Why should we bail out the big three?

[trikkonceptz]

Here is an excellent reason;

-I have essentially lost my job ...

I have spent the past 5 years working for the auto industry, first in sales, then moved into the aftermarket side of sales and continued into marketing and event planning, like car shows, special edition vehicles etc ...

My recent venture put me in the hands of Ford, where I have been for 2 yrs. Our dealership has been losing close to $300,000 a month since March of this year. To quantify it, we use to sell 400 new vehicles a month, last month we sold 61.

So in an effort to keep the building open, they went around the company and slashed pay. Offering everyone the chance to stay and tough it out or quit to try and find a new job. For me it meant reducing my pay by 2/3.

As of Jan 1 I will be making slightly more that unemployment will pay and working 30hrs a week.

I consider myself lucky in that we have not been one of the dealerships that has had to close its doors recently and they are trying to stay open to weather these difficult times.

I however am looking at difficult decisions of my own. My skill set is in the automotive field, everything I know from sales to marketing to engineering is related to the automotive field and now for the first time in a long time I have to look for another job.

I would like to get into engineering work, but I have not yet completed my degree, do any of you know what companies out there have entry level engineering work? I obviously have the aptitude for the work, but limited experience due to my involvement in the auto industry.

So as you can see these high level decisions can and will have local ramifications very quickly.

[DifferentPointofView]

This isn't the first time we've had to bail out the big 3, or so my dad said. I think that yes we should bail them out to prevent 30 some odd thousand jobs from being lost, but I think that in the longrun the Automakers should pay the government back for keeping them in business.

The only problem is this is what does this teach our youth? Don't worry if you screw up, because the government will always be there to bail you out?

The big three has a problem with mass producing vehicles and hoping that they'll sell them all at the lots. you loose a lot of money if you don't sell vehicles, especially a large amount and you don't have the money.

Something toyota figured out was don't make more cars than you will sell. Every Toyota that comes out of the factory has been pre-ordered, whether by independent auto dealers, or private orders, and they get already have the cash for every vehicle that rolls out of the factory. So if the dealer doesn't sell the vehicles, Toyota doesn't loose any money. I learned this when my Class took a field trip to the Toyota Plant in Princeton, IN. I also learned about their Andon system that rates them so high in reliabilty. but that's another topic.

Yes, bail them out, because even though the owners of the companies screwed up, its not gonna be them who get penalized, it will be the workers and the people that make the backbone of the Economy like Trikkonceptz that will suffer and get the low end of the bargain. Just penalize the Owners by making them pay back for the bailout. Kinda like a loan. Just ensure the Owners can't cut payroll or jobs to pay for the money back.

[cfg83]

trikkonceptz -

I am in favor of the bailout. It's chump-change compared to the Wall Street bailout. I would also forgive the loan if they failed to pay up.

As far as I am concerned, the game has been rigged against you and me for a longggggggggggg time :

Detroit: A Riposte to the Bashers
http://www.unsustainable.org/index.a...e&contentID=39

The elephant in the room is unfair foreign trade practices. Though you would never know it from recent reporting, for forty years the Detroit companies have been systematically undermined by foreign competitors' predatory pricing in the American market. They have been thereby starved of the adequate returns necessary to invest in new, more efficient production technologies.

The Japanese in particular have used unfair trade practices to devastating effect. On the one hand they have kept their home market as a protected sanctuary, where, operating in cartel fashion and free from effective foreign competition, they have generally garnered superrich profits. These profits have been the ultimate source of the massive investments in both manufacturing technology and R & D that have enabled the Japanese to pull far ahead of the American industry in recent decades. Meanwhile teh Japanese have kept the American competition pinned down in the American market by selling at little more than marginal cost.

All Japanese government denials to the contrary, the Japanese domestic market has always been heavily protected. Thus the high pricing there has been reserved for Japanese producers. Two German manufacturers, Mercedes-Benz and BMW, enjoy token positions at the top end but have been strictly boxed in to ensure that for more than two decades the combined share of all foreign makers has been kept to a mere 4 percent. ...

I hate the USA-CEO culture, but I think they have been shaped by the short-term-profit requirements of that very same Wall Street that has just soaked us for a cool $700 billion.

CarloSW2

[trikkonceptz]

Well the verdict is in;

Instead of cutting my department out and throwing me out on my ass, the owner of the dealership gave us all the option of cutting our salaries in half until this blows over. It doesn't sound good, but considering that half my salary is much more than unemployment it is the best option I have atm.

I at least get a reduced hour schedule giving me time to be home, which uses less gas plus gives me time to get my affairs in order and continue looking for a "better" job with slightly less stress.

And in case you are wondering, our delaership's owner and GM have been on a $1 a week for the past 8 months. True they can afford it, but at least it shows that they want to keep the doors open as long as possible.

[Christ]

Originally Posted by DifferentPointofView

This isn't the first time we've had to bail out the big 3, or so my dad said. I think that yes we should bail them out to prevent 30 some odd thousand jobs from being lost, but I think that in the longrun the Automakers should pay the government back for keeping them in business.

The only problem is this is what does this teach our youth? Don't worry if you screw up, because the government will always be there to bail you out?

The big three has a problem with mass producing vehicles and hoping that they'll sell them all at the lots. you loose a lot of money if you don't sell vehicles, especially a large amount and you don't have the money.

Something toyota figured out was don't make more cars than you will sell. Every Toyota that comes out of the factory has been pre-ordered, whether by independent auto dealers, or private orders, and they get already have the cash for every vehicle that rolls out of the factory. So if the dealer doesn't sell the vehicles, Toyota doesn't loose any money. I learned this when my Class took a field trip to the Toyota Plant in Princeton, IN. I also learned about their Andon system that rates them so high in reliabilty. but that's another topic.

Yes, bail them out, because even though the owners of the companies screwed up, its not gonna be them who get penalized, it will be the workers and the people that make the backbone of the Economy like Trikkonceptz that will suffer and get the low end of the bargain. Just penalize the Owners by making them pay back for the bailout. Kinda like a loan. Just ensure the Owners can't cut payroll or jobs to pay for the money back.

Add a few '0's to that number. The cursory estimate is closer to 3 million.

Remember, it's not just the Big3's employees that lose their jobs. Dealers around the country, and all the companies that produce parts for the big3 vehicles lose work as well, meaning loss of capital, restructuring of companies due to less work, and less income, meaning less room for people to work.

The damage isn't just to the big3, and it's not just to America. What people don't understand is that dropping the big3 will also hurt Japan's economy, China's economy, all the asian countries, basically. Ford has ties/affiliations to UK and European companies, as does GM and Chrysler, so it will also affect them.

The most noticeable effect will be at home, and the most immediate. But it doesn't just stop at our shores. The next time you change your alternator belt, look at the name on the alternator... It's probably Mitsubishi. (Mitsuba is the same.)

[cfg83]

trikkonceptz -

Under the circumstances I guess this is "good" news. At least you will be in a position to say that you are employed when you go for job interviews.

CarloSW2

[trebuchet03]

It sounds like you have a pretty decent bossman....

Personally, I still feel it necessary for the big three to present business models a priori.

The bail out won't change the fact that 61 vehicles were sold rather than 400. I'm not going to be another one to say what they need to do - because there are other much better at figuring that out. It is obvious, however, that the status quo is nOooOt quo.

[Christ]

Originally Posted by trebuchet03

It sounds like you have a pretty decent bossman....

Personally, I still feel it necessary for the big three to present business models a priori.

The bail out won't change the fact that 61 vehicles were sold rather than 400. I'm not going to be another one to say what they need to do - because there are other much better at figuring that out. It is obvious, however, that the status quo is nOooOt quo.

The only thing I hold fast to is that the UAW NEEDS to accept rate cuts, or they need to accept more responsibilities per employee, making them worth what they're paid in each market. The US and local Gov'ts CAN add input to this, since THEY'RE the ones that control prevailing wages, and if the Gov't ends up being some sort of comptroller for the big3, the UAW will be left with whatever monies are being paid, and probably left with fewer members, as there won't be as many positions available once its' determined that one person CAN do what it "takes" two to do now. Either way, it's either rate cuts or people lose jobs, but even 10,000 jobs lost is better than 3+ million.

On the other hand, the big3 DO need to re-think their ideas behind manufacturing. They need to adopt LEAN manufacturing processes, which are proven to be one of the biggest resources for any company trying to save from losing money.

Also, another step in the LEAN mfg system is "give them what they ask for, nothing more, nothing less."

Japan has been doing this for decades, as have several other countries. The US and organizations within this country are JUST NOW figuring it out. You don't provide goods and services for free. So why would you give a customer 5 rulers when they only needed, asked for, and paid for 4? You just ripped yourself off, and they're not going to keep that other ruler in stock anyway.

If you put together a kit of something, and it requires 24 bolts, 13 nuts, and 38 washers, you don't just put in a handful of bolts, a smaller handful of nuts, and a larger handful of washers. You put in exactly what's needed to build the kit. Customer loses parts, that's their problem.

How does this apply to the big3? Nobody asked for cars that ONLY come with auto transmissions... nobody asked for cars that have A/C as a factory option, rather than a consumer option. If they didn't ask for it, and they're not paying for it, DON'T GIVE IT TO THEM.

Simple things like this, done several years ago, could have helped to turn around what is now a giant clusterfsck.

Each American manufacturer in the big3 paired with companies overseas back in the 80's, and formed tenuous relationships, yet REFUSED to take cues from them EVER AFTER those same companies started taking the US market's lion's share of sales away from the big3.

They were too stuck on the idea of "people will buy it, just because WE made it, and they LOVE what WE make."

Wrong.

This has been a lecture on how the price of rice in America is directly proportionate to the size of the asteroids constantly bombarding stellar masses in the milky way galaxy.

I hope you learned something.

[trebuchet03]

Offering an automatic transmission without offering a manual gearbox would be a fairly good example of lean manufacturing - at it's core, lean manufacturing is "Less work, more value". The cost of developing any gearbox that would be used next year has already been invested. When I see automatic tranny as an option, it only adds value (base price and resale) to the vehicle. The consumer cost isn't higher because it lowers the vehicle value

A/C - I can kinda see that... Except home is S. Florida. I know of almost no one that would consider any vehicle without A/C. Regional? Absolutely. But if most of the vehicles you sell will have A/C installed - the ones without A/C are going to cost more to assemble (nothing happens to the vehicle while moving down the line - which is one of the most expensive processes you can do to any item on a production line).

The cost to tool a cup holder into a trim piece die (that needs to be made anyway) is insignificant compared to the apparent value it adds. After all, like the people actually buying new minivans tell us - 'more cup holders = safer vehicle.'

The issues you present are not so much that of lean manufacturing (I can go into more detail, I've seen some really great low volume applications locally). It sounds like you have a problem more with what's called 'custom mass production' or "Mass Customization." A very successful application that maximized this is the Scion vehicle line.

Volumes have been written on optimizing the number of customization parameters versus perceived value versus manufacturing costs. I personally have not read any, but am aware of their existence

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Of course, we must all accept... Well, most of us at least.... We are not a part of the solution. You bought used, not new. If you want a say, you'll need to do so by buying a new car that closest represents the feature set you want. If no one bought the Prius (or insight, etc.) - I highly doubt any other manufacturers would be developing hybrids and/or licensing the synergy drive train.

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Here's another easy way to lower costs..... De-automate. When designed for assembly, automation is incredibly expensive next to non automated processing.... The problem is, and it's a doozie, quality goes down the tubes. You'd lose high skill tech jobs (programming bots at about a $million each) but you'll gain low skill assembly work. I don't think this is the way to go - domestic brands are finally rebuilding their quality reputation (largely due to automation).

That said - automated optimized designs really piss off hackers and tinkerers.... Because one thing it means (generally) is no screws, no bolts. How many of you have come across a part on your car that snaps shut/together (rather than a screw or bolt?)


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If you're interested in Lean Manufacturing, I can recommend a book or two if you want (of course, they're kinda pricey).... Also, you might want to read about heijunka and production leveling (basically, what good is a 500 part per day machine if that stock waits in a warehouse for 3 days before use?).

Plenty cost savings can be had by applying heijunka techniques. I see no reason why the dealership system needs so much stock on hand to later become a tax burden.

But, Lean manufacturing, production leveling, etc. etc. does not address the issue that 61 vehicles rather than 400 were sold I'm willing to bet it wasn't Ford's choice of using a specific brand of spot welder robot that made the customer move to another brand

[Christ]

I realized almost immediately after posting that, that those two examples were poor for LEAN manufacturing.

I'm actually certified in LEAN process enhancement, due to working for Endicott Interconnect Technology (EIT, Inc.) in 2007. It was a requirement of my employment. I also had to be trained in "TAKT" management, another Japanese-American adaptation of work processes and handling waste while maximizing production per dollar.

All these things were requirements of my job at the time, as I was dealing with millions of dollars of circuitry and equipment on my "off" days.

The company also had/has several other certifications and training processes, some involving ISO, some involving MIL certification (another necessity for me) under which I was required to sign a Federal NDA (non-disclosure agreement), basically attesting to my own immediate guilt, were I ever to divulge information about the specifics of 1.) the materials I worked with, 2.)the products I produced, 3.)the programs I used, 4.) the processes I knew/learned/observed while working there, and 5.)any other pertinent information about the company or its products, WITHOUT REGARD TO IDENTITY.

What this meant was that without the proper clearance, you did not exist to me, where it pertained to my work. I was basically on lock-down for 8-16 hours a day (night), working in a limited access building with an even more limited access work-space.

But, I digress.

Thank you for correcting my example of lean manufacturing processes, and the input added thereafter.

Also, since I still hold interest in LEAN manufacturing and TAKT processes as a whole, could you please PM me those titles?