So why is GM going down?

[Cleaning Fool]

Originally Posted by Len_A

7 myths about Detroit automakers

BY MARK PHELAN
FREE PRESS COLUMNIST

This column by Free Press auto critic Mark Phelan originally was published on Nov. 17 and has been updated.

The debate over aid to the Detroit-based automakers is awash with half-truths and misrepresentations that are endlessly repeated by everyone from members of Congress to journalists. Here are seven myths about the companies and their vehicles, and the reality in each case.

Myth No. 1: Nobody buys their vehicles

Reality: General Motors Corp., Ford Motor Co. and Chrysler LLC sold 8.5 million vehicles in the United States last year and millions more around the world. GM outsold Toyota by about 1.2 million vehicles in the United States last year and holds a U.S. lead over Toyota of nearly 700,000 so far this year. Globally, GM in 2007 remained the world's largest automaker, selling 9,369,524 vehicles worldwide -- about 3,000 more than Toyota.

Ford outsold Honda by about 850,000 and Nissan by more than 1.3 million vehicles in the United States last year.

Chrysler sold more vehicles here than Nissan and Hyundai combined in 2007 and so far this year.

Myth No. 2: They build unreliable junk

Reality: The creaky, leaky vehicles of the 1980s and '90s are long gone. Consumer Reports recently found that "Ford's reliability is now on par with good Japanese automakers."

The independent J.D. Power Initial Quality Study scored Buick, Cadillac, Chevrolet, Ford, GMC, Mercury, Pontiac and Lincoln brands' overall quality as high as or higher than that of Acura, Audi, BMW, Honda, Nissan, Scion, Volkswagen and Volvo.

J.D. Power rated the Chevrolet Malibu the highest-quality midsize sedan. Both the Malibu and Ford Fusion scored better than the Honda Accord and Toyota Camry.

Myth No. 3: They build gas-guzzlers

Reality: All of the Detroit Three build midsize sedans that the Environmental Protection Agency rates at 29-33 miles per gallon on the highway.

The most fuel-efficient Chevrolet Malibu gets 33 m.p.g. on the highway, 2 m.p.g. better than the best Honda Accord. The most fuel-efficient Ford Focus has the same highway fuel economy ratings as the most efficient Toyota Corolla. The most fuel-efficient Chevrolet Cobalt has the same city fuel economy and better highway fuel economy than the most efficient non-hybrid Honda Civic.

A recent study by Edmunds.com found that the Chevrolet Aveo subcompact is the least expensive car to buy and operate. (personal note - I kind of dispute this being in here, as the Aveo is a Korean built import)

Myth No. 4: They already got a $25-billion bailout

Reality: None of that money has been lent out and may not be for more than a year. In addition, it can, by law, be used only to invest in future vehicles and technology, so it has no effect on the shortage of operating cash the companies face because of the economic slowdown that's killing them now.

Myth No. 5: GM, Ford and Chrysler are idiots for investing in pickups and SUVs

Reality: The domestics' lineup has been truck-heavy, but Toyota, Nissan, Mercedes-Benz and BMW have spent billions of dollars on pickups and SUVs because trucks are a large and historically profitable part of the auto industry.

The most fuel-efficient full-size pickups from GM, Ford and Chrysler all have higher EPA fuel-economy ratings than Toyota and Nissan's full-size pickups.

Myth No. 6: They don't build hybrids

Reality: The Detroit Three got into the hybrid business late, but Ford and GM each now offers more hybrid models than Honda or Nissan, with several more due to hit the road in early 2009.

Myth No. 7: Their union workers are lazy and overpaid

Reality: Chrysler tied Toyota as the most productive automaker in North America this year, according to the Harbour Report on manufacturing, which measures the amount of work done per employee. Eight of the 10 most productive vehicle assembly plants in North America belong to Chrysler, Ford or GM.

The oft-cited $70-an-hour wage and benefit figure for UAW workers inaccurately adds benefits that millions of retirees get to the pay of current workers, but divides the total only by current employees. That's like assuming you get your parents' retirement and Social Security benefits in addition to your own income.

Hourly pay for assembly line workers tops out around $28; benefits add about $14. New hires at the Detroit Three get $14 an hour. There's no pension or health care when they retire, but benefits raise their total hourly compensation to $29 while they're working. UAW wages are now comparable with Toyota workers, according to a Free Press analysis.

Well, JD Power did hand out those awards. The problem is, they are initial quality awards. In my opinion, so what. Lets see how reliable the Malibu will be over the next 10 years, because in the end thats what alot of people want. Will it nickel and dime you? Will the transmission hold up? Will the AC units hold up? Will the electrical systems hold up? The $1000-$2000 dollar repair bills have sent alot of consumers over too Toyota and Honda. They have been losing customers for sometime. When the Malibu can hang with Honda and Toyota in the durability dept, the may start to get some customers back.

[wfedwar]

Originally Posted by Len_A

[b][size="2"]Hourly pay for assembly line workers tops out around $28; benefits add about $14. New hires at the Detroit Three get $14 an hour. There's no pension or health care when they retire, but benefits raise their total hourly compensation to $29 while they're working. UAW wages are now comparable with Toyota workers, according to a Free Press analysis.

Yeah, and comparable to wages the operators make at the chemical plant where I work.

[jfelbab]

Len, fill me on your VEBA plan.

Does not the big 3 owe the UAW some $52 Billion in funding for this plan? Do you see any way that plan is going to be funded?

Also here is a LAT article on the cost of labor differences.
Is Big Labor killing the Big Three? - Los Angeles Times

The basic hourly wage received by a UAW worker in a Big Three plant is close to that received by a Toyota or Honda worker in a U.S. plant. The UAW-negotiated wage was roughly $28 an hour in 2007. For new workers, the hourly wage was lower; senior workers made more money. The major cost difference between UAW members and employees in foreign-nameplate factories in the U.S. comes in fringe benefits. The UAW has been one more of the more successful American unions in fighting for generous pensions and health benefits for its members.

[Len_A]

Originally Posted by jfelbab

Len, fill me on your VEBA plan.

Does not the big 3 owe the UAW some $52 Billion in funding for this plan? Do you see any way that plan is going to be funded?

Yes, they do owe some remaining money for the VEBA, although this second, I can't verify the amounts the three car companies said they have left to pay. Most of the VEBA is already funded, something like two-thirds of it already. The VEBA isn't anything really new - I think there have been a couple of others, but they've had some problems. If you don't mind, I'll have to research what's left to pay. I will say, however, the union did agree to let the remaining payments stretch out a bit longer.

[jfelbab]

Originally Posted by Len_A

Yes, they do owe some remaining money for the VEBA, although this second, I can't verify the amounts the three car companies said they have left to pay. Most of the VEBA is already funded, something like two-thirds of it already. The VEBA isn't anything really new - I think there have been a couple of others, but they've had some problems. If you don't mind, I'll have to research what's left to pay. I will say, however, the union did agree to let the remaining payments stretch out a bit longer.

I did find this article which doesn't exactly paint it in a good light.

VEBAs in the Auto Industry:

[Len_A]

Originally Posted by Cleaning Fool

Well, JD Power did hand out those awards. The problem is, they are initial quality awards. In my opinion, so what. Lets see how reliable the Malibu will be over the next 10 years, because in the end thats what alot of people want. Will it nickel and dime you? Will the transmission hold up? Will the AC units hold up? Will the electrical systems hold up? The $1000-$2000 dollar repair bills have sent alot of consumers over too Toyota and Honda. They have been losing customers for sometime. When the Malibu can hang with Honda and Toyota in the durability dept, the may start to get some customers back.

In terms of durability, Consumer Reports is the only source I know of for longer term durability reports. Keep in mind, that's data solicited from owners who subscribe to Consumer Reports, and for years, they've been very down on the Detroit.

Ford - Consumer Reports stated the following:

Ford leads the domestics

Ford's three brands-Ford, Lincoln, and Mercury-continue to pull away from the rest of the Detroit automakers. Almost all Ford models are now average or better, with the exception of some that are truck-based. Excluding those, Ford's reliability is now on par with good Japanese automakers.

GM & Chrysler:

General Motors is a mixed bag. Among the bright spots is the redesigned Chevrolet Malibu; in its first year, the four-cylinder version is better than average and the V6 is average. The Buick Lucerne with a V8 and the Pontiac G6 with a four-cylinder are above average, and the Chevrolet Avalanche has improved to average.

But a quarter of GM models are still well below average in reliability. Some that didn't fare well are fairly new designs that did well in our testing, such as the Cadillac CTS and the Buick Enclave, GMC Acadia, and Saturn Outlook SUV triplets. Chrysler trails the pack. Almost two-thirds of its products rate below average for reliability. The redesigned 2008 Chrysler Town & Country and Dodge Grand Caravan minivans earned low scores, as did the Chrysler Sebring V6 and Dodge Avenger sedans and the Jeep Liberty SUV. The Sebring Convertible has the worst score: 283 percent worse than average. The only above-average models are the Dodge Caliber hatchback and Jeep Patriot SUV.

It should be noted that the previous generation Chevy Mailbu, for model years '04, '05, '06, & '07 had better than average reliability on almost every area, and what Data Consumer Reports has so far on the '08, puts it on par with Toyota Camry and better than the '07 Camry, which had serious transmission troubles.

In fact, if Consumer Reports is to be believed, Mercedes quality and reliability is no better than the best of GM & Chrysler, and reliability is, in some cases, not up to Ford's.

Toyota is noted as improving their troublesome '07 performance, and I can find plenty of complaints on line about '07 transmissions, and prior to '07, with Toyota, a lot of engine seizures due to oil sludge, in every thing from Corolla 4 cylinders to Lexus V-8's. Last year, Toyota's Chairman ordered the company to slow down the product development cycle by six months and do more prototyping, because their quality took a real bad hit.

Nissan's Canton Mississippi plant had serious first year problems with every vehicle they made their, and Honda's had some problems too, but far less than Toyota and Nissan. All you have to do is search on-line - bad quality problems, and dealers treating customers like sh*t, especially on the Toyota engine oil sludge situation, was no different than any of the complaints from domestic dealer customers. And it should also be noted that Toyota dealers are starting to but heads with Toyota management over Toyota's desire to have the dealers expand their service departments. .

[Len_A]

Originally Posted by jfelbab

I did find this article which doesn't exactly paint it in a good light.

VEBAs in the Auto Industry:

LOL. Do you know who you're quoting? The Soldiers of Solidarity is a dissident movement within the UAW, pissed off like you wouldn't believe, over the UAW leadership negotiating any concessions. I'm certain that there are articles out there, angrily denouncing the UAW leadership for suspending the jobs banks.

And I'm not laughing at you - I'm laughing at them. They're the stereotype of what people find worst in organized labor. I take nothing they say at more than face value. If it was up to them, there would be no VEBA, no outsourcing, no two tiered wage structure, etc. Google "Soldiers of Solidarity " and you'll see what I mean. They've never got more than two or three percent of the votes in any union election that I know of. All bark, no bite.

[jfelbab]

Originally Posted by Len_A

LOL. Do you know who you're quoting? The Soldiers of Solidarity is a dissident movement within the UAW, pissed off like you wouldn't believe, over the UAW leadership negotiating any concessions. I'm certain that there are articles out there, angrily denouncing the UAW leadership for suspending the jobs banks.

And I'm not laughing at you - I'm laughing at them. They're the stereotype of what people find worst in organized labor. I take nothing they say at more than face value. If it was up to them, there would be no VEBA, no outsourcing, no two tiered wage structure, etc. Google "Soldiers of Solidarity " and you'll see what I mean. They've never got more than two or three percent of the votes in any union election that I know of. All bark, no bite.

Sorry, Len, I didn't have any idea who they were. I didn't intend to insult.

I posted the article for comment and discussion purposes. I'd appreciate your opinion on VEBA and if you think it is adequately funded though. What do yousee as the pros and cons.

[jfelbab]

Some new CU information. Would you buy that car again?

Best and worst in new car owner satisfaction: Car owner, auto shopping

[Len_A]

Originally Posted by jfelbab

Sorry, Len, I didn't have any idea who they were. I didn't intend to insult.

I posted the article for comment and discussion purposes. I'd appreciate your opinion on VEBA and if you think it is adequately funded though. What do yous ee as the pros and cons.

NO, no, no - no offense taken from here - I think those guys are comical. I would think they were funnier, if they weren't feeding the worst stereotypes people have of labor unions.

[ianitrix]

Originally Posted by ZaneO

So what exactly do you do?

I proudly work for chrylser on the line and work for every dollar I make . We built 550 vans per shift thats about one every 48 seconds, most jobs by me you dont have time to tie your shoes. Now Im not here for you all to feel sorry for me but when people make comments that I dont deserve my pay pisses me off.
Have a nice day...

[Len_A]

Originally Posted by ianitrix

I proudly work for chrylser on the line and work for every dollar I make . We built 550 vans per shift thats about one every 48 seconds, most jobs by me you dont have time to tie your shoes. Now Im not here for you all to feel sorry for me but when people make comments that I dont deserve my pay pisses me off.
Have a nice day...

I find the harsh attitudes toward blue collar manufacturing workers, especially auto workers, truly offensive. Unless you've either actually done the work, or been in a physical position to observe the work being performed (both of which I've done), you really don't understand the how hard the work is. This is work where most of the jobs send you home feeling physically whipped at the end of the day, sometimes to the point of being sore every day. Repetitive motion injury is widely prevalent, even in the Japanese owned transplants, and I know for a fact that the transplants bust their butts to try minimize repetitive motion injury. It's still as prevalent as the domestic plants, because that's the nature of mass production that involves human labor.

I,for one, will never let my disagreements with the car makers or the unions diminish my respect for the very hard working people of all of the auto industry, domestic and transplant, union and non union.