bluejuice

They break it down by hourly cost per employee in 2001-2005, noticeably absent in 06-07. In 2005, they provide a stat of $81.18 Avg labor cost per active worked U.S. hourly with a subnote of:

Includes U.S. hourly wages and benefits divided by the number of hours worked.

Number of hours worked being the denominator here. What are they, did they increase or decrease? I find it highly suspect that in 2003 and 2004 those numbers are $73.73 and $78.39 respectively, yet in 05 it jumps over 10%. Maybe this little tidbit has something to do with it (and it isn't labors fault):

"As of December 2005, GM had unrecognized actuarial losses of $32.1 billion for its U.S. and and non U.S. OPEB plans. These balances were accumulated by differences in actual experience compared to original assumptions accumulated over several years, in particular, the general trend of lower discount rates, driven by interest rate environments, as well as escalating health care cost trend rates."

2005 GM Financials, page 58.

OK, so lower discount rates, higher interest rates and escalating health care is labor's fault????? 32.1 billion, yeah right, all the employees fault.

A300_Driver

It's not all their fault, but this has something to do with it:

GM Spends $17 Million Per Year on Viagra

And I'll bet it's not just the managers who are using it!

nightfreight

Well, I for one, do not support giving the big 3 a nickel unless they can get their house in order. That includes labor (both management and UAW) and practically every area. Do they really need as many dealerships as they operate? What's the difference between a Pontiac and a Buick? In reality, probably the only way to slash costs is bankruptcy. Lending them money is a bad investment unless they can help themselves. Do they think the auto market is going to substantially improve in 6 months? Credit will be tight for some time. I don't see loans given to those that can't afford to pay. This has been the real problem for sometime.

You guys keep looking to find who is at fault. Is UAW at fault? Management? Economy? Pensions and Health care? All of these are part of the problem. If your costs exceed your revenue, you have problems. I don't see the revenue (car sales) improving in the next few years. This leaves a focus on costs.

Long term problems are there as well. Many of us believe that Honda and Toyota make a better car and service it better also. Less people will buy cars and most of those are seeking higher quality and more efficient cars. I think I would rather own a Camry as opposed to a Malibu. Certainly not the UAW's fault, but if they want to be able to compete, maybe if they lower their costs, they could compete on price. Of course, they will need an improved product, one competitive with foreign autos. This won't happen in the next year, so for now, they need to focus on cost.

bluejuice

Wrong again. In your scenario, you are tripping over dollars to save nickels. Doesn't make good business sense. Just focusing on costs isn't going to do anything. Who cares if a Malibu costs 10k and a Camry costs 20k, personally, I'm still going to buy the Camry because it's a better product that deserves the command in premium. This is a core business strategy that needs to be fixed from the top level down at GM, not from the bottom up, and much sooner than later.

I couldn't agree with you more about domestic and foreign branding and dealerships.

RedeyeAV8r

Sure Organized Labor has some influenece on the Hill, but please you really think Unions have more Influence on the Hill than BIG Corp money?

A300_Driver

GM makes some fine cars: Corvette, Malibu, CTS, and Outlook/Traverse

How many more could they have sold if their roughly $2000 cost differential could have been put into quality improvement efforts?

nightfreight

blue,

Longterm you are absolutely right. Reputation and quality doesn't happen overnight. To be successful, they will need to fix these things. But to be able to do this, they need to survive in the short term. Slashing costs can be accomplished quickly and probably best by bankruptcy.

Again, I am not looking for who is at fault. But if they want to get government money, I think they have to show that they will help themselves. The execs can carpool to DC if they want, but they need to have a plan as well.

bluejuice

If you look at the numbers from the 2007 annual report where GM lost 38.7 billion, you could have every single worker at GM (hourly and salary) worldwide work for free all year long, and they will still lose over 15 billion dollars.

Boys, like I said before, you can trip over dollars to save nickels all day long, but in the end, it isn't going to matter unless there's a monumental change in philosophy.

AerisArmis

Why are you selling them short? All the big unions supported BHO with $$$ and get out the vote organizing. They didn't do it for "some" influence, they did it for "a whole great big ***ing bunch" of influence! They backed the winning horse and are at the pay window. It's how it works amigo, they earned it, and they want it. Sit back, watch, and learn, it'll be very educational.

jungle

I like your analogy with the bookies. Except they may just find the paywindow closed. The myth is that they have bought a lot of influence, the fact is that their numbers have diminished every year for the past forty or so.
Many promises have been made to many people. And like a bad bookie who lays off too many bad bets, you may just find he has skipped town.


The only real progress they have made is in the increasing number of Ricco convictions. Unions are great for collective bargaining, many have failed in the ethics and political arena.
I don't blame the failure entirely on the unions or management, but I do think our support of US interests and industry has been given very little attention for decades resulting in some extremely lopsided trade situations.