Sunday, October 7, 2007

Why American Cars Suck II

That's what I'm saying...

HT Captain Capitalism

13 comments:

jkruse said...

Sorry, I'm not keeping up.

Now you are for nationalized health care?

jroosh said...

No. Not yet at least.

This is a commentary on how one of the world's once largest and most succesful companies was ruined by overreaching, arrogance and mostly by labor unions (with the complicity of management at the time) inflating the value of their product (labor) and permanently rendering their employer unable to compete in the worldwide marketplace.

jkruse said...

Then why did you show a graph of health care costs?

jroosh said...

Then why did you show a graph of health care costs?

...because you can see the burden the big three have to bear relative to Toyota.

jkruse said...

But you told me the demise of the big three was caused ...mostly by labor unions...

Bike Bubba said...

The "Cadillac" healthcare is part of the deal that the union gets by threatening to shut down the company.

jkruse said...

It's ironic you use the adjective "cadillac" to describe their healthcare plan.

It looks to like like a big portion of those healthcare costs go to paying retirees. Want to guess how many of them were bought out early so that factories that produced crappy gas guzzlers could close down because nobody wanted their product anymore?

jroosh said...

It's ironic you use the adjective "cadillac" to describe their healthcare plan.

True enough. Cadillac used to mean something until Cadillac got fat, lazy and arrogant and started cutting corners and allowing their labor unions to rule the roost.

It looks to like like a big portion of those healthcare costs go to paying retirees. Want to guess how many of them were bought out early so that factories that produced crappy gas guzzlers could close down because nobody wanted their product anymore?

Thats true. They have accumulated a huge liability to those that aren't currently contributing and that were mostly responsible for putting the company in the current crisis.

Its probably too late to do anything to rectify it now short of bankruptcy...just a cautionary tale now.

jkruse said...

It's admirable that you keep clinging to the notion that if it weren't for those dastardly unions, GM would still be rolling out the best cars in the world and making money hand over fist.

I won't pretend that the union leaders and members weren't greedy, if you won't pretend that poor design, crummy execution, and a lousy understanding of what consumers wanted weren't the main reasons for the big 3's demise.

jroosh said...

I won't pretend that the union leaders and members weren't greedy, if you won't pretend that poor design, crummy execution, and a lousy understanding of what consumers wanted weren't the main reasons for the big 3's demise.

Indeed. I agree with you. That's the "arrogance" I have been referring to. The big three cashed in on "Buy American" so many times that they finally overdrew the goodwill account with crappy product. Planned obsolescence.

At the same time, drunk with their huge market share, they gave in to the unions, and the unions lost their pride in workmanship.

It's a perfect lesson in what happens when you mess with the free market.

redBeard said...

It's a perfect lesson in what happens when you mess with the free market.

Not sure what you mean by that. I didn't see anything in anyones' argument about lack of a free market (or gov't regulation).

The US auto companies basically did what they thought would perpetuate them, correct? Working with (or caving into) unions doesn't seem like 'messing with the free market'....

jroosh said...

unions doesn't seem like 'messing with the free market'....

Huh? Just exactly what do you think the goal of organized labor is then?

It is first and foremost to artificially raise the value of labor by moving together as a block. A strike, as far as I am concerned is messing with a free market.

As far as I am concerned, if you don't show up for work, you are fired. If you don't like the pay and benefits, go find another job.

Unions tend to artificially create a haven for people who aren't willing to sell their services (labor) on the free market.

They tend to artificially extend the viability of a person's skills such that when the industry moves overseas to find cheaper labor, the worker go off a cliff because they've become obsolete to our economy.

Unions take away the incentive for their members to reeducate and reinvent themselves to keep pace with our economy's changing needs.

Unions are the only segment of our work force that I know of that think job security is 1) not a myth and 2) can somehow be mandated in a contract.

Job security is a myth no matter who you are.

Furthermore, Union leadership has lost its charter. They are advising their members in such a way that is not in the interest of the members rather in the interest of perpetuating the union's existence.

I submit as proof the advice given by union leaders to the NWA mechanics a while back: Strike.

Anyone could see that they would lose that battle. And they did, and it probably hurt a lot of people.

redBeard said...

Those pesky employees.....

If only businesses didn't have to deal with employees, supplier vendors, product distributors, lawyers, accountants, board members, stock holders, realtors, landlords, banks, insurance companies, and customers, they could finally get down to business and focus on the important aspect of making money..... ;)

I definitely agree with you that many unions are losing clout and ability to make a statement.