The end of the road for U.S. carmakers? Are the Big Three worth saving?

United States workers make much more than their overseas competitors, and south of the border. Do the math and you see why we can't compete. It's not that they are better than us, just cheaper. Our quality is as good as the machine produces it. Very few things are handmade for mass quantity goods. Operator "A" in India makes 2$ a day and operator "B" in America makes 120$ a day. Where are you going to buy your parts/components/product from?


That is certainly a factor, but it is too simplistic. This problem is many times more complex than that, on many levels. Otherwise, all manufacturing would be done in India and China. many companies are finding the savings their accountants calculated simply are not showing up...hmmm, what a surprise ...not to anyone who has actually made parts at some point of their career. :bonk:
 
Elsmar Forum Sponsor
Their average worker costs are about 25$ less per hour. Paying legacy benefits is what's doing in the little 3. Follow the money.
 
United States workers make much more than their overseas competitors, and south of the border. Do the math and you see why we can't compete.
Paying legacy benefits is what's doing in the little 3. Follow the money.
Your explanation changes from post to post. This is a very complex subject and there is no simple answer.
We abhor SUV's now, but they were very popular a few years ago. We consider the automotive top management as incompetent, now, but when their stocks were delivering the quarterly results, making our 401k's grow, we did not care.

This is a very complex, multi-faceted issue. No simple solution. No single explanation.
 
Complex to you maybe. Look at all of the manufacturing that has left. Don't be too ethnocentric in your thoughts.
 
Complex to you maybe. Look at all of the manufacturing that has left. Don't be too ethnocentric in your thoughts.

Would you mind sharing the relevant global level experience you possess that has provided your insight?
 
I've definitely got to agree with Sidney on this one - lots of issues make it complex - differences in environmental regulations, long supply chains, increased efficiency in manufacturing through automation. One example from the steel industry - soaking pits for reheating ingots. The first plant I worked in still had some manually fired ones - one operator could tend 4 pits. The "automated ones" one operator could control 6 banks of 3 each for a total of 18, and that was in 1974. Today, forget ingots and their associated loss in yield, it's continuously cast slabs that get to the mill and require less re-heating and even less human attention. The last large mill I worked at had about 2600 employees management and union in 2000- we produced about 5 times as much as they did in the 1970's when they had a peak employment of over 6000.

We're in the midst of a manufacturing change similar to the one that occured in farming 40 or 50 years ago. We need about 2% of our population as farmers to feed us in the US versus about 50% in my father's (WWII) generation. Accoring to USA today, 50 years ago 1/3 of the work force was employed in manufacturing and today it's down to a little more than 1/10. I don't know if we'll get down to 2% as we did in farming, but we're headed down and it won't stop for some time, moreover, the jobs remaining in manufacturing require increasing knowledge and expertise which implies additional skills needed coming in, or acquired from the employer via training. Taking actions like dropping out of high school and going to work for the local mill just isn't going to happen anymore, or even graduating high school and going to work for the local mill.

I'm still in steel production - but the end product isn't a slab, bar, billet or sheet of steel, it's powdered metal that can be used to produced near net-shape parts. We still high hourly workers locally, and they still join a union, but if you want hired, you'd better have additional education and skills past those provided by a high school diploma.
 
Tier one to many auto companies. Have quoted against India, China, Korea, Malaysia, Mexico, to name a few. Have worked for Motorola and most of their production is overseas now. Laid off from John Crane International when the production facility moved to cheaper labor. How about you Randy? Hows the weather in Arkansas?
 
Back
Top Bottom