ellives

http://www.businessweek.com/managing/content/sep2007/ca20070930_668408.htm?chan=careers_managing+index+page_top+stories The Problem with GM's UAW Deal The industrial model the pact clings to is already obsolete and ignores what really matters today: what Peter Drucker called "knowledge work" by Rick Wartzman In 1946, Peter Drucker's intimate, multiyear examination of General Motors (GM), Concept of the Corporation, was published. GM hated it. Drucker's take—that the then-wildly-successful automaker might want to reexamine a host of long-standing policies on customer relations, dealer relations, employee relations, and more—was viewed from inside the corporation as hypercritical. GM's revered chairman, Alfred Sloan, was so upset about the book that he "simply treated it as if it did not exist," Drucker later recalled, "never mentioning it and never allowing it to be mentioned in his presence." The United Auto Workers didn't exactly embrace Drucker's thinking either. Among his specific recommendations was for GM's hourly workers to assume more direct responsibility for what they did, adopting a "managerial aptitude" and operating within a "self-governing plant community." The UAW's powerful president, Walter Reuther, greeted that notion this way: "Managers manage and workers work, and to demand of workers that they take responsibility for what is management's job imposes an intolerable burden on the working man." Six decades later, were Drucker alive to set down the latest chapter in the GM saga, my guess is that, once again, neither the company nor the union would care much for what he'd have to say. At the least, Drucker would surely be skeptical of how transformational the four-year contract reached last week between GM and the UAW really is. Obsolete Industrial Model Yes, the restructuring of GM's massive obligations for UAW retiree health care, along with wage and benefit concessions made by the union, promise to bring the company's cost structure more in line with that of its Asian rivals. That may well allow GM to become consistently profitable, which is no small thing. Yet on some level, the agreement clings to an industrial model that is already obsolete. And it runs counter to GM Chief Executive Rick Wagoner's previously articulated strategy of designing new vehicles so they can be put together anywhere across the globe. In particular, according to news reports, GM has pledged to invest billions of dollars to keep making certain cars, trucks and engines in the U.S., providing a boost to facilities in Wisconsin, Michigan, and Indiana and, the UAW hopes, a measure of job security for its 74,000 unionized workers. As the company characterized the contract, it "paves the way for GM to significantly improve its manufacturing competitiveness" while simultaneously "strengthening its core manufacturing base in the U.S." Shifting Away From Manufacturing But these two principles—preparing for the future while locking into a made-in-America mindset—are fundamentally at odds. As Drucker saw it, huge economic and demographic forces have set the U.S. and other developed nations on a course in which manufacturing jobs are destined to play a lesser and lesser role. Much of this work, he said, will invariably keep moving offshore. To try to thwart this change through what amounts to bargaining-table protectionism is folly. The 21st century shift from traditional lines of manufacturing to what Drucker called "knowledge work"—laboratory analysis, software design, and so on—is as inexorable as the 20th century transition from agriculture to manufacturing. After World War II, about one in three U.S. workers was employed in manufacturing. Today that figure stands at about 1 in 10 (although manufacturing output, as a share of total economic output, has remained steady, thanks largely to rising productivity). Education Over Apprenticeship "Most people continue to believe that when manufacturing jobs decline, the country's manufacturing base is threatened and has to be protected," Drucker wrote in 2001, four years before he died. "They have great difficulty in accepting that, for the first time in history, society and economy are no longer dominated by manual work, and a country can feed, house and clothe itself with only a small minority of its population engaged in such work." Drucker didn't mean that people would cease using their hands altogether; in fact, in many cases, they might use them more. But their work will be "based on theoretical knowledge that can be acquired only through formal education," he explained, "not through apprenticeship." All of this suggests that whatever investment GM is making in solidifying its manufacturing presence in the U.S. would be better spent on launching programs to retrain and redeploy its younger workers for a fate that, ultimately, many of them won't be able to escape. The End of the Assembly Line This must not be some halfway initiative, either. Indeed, imagine a major corporation creating a lifelong learning curriculum that had as much energy and talent and financial strength behind it as the building of a battery of new factories. Imagine a retraining effort so robust and path-breaking that the union could never dismiss it as some corporate sop. In 1983, in a new epilogue to Concept of the Corporation, Drucker wrote: "GM may, within a decade, develop into a true transnational company that integrates markets of the developed world and their purchasing power with the labor resources of the Third World. "And while it is much too early even to guess what GM's labor relations will look like," he added, "the assembly line, that symbol of industry during the first half of the century, will, by the year 1990 or the year 2000, probably have faded into history." Drucker was, obviously, a little off in terms of timing. But there's no denying the trend—even for those who'd like to pretend, as Alfred Sloan once did, that it just isn't there. Rick Wartzman is the director of the Drucker Institute at Claremont Graduate University and an Irvine senior fellow at the New America Foundation.

Just make sure you get it rigged up with 33's so you can run over a few of those Prius' along the way.

Ford has been scary for quite a while. They need a very favorable deal from the UAW to stay in the game at all. Personally I love the fact Chrysler is private and they are not beholden to anyone. The UAW can't get their hands on profitability numbers so Chrysler can tell them to go pound sand or at least they can play the negotiation game all the while slowly easing their operations out of the UAW stranglehold. GM was the natural target for the UAW because they're the most visible and profitable of the big 3. The UAW needs to absorb the fact they need to focus on Toyota and Honda. Until then, they have no credibility with anyone.

Here's one analyst I'm hoping will disappear within the next 5 years.... "those than can... do... those that can't.... analyze" Just a matter of getting consumers to actually look at the products. I don't think there's any more distinctive design than the Saturn Sky.

http://www.msnbc.msn.com/id/21016575/from/RS.1/ Hefty GM hybrids could boost automaker Chevy Tahoe, GMC Yukon get impressive mileage; ‘halo’ effect seen By Roland Jones Associate editor Updated: 6:52 p.m. ET Oct 2, 2007 General Motors took a major step forward last week in its bid to boost its fading fortunes, but it’s probably not the one you’re thinking of. True, GM clinched a new four-year labor contract with striking United Auto Workers that, if ratified by union members, could put the automaker on more even footing with its Asian rivals. But in a less noticed-move that ultimately could prove nearly as important, GM provided new details about the industry's first full-size hybrid gas-and-electric-powered sport utility vehicles, which will appear on dealers’ lots in November. The new hybrid versions of the Chevy Tahoe and GMC Yukon will offer an impressive 21 miles per gallon in city driving and 22 miles per gallon on the highway, according to official mileage estimates from the Environmental Protection Agency, issued Thursday. That’s a 30 percent gain in overall fuel economy and 50 percent for city driving, making the new SUVs as fuel-efficient in the city as a four-cylinder Toyota Camry. Although sales of large SUVs have taken a hit in recent years as gasoline prices have risen, with once-popular models seeing big production cuts and buyers flocking to so-called "crossover" vehicles, many buyers still want a large vehicle or one with the ability to tow large loads. A strong reception for the new hybrid SUVs could help boost sales of other GM vehicles by creating a "halo" effect for the company, said Tom Appel, editor of Consumer Guide Automotive, which offers buying advice to car shoppers. GM could use a halo effect as it markets important new sedans such as the Saturn Aura, midsize Cadillac CTS and forthcoming Chevy Malibu. “GM has been heavily reliant on fleet sales and they need to get into consumer retail more," Appel said. "And this is the sort of good news that helps you sell product overall.” Good product is vital to GM’s success. The automaker has reduced capacity, pared its workforce, shut plants and scored a victory with its union deal on health care, which removes some $50 billion in health-care liabilities from its books. Now GM is relying on some hit new models to drive up sales and revenue. Sales of GM’s top brands of Buick, Cadillac and Chevy are down sharply so far this year. Only the GMC and Saturn brands are showing a gain. GM has low sales projections for its two hybrid SUVs, but their impact could still be significant, Appel said. “[These new hybrid SUVs] might not be the one product that contributes to GM’s financial success, but I think they will contribute to GM’s overall renaissance,” he said. “The ability to take a very heavy vehicle and give it really good fuel economy speaks volumes about GM’s reinvestment in its products and future products.” Jointly developed with BMW and DaimlerChrysler, GM’s “two-mode” hybrid system could lead to a revitalization of SUV sales. It also reportedly will be featured on GM’s full-size pick-up trucks in 2009 as well as the Dodge Durango, Chrysler Aspen, Mercedes-Benz ML and BMW’s X6 SUVs. The “two-mode” system allows the Yukon and Tahoe to travel using electrical power at speeds up to 30 mph before the gas engine kicks in, while GM’s “Active Fuel Management” system saves additional fuel by disengaging half of the engine’s cylinders when full power is not required. GM also improved aerodynamics and reduced the weight of some components to offset the added weight of the hybrid battery pack. Large SUVs are excellent candidate for hybrid drive, notes Karl Brauer, editor in chief at automotive research site Edmunds.com. Heavy vehicles use large amounts of gas moving from a standing start to 5 mph, but hybrids use stored electricity to get rolling, so that gas is saved. “I think these vehicles will be really important,” Brauer said. “Even before the price of gas went up people were wondering if these big SUVs were a fad, but I think the genie is out of the bottle. Americans have been spoiled with big, roomy utilitarian vehicles, and I don’t think they want to give them up, even with the price of gas going up. They don’t want to give up on space and don’t want to burn too much fuel. So the ultimate fulfillment of all these needs is a high-mileage, fuel-efficient SUV, and that is what GM is going after with these two SUVs.” Brauer expects hybrid technology to become more common in American vehicles, much as fuel-injection technology has become common. “I think hybrid drive trains are the next fuel injection,” he said. “The technology helps performance and fuel economy, and as the technology shrinks and the battery and motors become smaller they will become ubiquitous. We are at a point now where you can add fuel injection to any old car, and I see that coming for hybrid technology.” The hybrid Tahoe and Yukon could even revitalize sales in the SUV segment, said Aaron Bragman, an analyst at consultancy Global Insight. “Given Americans’ historical love affair with large vehicles, offering SUVs that achieve mileage comparable to a midsize sedan could be just the ticket to breathing new life into a segment many had written off as doomed,” he said in a research note. © 2007 MSNBC Interactive

http://www.msnbc.msn.com/id/21101934/ Ford’s September sales plummet, GM’s are flat Toyota figures slip slightly, Honda posts gains led by Accord and CR-V The Associated Press Updated: 5:03 p.m. ET Oct 2, 2007 DETROIT - Weakness in the housing market and flagging consumer confidence made September another tough month for the auto industry, although General Motors, Honda and Nissan bucked the trend with hot-selling new vehicles, according to U.S. sales figures released Tuesday. Ford Motor Co.'s U.S. sales plummeted 21 percent for the month, largely due to a 62 percent reduction in sales to rental car companies. Toyota Motor Corp. posted a 4 percent decline but still outpaced Ford for the month and for the January-September period, continuing its drive to replace Ford as the nation's No. 2 automaker in sales after GM. Toyota had sold 28,654 more vehicles than Ford as of the end of September. Chrysler LLC also was down 5 percent for the month. Overall U.S. sales were down 3 percent from last September, according to Autodata Corp. General Motors Corp. said sales were flat compared with last September, despite a month of difficult labor negotiations and a two-day strike by the United Auto Workers union. GM produced 30,000 fewer vehicles because of the strike, but the walkout had no impact on sales and GM's production schedule is unchanged, said GM's top sales analyst, Paul Ballew. Ballew said the Federal Reserve's interest rate cut in the middle of September didn't have an immediate impact on sales but helped calm the market and ensure that the tightening mortgage market won't affect automotive credit. "For us as an industry, we support and applaud the Fed's move because we cannot have the spillover effects into other categories," Ballew said. Still, he said high energy prices and a slump in important markets like California and Florida will continue to hurt the industry through the fourth quarter. Erich Merkle, vice president of auto industry forecasting for consulting company IRN Inc. in Grand Rapids, said it will take months for the rate cut to trickle down to average consumers. "These are pretty weak numbers and this is indicative of the overall weakness we've seen in the economy," Merkle said. GM's car sales were down 4 percent while truck sales were up 4 percent on the strength of the Chevrolet Silverado and other new pickups. GM also got a boost from new crossovers like the Buick Enclave and the new Cadillac CTS sedan, which posted a 73 percent sales increase for the month. Ford's car sales dropped 39 percent compared with last September while its truck sales were down 5 percent. Sales of Ford's F-150 pickup, long the best-selling vehicle in the United States, fell 21 percent as newer pickups from GM and Toyota stole its thunder. George Pipas, Ford's top sales analyst, said Ford is on track to cut sales to daily rental fleets by more than its original goal of 30 percent this year, or 135,000 vehicles. Ford, GM and Chrysler have been trying to cut back on rental sales, which can hurt brand image and profits. Pipas said Ford's retail sales _ or sales excluding those to rental and other fleets _ were down 15 percent. That was more bad news for the automaker, which hasn't seen sales rise since October 2006, according to Ward's AutoInfoBank. But Pipas said Ford is meeting its goal of stabilizing U.S. market share, which has held steady at around 13 percent for most of 2007. Chrysler's car sales shot up 18 percent with the introduction of the newly redesigned Sebring, but its truck sales were down 11 percent despite the heaviest incentive spending on pickups in the industry, according to the auto research site Edmunds.com. Paul Taylor, chief economist with the National Automobile Dealers Association, said Ford, GM and Chrysler deserve credit for holding the line on fleet sales. Chrysler said its fleet sales were down 20 percent in September, while GM's were down 7 percent. Taylor said the volume won't be missed much, since fleet sales don't help manufacturers or dealers because of their low margins. Toyota's overall decline compared with September of last year was led by its trucks, which were off 6 percent. Car sales were down 4 percent, the company reported, but it said the figures were compared with a best-ever September 2006. Toyota spokesman Irv Miller said production of some popular vehicles like the subcompact Yaris hasn't kept up with U.S. demand. But Miller said Toyota believes the market will get stronger toward the end of the year. "We're confident the next few months will keep us on track to reach our growth targets," he said. Honda Motor Co.'s U.S. sales rose more than 9 percent, with car sales up 7 percent and truck sales up 13 percent. The new Accord sedan and CR-V crossover vehicle helped fuel the increase, the company said. Nissan Motor Co.'s sales gained 7 percent on the strength of its redesigned Altima sedan as well as the new Rogue crossover. Nissan's car sales were up 17 percent, while truck sales fell 6 percent. The Associated Press reports unadjusted figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 25 sales days last month and 26 in September 2006. Ford's shares rose 34 cents, or 4.1 percent, to $8.57 Tuesday as investors anticipated a new contract with the UAW that could help Ford. GM shares rose $1, or 2.8 percent, to $37.05. Reuters contributed to this report.

After I posted my first reply to this comment it also dawned on me to make another comment given you referenced "6 college degress or certifications." This leads me to believe you have none of these, which is likely another part of your problem. If you're not willing to invest the time in these measures of knowledge, it's really tough to complain about lack of compensation. I'm presuming GM has some kind of education reimbursement program?

Find another job. You're underpaid. Glad to see a UAW member defend the union here. One post isn't going to change many (any?) minds but a vacuum will always be filled with something eventually (a law of physics of course) so you're always better off to fill the vacuum with information.

Anybody knows more than they do.... OBviously.... DOH!

Rubbish. Pricing is established based on the market. If a manufacturer prices too high for the market, nobody will will buy the product. There's simply no basis for a lawsuit here. It's a total waste of time and money.

The details of this contract makes me want to vomit... particularly in the PDF document link above. Most of it is marketing spin focused on justifying the very existence of the union.

It's just more whining. Pricing is determined by market conditions. Plain and simple.

Seems like we're going to find out. This deal will continue to be bad news for GM. As I've said before, GM will continue to die the "death of 1000 cuts" because they didn't bust the UAW. This is only way they're going to get the level of competitive advantage they need to slow down the Toyota machine. Let's hope I'm wrong and they can figure out a way to build and sell cars on merits that exceed those of Toyota vehicles. If not, GM might as well just shut down and sell off their assets and just hand over the proceeds to the UAW. If I owned the UAW, it's what I'd do. I'm not going to operate a company for a loss - ever.

To quote Gordon Gecko: "Greed is good." In fact, greed is what makes the capitalist system work. The problem comes in when greed surpasses morality and we start doing things on behalf of greed that we would not normally do. This, some would say, is one of the inherent flaws in the system... the devil is always there to tempt us.

No surprise NPR is still there given it's a left organization. msnbc to a lesser extent. Interesting MSNBC is reporting being "close to an agreement" and spinning the results already.

Did anybody else notice how quickly the "strike story" dropped off the front page of CNN? Supports my prior statement that "nobody cares."

"Job security is very important for us. Without going into the specifics, that is one of the open items," he said. He added that the open topics included investment, job-creation, the commitment of new models to plants and other economic issues that affect UAW members. They don't get the fact that having people idle adds cost to the production of cars that need to be sold. How does ANY company provide "job security?"

Corporations exist to make money. They don't exist to provide a living to anyone. This is a simple fact you liberals can't seem to understand.

Read the post 2 prior to yours.... when this last happened in '98, they last 2 points of market share they never recovered. The same will happen this time. The market doesn't stop because GM isn't building cars. A strike for GM in the current market is a death spiral. To quote George W.: "Bring them on"

You're talking about tariffs. Good luck with that one. The fault lies with the UAW - not the US government.

He lost *my* vote with that comment.

These comments by current and former employees are incredible. The sense of entitlement that eminates from statements like this "We have given up plenty for GM, now they can give something up for us. I'm behind the union 100 percent." have me in total amazement. I'm expecting they'll both go down in flames. I'll watch from the sidelines from now on. I won't buy another GM product until the UAW is dead or they've unionized Toyota and Honda. Simple choices for simple minds.

Nobody cares. I think we should start calling him "Goodbye Ron."

Exactly the point. I'm tired of it myself and I actually care. A typical car buyer doesn't give a $h! if the UAW strikes. They can buy "relevant" cars they actually want anyway, so they couldn't care less.

Aw geez. I shoulda killed that byline before posting that note.