<div class='adsense' style='text-align:center; padding: 0px 3px 0.5em 3px;'> <script type="text/javascript"></script> <script type="text/javascript" src="http://pagead2.googlesyndication.com/pagead/show_ads.js"> </script> </div> Idle workers angry over GM buyout plan

SAYING WHAT HAS TO BE SAID...IN TRUE LIBERTARIAN FASHION

Idle workers angry over GM buyout plan

Published Thursday, March 23, 2006 by Editor | E-mail this post

Unlike many of its competitors, GM’s manufacturing costs are astronomical, much of these costs are tied up in the cost for labor. For years General Motors has tried new strategies to reduce the cost of labor, but the UAW has consistently resisted such moves and in so doing they have crippled a once vibrant and dominant US company.

These high costs have left GM (and Ford) weakened. They must charge more for their products to recoup these high costs, but in so doing they price themselves right out of the market. If GM lowers its prices to remain competitive, then they loose money, given the high production costs embedded in each vehicle sold. UAW workers have resisted moves towards increased productivity and increased automation, strategies long employed of Asia and European rivals. Indeed, using non-unionized American employees, Hyundai, Toyota, Honda, etc…produce thousands of vehicles for far less than their American counterparts.

Given the fact that GM has been unable to convince the unions of the need for greater efficiency, the firm as been reduced to simply dismissing employees as a means of lowering costs, a financial strategy which has a poor track record to say the least. Now GM is offering to “buyout” its employees. The firm is offering early retirement, to nearly 100,000 GM workers. General Motors and its Delphi subsidiary are offering to pay workers up to $140,000 to quit or take early retirement. The announcement has struck a sour note with many employees who have called on the Union to fight, arguing the move is a slap in the face and robs employees of their “future.”

What these workers fail to understand is: if they continue to drag down the company with their union inspired intimidation tactics, there will be no company left to fight. In reality GM needs to do more than simply shrink its job force, the firm must shrink its unionized job force. As along as the UAW dictates the terms of employment for autoworkers in America, the US auto industry will remain crippled, leading to eventual extinction.
http://www.latimes.com/news/nationworld/nation/la-na-workers23mar23,0,7977327.story?coll=la-home-headlines

5 Responses to “Idle workers angry over GM buyout plan”

Mark Graban on March 23, 2006

That's a very simplistic analysis. You're saying GM management has all of the answers, if just that lousy UAW would get out of the way? It's much more complicated than that. Toyota isn't more efficient because they have non-union workers. It's really a difference in the management systems, the Toyota Production System vs. everyone else trying to copy bits and pieces of the Toyota approach, usually unsuccessfully.
The Phalanx on March 23, 2006

GM management has all the answers? Hardly...GM Mgt has failed to produce competive products, failed to market those products and failed to gauge the needs of their potential customers
Mark Graban on March 23, 2006

OK, so we agree that GM management doesn't have the answers and hasn't designed appealing vehicles. So why are you placing all the blame on the UAW workers then?
The Phalanx on March 24, 2006

Not placing all the blame on the UAW, however, the article referenced is discussing the response of UAW members to the GM buyout plan and thus I am simply highlighting the complicity of the UAW for their part in the down fall of GM and the fact that their grumblings are unfounded. Such statements as "they promised us a future," refelect an ignorance on the part of certain UAW members on the reponsibility of a business, which is not a social welfare organization.

I have on several occasions highlighted the failure of GM and Ford to devlop and market succesful products. Obviously it can be done, witness the ongoing success of Chrysler, which continues to gain marketshare, unlike their Detroit rivals...
mitch on March 29, 2006

Why isn't GM paying for each employee to consult with a financial advisor to help make a decision about taking the buyout?