I'll give you guys something to think about concerning GM.
My local factory in Janesville Wisconsin is now closed. At one time it employed 7000 hourly workers and supported a rich local variety of suppliers.
At the time of closing, there were about 1200 active employees, and these assemblers actually made more vehicles per hour ( or week or year ) than the 7000 did 25 years ago. GM's productivity has skyrocketed in recent years. more productive than any of the foriegn or "transplanted" automakers.
Cutting employees at this time is now proportionate to cutting products. You can't just lay off shifts or reduce production in individual plants as they are already cut to the bone. You have to eliminate the entire factories.
That local plant, at closing, supported a modest number of local suppliers.. perhaps totalling 1000 employees. Oddly, many of those support workers are short-haul truck drivers, as GM needs "just-in-time" delivery to avoid inventory overhead... and the taxes on that inventory. 95% of all supplies to that factory arrive by truck, not rail. That is much of the hidden cost of modern manufacturing. 30 years ago, the opposite was true, as rail was by far cheaper.
Near the closing of the plant, a schedule change had to be made. Roofs for the sunroof option for large SUVs are made from heavily galvanised steel, or stainless stell can be substituted. Stainless is much more expensive. GM had been using stainless because it could not get smaller orders of heavily glavanised ( remember "just-intime" ?). China has gobbled up all galvanised in the huge quantities steel mills like... and they also grabbed all the stainless! So sunroofs could not be made for several weeks in Janesville... at any price.
I'm sure the steel was shipped by rail, then ship... not by truck... to China.
What's sick here is not just GM.
It is the entire modern way of manufacturing, financing, shipping, taxing.
The modern way works when times are good, and volume is not the problem. But when volume stumbles, the whole system crashes, as the manufacturers are no longer set for rail transportation, or can store months of raw supplies, or can cut back workers and linespeeds, as these are already set for maximum productivity... not guarding for catastophy.
GM cannot go back to using hand-held spotwelders, even though you could run a body shop with a few people and have them double or triple up on jobs at lower speeds. The modern robot-shop requires volume for profit. Same for the paint shop, trim, and chassis lines. Without redesigning the manufacturing process, there is no going back.
But China is not run by modern standards of productivity. It does hand weld. It is labor intensive, and can cut back in hard times. They do use rail, and large onsite storage of materials. They do not outsource what can be made in house.
The UAW union forsaw many of these problems, and feared GM and Ford would simply layoff or close factories in response to hard times, rather than just layoff or reduce linespeeds. That is why they forced the big three to have SUB pay and JOB banks... to discourage the practice of closing one plant, and building another, to suit their modern manufacturing productivity.
This forced GM and Ford to look a bit ahead when designing their products and manufacturing processes to preserve the status of their hourly workers. Apparently Ford listened, and they will survive... perhaps without government intervention. GM did not listen to the union. Now they are on the verge of bankruptcy, even though their union labor is a fraction of what it was 25 years ago. And the government was also warned by the UAW, that this was a possible result of our modern manufacturing process... where productivity is just a way of eliminating jobs, rather than a way of making workers more productive.
Skeleton crews running robotic factories financed only for maximum production will eventually fail. Doesn't matter if it's GM, Ford, Toyota, or Harley Davidson. It doesn't matter if it is the US, great Britian, Germany or Japan. This has nothing to do with labor, or even management. It is our accepted way of producing things.
GM did everything right by the modern book of manufacturing. And they desperately have already sold off every division they could to trim their size... Delphi, EDS, Hughes, Locomotive, Bus... to try to save their business and stave off the bond holders.
This is eactly the problem facing the governments now. It's not just a matter of throwing money at the problem. The entire system of finance and capitalism and manufacturing is ill. That has got to get fixed. A little over a year ago, GM stock was at a record high, and they had record quarterly profits.
And they were already doomed, as their process was modern productivity, modern finance, and cannablism of their holdings, to satisfy stock and bond holder expectations. Never did they consider they were on the wrong path.
Small, labor intensive shops, minimally financed, producing needed goods will survive without any help from the government... if the government leaves them alone. This is the production model in China and India. If they try to mimic the modern US productivity model, their businesses will collapse just as ours has.
It's not a matter of saving GM, or Chrysler, or Ford, or Wall Street. It's a matter of saving ourselves by rejecting the processes that do not work, and demanding our businesses behave responsibly to the welfare of the general public. We need a new game plan, so shareholders, and bond holders, and workers are not left holding an empty sack when hard times arrive. For example, did no one think of saving the grain for the coming famine? That concept is thousands of years old and still valid today.
Dick
