Originally Posted by Tracym (Post 7049305)

Majority of what? We're comparing the US vs. foreign car companies - not McDonalds.

For example:

Currently, the average U.A.W. member costs G.M. about $74 an hour in a combination of wages, health care and the value of future benefits, like pensions. Toyota, by comparison, spends the equivalent of about $45 an hour for each of its employees in the United States.

Base wages between the Big Three and the foreign companies are roughly comparable, with a veteran U.A.W. member earning $28 an hour at the Big Three compared to about $25 an hour at Toyota’s plant in Georgetown, Ky. (Toyota pays less at its other American factories.)

But the gap in labor costs becomes larger when health care, particularly for thousands of retirees and surviving spouses, and job security provisions are considered.

Mr. Gettelfinger said Wednesday that the union would suspend the much-criticized “jobs bank” program, which allows laid-off workers to continue drawing nearly full wages.

http://dealbook.blogs.nytimes.com/20...lp-automakers/

Bet that's a bunch bigger gap than Sams Club and Costco.

Double standard, it seems to me... if ya want to support the companies who are best to the workers - better buy American cars.

Originally Posted by RoadWarriorFromLP (Post 7049443)

You're falling for GM's cost cutting mantra hook, line and sinker. (Don't worry, you're not alone -- most Wall Street analysts, who also didn't see this coming even though they should have, also missed it. Moral of the story -- most Wall Street analysts aren't very good.)

If Toyota tried to operate with its own expenses but GM's revenues, it would lose money. This is true even though GM sells more vehicles than Toyota.

The problem with Detroit is that they produce large quantities of vehicles that people don't want. Getting rid of this abundance of schlock requires substantial discounts, massive incentives, bucketloads of cut-rate financing and a high percentage of sales going to customers who pay bottom dollar, such as rental car companies and government agencies.

If GM tried to sell vehicles for the same prices that Toyota does, it would sell a lot fewer vehicles, because the vehicles are generally inferior and don't merit the same prices. But when vehicles are sold at such relatively low prices, it is not possible to be profitable.

These companies, particularly GM, have been mismanaged for four decades. Brock Yates first wrote about these problems in 1968, and they have gotten worse ever since. Betting the farm on SUV's, without any backup, was just most of the latest of a long line of mistakes.

Originally Posted by Tracym (Post 7049460)

Overhead and labor costs are certainly part of it - and I didn't get my info from GM.

Originally Posted by Tracym (Post 7049460)

They don't produce only vehicles noone wants

Originally Posted by Tracym (Post 7049460)

As far as quality - I'm not convinced entirely - like I said, I've had quite a few American vehicles, and they've been terrific.

Originally Posted by Tracym (Post 7049460)

As far as quality - I'm not convinced entirely - like I said, I've had quite a few American vehicles, and they've been terrific. I think people jump on that bandwagen, without always enough evidence. Some foreign cars are better, sure - but Detroit puts out some ok ones too.

Originally Posted by RoadWarriorFromLP (Post 7049476)

You should. If you look at their own financial statements, you can see that their operating costs are about the same.

If that was true, the steep discounting wouldn't be required, even during good economic times.

The price discounting reflects the inability to compete. Since they can't sell the car on its own merits, they have no choice but to sell the deal.

Reliability studies from JD Power and Consumer Reports consistently show that most American vehicles have inferior reliability in comparison to the best of the Asians. Some people may have particularly good luck, but overall, the domestics have not been as good.

Ford is beginning to close the gap, but the long-term results remain to be seen. It's too soon to tell, for the changes that they have made are too recent to assess for the long term. However, Ford does seem to be on the right track.

Originally Posted by Tracym (Post 7049305)

But the gap in labor costs becomes larger when health care, particularly for thousands of retirees and surviving spouses, and job security provisions are considered.

Originally Posted by sunflwrgrl13 (Post 7049597)

IMHO, it's the very health care, retiree cost and job security provisions that are the problems. It is not up to the company to have job security provisions, or to give retirement/pensions to retirees. I can understand possibly giving the pension benefit to those that are grandfathered in, as such things like a 401k wasn't really heard of. However, when does it become the responsibility of the person to plan their own retirement? You can never count on a company to always be solvent enough to provide that, and when they go bust, like the Big 3 might, then how many thousands are up a sh*t creek. If these people saved, and planned for the unexpected, they wouldn't be facing such dire circumstances.




No laid-off worker should be paid full compensation, period. That's what unemployment is for. You get laid off, you draw unemployment until you get another job - seems pretty straight-forward to me. This is just a prime example of another cost that is bringing down the Big3.

I'll buy American when I can get the best value for my money. Have you ever read Consumer Reports?? They do independent studies of all kinds of products. There are no American cars that are consistently, reliable, meet safety standards, compete in mpg, etc in their list. The occassional model year may provide a good vehicle, but it's very few and far between.

OOC, does anyone understand the concept of Just-in-Time (JIT) inventory? It always blows my mind (this goes for all dealerships) how many cars are simply sitting on lots waiting to bought. There is a crapload of money tied up in keeping these cars in inventory. I've simply never understood why any dealer/car mfr would keep these many cars in inventory. All of them utilize JIT in manufacturing the cars (getting the right parts, in the right qty to the right place at the right time). So why don't they use this same idea to basically produce cars on demand? Maybe they should implement the idea of most cars being a custom order, so they don't get stuck with millions in inventory that they can't sell.

Originally Posted by sunflwrgrl13 (Post 7049597)

OOC, does anyone understand the concept of Just-in-Time (JIT) inventory? It always blows my mind (this goes for all dealerships) how many cars are simply sitting on lots waiting to bought. There is a crapload of money tied up in keeping these cars in inventory. I've simply never understood why any dealer/car mfr would keep these many cars in inventory. All of them utilize JIT in manufacturing the cars (getting the right parts, in the right qty to the right place at the right time). So why don't they use this same idea to basically produce cars on demand? Maybe they should implement the idea of most cars being a custom order, so they don't get stuck with millions in inventory that they can't sell.

Originally Posted by cindyabs (Post 7049727)

Driving to my Mom's for Thanksgiving, there is a "speedway" we pass. Lo, and behold as we went by, there were HUNDREDS of brand new cars, SUVs, minivans sitting out covering the raceway area, parking lot etc. Never seen anything like it.

I don't think they were foreign brands.

Originally Posted by cindyabs (Post 7049727)

Driving to my Mom's for Thanksgiving, there is a "speedway" we pass. Lo, and behold as we went by, there were HUNDREDS of brand new cars, SUVs, minivans sitting out covering the raceway area, parking lot etc. Never seen anything like it.

I don't think they were foreign brands.

Originally Posted by Tracym (Post 7049556)

But all of this isn't my main point. My main point was - many say buy from Costco rather than Sams because they treat the workers better.

I'm saying the same appears to apply to the US car manufcaturers - and the unions. So BUY AMERICAN :thumbup::rofl:

Originally Posted by Tracym (Post 7048274)

I've had a fair number of American made cars, paid a lot less money than I would for Honda etc. (and I know, because I compared).

My last one was still running well at 12 years old, and 165,000 miles. With little maintenance. They aren't all that good, but that car was terrific. My current one is quite fine too.

My last japanese made car died (engine) at 100,000. I was told that model of car was known for doing that.

So I am not remotely convinced that all the foreign cars are better than all the American ones. Some models, some ways - sure. But not all.

Originally Posted by sunflwrgrl13 (Post 7049597)

...

OOC, does anyone understand the concept of Just-in-Time (JIT) inventory? It always blows my mind (this goes for all dealerships) how many cars are simply sitting on lots waiting to bought. There is a crapload of money tied up in keeping these cars in inventory. I've simply never understood why any dealer/car mfr would keep these many cars in inventory. All of them utilize JIT in manufacturing the cars (getting the right parts, in the right qty to the right place at the right time). So why don't they use this same idea to basically produce cars on demand? Maybe they should implement the idea of most cars being a custom order, so they don't get stuck with millions in inventory that they can't sell.

Originally Posted by Steerpike (Post 7051088)

Tracy - of course, there are exceptions to any rule. But if there is one piece of 'common knowledge' that I thought just about everyone shared, it was that Japanese cars are significantly more reliable than US cars. Check out this page:
http://autos.yahoo.com/consumerrepor...used_cars.html

In the 'best of the best' list, there are 58 Japanese cars and 4 US cars. In the 'Worst of the worst' list, there are 22 US cars and 2 Japanese cars.

In the ranked reliability listing in this article: http://www.auto-broker-magic.com/used-car-ratings.html , count the number of US cars in the top 10 (answer: 0). I found plenty of other similar lists, but you have to wade through more pages to get to the charts/summaries.

The absolute #1 criteria for me in choosing a car is reliability; I drive hundreds of miles each week, and can't afford to break down. I believe that is the #1 criteria of most buyers (and explains why people buy Japanese, even though - as you rightly point out - they are more expensive). Once the US mfr's solve the reliability issue, they'll have customers.

I appreciate your point about spending your money in places that offer good working conditions. The big three appear to do so, and thus they deserve consideration. I'll consider them as soon as their products get equal placement on the reliability charts. Meanwhile, Costco offers excellent quality products and also offers its workers much better benefits, so they get my dollar now.

PS - my current 'Japanese' car is actually built in Ohio, and is one of those cars listed in the 'best of the best' table above. So clearly, American workers can do it; they just need to be better managed.