GM crashes and Honda opens a new plant
11-19-2008, 06:04 AM
#1
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GM crashes and Honda opens a new plant
I live in Indy not far from this plant. While everybody says the economy is trashed and car companies are going bankrupt, HONDA opens a new plant and starts making Civics......
So what about this,, somthing just does not add up.. like union wages..
Honda is paying 1/2 what the UAW requires and they had 30,000 job apllicaions for 1,000 jobs...
See below an artical from the Indianapolis Star..
Honda production under way
Greensburg plant is going ahead with original hiring plans
Star report
Posted: November 17, 2008Read Comments(24)Recommend (3)E-mail Print Share Del.icio.us Digg Reddit Yahoo Google A A 11 A.M. UPDATE: Natural gas to power Civics
Hundreds of Honda workers joined executives of the Japanese automaker, Gov. Mitch Daniels and other dignitaries for a celebratory plant dedication ceremony.
The production lines turned silent for nearly an hour as workers gathered a makeshift stage with nightclub-like lights and music.
"On behalf of Honda associates around the world, I want to welcome you to the Honda family," said Takeo Fukui, president and CEO of Honda motor Co. Ltd.
Honda employees drove an Indiana-produced Civic off the production line to applause.
Receiving nearly as many cheers, Honda also announced that a portion of the Civics built in Greensburg will be Civic GXs. This environmentally friendly version of Honda's top selling car runs on natural gas.
Daniels said the plant's existence proves that Indiana can compete in a tough, global economy.
"We all know that these are not the best of times," he told the gathering on plant floor. But, he added, "a great product like the Civic will always find a customer."
- Erika D. Smith
8 A.M. UPDATE: Production begins at plant
GREENSBURG, Ind. -- Nine hundred workers in white jumpsuits and green hats put Honda Civics together this morning in the public's first look at the automaker's plant here.
Only one shift was working today and they expect to turn out nearly 180 blue, burgundy and gun-handle brown Civics. Eventually the plant will make 800 cars a day with two shifts of workers.
The plant has a bright and airy feel, trimmed with white paint and yellow caution stripes intended to keep visitors safe. The production floor is mostly clean of debris and supplies are in neat bins.
Even Civic doors, welded by jerky robots at one end of the plant, are shipped overhead along catwalks overhead.
One Civic takes about four hours to assemble once the painted steel shell is done. From steel to a shell takes two days to make, although production is running slower right now.
-- Erika D. Smith
7 A.M. UPDATE: Ceremony will be Honda's second
This will be Honda's second time celebrating its new assembly line.
After months of fine-tuning equipment and training, Honda Manufacturing of Indiana launched production on the first shift with 900 employees on Oct. 9.
At that party, Honda officials photographed about 100 Greensburg Honda workers who were suited in green baseball caps and white jumpsuits, traditional Honda garb for auto workers.
For the photo, the employees were gathered around a black 2009 Honda Civic, the first car made in the plant ready to be sold to a customer. Cars made up to that point were part of training. Honda will park the black Civic permanently in a public display area at the plant. There was no public hoopla - just a press release.
Today's ceremony will feature Gov. Mitch Daniels and U.S. Representative Mike Pence along with Global CEO and President Takeo Fukui and Honda Manufacturing of Indiana President Yuzo Ueohara.
-- Tom Spalding
6:30 A.M. UPDATE: Honda could be big winner
Automakers worldwide are suffering, but when fortunes improve, Japan's Honda Motor Co. and its investors will drive away as big winners, business weekly Barron's said in its edition out today.
Honda and Fuji Heavy Industries Ltd's Subaru, through the first nine months of the year, were the only two automakers to see U.S. sales increase. But a severe slump in sales took a toll in October, depressing Honda's U.S. sales 25 percent, but still ahead of the industry's overall 32 percent decline, the publication said.
Honda now sees 2008 U.S. sales down 2.4 percent, its first yearly decline in 15 years, and it will be in for more pain if the global auto industry heads into "outright collapse ... with a recovery at least 18 months away," as research firm J.D. Powers has predicted, Barron's said.
- Reuters
Previous Star coverage: Economy nixes talk of expansion
Two years ago, Japanese automaker Honda bought 1,700 acres in southeastern Indiana for a plant site, fueling talk the new factory might be expanded as soon as it was built to handle the rising demand for small cars.
Today, Honda President Takeo Fukui is scheduled to preside over the dedication of Honda Manufacturing of Indiana LLC, the half-mile-long plant that began making cars last month in Greensburg.
But now, no one thinks the $550 million plant is in line for a quick expansion. Sales of new autos of all makes have dropped 14.6 percent this year through October. Forecasters say next year could be worse.
"Things have changed considerably since the announcement of this plant was made in 2006," Honda spokesman Andrew Stoner said.
Honda Greensburg, set up to assemble 200,000 compact Civic sedans a year, has some built-in shock absorbers to help it weather lean times.
And it is going ahead with the original hiring plans, Stoner said. About 900 people work in the plant, and 100 others will be hired next month to complete the first shift at 1,000 workers.
A second group of 1,000, chosen from the pool of 30,000 job applications Honda received last year, will be hired next year for the second shift.
Although the auto market has cooled, analysts figure Honda will go ahead with plans to bring in the second shift at Greensburg.
"I don't see any reason why a second shift wouldn't be necessary by mid-2009," said auto analyst Erich Merkle, in the Grand Rapids, Mich., office of the accounting firm Crowe Horwath.
"This year has been a very difficult environment for the auto industry. It's difficult to justify capital expenditures. But they've already spent the capital to build the plant."
800 cars a day
At Honda Greensburg, each shift is geared to roll out 400 cars a day, or 800 total for both shifts. Finished cars are shipped about 80 miles to a rail yard at Cincinnati for delivery to dealers throughout North America. Civics bound for Indiana dealers are trucked.
After training on the assembly line for months, Honda workers began to make cars for sale in October. Workers made about 24 cars a day in mid-October and have reached a daily rate of about 150 cars, Stoner said, on the way to the goal of 400.
Every auto plant ramps up slowly as people learn how to do their jobs well and engineers fine-tune the machines.
Because the typical automobile consists of about 5,000 separate pieces of metal, plastic, glass, rubber and cloth, auto assembly plants are among the most complicated enterprises ever created.
Massive computers orchestrate conveyor lines in constant motion, moving tons of auto parts among paint, weld, stamping and pre-assembly areas.
One conveyor line, for example, delivers green doors to the right workstation on the assembly line at the precise moment the green car body arrives from the paint shop.
Assembly lines at Toyota and General Motors typically rely more than Honda does on robots and automation. Its plants usually employ a few dozen more workers in the belief that people can see and fix defects more quickly than machines can.
GM also has farmed out to its suppliers thousands of old assembly line jobs, such as fitting together the gauges and the dashboard. In Honda plants, more of this sub-assembly work remains in-house, although Honda Greensburg makes use of a supplier in its 391,500-square-foot consolidation center.
At full output, about 300 workers employed by One Solution Logistics in the consolidation center will organize auto parts and do some final work on components shipped in by auto-parts makers, Stoner said. Of the 150 suppliers to Honda Greensburg, 21 parts makers are in Indiana and 61 are in Ohio, where Honda has a major production complex west of Columbus.
Moving sub-assembly work outside the main plant traces in part to the Detroit automakers. General Motors, for example, turned to suppliers in an effort to bring down costs to the level of Japanese rivals that pay lower wages.
General Motors' base wage under the United Auto Workers contract is about $28.69 an hour, or about $59,675 a year. Last year, the union accepted some wage cuts -- to $14 an hour for new hires on sub-assembly lines bringing new work into the plant.
That's less than Honda Greensburg base wages. Production workers hired this year will start at $14.84 an hour in Greensburg and receive a $3.71 raise next year to $18.55, or about $38,500 a year.
Like all Honda plants in North America, the Greensburg plant has no union. The UAW never has organized workers in a Japanese auto plant outside Michigan.
Strong demand for Civic
The plant is opening at a time when auto sales have slipped nationwide. Demand for the fuel-efficient Civic, though, has been unwavering amid rising fuel prices.
Through October, Honda sold 304,297 Civics, 9.2 percent more than last year. Though sales might rise next year, no boom is expected.
In the slow economy, production by all companies in North America could decline to the unusual low of 11.7 million vehicles next year, down from 12.9 million this year, and from 15.1 million in 2007, estimates market researcher CSM Worldwide in suburban Detroit.
Honda's opening cements Indiana's rapid rise to become the No. 5 car state, with annual production capacity of 1.1 million Honda, GM, Subaru and Toyota vehicles. If the car market booms again, and Honda expands in Greensburg, Indiana could become the No. 3 state, analysts say.
Indiana's extensive crop of homegrown carmakers had closed by the mid-1930s, except Studebaker in South Bend, which shut down in 1963. From then until the 1987 opening of GM's Fort Wayne truck plant, no conventional autos were made in the state, although a small volume of buses and Humvee army trucks for the military continued to be assembled.
Opening the Greensburg plant lets the Honda assembly line in East Liberty, Ohio, focus on the CR-V, a compact sport utility vehicle made from Civic parts.
- Ted Evanoff
Assembly lines
Seven Indiana plants assemble cars, pickups, sport utilities, Army trucks and minivans.
Company Location Employees Model
AM General Mishawaka 1,000 Humvee
AM General Mishawaka 600 Hummer H2
GM Fort Wayne 2,900 Chevrolet Silverado, GMC Sierra
Honda Greensburg 2,080* Honda Civic
Subaru Lafayette 2,600 Subaru Legacy, Tribeca, Outback; Toyota Camry
Toyota Princeton East 3,300 Toyota Sienna, Sequoia
Toyota Princeton West** 1,300 Toyota Tundra, Sequoia
NOTE: *At full output in 2009. **Princeton West is being converted to produce only the Highlander.
Source: Indianapolis Star research
So what about this,, somthing just does not add up.. like union wages..
Honda is paying 1/2 what the UAW requires and they had 30,000 job apllicaions for 1,000 jobs...
See below an artical from the Indianapolis Star..
Honda production under way
Greensburg plant is going ahead with original hiring plans
Star report
Posted: November 17, 2008Read Comments(24)Recommend (3)E-mail Print Share Del.icio.us Digg Reddit Yahoo Google A A 11 A.M. UPDATE: Natural gas to power Civics
Hundreds of Honda workers joined executives of the Japanese automaker, Gov. Mitch Daniels and other dignitaries for a celebratory plant dedication ceremony.
The production lines turned silent for nearly an hour as workers gathered a makeshift stage with nightclub-like lights and music.
"On behalf of Honda associates around the world, I want to welcome you to the Honda family," said Takeo Fukui, president and CEO of Honda motor Co. Ltd.
Honda employees drove an Indiana-produced Civic off the production line to applause.
Receiving nearly as many cheers, Honda also announced that a portion of the Civics built in Greensburg will be Civic GXs. This environmentally friendly version of Honda's top selling car runs on natural gas.
Daniels said the plant's existence proves that Indiana can compete in a tough, global economy.
"We all know that these are not the best of times," he told the gathering on plant floor. But, he added, "a great product like the Civic will always find a customer."
- Erika D. Smith
8 A.M. UPDATE: Production begins at plant
GREENSBURG, Ind. -- Nine hundred workers in white jumpsuits and green hats put Honda Civics together this morning in the public's first look at the automaker's plant here.
Only one shift was working today and they expect to turn out nearly 180 blue, burgundy and gun-handle brown Civics. Eventually the plant will make 800 cars a day with two shifts of workers.
The plant has a bright and airy feel, trimmed with white paint and yellow caution stripes intended to keep visitors safe. The production floor is mostly clean of debris and supplies are in neat bins.
Even Civic doors, welded by jerky robots at one end of the plant, are shipped overhead along catwalks overhead.
One Civic takes about four hours to assemble once the painted steel shell is done. From steel to a shell takes two days to make, although production is running slower right now.
-- Erika D. Smith
7 A.M. UPDATE: Ceremony will be Honda's second
This will be Honda's second time celebrating its new assembly line.
After months of fine-tuning equipment and training, Honda Manufacturing of Indiana launched production on the first shift with 900 employees on Oct. 9.
At that party, Honda officials photographed about 100 Greensburg Honda workers who were suited in green baseball caps and white jumpsuits, traditional Honda garb for auto workers.
For the photo, the employees were gathered around a black 2009 Honda Civic, the first car made in the plant ready to be sold to a customer. Cars made up to that point were part of training. Honda will park the black Civic permanently in a public display area at the plant. There was no public hoopla - just a press release.
Today's ceremony will feature Gov. Mitch Daniels and U.S. Representative Mike Pence along with Global CEO and President Takeo Fukui and Honda Manufacturing of Indiana President Yuzo Ueohara.
-- Tom Spalding
6:30 A.M. UPDATE: Honda could be big winner
Automakers worldwide are suffering, but when fortunes improve, Japan's Honda Motor Co. and its investors will drive away as big winners, business weekly Barron's said in its edition out today.
Honda and Fuji Heavy Industries Ltd's Subaru, through the first nine months of the year, were the only two automakers to see U.S. sales increase. But a severe slump in sales took a toll in October, depressing Honda's U.S. sales 25 percent, but still ahead of the industry's overall 32 percent decline, the publication said.
Honda now sees 2008 U.S. sales down 2.4 percent, its first yearly decline in 15 years, and it will be in for more pain if the global auto industry heads into "outright collapse ... with a recovery at least 18 months away," as research firm J.D. Powers has predicted, Barron's said.
- Reuters
Previous Star coverage: Economy nixes talk of expansion
Two years ago, Japanese automaker Honda bought 1,700 acres in southeastern Indiana for a plant site, fueling talk the new factory might be expanded as soon as it was built to handle the rising demand for small cars.
Today, Honda President Takeo Fukui is scheduled to preside over the dedication of Honda Manufacturing of Indiana LLC, the half-mile-long plant that began making cars last month in Greensburg.
But now, no one thinks the $550 million plant is in line for a quick expansion. Sales of new autos of all makes have dropped 14.6 percent this year through October. Forecasters say next year could be worse.
"Things have changed considerably since the announcement of this plant was made in 2006," Honda spokesman Andrew Stoner said.
Honda Greensburg, set up to assemble 200,000 compact Civic sedans a year, has some built-in shock absorbers to help it weather lean times.
And it is going ahead with the original hiring plans, Stoner said. About 900 people work in the plant, and 100 others will be hired next month to complete the first shift at 1,000 workers.
A second group of 1,000, chosen from the pool of 30,000 job applications Honda received last year, will be hired next year for the second shift.
Although the auto market has cooled, analysts figure Honda will go ahead with plans to bring in the second shift at Greensburg.
"I don't see any reason why a second shift wouldn't be necessary by mid-2009," said auto analyst Erich Merkle, in the Grand Rapids, Mich., office of the accounting firm Crowe Horwath.
"This year has been a very difficult environment for the auto industry. It's difficult to justify capital expenditures. But they've already spent the capital to build the plant."
800 cars a day
At Honda Greensburg, each shift is geared to roll out 400 cars a day, or 800 total for both shifts. Finished cars are shipped about 80 miles to a rail yard at Cincinnati for delivery to dealers throughout North America. Civics bound for Indiana dealers are trucked.
After training on the assembly line for months, Honda workers began to make cars for sale in October. Workers made about 24 cars a day in mid-October and have reached a daily rate of about 150 cars, Stoner said, on the way to the goal of 400.
Every auto plant ramps up slowly as people learn how to do their jobs well and engineers fine-tune the machines.
Because the typical automobile consists of about 5,000 separate pieces of metal, plastic, glass, rubber and cloth, auto assembly plants are among the most complicated enterprises ever created.
Massive computers orchestrate conveyor lines in constant motion, moving tons of auto parts among paint, weld, stamping and pre-assembly areas.
One conveyor line, for example, delivers green doors to the right workstation on the assembly line at the precise moment the green car body arrives from the paint shop.
Assembly lines at Toyota and General Motors typically rely more than Honda does on robots and automation. Its plants usually employ a few dozen more workers in the belief that people can see and fix defects more quickly than machines can.
GM also has farmed out to its suppliers thousands of old assembly line jobs, such as fitting together the gauges and the dashboard. In Honda plants, more of this sub-assembly work remains in-house, although Honda Greensburg makes use of a supplier in its 391,500-square-foot consolidation center.
At full output, about 300 workers employed by One Solution Logistics in the consolidation center will organize auto parts and do some final work on components shipped in by auto-parts makers, Stoner said. Of the 150 suppliers to Honda Greensburg, 21 parts makers are in Indiana and 61 are in Ohio, where Honda has a major production complex west of Columbus.
Moving sub-assembly work outside the main plant traces in part to the Detroit automakers. General Motors, for example, turned to suppliers in an effort to bring down costs to the level of Japanese rivals that pay lower wages.
General Motors' base wage under the United Auto Workers contract is about $28.69 an hour, or about $59,675 a year. Last year, the union accepted some wage cuts -- to $14 an hour for new hires on sub-assembly lines bringing new work into the plant.
That's less than Honda Greensburg base wages. Production workers hired this year will start at $14.84 an hour in Greensburg and receive a $3.71 raise next year to $18.55, or about $38,500 a year.
Like all Honda plants in North America, the Greensburg plant has no union. The UAW never has organized workers in a Japanese auto plant outside Michigan.
Strong demand for Civic
The plant is opening at a time when auto sales have slipped nationwide. Demand for the fuel-efficient Civic, though, has been unwavering amid rising fuel prices.
Through October, Honda sold 304,297 Civics, 9.2 percent more than last year. Though sales might rise next year, no boom is expected.
In the slow economy, production by all companies in North America could decline to the unusual low of 11.7 million vehicles next year, down from 12.9 million this year, and from 15.1 million in 2007, estimates market researcher CSM Worldwide in suburban Detroit.
Honda's opening cements Indiana's rapid rise to become the No. 5 car state, with annual production capacity of 1.1 million Honda, GM, Subaru and Toyota vehicles. If the car market booms again, and Honda expands in Greensburg, Indiana could become the No. 3 state, analysts say.
Indiana's extensive crop of homegrown carmakers had closed by the mid-1930s, except Studebaker in South Bend, which shut down in 1963. From then until the 1987 opening of GM's Fort Wayne truck plant, no conventional autos were made in the state, although a small volume of buses and Humvee army trucks for the military continued to be assembled.
Opening the Greensburg plant lets the Honda assembly line in East Liberty, Ohio, focus on the CR-V, a compact sport utility vehicle made from Civic parts.
- Ted Evanoff
Assembly lines
Seven Indiana plants assemble cars, pickups, sport utilities, Army trucks and minivans.
Company Location Employees Model
AM General Mishawaka 1,000 Humvee
AM General Mishawaka 600 Hummer H2
GM Fort Wayne 2,900 Chevrolet Silverado, GMC Sierra
Honda Greensburg 2,080* Honda Civic
Subaru Lafayette 2,600 Subaru Legacy, Tribeca, Outback; Toyota Camry
Toyota Princeton East 3,300 Toyota Sienna, Sequoia
Toyota Princeton West** 1,300 Toyota Tundra, Sequoia
NOTE: *At full output in 2009. **Princeton West is being converted to produce only the Highlander.
Source: Indianapolis Star research
11-19-2008, 06:13 AM
#2
Team Owner
What doesn't add up is they pay no F'in property tax and get all kinds of breaks to save money while GM bends over. They sit and laugh at us in Japan with no national policy as Japan and others pit one state against to see drops their shorts the most in subsidies.
What doesn't add up is GM cannot open a plant in Japan they are not allowed.
What does not add up is Japans home market is closed to hundreds of our products.
If they are getting half what GM new hires are getting paid they are getting about 7 bucks per hour. Japan has raped us for years along with the rest of the world and their closed markets.
See where the companies like Honda would be if the US imposed the same standards on Honda as Japan does on our domestic companies of all types.
Funny how Honda donated a million bucks and it was all over the national news but GM donates millions and millions around the country each year for how many years? It gets hardly any press. How much tax will Honda pay in this country? Very little as foreign corp they cook the books to show little profit by high charges from Japan to the factory here in the USA.
What doesn't add up is GM cannot open a plant in Japan they are not allowed.
What does not add up is Japans home market is closed to hundreds of our products.
If they are getting half what GM new hires are getting paid they are getting about 7 bucks per hour. Japan has raped us for years along with the rest of the world and their closed markets.
See where the companies like Honda would be if the US imposed the same standards on Honda as Japan does on our domestic companies of all types.
Funny how Honda donated a million bucks and it was all over the national news but GM donates millions and millions around the country each year for how many years? It gets hardly any press. How much tax will Honda pay in this country? Very little as foreign corp they cook the books to show little profit by high charges from Japan to the factory here in the USA.
Last edited by John Shiels; 11-19-2008 at 06:23 AM.
11-19-2008, 06:30 AM
#3
Team Owner
Tuesday, November 18, 2008
Do Detroit 3 automakers deserve bailout?
Preemptive aid would avoid catastrophic destruction of jobs
Jason H. Vines
We may never know the financial burden of Hurricane Katrina on New Orleans and the rest of America. Some have pegged it at between $200 billion and $300 billion. Almost everyone now agrees that more and better "things" should have been done prior to the storm and certainly in the days and weeks after the disaster.
Another disaster is headed to our shores that will prove considerably more costly and affect far more communities than did Katrina. The question is: Do we do something preemptive or in reaction to the storm?
Unless Congress comes to the aid of the U.S. auto manufacturers, the waves from the failure of these large employers and the core of our manufacturing base will take a large and destructive path across America.
Advertisement
The U.S. automakers are on the verge of collapse. When our economy and other economies around the world recover -- and they will, someday -- there will still be millions of people who need new vehicles. Is it important that U.S. auto manufacturers are a part of that market? Yes for historical and future reasons.
General Motors and Ford, both 100-plus years old, helped establish what sets America apart as the greatest nation on earth -- our strong middle class. Historian Daniel Boorstein called the car the "great equalizer" of the 20th century for Americans. It gave us mobility and an ability to further prosper.
When the world was threatened in World War II, it was the U.S. automakers that turned their factories into the Arsenal of Democracy. Without their support, it really is unthinkable to imagine us as freedom-loving people.
The demise of America's car companies, today woefully short on cash, means the loss of millions of jobs directly -- from the assembly plant worker to secretaries to dealership mechanics -- and indirectly from waitresses at local restaurants, store owners and others. It's not just a ripple effect, but a potential tsunami.
In 1994, when I worked for the then-American Automobile Manufacturers Association, it found that the companies accounted for one of every 13 jobs in this country. Recent studies state the number at one in 10. That is an enormous figure and a key reason why all other major industrial countries that have an auto industry cherish and support it. That also is the reason that emerging markets like China put a lot of stock into developing a vibrant auto industry.
If you want to see a region that has abandoned its manufacturing base and is left with a services-based economy, look no further than the United Kingdom. The situation there isn't pretty.
Jobs don't tell the whole story, though. Thousands of communities across our country depend heavily on the auto and supplier plants. The computer industry enjoys these car companies and their suppliers as some of their best customers, as do steel, glass, plastics and chemical companies. Community charities, school programs and sports programs will be hit hard when that local go-to car dealer can't support the Little League or Girl Scouts or the breast cancer walkathon.
But they got themselves into this mess, you know. How so? They supported communities with jobs and taxes. They provided health care and pensions while their foreign counterparts (read: the "smarter car companies") let their home governments pick up most of the tab for these benefits through higher taxes on all citizens.
They should have seen this coming, you say? Seen what? Gas jumping up to more than $4 a gallon? No, they didn't see it, but neither did Toyota and Japan Inc. as they sold larger vehicles in the U.S. market and are too paying for this bad bet today.
They didn't care about the environment. Really?
The most significant anti-pollution device in the history of the automobile industry is the catalytic converter. Which Japanese or German company invented it? It was General Motors. And if you want to talk about clean manufacturing, America's car companies have facilities where the air and water that leave the factory is cleaner than when it first came in.
But the Detroit automakers don't care about fuel economy. Really? In the segments in which they compete, General Motors and Ford products in particular rate at or near the top in every one of them.
Insurance giant AIG's bailout has now grown to $150 billion, and Washington and New York didn't bat an eye. Meanwhile, America's car companies have to beg for a sum far south of those numbers.
And so, we see this storm getting closer by the day. The question is: Do we do something about it before it hits the shores and devastates communities across our land? Or do we say let 'em go broke and hope for the best?
Ask the people of New Orleans what they wish had been done before the storm struck.
Jason H. Vines is senior vice president of Compuware Corp. in Detroit and a former senior executive at Chrysler, DaimlerChrysler, Nissan and Ford Motor Co.
Do Detroit 3 automakers deserve bailout?
Preemptive aid would avoid catastrophic destruction of jobs
Jason H. Vines
We may never know the financial burden of Hurricane Katrina on New Orleans and the rest of America. Some have pegged it at between $200 billion and $300 billion. Almost everyone now agrees that more and better "things" should have been done prior to the storm and certainly in the days and weeks after the disaster.
Another disaster is headed to our shores that will prove considerably more costly and affect far more communities than did Katrina. The question is: Do we do something preemptive or in reaction to the storm?
Unless Congress comes to the aid of the U.S. auto manufacturers, the waves from the failure of these large employers and the core of our manufacturing base will take a large and destructive path across America.
Advertisement
The U.S. automakers are on the verge of collapse. When our economy and other economies around the world recover -- and they will, someday -- there will still be millions of people who need new vehicles. Is it important that U.S. auto manufacturers are a part of that market? Yes for historical and future reasons.
General Motors and Ford, both 100-plus years old, helped establish what sets America apart as the greatest nation on earth -- our strong middle class. Historian Daniel Boorstein called the car the "great equalizer" of the 20th century for Americans. It gave us mobility and an ability to further prosper.
When the world was threatened in World War II, it was the U.S. automakers that turned their factories into the Arsenal of Democracy. Without their support, it really is unthinkable to imagine us as freedom-loving people.
The demise of America's car companies, today woefully short on cash, means the loss of millions of jobs directly -- from the assembly plant worker to secretaries to dealership mechanics -- and indirectly from waitresses at local restaurants, store owners and others. It's not just a ripple effect, but a potential tsunami.
In 1994, when I worked for the then-American Automobile Manufacturers Association, it found that the companies accounted for one of every 13 jobs in this country. Recent studies state the number at one in 10. That is an enormous figure and a key reason why all other major industrial countries that have an auto industry cherish and support it. That also is the reason that emerging markets like China put a lot of stock into developing a vibrant auto industry.
If you want to see a region that has abandoned its manufacturing base and is left with a services-based economy, look no further than the United Kingdom. The situation there isn't pretty.
Jobs don't tell the whole story, though. Thousands of communities across our country depend heavily on the auto and supplier plants. The computer industry enjoys these car companies and their suppliers as some of their best customers, as do steel, glass, plastics and chemical companies. Community charities, school programs and sports programs will be hit hard when that local go-to car dealer can't support the Little League or Girl Scouts or the breast cancer walkathon.
But they got themselves into this mess, you know. How so? They supported communities with jobs and taxes. They provided health care and pensions while their foreign counterparts (read: the "smarter car companies") let their home governments pick up most of the tab for these benefits through higher taxes on all citizens.
They should have seen this coming, you say? Seen what? Gas jumping up to more than $4 a gallon? No, they didn't see it, but neither did Toyota and Japan Inc. as they sold larger vehicles in the U.S. market and are too paying for this bad bet today.
They didn't care about the environment. Really?
The most significant anti-pollution device in the history of the automobile industry is the catalytic converter. Which Japanese or German company invented it? It was General Motors. And if you want to talk about clean manufacturing, America's car companies have facilities where the air and water that leave the factory is cleaner than when it first came in.
But the Detroit automakers don't care about fuel economy. Really? In the segments in which they compete, General Motors and Ford products in particular rate at or near the top in every one of them.
Insurance giant AIG's bailout has now grown to $150 billion, and Washington and New York didn't bat an eye. Meanwhile, America's car companies have to beg for a sum far south of those numbers.
And so, we see this storm getting closer by the day. The question is: Do we do something about it before it hits the shores and devastates communities across our land? Or do we say let 'em go broke and hope for the best?
Ask the people of New Orleans what they wish had been done before the storm struck.
Jason H. Vines is senior vice president of Compuware Corp. in Detroit and a former senior executive at Chrysler, DaimlerChrysler, Nissan and Ford Motor Co.
11-19-2008, 10:30 AM
#5
Melting Slicks
Don't want to start a union 
but does Honda hire UAW workers?
My dad said he heard that avg UAW wage was $80+/hour while Toyota (or other Japanese mfg) plant in the US paid $40+/hour to non-union workers. That can make a big difference right there.
If big 3 file bankruptcy, doesn't that get them out of union contracts and they can negotiate pensions, etc. ?
A friend said he son works for Honda in LA. He is part of a group that goes around doing service for free - like helping in food banks, pick up trash, etc. (not service cars). They all wear shirts that say something like "Honda is here to help". Good PR for those that see them helping out.
but does Honda hire UAW workers?My dad said he heard that avg UAW wage was $80+/hour while Toyota (or other Japanese mfg) plant in the US paid $40+/hour to non-union workers. That can make a big difference right there.
If big 3 file bankruptcy, doesn't that get them out of union contracts and they can negotiate pensions, etc. ?
A friend said he son works for Honda in LA. He is part of a group that goes around doing service for free - like helping in food banks, pick up trash, etc. (not service cars). They all wear shirts that say something like "Honda is here to help". Good PR for those that see them helping out.
11-19-2008, 10:53 AM
#6
Melting Slicks
Member Since: Jun 2002
Location: Charleston South Carolina
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What doesn't add up for me is that all of the "Big Three" have very profitable ex-US divisions that have no problems and make lots of money. It seems to be the US divisions that are dragging the companies down.
I bet Michigan is dropping it's drawers for the big three too. States know that if they can get the company to locate in their state, by forgiving taxes, they'll increase their revenue everywhere else from all those workers paying income taxes, shopping taxes, buying gasoline and houses (property taxes). No company, no increase in taxes collected. It's a no brainer for the states to wave business taxes to get a company to locate in their state. The only businesses they charge full taxes are the ones already there.
I bet Michigan is dropping it's drawers for the big three too. States know that if they can get the company to locate in their state, by forgiving taxes, they'll increase their revenue everywhere else from all those workers paying income taxes, shopping taxes, buying gasoline and houses (property taxes). No company, no increase in taxes collected. It's a no brainer for the states to wave business taxes to get a company to locate in their state. The only businesses they charge full taxes are the ones already there.
11-19-2008, 01:39 PM
#7
Burning Brakes
General Motors' base wage under the United Auto Workers contract is about $28.69 an hour, or about $59,675 a year. Last year, the union accepted some wage cuts -- to $14 an hour for new hires on sub-assembly lines bringing new work into the plant.
That's less than Honda Greensburg base wages. Production workers hired this year will start at $14.84 an hour in Greensburg and receive a $3.71 raise next year to $18.55, or about $38,500 a year.
Like all Honda plants in North America, the Greensburg plant has no union. The UAW never has organized workers in a Japanese auto plant outside Michigan.
That's less than Honda Greensburg base wages. Production workers hired this year will start at $14.84 an hour in Greensburg and receive a $3.71 raise next year to $18.55, or about $38,500 a year.
Like all Honda plants in North America, the Greensburg plant has no union. The UAW never has organized workers in a Japanese auto plant outside Michigan.
Can someone in the know explain these numbers to me? Are these real wages for plant workers?
