford's Japanese affiliate Mazda Motor Corp. and an unfinished one at Ford's European operations, Mr. Fields says Ford's previous North American restructuring plan, launched in 2002, "erred on the side of being a bit too polite."

The 2002 plan failed to deliver on promises that Ford would generate by now annual pretax profits of $7 billion. Through the first nine months of last year, Ford's pretax profit was $1.9 billion. Among the reasons why, says Mr. Fields: It was based on predictions of lower gas prices and higher prices for new vehicles. But gas prices soared, and vehicle prices fell under the pressure of the U.S. industry's relentless discount wars.

Ford also underestimated Asian competitors like Toyota Motor Corp. and Hyundai Motor Co., and didn't anticipate that General Motors Corp. would use expensive incentives like zero-percent financing or employee-discount plans as aggressively as it did.



Mr. Fields faces considerable skepticism among investors and analysts. Debt-rating agencies Standard & Poor's Corp. and Moody's Investors Service Inc. recently downgraded Ford's debt without waiting for formal disclosure of Mr. Fields's restructuring plan. Some analysts have suggested Ford could ultimately be forced to seek bankruptcy-court protection, particularly if GM takes that route to shed its crushing health and pension obligations. GM and Ford executives say bankruptcy court isn't in their plans. But worries that Ford management isn't up to the challenges it faces have weighed down the company's stock in recent months.

Mr. Ford, who is the great-grandson of company founder Henry Ford, didn't respond to email queries for this article. As chairman of the company, Mr. Ford is effectively the chief steward of one of the world's great industrial fortunes.

Mr. Fields says he is now trying to rouse and create a sense of urgency in a corporate culture that has withstood repeated efforts at overhauls, ranging from former CEO Alex Trotman's sweeping "Ford 2000" globalization effort, to former CEO Jacques Nasser's dot-com era campaign to remake Ford into a diversified consumer-products company with a strong Internet component.

At a news conference, Ford CEO Bill Ford, Jr. details Ford's restructuring plan, saying "We will not stand for business as usual."Ford management culture remains very much the top down, militaristic institution created in the 1950s when a team of World War II veterans, including future Secretary of Defense Robert McNamara, was hired to run Ford and earned the nickname the "Whiz Kids," company executives say. For most executive meetings, there is a "pre-meeting" to avoid surprises. The company's U.S. vehicles, with a few exceptions, reflect a play-it-safe approach that worked for Ford in the past but has more recently caused Ford to drop off the shopping lists of large groups of consumers.

Mr. Fields, who says his goal is to create "a sense of crisis, but not panic," among Ford employees, believes this cultural shakeup will work where others failed because fear is a good motivator. He is fond of using the phrase "change or die" in meetings.

Mr. Fields's focus on culture is evident in the drab, cold, windowless conference room deep inside Ford's Product Development Center here that has become the Way Forward war room. High on the wall, hangs a big, white sheet of paper on which is written: "Culture eats strategy for breakfast." The room is ground zero for the group of managers that has worked for the past two months to develop the Way Forward plan. Among other maxims on the wall: "Culture is unspoken, but powerful. It develops over time -- difficult to change."

In an effort to make this restructuring succeed where the previous efforts failed, Mr. Fields tapped several hundred workers across Ford to be part of the Way Forward planning process. His top two lieutenants on the effort are Anne Stevens, a Pennsylvania native who is chief operating officer of the Americas, and Robert Shanks, vice president and controller of the Americas who worked with Mr. Fields at Mazda and Ford of Europe.

"They aren't political and have no time for BS. That's what I want our culture to be," says Mr. Fields, who has asked his top lieutenants and members of the Way Forward team to wear a blue rubber wristband that says "Red, White and Bold" to signify a new Ford.

Ms. Stevens and Mr. Shanks have had day-to-day control of the Way Forward plan, meeting every day for two hours or more in the windowless conference room with a group of 20 to 50 people who were working on the plan. Those people represented a larger group of 200 or more that were working on nine or 10 different "cross-functional teams" focused on subjects like brands, revenue, purchasing, culture and capacity.

Each of those teams, with 20 or so people on them, were meeting four hours a day every day all of October and November at other sites around Ford, which has its headquarters, design labs, testing sites, a museum and other operations spread across Dearborn almost like a college campus. Members were sworn to secrecy, told not to tell their bosses what decisions they were reaching and expected to keep up with their normal jobs.

"I said, 'don't share this with your managers or else it will come back everything is fine,'" said Mr. Fields, in an interview from the Way Forward room, where about 20 sheets of papers are posted around the off-white walls, encircling a long, rectangle table that is actually smaller desks placed together.

Mr. Fields, who banned PowerPoint presentations for Way Forward, said he likes to see plans posted up on the wall where he can see the development of an idea. On these big sheets are detailed lists of what customers Ford wants, a discussion of how a turnaround is supposed to feel "uncomfortable but exhilarating," and something called the "Rules of the Road" which implores employees to remember "conflict is healthy."

At the top of one wall is a chart showing the timeline for the plan that launched Oct. 3 and needed to be wrapped up in time for presentation to Ford's board of directors on Dec. 7. A "Days Remaining" calendar has a big zero showing. A nearly final review of the plan was given Nov. 14, a Veteran's Day holiday at Ford, to about 20 senior leaders who were told to critique the plan from the vantage point of hourly workers, Wall Street analysts, board members and journalists.

The teams were intentionally made up of senior executives on down to midmanagement and general salaried workers. Lawyers, engineers, public-relations experts, accountants and others sat on teams of departments they had little expertise in. The brand team, which Ms. Stevens said was the one she felt was most important, intentionally had designers, engineers and outside ad agencies involved.

The brand group was headed up by self-proclaimed Ford brat Mary Lou Quesnell, a global marketing director with 20 years experience at Ford whose father also had 22 years there. To inspire her brand team -- which was charged with figuring out what consumers Ford could get and who they couldn't -- she showed her team a video of Americana images like a Bruce Springsteen album cover, cotton fields, open roads in the heartland and the 1980 U.S. Olympic hockey team set to "Little Pink Houses," by John Cougar Mellencamp.

"We've all had our frustrated days where a decision needed to be made and no one would make it. I think what's refreshing now is we are starting with the customer and saying 'OK, what do we do to get them to love us?' " said Ms. Quesnell, wearing her blue wristband.

Mr. Fields says another reason the plan will work is because so many different people were involved. He notes that Carlos Ghosn, the celebrated CEO of the partnership between Renault SA and Nissan Motor Corp., used cross-functional teams when he successfully restructured Nissan.

"The workers are more invested in this than if it was some plan dropped on them from up high," said Mr. Fields. "We are confronting reality here. This is not about being popular."

Write to Jeffrey McCracken at jeff.mccracken@wsj.com
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Rotation_slim
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Username: Rotation_slim

Post Number: 30
Registered: 10-2005
Posted From: 24.221.70.68
Posted on Monday, January 23, 2006 - 2:21 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

2 comments -

1) They choose a guy with a mullet to lead the way... could be genious..

2) Bill Ford stands up and says: we will no longer build cars that we "can build" we will build cars "customers want". Mullet guy (Mark Fields) then says "we will save money by sharing parts on a bunch of models. Sounds like they are still planning to build what is convenient, not what the customer wants. Seems to be a big disconnect between what Ford & Fields said.
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English
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Username: English

Post Number: 476
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Posted From: 68.248.9.83
Posted on Monday, January 23, 2006 - 2:23 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Is anyone else as worried about this as I am?

If Ford and GM go bankrupt by 2010, that is the death knell for the region, isn't it?

And if the Chinese start making cars (and they will), it is the end. Don't they have an $8,000 model they're selling overseas?
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Northend
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Username: Northend

Post Number: 653
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Posted From: 69.212.62.92
Posted on Monday, January 23, 2006 - 2:34 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

rotation
1) true
2) true


funny how Ford's announcement triggers a 5% spike in GM's stock price.

funny how one could make a fortune selling moving boxes in Dearborn between Michigan Ave. and Ford Ave.
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Spitty
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Username: Spitty

Post Number: 418
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Posted From: 136.1.1.154
Posted on Monday, January 23, 2006 - 2:41 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Not that big of a difference rotation. He said that they would share parts that are "invisible to the customer." Maybe they're underestimating what the customer looks at though.

I think Fields has hair plugs too. Impossible to tell from the WSJ pic, but i think he may actually be hiding a skullet under all of that. Kind of scares me to think what he considers "invisible to the customer" if he thinks that head of doll hair is fooling anybody.

He immediately made me think of the boss from the show The Office- and reminds me a little of Lumberg from Office Space.
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Track75
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Username: Track75

Post Number: 2191
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Posted From: 12.75.22.100
Posted on Monday, January 23, 2006 - 2:45 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

funny how Ford's announcement triggers a 5% spike in GM's stock price.


Well, F is up 8%, and the run-up came between 9:30 and 10:00 a.m., prior to the internal announcement. Earnings were released this morning and they were better than expected (overseas and in financing, NA still lost $1.6 billion). The stocks may have jumped on the earnings news, not the restructuring plan.
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Fnemecek
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Username: Fnemecek

Post Number: 1478
Registered: 12-2004
Posted From: 70.236.200.23
Posted on Monday, January 23, 2006 - 2:46 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

By JEFFREY MCCRACKEN
Staff Reporter of THE WALL STREET JOURNAL



What?!?

McCracken is now with the WSJ? Dang, I remember when he used to sit next to me at my world politics class at WSU. He used to work for the South End and I used to bombard the paper with letters to the editor.
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Detroitduo
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Username: Detroitduo

Post Number: 449
Registered: 06-2005
Posted From: 194.138.39.56
Posted on Monday, January 23, 2006 - 2:56 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

The new FORD slogan,

"All Business up front... PARTY in the back!"
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Pffft
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Username: Pffft

Post Number: 739
Registered: 12-2003
Posted From: 12.34.51.20
Posted on Monday, January 23, 2006 - 2:59 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Yeah, then he crossed the picket line and went to the Freep.
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Track75
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Username: Track75

Post Number: 2192
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Posted From: 12.75.22.100
Posted on Monday, January 23, 2006 - 3:23 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

Is anyone else as worried about this as I am?

If Ford and GM go bankrupt by 2010, that is the death knell for the region, isn't it?


This is just another step in a decades-old process. It will be ugly, but it was ugly in the 70's and in the 80's and even in the booming 90's. Our region's core industry has been downsizing longer than many forumers have been living.

Scratch beneath the excess plant capacity, the bloated union ranks and archaic work rules, the "frozen middle" to use Roger B. Smiths's term, and less-than-effective top management and we still have an automotive talent pool unmatched in N.A. and the equal of those in Japan and Europe. But they're harnessed to an industry structure that currently isn't capable of being wildly successful. The inherited cost structure and generations-old work culture has and will prevent a big resurgence -- the existing framework needs to be blown up or it will just slowly rot away.

Radical change doesn't normally come from incremental moves. The Big 3 have been making incremental moves for a few decades, and each new resturcturing plans is touted as "the" plan that will put them back on the road to prosperity. All the plans proved to be too little, too late, but that's the inevitable outcome of management's risk-averse culture and the union's old-fashioned approach.

To get ahead of the curve there needs to be a radical restructuring. Even after Ford closes the plants they'll be hard pressed to maintain their market share against foreign competitors. They'd be better off cutting back 40% or 50% instead of 20% - 25%, and keeping only the most profitable 50% - 60% of their current offerings. In fact, if you add their previous restructurings to the current one it looks like a radical restructuring, but without the benefit of being able to recast the company into lean, strong long-term competitor.

I think, absent a real radical restructuring (which is basically impossible given union, dealer and management mindsets) only bankruptcy will give Ford and GM a chance to redeploy our region's talent pool in way that will result in two genuinely competitive companies.

The auto business is a profitable business, for some companies. Starting from a clean sheet, without huge financial liabilities, a screwed up culture or the stupid union or dealer handcuffs, it's possible to have a thriving, growing, extremely profitable Detroit-based auto industry. It may take a couple bankruptcies and a decade or two to get there though.
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Xd_brklyn
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Posted From: 66.88.89.94
Posted on Monday, January 23, 2006 - 3:43 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

"Rewiring the union mindset... "??? The WSJ article was about shaking out upper & mid-management stasis.
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Northend
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Posted From: 69.212.62.92
Posted on Monday, January 23, 2006 - 3:52 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

the Ford corporate culture is not going anywhere anytime soon. What I heard this morning was way more than what typically comes out of Ford's mouth but how do you implement changes companywide when its culture has not changed much over the past 100 years???
As T75 said, only a radical event might make it happen.
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Rustic
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Username: Rustic

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Posted From: 130.132.177.245
Posted on Monday, January 23, 2006 - 3:54 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

track75, why the curiously gentle language to describe management?

"bloated union ranks ... archaic work rules, the "frozen middle" to use Roger B. Smiths's term, and less-than-effective top management"

less-than-effective? jeez in your opinion was it merely "less-than-effective" decade after decade to bloat the union ranks, negotiate paleolithic work rules and calcify a middle management class which makes yer bloated union ranks look like walmart cleaning staff ... I think stronger language MIGHT be appropriate, lol.
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Hochi
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Posted on Monday, January 23, 2006 - 4:01 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

As a worker connected with Ford I have to say that I have a great deal of faith in this new plan. Anyone who has worked with Ford (and GM for that matter) does know that something radical needed to be done to shake loose the culture that has keep the company stagnant form many years. There is a great deal of talent that is just waiting to be unleashed at Ford. This could very well be just the end needed to signal a new beginning.
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Track75
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Posted on Monday, January 23, 2006 - 4:16 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

rustic, note that I didn't disparage indivdual union workers. Anyone who's been in a plant knows that there are more workers than needed and the work rules are ridiculous, but most line workers do their best. Similarly I didn't disparage the managers and execs personally. There've been idiots, but there've been plenty of very skilled workers/managers/execs who still couldn't make everything all better.

The problem today is not so much the individual workers/managers/executives as it is the system, and that system is a result of management decisions and union power and a half-century hangover from the glory years. Sweet union contracts kept the companies going back then but they're paying for it now. You can blame management for it but I don't see that they had much of an alternative. YMMV
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Pffft
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Username: Pffft

Post Number: 742
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Posted From: 12.34.51.20
Posted on Monday, January 23, 2006 - 4:21 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Roger Smith was one of the worst things to happen to GM, a certified bean counter. He WAS the frozen middle ...he helped perpetuate that whole system.
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Rustic
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Posted on Monday, January 23, 2006 - 4:25 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

track75, okay fine but in the words of Uncle Ben Parker "With great power comes great responsibility".

btw I absolutely agree with you (and hochi) about all of the talent in the NA (hochi said Ford) auto industry. I certainly hope it can be unleased and then properly harnessed. ... Yay Detroit!
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Czar
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Username: Czar

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Posted From: 129.137.167.90
Posted on Monday, January 23, 2006 - 4:46 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

More great management decisions:

http://www.cnn.com/2006/US/01/ 23/ford.fires/index.html
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Devinc
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Username: Devinc

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Posted From: 69.14.138.74
Posted on Monday, January 23, 2006 - 10:15 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

What stood out for me was Bill Ford saying "I believe this is the path to winning."
What does he know about winning?
Maybe he should put Millen in charge to handle the company?
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Mcwm
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Username: Mcwm

Post Number: 120
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Posted on Tuesday, January 24, 2006 - 12:20 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

1. Ford's focus (no pun intended) on "innovation" seems key, especially if closely tied to hybrid and alternative fuel driven vehicles.

2. Ford (and GM) must address legacy costs immediately. Desperate need for effective governmental policy regarding health care.

3. Fond memories of Wixom plant. Though soon "idle", may she roar to life again someday in some positive fashion.
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Livernoisyard
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Username: Livernoisyard

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Posted on Tuesday, January 24, 2006 - 1:09 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Don't look to the government for health care. That issue was major in the Dems dropping from legislative power in 1994. It ain't gonna happen.

The Wixom plant will just join other idle, "mothballed" manufacturing facilities in Metro Detroit. The small number of employees left working there doesn't justify its continuance. Maybe if Ford built something that sells, well just maybe it'll reopen.

The financial news mentioned that the "work rules climate" at Wixom played a role in its closing. Translated: Ford will not reopen Wixom until its UAW relationship is radically changed in the future.

(Message edited by livernoisyard on January 23, 2006)
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Pffft
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Posted on Tuesday, January 24, 2006 - 2:18 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

You might make more points by documenting and linking to that statement, Liv.
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31ford
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Posted on Tuesday, January 24, 2006 - 2:48 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

As someone that studies Ford & Ford history, here's the bottom line.
Ford used to make cars that sold themselves. Now they have to hype the hell out of them to get them to sell.
They need to finish undoing what Nasser fucked up & go back to vertical integration. All this outsourcing eats up profits.
At least this is how I see it.


I don't post here much anymore due to a moderating role in another website. I still lurk here all the time tho.
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Livernoisyard
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Posted on Tuesday, January 24, 2006 - 2:51 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

If you're referring to the "work rules," I probably heard it on WABC radio (streaming) yesterday/night, either during a newscast or, perhaps, the John Batchelor program (10 PM to 1 AM, NY time). Ford was mentioned, ad nauseum, for the past several days. It's difficult for me to pinpoint the source of every Ford story or scenario, especially on radio.

That pundit didn't single out any individual plants, though. He mentioned that the union climate ("work rules") was a major consideration in determining which plants got axed.

In any case, security analysts and others have mentioned that particular issue, among others, several times recently. It's nothing new or secret. Just google or yahoo it...
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Livernoisyard
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Post Number: 118
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Posted on Tuesday, January 24, 2006 - 2:59 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

The Fords control 40% of the voting shares at FMC. All that the Fords need to rule is to swing over only 17% of the voting shares that they don't control. Sheesh.

They put Nasser in to chop heads, where and when necessary. Blaming Nasser for carrying out his masters' decisions is a flimsy excuse.

Hopefully, they'll still be around when the next UAW contract is drafted in 20 months.
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Jerome81
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Posted on Tuesday, January 24, 2006 - 3:12 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

The work rules killed GM Oshawa too. And it was one of the top 3 plants in north america for quality. essentially the union made it uncompetitive for gm to build cars there any longer, not matter how good the qualtiy was.
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Rustic
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Posted From: 67.163.181.81
Posted on Tuesday, January 24, 2006 - 3:23 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

For those of us not inside the fence, what is meant by "work rules" ... seems that what Jerome81 and Livernoisyard are describing is specific for specific factories, is this the case? while what track75 seemed to be describing by work rules was more of a national contract thing? btw, apologies if these questions seem dumb but not all of us (even those of us who were born and raised, educated and came of age in Detroit) ever cashed a paycheck from the auto companies ...
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Livernoisyard
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Username: Livernoisyard

Post Number: 120
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Posted on Tuesday, January 24, 2006 - 3:57 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

From Wikipedia:
"For example, the departure of high-paying industrial work from "union-shop" states to right-to-work states would decrease real wages, etc. in the "union-shop" states, and consequently increase them in right-to-work states. Such disparities are not necessarily due to the ineffectiveness of unions, but may be due to ownership attempts to leave or otherwise generally avoid "union-shop" states in favor of right-to-work states, in which they can pay lower wages. More importantly, even if ownership maintains the same pay scale, ownership can avoid what it may consider "restrictive" union work rules and institute its own work rules in lieu thereof."

Right-to-work law
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Oldredfordette
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Posted on Tuesday, January 24, 2006 - 10:31 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Work rules include things like safety issues - but hell, what's a workers life? So what if those rules have saved thousands of them.

Among the rest of the fallout, the end of a paycheck for thousands of employees, the end of business around Wixom, St. Louis, Atlanta and Windsor. Home prices are going to be further damaged in that area of Oakland County (we can't take much more of that) and more of our job pool will be leaving the state.

Whoo hoo! Yeah!

Maybe, just maybe, Ford Motor Company could have switched a couple of years ago from Behemoth Guzzlers to the hybrid technology - before it became a crisis. Or at least lead the way in small efficient cars.

The waste of this decision makes me sick.

It's always nice to see the forum regulars run to the WSJ for their thinking. Shareholder returns expectations run American corporations, kids, it's not union rules that are killing it.
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Merchantgander
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Username: Merchantgander

Post Number: 1495
Registered: 01-2005
Posted From: 150.198.164.127
Posted on Tuesday, January 24, 2006 - 10:45 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Oldredfordette, there are plenty of governmental laws and regulations that provide for a safe work environment. There are a lot of non-union work places that provide a safe work environment.
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Pffft
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Username: Pffft

Post Number: 748
Registered: 12-2003
Posted From: 71.144.85.254
Posted on Tuesday, January 24, 2006 - 12:07 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Yeah, just ask the Sago miners.

Tell me, Merchantgander, just how many auto workers you know, and in which plants? Name them. Because if you don't know anyone who works in a plant, then you don't know the safety conditions.
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Rustic
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Username: Rustic

Post Number: 1970
Registered: 10-2003
Posted From: 130.132.177.245
Posted on Tuesday, January 24, 2006 - 12:43 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

So "work rules" are not specific to specific plants? these would be negotiated at the national level? I'm imagining things like safety protocols, senority issues, health and safety staff etc. Is that accurate?

If so then work rules that happen to hamstring a specific plant, like J'81 mentioned, would be due to the implimentation of nationally negotiated and agreed upon rules between the company and union. Is that right?

btw, no politics on my end of things, I'm just trying to understand terminology ...
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Ndavies
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Username: Ndavies

Post Number: 1594
Registered: 10-2003
Posted From: 129.9.163.234
Posted on Tuesday, January 24, 2006 - 12:44 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

The safety rules are not the work rules they are complaining about.

The work rules are the restrictions placed on who can perform jobs. It applies to the number of job classifications in a plant. The problem occurs when people are sitting around waiting for someone with the correct job classification to show up to perform a task. The more job classifications in a plant, the more people that sit around staring at a screw that needs to be turned, waiting for the guy who's allowed to turn that screw. Job protectionism at it's finest.

The work rules greatly increase the number of people needed to perform the tasks.

(Message edited by ndavies on January 24, 2006)
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Ndavies
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Username: Ndavies

Post Number: 1595
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Posted From: 129.9.163.234
Posted on Tuesday, January 24, 2006 - 12:47 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

There are both national contract work rules and local plant work rules. The national contracts are negotiated first, with specific plant work rules negotiated afterwards.
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Livernoisyard
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Username: Livernoisyard

Post Number: 122
Registered: 10-2004
Posted From: 69.242.223.42
Posted on Tuesday, January 24, 2006 - 1:32 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Another consideration is the job pool of some 78,000 or so "workers" who are theoretically supposed to report to "work" in case of need, but in reality usually play cards, etc. The average outlay for the automakers per UAW pool employee is around $130K annually ($65/hr).

This totals $10 billion/yr, according to my math. If these figures are terribly out-of-line, somebody please inform us about the current implementation of the "job pool."

A safe bet: This provision won't be around after the next UAW contract.

(Message edited by livernoisyard on January 24, 2006)
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_sj_
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Username: _sj_

Post Number: 1190
Registered: 12-2003
Posted From: 69.220.230.150
Posted on Tuesday, January 24, 2006 - 1:45 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

Maybe, just maybe, Ford Motor Company could have switched a couple of years ago from Behemoth Guzzlers to the hybrid technology - before it became a crisis. Or at least lead the way in small efficient cars.




Ford cuts are not enough to compete.

Hybrids are not what people want(For one they save nothing in areas such as Detroit), they want price and performance and the Ford and GM only provide that to their employees in the form of price subsidies.
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Jiminnm
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Username: Jiminnm

Post Number: 280
Registered: 02-2005
Posted From: 69.241.164.222
Posted on Tuesday, January 24, 2006 - 1:59 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

A hybrid is beneficial only if the majority of your driving is city stop and go. Since 70-75% of my driving is on the interstate or high speed highways, a hybrid would produce no better, and maybe worse, mileage than a similar gas powered car (not to mention the future cost of battery replacement). And _sj_ is right, a majority of car buyers don't want a hybrid, yet.

As for whether these cuts are enough, only time will tell. They will probably stave off some problems for a few years, when more will be necessary.

What this announcement does demonstrate, however, is that GM's announced changes are totally inadequate. They have serious problems ahead without more reductions, and substantial management changes.
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Track75
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Username: Track75

Post Number: 2196
Registered: 10-2003
Posted From: 12.75.21.225
Posted on Tuesday, January 24, 2006 - 2:02 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

A few examples of how union work rules have manifested themselves:

Last month a guy I know did a one-week install of a couple new machines at a Big-3 assembly plant. A plant welder showed up on Monday. He was told they wouldn't need any welding done until the weekend when the job was almost done. He still sat there all week doing nothing for 10 - 12 hours each day per the rules. On Saturday he did about 3 hours of welding that my friend could have done himself if the rules permitted it.

When I worked at an OEM plant location I was warned not to carry my laptop to the IT dept for software installation until after 3:30 p.m. (when the union guys left) lest a grievance be filed against me for doing Millwright work. I was supposed to call a Millwright to come and pick up my laptop and carry it a few hundred feet.

Another friend used to manage the tool crib at a powertrain plant. A common income-boosting move by the skilled trades folks was to sabotage a machine just before the shift ended, especially on a weekend (premium time). Certain problems required the full complement of trades, Millwrights, Electricians, Machinists, Welders, Pipefitters, Fabricators etc. They do the 15 minute repair and go home while being paid the 4 hour minimum at 1.5X or double time for after hours maintenance work.

Ohh, I've just scratched the surface but you get the idea. This stuff still happens today. My FIL works maintenance on midnights at a local plant. The inefficiency and outright stupidity that emanates from bad work rules, outdated job classification (Oilers, Boilermen in a plant with no modern need for such) is not helpful given our auto industry's woes.

Perhaps you saw the article in the Detroit News on Sunday in which a Committeeman at a local plant sent a letter around asking his tradesmen to work to rule as retaliation for some layoffs. Amazingly, despite all the bad news and problems in the industry here in 2006 there's still a mentality in some that think hurting the company is good for the employees.

letter

http://www.detnews.com/apps/pbcs.dll/article?AID=/20060122/AUTO01/601220372/1148
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Genesyxx
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Username: Genesyxx

Post Number: 415
Registered: 02-2004
Posted From: 209.69.165.10
Posted on Tuesday, January 24, 2006 - 4:40 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

No one mention's Chrysler's announcement of cutting white-collar jobs, albeit mostly in Germany?
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Livernoisyard
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Username: Livernoisyard

Post Number: 123
Registered: 10-2004
Posted From: 69.242.223.42
Posted on Tuesday, January 24, 2006 - 7:58 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Dieter continues cost-cutting in Deutschland doing what he did here in AH. Even moving its HQ. Someday he might move it one final time after he returns to the US. He said he'd be back.

Chrysler (once number 2 decades ago) will surpass Ford and GM, eventually. It'll be interesting to witness what his next UAW contract might be about...
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3rdworldcity
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Username: 3rdworldcity

Post Number: 182
Registered: 01-2005
Posted From: 68.73.196.193
Posted on Tuesday, January 24, 2006 - 8:19 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Ford's doomed.

Starting forty + years ago the unions whipsawed the Big Three every 3 years and Management caved in to meet short term goals. Not an ounce of vision or common sense between them. They took the poison back then and are in the throes of death now. They deserve each other and the terrible positions they're in now.

Most suppliers, tool & die folks and anyone w/ an ounce of brains saw this coming years ago. Not the unions. Not Management.

The cockeyed process they just went through to come up with their brilliant plan is about as dumb-assed and convoluted that only a Harvard MBA could come up with it. If I ran my businesses like that I'd be broke just as they are.
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Danny
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Username: Danny

Post Number: 3659
Registered: 02-2004
Posted From: 207.74.110.184
Posted on Tuesday, January 24, 2006 - 9:53 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Ford is doomed becuase we Americans keep on buying foreign cars. GM is doomed becuase we Americans keep on buying foreign cars. And of course becuase we Americans keep on buying foreign cars. As along as we Americans keep on buying too many foreign imports. Sooner or later we will imperialized by all foreign nations.
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Rustic
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Username: Rustic

Post Number: 1973
Registered: 10-2003
Posted From: 67.163.181.81
Posted on Wednesday, January 25, 2006 - 12:08 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

re work rules. Ndavis mentioned that there are plant specific work rules. Are these the application of nationally applied work rules to specific plants thus some plants may get hit differently than others OR can there also be specific rules to individual plants?

track75, maybe I'm just not saavy to the codespeak, but honestly I don't see what the big deal is about that specific memo. It doesn't say to refuse to do the additional work but do it under protest (not unreasonable coming from the union if the plant is laying off workers yet the work remains, right?) and follow rules and work safe. Of course I admit that I don't understand the subtext of this sorta letter so I'm probably missing something.
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Track75
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Username: Track75

Post Number: 2198
Registered: 10-2003
Posted From: 12.75.24.48
Posted on Wednesday, January 25, 2006 - 12:34 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

There are individual plant work rules, rustic. It's been a long time since I read the contracts but the national agreement is more high-level and the plant agreement gets into minutiae like number of urinals, who parks where, and can salaried workers smoke in the plant or just hourly workers. It also covers job classifications. A few plants have made big reductions in the number of job classifications in order to be more competitive. Their skilled trades workers will be cross trained to be more flexible. And then you need fewer to do the same work ==> layoffs.

rustic, you gotta have your union codespeak decoder ring on when you read the memo. Google up work-to-rule to see how workers undertake a passive-agressive form of protest. Imagine if your kids did exactly what you literally told them to do and only that. Sounds good at first, but ...
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Rustic
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Username: Rustic

Post Number: 1975
Registered: 10-2003
Posted From: 130.132.177.245
Posted on Wednesday, January 25, 2006 - 2:12 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

OK so there ARE plant-specific work rules negotiated at the plant level. So what's the big deal? -- what's been stoppin' em from EVER negotiating better deals at the plant level? I assume the whole point of plant-specific work rules is to have clear and equitable procedural practices. Fine. I mean IF it truly is some PLANT-SPECIFC work rule that CAUSES stuff like worker sabotage or skilled tradesmen sitting on their butts instead of being productive as in the examples track mentioned, shit change the rules next time, duh. Quit bitching and moaning about it management and earn yer damn salaries and do yer job and make better contracts. On the other hand if it is simply poor worker morale within the industry causing a culture of waste and abuse, well shit quit bitching and moaning about it management and earn yer damn salaries and do yer job and manage. If it is some where inbetween, well ... _fill-in-the-blank_ ...

Jeez. maybe that sounds naive, and I agree that I am on this subject but come-on ...

A larger question is this. What seems to be hurting the domestics right now is the legacy costs of older workers and the chicken-and-egg problem of overcapacity/eroding-marketsha re. Is that right? Some of the other problems the domestics faced in the not too recent past (poor quality and lack of innovation) have been fairly well-addressed. OKAY so what do work-rules have to do with these problems? That what is killing the domestics on Wall Street and more importantly causing them to bleed $$$.
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Lt_tom
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Username: Lt_tom

Post Number: 63
Registered: 06-2004
Posted From: 208.0.107.92
Posted on Wednesday, January 25, 2006 - 5:01 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Ford is going to eventually go b-rupt, head into reorganization, and emerge as a private, much smaller family-owned company.
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Track75
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Username: Track75

Post Number: 2199
Registered: 10-2003
Posted From: 12.75.18.147
Posted on Wednesday, January 25, 2006 - 5:43 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

rustic, I do think you're being naive. Do you really think that plant level management and upper management haven't tried to change the contracts that have allowed stupid business practices to exist? They'd have to get the union to agree and the union obviously doesn't want to change the contracts to suit management.

You don't seem to understand how much power the union has and how little power management has when it comes to bargaining. Workers can stop or slow production without incurring great financial harm to themselves, while causing great financial harm to the employer. Management can lock-out workers and replace them all, in theory, but have you ever seen that happen at a Big-3 plant in your lifetime? No. You can't replace 100K - 200K workers fast enough to stay solvent. Ergo 50+ years of not-so-great-for-the-company contracts in order to secure labor peace and live to make cars another day.

Work rules are just a part of what ails the OEMs. You accurately cited two mega-problems -- legacy costs and overcapacity. Legacy costs are the result of prior contracts. Part of the overcapacity problem is caused by the contract-based impediments to closing plants and laying off workers. The other part is insufficient demand because consumers choose non-Big-3 brands. That part is management's fault IMO.
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Rustic
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Username: Rustic

Post Number: 1979
Registered: 10-2003
Posted From: 130.132.177.245
Posted on Thursday, January 26, 2006 - 3:20 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Track75, I'm sorry but all industries have their specifc pathologies. All industries have their specifc problems, challenges and issues. It is hard work to work in ANY industry, that's why it is work, right? The auto biz has been and remains a stunningly, jawdroppingly PROFITABLE business for those companies at the top of the heap. (Toyota makes alot of coin and until the last few years so did Ford and GM). Further, the domestics, in spite of their dire straights right now can leverage unfathomable brand recognition and cultural resonance cw other industries. (There is a nostalgic honda minivan commercial on TV that shows a bunch of gussied up 70's era domestic (of course) vans -- the domestics are now pissing away their own history to foreign firms, SMDH.)

Track75, if it is true that the union has such power as you describe, well it has NOT manifested itself over the decades in such things as sucessful opposition to building (nominally) non-union, lower wage factories in the South in the 60's and 70s then in south america in the 70's and 80s then mexico in the 90's and 00s and now china. It has not manifested itself in sucessful opposition to automakers investing in foreign companies. (Talk about eroding yer market share, what self respecting POWERFUL union, that can do such things as force FoMoCo to self-destruct by building too many urinals at Wixom would possibly stand by to have PROFITS earned off the backs of union workers invested in the very companies that are eroding their market share!) Nor has the UAW historically had any sucessful opposition to branding foriegn cars with american brands (dodge colt, all of those domestic light trucks etc.). It has not manifested itself in significant opposition to mfgs. attempting to start other brands or spinoff companies as attempts at nonunion splinter companies.

Track75, as to the union's power, I understand that is the big boogie man by management in general in industries across the board. I understand that for business and possibly political reasons, many people have a general opposition to unionized workers. Further I understand that dealing with the UAW is a significant part of the job description of any auto exec. The thing is OTHER american industries that have been notoriously NONunion and completely WITHOUT the legacy costs or contract obligations of the auto biz are now or have been evaporating (e.g. most recently semiconductor mfg and IT, soon probably pharma). Further OTHER industries that HAD been staunchly union and became nonunion in the last few decades (e.g. textiles, printing) have evaporated to low wage countries. At the SAME TIME all this stuff was happening, contract obligated costs at the auto mfgs INCREASED (unless I'm mistaken this job pool stuff is relatively new) at a time when PROFITS went through the roof. These were EXPERTS on both sides of the table negotiating these contracts, they knew the writing on the wall, that things were gonna get tighter ... well ... now things are tighter and ya wanna place the blame on the unions for contract decisions mutually made between union AND management?

I'm sorry I guess I'll hafta stay naive.
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Rustic
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Username: Rustic

Post Number: 1980
Registered: 10-2003
Posted From: 130.132.177.245
Posted on Thursday, January 26, 2006 - 3:20 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

track75, btw, as always it is good talking with you ...
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Track75
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Username: Track75

Post Number: 2205
Registered: 10-2003
Posted From: 12.75.19.101
Posted on Friday, January 27, 2006 - 11:19 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Likewise, always fun talking with you about the auto industry, I just wish it were more upbeat.
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Rustic
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Username: Rustic

Post Number: 1986
Registered: 10-2003
Posted From: 130.132.177.245
Posted on Friday, January 27, 2006 - 11:58 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

track, well on the plus side y'all are making some pretty good cars nowadays that's for sure -- think back to that thread about those late 70's - mid 80's heaps that passed for cars, (sports sedans no less) ...

Frankly track, although the long term prospects of large scale auto mfg and massive blue collar employment (UAW or no UAW) in the US look dire, I think for the NEAR term design, engineering AND marketting COULD blossom under the right circumstances. Longer term it is all likely doomed, imo, but that has more to do with the rise of CHINA and INDIA as self-sustaining markets and the decline of US significance as an economic superpower -- and theres nuthin the post-industrial "whiz kids" workin hard in Dearborn can do about that.

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