The Dean

Ken Pool is making good money.

On weekdays, he shows up at 7 a.m. at Ford Motor Co.'s Michigan Truck Plant, 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.

The Dean

Mods,

Please move this to the 'Sandpit' - apologies.

bimcnorth

Gosh..

So making huge gas-guzzling cars at outdated industries at a time when Oil hit $140 followed by a total credit crunch followed by a deep recession had nothing to do with it?

They really should have learned from the Germans and the japanese, unless you invest in tomorrows technology you become history.

The Dean

Good points......... of course those are factors...........

......... but when nobody is buying your cars, cash flows dry up, and if you are paying $31 per hour (for say 35 hours a week) to 12,000 people, that's USD 13 million PER WEEK going down the Swanee........ with nothing in return.

I couldn't believe it when I heard about it, and I'm surprised there hasn't been more press coverage about it.

Roadking

A little simplistic, guys. Toyota are reversing their forecast for the year backwards, Honda are walking away from production facilities, BMW cannot even commit to a number and have laid off 4'000 people and MB will not make a forecast for 2009. We all know about the VW - Porsche scenario! Remember, the US auto makers carry $1'000 per car as pension requirements for every car built - even when they don't build them!

bimcnorth

Of course it´s simplistic...It´s on Internet

But basically no other country are in danger of having an entire industry, an iconic industry to boot! going tits up before christmas.
The germans and the japs are hurting but still show some profits while Detroit have being loosing money since the price of gas went up considerably..


2007...AP

The Dean

Bimcnorth,

Any chance you can trace the exact date of that quote?

Would appreciate it, work-wise.

Thanks.

Roadking

Below editorial frpm a respected detroit newspaper. Granted it's Detroit but the figures don't lie:

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 six 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 about 560,000 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
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, or higher, than that of Acura, Audi, BMW, Honda, Nissan, Scion, Volkswagen and Volvo.
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 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.
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 domestic companies' lineup has been truck-heavy, but Toyota, Nissan, Mercedes-Benz and BMW have all 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.

What I can tell you is all manufacturers are hurting big time, not just the Americans.
And it's not down to lack of investments in new products. In the 70's and 80's the Japanese merely copied the US and European products saving on R&D costs.

The Dean

What's the date of that article, Roadking? Recent?

Roadking

Yesterday: http://www.freep.com/article/20081117/COL14/811170379.

Roadking

Dean, a good source of Automotive news is: http://www.autonews.com/, if you are interested.

Charismatic

They make cars for niche markets and selling them on heavy finance. The markets are closing and cheap finance drying up...

Not really rocket science is it?

I bet the EU won't be happy though .

al dente

Someone told me that the reason the bail out is at the top of the agenda is that it is the only manufacturing industry left in USA. Also, 1 in 12 people's incomes are affected by it.

Dinner table chat, so not utterly reliable..

bimcnorth

Here we go...


http://www.msnbc.msn.com/id/21661794/

UKCityGent

A loooong time ago i started to work at Ford as a consultant in the UK and one of the key projects which was started about 10 yrs before i arrived was the new all-sing and all-dancing order management systems which was going to go global. It was built to the tune of $150m. It was canned without ever going live !

I hope Ford, and GM do go into chapter 11, where they can be re-structured with the correct people (i.e. No unions!) and re-organisational skills.