Unions to blame for job losses

[SuperScout]

[The entire story appears in the Detroit News, written by Bryce G. Hoffman. After reading this article, you will probably understand why the Big 3 auto makers are laying off thousands, and the companies are losing billions of $$!]

Ken Pool is making good money. On weekdays, he shows up at 7 a.m. at Ford Motor Co.'s Michigan Truck Plant in Wayne, signs in, and then starts working -- on a crossword puzzle. Pool hates the monotony, but the pay is good: more than $31 an hour, plus benefits. ?We just go in and play crossword puzzles, watch videos that someone brings in or read the newspaper," he says. "Otherwise, I've just sat."
Pool is one of more than 12,000 American autoworkers who, instead of installing windshields or bending sheet metal, spend their days counting the hours in a jobs bank set up by Detroit automakers and Delphi Corp. as part of an extraordinary job security agreement with the United Auto Workers union. The jobs bank programs were the price the industry paid in the 1980s to win UAW support for controversial efforts to boost productivity through increased automation and more flexible manufacturing. As part of its restructuring under bankruptcy, Delphi is actively pressing the union to give up the program.
With Wall Street wondering how automakers can afford to pay thousands of workers to do nothing as their market share withers, the union is likely to hear a similar message from the Big Three when their contracts with the UAW expire in 2007 -- if not sooner. "It's an albatross around their necks," said Steven Szakaly, an economist with the Center for Automotive Research in Ann Arbor. "It's a huge number of workers doing nothing. That has a very large effect on their future earnings outlook."
General Motors Corp. has roughly 5,000 workers in its jobs bank. Delphi has about 4,000 in its version of the same program. Some 2,100 workers are in DaimlerChrysler AG's Chrysler Group's job security program. Ford had 1,275 in its jobs bank as of Sept. 25. The pending closure of Ford's assembly plant in Loraine, Ohio, could add significantly to that total. Those numbers could swell in coming years as GM and Ford prepare to close more plants.
Detroit automakers declined to discuss the programs in detail or say exactly how much they are spending, but the four-year labor contracts they signed with the UAW in 2003 established contribution caps that give a good idea of the size of the expense.
According to those documents, GM agreed to contribute up to $2.1 billion over four years. DaimlerChrysler set aside $451 million for its program, along with another $50 million for salaried employees covered under the contract. Ford, which also maintained responsibility for Visteon Corp.'s UAW employees, agreed to contribute $944 million. Delphi pledged to contribute $630 million. In August, however, Delphi Chairman and Chief Executive Officer Robert S. "Steve" Miller said the company spent more than $100 million on its jobs bank program in the second quarter alone. "Can we keep losing $400 million a year paying for workers in the jobs bank and $400 million a year on operations? No, we cannot deal with that indefinitely," Miller said in a recent interview with The Detroit News. "We can't wait until 2007."

[b3196]

Brice
I've seen this program working here in Indy at the GM plant. This person works every Sat and Sun. Except when he takes his 4 weeks vacation. When I asked him what he does on the weekends, he stated "nothing" So I got in my Toyota and went home
Bob K

[Seascamp]

The author describes a symptom, and just touches on the root of the problems. Someone here mentioned the work of Deming plus reference to JIT; I call that the "JIT house", but that?s another story. Anyway, none of Deming?s concepts or JIT or SAP or MRP, MRPII or advanced process techniques such as STP (Statistical Process Control) have a hope in hell of being implemented or succeeding unless the enterprise has ownership of the process. When tooling, processes, process improvement, methods and flow are controlled by a 3rd party then we gots what we got, and that equals screwed. GM or Ford may own all the tooling, the buildings, the designs, pay the bills, etc., but they don?t own the process and process improvement comes at a punitively high cost and very slowly. The competition lives and breathes continuous process improvement as witnesses by the fact that the most prestigious industrial award in Japan is called the ?Deming Award? for process improvement.

That was what Dr. W. Edwards Deming is all about; continuous process improvement, and why he left his research scientist job at Ford and went to Japan to help take their fledgling auto industry from 0 to warp speed almost overnight. Bottom line, way back then Deming clearly saw that it would be impossible to implement needed changes with the existing environment in Detroit. Sure, by the 80s, Detroit was on the ropes and forced some process changes via negotiation. Lack of vision got them in a mess at the time, and greater lack of vision only postponed a far greater mess. This saga has repeated so many times and is exactly why a well known US outfit just finished putting up an ultra modern turbine manufacturing facility just south of Budapest. I mean three 747s could park in that building, wing tip to wing tip, and have all kinds of room left over. Most notably, all the manufacturing equipment, CNC programming, robotic programming, business control processes, all of it, is of American origin.

We don?t have to go back that far in time to predict the next moves in Detroit. In the UK, the rarest thing to be found is Union-Management cooperation on anything and as a result, their auto industry was a mess, all same-same. The wisdom of the time was to nationalize the auto industry and one of the changes made was to implement a quasi Soviet style work quota system. I saw this in action near Birmingham, UK. I was in to work on the plant air compressor system and midway through the second shift was thought to be the lowest compressed air demand time. Ay yi yi, all these people were in sleeping bags or socializing, or, or, and the lines were all stop. I reckoned a strike was in progress and I don?t do strikes, nope, so I asked what was happening. I was informed that the work quota had been completed, but the people were obliged to stay on through the shift. Ha ha, same deal as I saw in the Soviet Union except there idle time was taken up with endless games of volleyball or look busy activities in the event one of the political boss hogs were around. Too funny, but the Ivan?s were artists at looking busy, but with nothing going on at all-kind of like sprinting in place and the dope politicos didn?t know crap from cumquats about what they were seeing. Hey, I didn?t say diddly about all that, as if anyone would have listened anyway. One must accept the way of things, then press on.

End of the UK story, they now import about 95% of their automobiles and that was that for their auto manufacturing industries, fini. Under the nationalization scheme, cost skyrocketed and product quality just went poof. Unaffordable and exceptionally poor quality products just sat in holding areas.

Scamp

[SuperScout]

And to take the next logical step for the stalinists, we have Madame Hillary and the socialist representative from Vermont proposing a "Marshall Plan" for the US auto industry. Irony of all ironies is that not one thin dime of US aid of the Marshall Plan ever went to Japan; again, part of the enduring genius of MacArthur was his reinvention of Japanese culture, society and government from the ground up, sans US foreign aid. Eventually, as you pintedout, the imported genius of Deming was added tothe mix, and viola!! we has what we has.

With the dual concrete mindsets of corporate owners and union bosses in place, I don't see much bright future for the US auto makers, and only hope we, as taxpaying suckers, don't bail them out of thier self-inflicted pickle.

[Keith_Hixson]

Lots of blame to throw around.
Both Management and Labor are to blame.

They need to talk, talk, talk and listen, listen, listen and study, study, study and see what they can do to over come these problems. It will take much give and take on both sides.

GREED is the main culprit on both sides of the issue. Greed without an honest look at the present and the future.

Keith

[Advisor]

Both sides of that mess forgot about those who were really paying the bills. The consumers...the union & management had a great party for years at the expense of those who bought their product (sometimes a very inferior product)...and, finally, the ultimate bill payer said ENOUGH! Buy American became equated with screw the consumer & finally, oh finally, the buyer woke up.
Hey, guys, isn't that market economy at work? Screw the automakers & the union. I'll buy an car made in America & I really don't care what the name on the vehicle is. Support the worker, I say..and to hell with the union & management.